10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

(Mark One)
þ	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended June 30, 2006
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 001-13545

AMB Property Corporation

(Exact Name of Registrant as Specified in Its Charter)

Maryland	94-3281941
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
Pier 1, Bay 1, San Francisco, California (Address of Principal Executive Offices)	94111 (Zip Code)

(415) 394-9000

(Registrant’s Telephone Number, Including Area Code)

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 whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ     Accelerated filer o     Non-accelerated filer o     

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

As of August 1, 2006, there were 88,382,890 shares of the Registrant’s common stock, $0.01 par value per share, outstanding.

AMB PROPERTY CORPORATION

INDEX

			Page
PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements (unaudited)
		Consolidated Balance Sheets as of June 30, 2006 and December 31, 2005		1
		Consolidated Statements of Operations for the three and six months ended June 30, 2006 and 2005		2
		Consolidated Statement of Stockholders’ Equity for the six months ended June 30, 2006		3
		Consolidated Statements of Cash Flows for the six months ended June 30, 2006 and 2005		4
		Notes to Consolidated Financial Statements		5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk		57
	Item 4.	Controls and Procedures		59
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings		60
	Item 1A.	Risk Factors		60
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds		60
	Item 3.	Defaults Upon Senior Securities		60
	Item 4.	Submission of Matters to a Vote of Security Holders		61
	Item 5.	Other Information		61
	Item 6.	Exhibits		61
EXHIBIT 3.1
EXHIBIT 10.4
EXHIBIT 31.1
EXHIBIT 32.1

PART I

Item 1.   Financial Statements

AMB PROPERTY CORPORATION

CONSOLIDATED BALANCE SHEETS

As of June 30, 2006 and December 31, 2005

	June 30,			December 31,
	2006			2005
	(Unaudited, dollars in
	thousands)
ASSETS
Investments in real estate:
Land	$	1,658,040		$	1,527,072
Buildings and improvements		4,648,074			4,273,716
Construction in progress		1,070,208			997,506
Total investments in properties		7,376,322			6,798,294
Accumulated depreciation and amortization		(774,528	)		(697,388	)
Net investments in properties		6,601,794			6,100,906
Investments in unconsolidated joint ventures		123,107			118,653
Properties held for contribution, net		71,981			32,755
Properties held for divestiture, net		46,857			17,936
Net investments in real estate		6,843,739			6,270,250
Cash and cash equivalents		202,345			232,881
Restricted cash		29,567			34,352
Mortgage and loan receivables		18,816			21,621
Accounts receivable, net of allowance for doubtful accounts of $5,567 and $6,302, respectively		127,528			178,682
Deferred financing costs, net		24,345			25,026
Other assets		90,026			39,927
Total assets	$	7,336,366		$	6,802,739
LIABILITIES AND STOCKHOLDERS’ EQUITY
Debt:
Secured debt	$	1,829,968		$	1,912,526
Unsecured senior debt		1,051,249			975,000
Unsecured credit facilities		904,452			490,072
Other debt		88,217			23,963
Total debt		3,873,886			3,401,561
Security deposits		44,286			47,055
Dividends payable		47,007			46,382
Accounts payable and other liabilities		162,930			170,307
Total liabilities		4,128,109			3,665,305
Commitments and contingencies (Note 12)
Minority interests:
Joint venture partners		950,209			853,643
Preferred unitholders		190,198			278,378
Limited partnership unitholders		89,705			89,114
Total minority interests		1,230,112			1,221,135
Stockholders’ equity:
Series L preferred stock, cumulative, redeemable, $.01 par value, 2,300,000 shares authorized and 2,000,000 issued and outstanding, $50,000 liquidation preference		48,017			48,017
Series M preferred stock, cumulative, redeemable, $.01 par value, 2,300,000 shares authorized and 2,300,000 issued and outstanding, $57,500 liquidation preference		55,187			55,187
Series O preferred stock, cumulative, redeemable, $.01 par value, 3,000,000 shares authorized and 3,000,000 issued and outstanding, $75,000 liquidation preference		72,127			72,344
Common stock, $.01 par value, 500,000,000 shares authorized, 88,099,463 and 85,814,905 issued and outstanding, respectively		880			857
Additional paid-in capital		1,685,688			1,641,186
Retained earnings		115,873			101,124
Accumulated other comprehensive income (loss)		373			(2,416	)
Total stockholders’ equity		1,978,145			1,916,299
Total liabilities and stockholders’ equity	$	7,336,366		$	6,802,739

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

1

AMB PROPERTY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

For the Three and Six Months Ended June 30, 2006 and 2005

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2006			2005			2006			2005
	(Unaudited, dollars in thousands, except
	share and per share amounts)
REVENUES
Rental revenues	$	175,330		$	154,370		$	351,234		$	307,204
Private capital income		4,943			3,438			10,049			6,756
Total revenues		180,273			157,808			361,283			313,960
COSTS AND EXPENSES
Property operating expenses		(24,537	)		(21,234	)		(49,680	)		(42,933	)
Real estate taxes		(20,346	)		(18,682	)		(40,720	)		(36,567	)
Depreciation and amortization		(44,088	)		(37,764	)		(87,162	)		(72,636	)
Impairment losses		(5,394	)		—			(5,394	)		—
General and administrative		(25,144	)		(20,111	)		(48,191	)		(38,060	)
Other expenses		296			792			(241	)		(738	)
Fund costs		(479	)		(380	)		(1,093	)		(744	)
Total costs and expenses		(119,692	)		(97,379	)		(232,481	)		(191,678	)
OTHER INCOME AND EXPENSES
Equity in earnings of unconsolidated joint ventures, net		8,278			7,188			10,366			8,430
Other income		1,933			1,667			4,998			1,804
Gains from dispositions of real estate interests		—			17,622			—			18,923
Development profits, net of taxes		45,698			1,975			46,372			19,924
Interest expense, including amortization		(44,075	)		(37,186	)		(83,800	)		(74,011	)
Total other income and expenses, net		11,834			(8,734	)		(22,064	)		(24,930	)
Income before minority interests, discontinued operations and cumulative effect of change in accounting principle		72,415			51,695			106,738			97,352
Minority interests’ share of income:
Joint venture partners’ share of income before minority interests and discontinued operations		(9,060	)		(8,893	)		(17,731	)		(18,242	)
Joint venture partners’ share of development profits		(1,619	)		(284	)		(1,651	)		(10,120	)
Preferred unitholders		(4,024	)		(5,368	)		(9,025	)		(10,736	)
Limited partnership unitholders		(495	)		(849	)		(1,311	)		(1,379	)
Total minority interests’ share of income		(15,198	)		(15,394	)		(29,718	)		(40,477	)
Income from continuing operations before cumulative effect of change in accounting principle		57,217			36,301			77,020			56,875
Discontinued operations:
Income (loss) attributable to discontinued operations, net of minority interests		1,063			(882	)		1,630			(2,634	)
Gains from dispositions of real estate, net of minority interests		17,073			5,370			24,087			33,315
Total discontinued operations		18,136			4,488			25,717			30,681
Net income before cumulative effect of change in accounting principle		75,353			40,789			102,737			87,556
Cumulative effect of change in accounting principle		—			—			193			—
Net income		75,353			40,789			102,930			87,556
Preferred stock dividends		(3,095	)		(1,783	)		(6,191	)		(3,566	)
Preferred unit redemption discount/(issuance costs)		77			—			(1,020	)		—
Net income available to common stockholders	$	72,335		$	39,006		$	95,719		$	83,990
Basic income per common share
Income from continuing operations (after preferred stock dividends) before cumulative effect of change in accounting principle	$	0.62		$	0.42		$	0.80		$	0.64
Discontinued operations		0.21			0.05			0.30			0.37
Cumulative effect of change in accounting principle		—			—			—			—
Net income available to common stockholders	$	0.83		$	0.47		$	1.10		$	1.01
Diluted income per common share
Income from continuing operations (after preferred stock dividends) before cumulative effect of change in accounting principle	$	0.60		$	0.40		$	0.77		$	0.62
Discontinued operations		0.20			0.05			0.29			0.35
Cumulative effect of change in accounting principle		—			—			—			—
Net income available to common stockholders	$	0.80		$	0.45		$	1.06		$	0.97
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING
Basic		87,317,494			83,521,538			86,915,959			83,339,366
Diluted		90,135,659			87,076,011			90,147,493			86,845,858

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

2

AMB PROPERTY CORPORATION

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

For the Six Months Ended June 30, 2006

														Accumulated
				Common Stock				Additional						Other
	Preferred			Number				Paid-In			Retained			Comprehensive
	Stock			of Shares		Amount		Capital			Earnings			Income (Loss)			Total
	(Unaudited, dollars in thousands, except share amounts)
Balance as of December 31, 2005	$	175,548			85,814,905	$	857	$	1,641,186		$	101,124		$	(2,416	)	$	1,916,299
Net income		6,191			—		—		—			95,719			—
Unrealized gain on securities and derivatives		—			—		—		—			—			1,183
Currency translation adjustment		—			—		—		—			—			1,606
Total comprehensive income		—																104,699
Stock-based compensation amortization and issuance of restricted stock		—			407,558		4		10,937			—			—			10,941
Exercise of stock options		—			1,865,682		19		33,381			—			—			33,400
Conversion of partnership units		—			11,318		—		576			—			—			576
Forfeiture of restricted stock		—			—		—		(1,263	)		—			—			(1,263	)
Cumulative effect of change in accounting principle		—			—		—		(193	)		—			—			(193	)
Reallocation of partnership interest		—			—		—		1,064			—			—			1,064
Offering costs		(217	)		—		—		—			—			—			(217	)
Dividends		(6,191	)		—		—		—			(80,970	)		—			(87,161	)
Balance as of June 30, 2006	$	175,331			88,099,463	$	880	$	1,685,688		$	115,873		$	373		$	1,978,145

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

3

AMB PROPERTY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended June 30, 2006 and 2005

	2006			2005
	(Unaudited, dollars in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	102,930		$	87,556
Adjustments to net income:
Straight-line rents and amortization of lease intangibles		(11,300	)		(9,361	)
Depreciation and amortization		87,162			72,636
Impairment losses		5,394			—
Stock-based compensation amortization		10,941			6,944
Equity in earnings of unconsolidated joint ventures		(10,366	)		(8,430	)
Operating distributions received from unconsolidated joint ventures		1,147			663
Gains from dispositions of real estate interest		—			(18,923	)
Development profits, net of taxes		(46,372	)		(19,924	)
Debt premiums, discounts and finance cost amortization, net		5,247			1,671
Total minority interests’ share of net income		29,718			40,477
Discontinued operations:
Depreciation and amortization		544			16,416
Joint venture partners’ share of net income		(295	)		4,329
Limited partnership unitholders’ share of net income		81			(149	)
Gains from dispositions of real estate, net of minority interests		(24,087	)		(33,315	)
Cumulative effect of change in accounting principle		(193	)		—
Changes in assets and liabilities:
Accounts receivable and other assets		13,635			(40,086	)
Accounts payable and other liabilities		(4,239	)		(18,991	)
Net cash provided by operating activities		159,947			81,513
CASH FLOWS FROM INVESTING ACTIVITIES
Change in restricted cash		5,353			4,046
Cash paid for property acquisitions		(311,507	)		(193,470	)
Additions to land, buildings, development costs, building improvements and lease costs		(497,947	)		(221,573	)
Net proceeds from divestiture of real estate		149,559			237,649
Additions to interests in unconsolidated joint ventures		(5,121	)		(54,805	)
Capital distributions received from unconsolidated joint ventures		13,633			—
Repayment and (issuance) of mortgage and loan receivables		2,805			(7,944	)
Net cash used in investing activities		(643,225	)		(236,097	)
CASH FLOWS FROM FINANCING ACTIVITIES
Issuance of common stock, proceeds from stock option exercises		33,400			16,255
Borrowings on secured debt		196,149			65,892
Payments on secured debt		(208,377	)		(52,607	)
Borrowings on other debt		65,000			—
Payments on other debt		(746	)		(318	)
Borrowings on unsecured credit facilities		646,509			501,024
Payments on unsecured credit facilities		(252,828	)		(279,026	)
Payment of financing fees		(5,736	)		(3,315	)
Net proceeds from issuances of senior debt		99,456			—
Payments on senior debt		(25,000	)		—
Issuance costs on preferred stock or units		(217	)		—
Repurchase of preferred units		(88,180	)		—
Contributions from co-investment partners		124,185			99,377
Dividends paid to common and preferred stockholders		(86,536	)		(75,868	)
Distributions to minority interests, including preferred units		(52,810	)		(83,236	)
Net cash provided by financing activities		444,269			188,178
Net effect of exchange rate changes on cash		8,473			(4,024	)
Net (decrease) increase in cash and cash equivalents		(30,536	)		29,570
Cash and cash equivalents at beginning of period		232,881			109,392
Cash and cash equivalents at end of period	$	202,345		$	138,962
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest, net of capitalized interest	$	77,244		$	84,640
Non-cash transactions:
Acquisition of properties	$	399,625		$	217,674
Assumption of secured debt		(61,006	)		(15,477	)
Assumption of other assets and liabilities		(19,096	)		(2,871	)
Acquisition capital		(8,016	)		(5,856	)
Net cash paid for property acquisitions	$	311,507		$	193,470
Preferred unit redemption issuance costs	$	1,020		$	—
Contribution of properties to unconsolidated joint ventures, net	$	126,067		$	27,282

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

4

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 2006
(unaudited)

1.   Organization and Formation of the Company

AMB Property Corporation, a Maryland corporation (the “Company”), commenced operations as a fully integrated real estate company effective with the completion of its initial public offering on November 26, 1997. The Company elected to be taxed as a real estate investment trust (“REIT”) under Sections 856 through 860 of the Internal Revenue Code of 1986 (the “Code”), commencing with its taxable year ended December 31, 1997, and believes its current organization and method of operation will enable it to maintain its status as a REIT. The Company, through its controlling interest in its subsidiary, AMB Property, L.P., a Delaware limited partnership (the “Operating Partnership”), is engaged in the acquisition, development and operation of industrial properties in key distribution markets throughout North America, Europe and Asia. The Company uses the terms “industrial properties” or “industrial buildings” to describe various types of industrial properties in its portfolio and uses these terms interchangeably with the following: logistics facilities, centers or warehouses; distribution facilities, centers or warehouses; High Throughput Distribution^® (“HTD^®”) facilities; or any combination of these terms. Unless the context otherwise requires, the “Company” means AMB Property Corporation, the Operating Partnership and their other controlled subsidiaries.

As of June 30, 2006, the Company owned an approximate 95.3% general partnership interest in the Operating Partnership, excluding preferred units. The remaining approximate 4.7% common limited partnership interests are owned by non-affiliated investors and certain current and former directors and officers of the Company. Certain properties are owned through limited partnerships, limited liability companies and other entities. The ownership of such properties through such entities does not materially affect the Company’s overall ownership interests in the properties. As the sole general partner of the Operating Partnership, the Company has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Operating Partnership. Net operating results of the Operating Partnership are allocated after preferred unit distributions based on the respective partners’ ownership interests.

Through the Operating Partnership, the Company enters into co-investment joint ventures with institutional investors. These co-investment joint ventures provide the Company with an additional source of capital and income. As of June 30, 2006, the Company had investments in seven consolidated (including one consolidated joint venture in liquidation) and two unconsolidated co-investment joint ventures.

AMB Capital Partners, LLC, a Delaware limited liability company (“AMB Capital Partners”), provides real estate investment services to clients on a fee basis. Headlands Realty Corporation, a Maryland corporation, conducts a variety of businesses that include development projects available for sale or contribution to third parties and incremental income programs. IMD Holding Corporation, a Delaware corporation, also conducts a variety of businesses that include development projects available for sale or contribution to third parties. AMB Capital Partners, Headlands Realty Corporation and IMD Holding Corporation are wholly-owned direct or indirect subsidiaries of the Company and the Operating Partnership.

As of June 30, 2006, the Company owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, or managed buildings, properties and development projects expected to total approximately 123.1 million rentable square feet (11.4 million square meters) and 1,118 buildings in 41 markets within eleven countries. The Company’s strategy is to become a leading provider of distribution properties in supply-constrained submarkets located near key international passenger and cargo airports, highway systems and seaports in major metropolitan areas of North America, Europe and Asia. These submarkets are generally tied to global trade.

5

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Of the approximately 123.1 million rentable square feet as of June 30, 2006:

•  on a consolidated basis, the Company owned or partially owned 928 industrial buildings, principally warehouse distribution buildings, encompassing approximately 92.2 million rentable square feet that were 95.4% leased;

•  the Company managed, but did not have an ownership interest in, industrial and other properties, totaling approximately 1.5 million rentable square feet;

•  through unconsolidated joint ventures, the Company had investments in 88 industrial operating properties, totaling approximately 14.2 million rentable square feet, and in one industrial development project, expected to total approximately 0.2 million rentable square feet;

•  on a consolidated basis, the Company had investments in 46 industrial development projects which are expected to total approximately 14.0 million rentable square feet upon completion; and

•  on a consolidated basis, the Company owned four development projects, with a total estimated investment of approximately $89.4 million and approximately 1.0 million rentable square feet, that were available for sale or contribution.

2.   Interim Financial Statements

The consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission. Accordingly, certain information and note disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments of a normal, recurring nature, necessary for a fair presentation of the Company’s consolidated financial position and results of operations for the interim periods. The interim results for the three and six months ended June 30, 2006 are not necessarily indicative of future results. These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2005.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Investments in Real Estate.  Investments in real estate and leasehold interests are stated at cost unless circumstances indicate that cost cannot be recovered, in which case, the carrying value of the property is reduced to estimated fair value. The Company also regularly reviews the impact of above or below-market leases, in-place leases and lease origination costs for all new acquisitions, and records an intangible asset or liability accordingly. Carrying values for financial reporting purposes are reviewed for impairment on a property-by-property basis whenever events or changes in circumstances indicate that the carrying value of a property may not be fully recoverable. Impairment is recognized when estimated expected future cash flows (undiscounted and without interest charges) are less than the carrying value of the property. The estimation of expected future net cash flows is inherently uncertain and relies on assumptions regarding current and future economics and market conditions and the availability of capital. If impairment analysis assumptions change, then an adjustment to the carrying value of the Company’s long-lived assets could occur in the future period in which the assumptions change. To the extent that a property is impaired, the excess of the carrying amount of the property over its estimated fair value is charged to earnings. As a result of leasing activity and the economic environment, the Company re-evaluated the carrying

6

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

value of its investments and recorded an impairment charge of $5.4 million during the three and six months ended June 30, 2006, on certain of its investments.

Reclassifications.  Certain items in the consolidated financial statements for prior periods have been reclassified to conform to current classifications.

Comprehensive Income.  The Company reports comprehensive income in its Statement of Stockholders’ Equity. Comprehensive income was $77.2 million and $38.7 million for the three months ended June 30, 2006 and 2005, respectively. Comprehensive income was $104.7 million and $84.2 million for the six months ended June 30, 2006 and 2005, respectively.

International Operations.  The U.S. dollar is the functional currency for the Company’s subsidiaries operating in the United States and Mexico. The functional currency for the Company’s subsidiaries operating outside the United States and Mexico is generally the local currency of the country in which the entity is located. The Company’s subsidiaries whose functional currency is not the U.S. dollar translate their financial statements into U.S. dollars. Assets and liabilities are translated at the exchange rate in effect as of the financial statement date. The Company translates income statement accounts using the average exchange rate for the period and significant nonrecurring transactions using the rate on the transaction date. These gains (losses) are included in accumulated other comprehensive income (loss) as a separate component of stockholders’ equity.

The Company’s international subsidiaries may have transactions denominated in currencies other than their functional currency. In these instances, non-monetary assets and liabilities are reflected at the historical exchange rate, monetary assets and liabilities are remeasured into the functional currency at the exchange rate in effect at the end of the period and income statement accounts are remeasured at the average exchange rate for the period. These gains (losses) are included in the Company’s results of operations.

The Company also records gains or losses in the income statement when a transaction with a third party, denominated in a currency other than the entity’s functional currency, is settled and the functional currency cash flows realized are more or less than expected based upon the exchange rate in effect when the transaction was initiated.

New Accounting Pronouncements.  In June 2005, the Emerging Issues Task Force (“EITF”) issued EITF 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights. Under this consensus, a sole general partner is presumed to control a limited partnership (or similar entity) and should consolidate that entity unless the limited partners possess kick-out rights or other substantive participating rights as described in 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. The Company adopted the consolidation requirements of this consensus in the third quarter of 2005 for all new or modified agreements and adopted the consensus for existing agreements during the first quarter of 2006. There was not a material impact on the Company’s financial position, results of operations or cash flows upon adoption.

3.   Real Estate Acquisition and Development Activity

Acquisition Activity.  During the three months ended June 30, 2006, the Company acquired 27 industrial buildings, aggregating approximately 2.5 million square feet for a total expected investment of $246.8 million. During the six months ended June 30, 2006, the Company acquired 59 industrial buildings, aggregating approximately 4.6 million square feet for a total expected investment of $400.1 million, of which the Company acquired 38 buildings through two of the Company’s co-investment joint ventures. During the three months ended June 30, 2005, the Company acquired twelve industrial buildings, aggregating approximately 2.1 million square feet for a total expected investment of $139.9 million. During the six months ended June 30, 2005, the Company acquired 18 industrial buildings, aggregating approximately 2.9 million square feet for a total expected investment of

7

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$217.7 million, of which the Company acquired 13 buildings through three of the Company’s co-investment joint ventures.

Development Starts.  For the three months ended June 30, 2006, the Company initiated four new industrial development projects in North America and Asia with a total estimated investment of $134.6 million, aggregating an estimated 2.0 million square feet. During the six months ended June 30, 2006, the Company initiated 11 new industrial development projects in North America and Asia with a total expected investment of $353.4 million, aggregating approximately 4.9 million square feet. During the three months ended June 30, 2005, the Company initiated six new industrial development projects in North America with a total expected investment of $82.1 million, aggregating approximately 1.7 million square feet. During the six months ended June 30, 2005, the Company initiated 13 new industrial development projects in North America and Amsterdam with a total expected investment of $172.1 million, aggregating approximately 2.6 million square feet.

Development Completions.  During the three months ended June 30, 2006, the Company completed four industrial buildings with a total investment of $55.0 million, aggregating approximately 0.5 million square feet. Three of these completed buildings with a total investment of $52.5 million and aggregating approximately 0.5 million square feet were placed in operations and one approximately 32,000 square foot building with a total investment of $2.5 million was sold to a third party. During the six months ended June 30, 2006, the Company completed 11 industrial buildings with a total investment of $347.3 million, aggregating 2.6 million square feet. Five of these completed buildings with a total investment of $77.5 million and aggregating approximately 0.8 million square feet were placed in operations, one 0.8 million square foot building with a total investment of $177.9 million was contributed to an unconsolidated joint venture, one approximately 32,000 square foot building with a total investment of $2.5 million was sold to a third party, and four buildings with a total investment of $89.4 million aggregating approximately 1.0 million square feet were available for sale or contribution as of June 30, 2006. During the three months ended June 30, 2005, the Company completed five industrial buildings with a total investment of $79.2 million, aggregating approximately 1.3 million square feet. Four of these completed buildings with a total investment of $59.1 million and aggregating approximately 0.9 million square feet were placed in operations and one approximately 0.4 million square foot building with a total investment of $20.1 million was contributed to an unconsolidated joint venture. During the six months ended June 30, 2005, the Company completed seven industrial buildings with a total investment of $96.0 million, aggregating 1.5 million square feet. Six of these completed buildings with a total investment of $75.9 million and aggregating approximately 1.1 million square feet were placed in operations, and one approximately 0.4 million square foot building with a total investment of $20.1 million was contributed to an unconsolidated joint venture.

Development Pipeline.  As of June 30, 2006, the Company had 47 industrial projects in its development pipeline, which will total approximately 14.2 million square feet, and will have an aggregate estimated investment of $1.1 billion upon completion. One of these industrial projects, with a total of approximately 0.2 million square feet and an aggregate estimated investment of $12.6 million upon completion, is held in an unconsolidated joint venture. The Company has an additional four development projects available for sale or contribution totaling approximately 1.0 million square feet, with an aggregate estimated investment of $89.4 million. As of June 30, 2006, the Company and its joint venture partners had funded an aggregate of $656.5 million and needed to fund an estimated additional $487.5 million in order to complete its development pipeline. The Company’s development pipeline currently includes projects expected to be completed through the second quarter of 2008. In addition, during the three months ended June 30, 2006, the Company acquired 129 acres of land for industrial warehouse development in North America and Asia for approximately $72.1 million. During the six months ended June 30, 2006, the Company acquired 340 acres of land for industrial warehouse development in North America and Asia for approximately $165.6 million.

8

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

4.   Gains from Dispositions of Real Estate Interests, Development Profits and Discontinued Operations

Development Sales.  During the three months ended June 30, 2006, the Company sold an approximately 32,000 square foot development project for $2.9 million, resulting in an after-tax gain of $0.1 million. In addition, during the three and six months ended June 30, 2006, the Company received approximately $0.4 million in connection with the condemnation of a parcel of land resulting in a loss of $1.0 million, $0.8 million of which was the joint venture partner’s share. For the six months ended June 30, 2006, the Company sold one land parcel and an approximately 32,000 square foot development project for an aggregate sale price of $7.6 million, resulting in an after-tax gain of $0.8 million. During the three months ended June 30, 2005, the Company sold one approximately 19,000 square foot development project for $2.1 million resulting in an after-tax gain of $0.1 million. During the six months ended June 30, 2005, the Company sold two land parcels and two development projects, aggregating approximately 43,000 square feet for an aggregate price of $45.0 million, resulting in an after-tax gain of $18.2 million, of which $9.9 million was the joint venture partners’ share.

Discontinued Operations.  The Company reported its property divestitures as discontinued operations separately as prescribed under the provisions of SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. During the three months ended June 30, 2006, the Company divested itself of eight industrial buildings, aggregating approximately 0.5 million square feet, for an aggregate price of $37.1 million, with a resulting net gain of $17.1 million. During the six months ended June 30, 2006, the Company divested itself of 12 industrial buildings, aggregating approximately 0.9 million square feet, for an aggregate price of $53.9 million, with a resulting net gain of $24.1 million. During the three months ended June 30, 2005, the Company divested itself of four industrial buildings, aggregating approximately 0.3 million square feet, for an aggregate price of $33.2 million, with a resulting net gain of $5.4 million. During the six months ended June 30, 2005, the Company divested itself of 28 industrial buildings, aggregating approximately 1.9 million square feet, for an aggregate price of $175.3 million, with a resulting net gain of $33.3 million.

Development Contributions.  During the three months ended June 30, 2006, the Company contributed one completed development project totaling approximately 0.8 million square feet into AMB Japan Fund I, L.P., and one completed development project totaling approximately 0.6 million square feet into AMB-SGP Mexico, LLC, both unconsolidated joint ventures. As a result of these contributions, the Company recognized an aggregate after-tax gain of $46.6 million representing the portion of its interest in the contributed properties acquired by the third-party co-investors for cash. No other contributions were made during the six months ended June 30, 2006. During the three months ended June 30, 2005, the Company contributed one completed development project totaling approximately 0.4 million square feet into AMB-SGP Mexico, LLC and recognized a gain of $1.9 million. For the six months ended June 30, 2005, the Company recognized a gain of $1.3 million, representing the additional value received from the contribution of a property to AMB-SGP Mexico, LLC during 2004.

Gains from Dispositions of Real Estate Interests.   On June 30, 2005, the Company contributed $106.9 million (using the exchange rate in effect at contribution) in operating properties, consisting of six industrial buildings, aggregating approximately 0.9 million square feet, to its then newly formed unconsolidated co-investment joint venture, AMB Japan Fund I, L.P. The Company recognized a gain of $17.6 million on the contribution, representing the portion of its interest in the contributed properties acquired by the third-party investors for cash.

Properties Held for Contribution.  As of June 30, 2006, the Company held for contribution to a co-investment joint venture three industrial buildings with an aggregate net book value of $72.0 million, which, when contributed to a joint venture, will reduce the Company’s current ownership interest from approximately 100% to an expected range of 20-50%. These assets are not being held for divestiture under SFAS No. 144.

Properties Held for Divestiture.  As of June 30, 2006, the Company held for divestiture five industrial buildings and one land parcel with an aggregate net book value of $46.9 million. These properties either are not in the Company’s core markets or do not meet its current strategic objectives, or are included as part of its development-for-sale program. The divestitures of the properties are subject to negotiation of acceptable terms

9

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

and other customary conditions. Properties held for divestiture are stated at the lower of cost or estimated fair value less costs to sell.

The following summarizes the condensed results of operations of the properties held for divestiture and sold under SFAS No. 144 (dollars in thousands):

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2006			2005			2006			2005
Rental revenues	$	248		$	16,809		$	1,094		$	36,948
Straight-line rents and amortization of lease intangibles		114			41			314			256
Property operating expenses		33			(2,941	)		(580	)		(6,574	)
Real estate taxes		(73	)		(2,017	)		(169	)		(4,598	)
Depreciation and amortization		(350	)		(7,166	)		(544	)		(16,416	)
Other income and (expenses), net		180			(25	)		181			(34	)
Interest, including amortization		801			(3,558	)		1,120			(8,036	)
Joint venture partners’ share of loss (income)		163			(2,075	)		295			(4,329	)
Limited partnership unitholders’ share of (income) loss		(53	)		50			(81	)		149
Income (loss) attributable to discontinued operations	$	1,063		$	(882	)	$	1,630		$	(2,634	)

As of June 30, 2006 and December 31, 2005, assets and liabilities attributable to properties held for divestiture under the provisions of SFAS No. 144 consisted of the following (dollars in thousands):

	June 30,		December 31,
	2006		2005
Accounts receivable, net	$	2,134	$	1,182
Other assets	$	164	$	56
Accounts payable and other liabilities	$	4,402	$	1,180

5.   Mortgage and Loan Receivables

Through a wholly-owned subsidiary, the Company holds a mortgage loan receivable on AMB Pier One, LLC, an unconsolidated joint venture. The Company also holds a loan receivable on G.Accion S.A. de C.V. (“G.Accion”), an unconsolidated equity investment. The Company’s mortgage and loan receivables at June 30, 2006 and December 31, 2005 consisted of the following (dollars in thousands):

			June 30,		December 31,
Mortgage and Loan Receivables	Market	Maturity	2006		2005		Rate
1. Pier 1	SF Bay Area	May 2026	$	12,755	$	12,821		13.0	%
2. G.Accion	Various	November 2006		6,061		8,800		10.0	%
Total Mortgage and Loan Receivables			$	18,816	$	21,621

10

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

6.   Debt

As of June 30, 2006 and December 31, 2005, debt consisted of the following (dollars in thousands):

	June 30,			December 31,
	2006			2005
Wholly-owned secured debt, varying interest rates from 0.8% to 10.4%, due November 2006 to December 2022 (weighted average interest rate of 4.6% and 4.1% at June 30, 2006 and December 31, 2005, respectively)	$	365,817		$	522,459
Consolidated joint venture secured debt, varying interest rates from 3.5% to 9.4%, due October 2006 to January 2025 (weighted average interest rates of 6.3% and 6.3% at June 30, 2006 and December 31, 2005, respectively)		1,454,493			1,378,083
Unsecured senior debt securities, varying interest rates from 3.5% to 8.0%, due November 2006 to June 2018 (weighted average interest rates of 6.2% and 6.2% at June 30, 2006 and December 31, 2005, respectively)		1,062,491			987,491
Other debt, varying interest rates from 6.7% to 8.6%, due August 2006 to November 2015 (weighted average interest rates of 7.3% and 8.2% at June 30, 2006 and December 31, 2005, respectively)		88,217			23,963
Unsecured credit facilities, variable interest rate, due June 2007 to June 2010 (weighted average interest rates of 3.2% and 2.2% at June 30, 2006 and December 31, 2005, respectively)		904,452			490,072
Total debt before unamortized net (discounts)		3,875,470			3,402,068
Unamortized net (discounts)		(1,584	)		(507	)
Total consolidated debt	$	3,873,886		$	3,401,561

Secured debt generally requires monthly principal and interest payments. Some of the secured loans are cross-collateralized by multiple properties. The secured debt is secured by deeds of trust or mortgages on certain properties and is generally non-recourse. As of June 30, 2006 and December 31, 2005, the total gross investment book value of those properties securing the debt was $3.7 billion and $3.6 billion, respectively, including $2.7 billion and $2.5 billion, respectively, in consolidated joint ventures. As of June 30, 2006, $1.5 billion of the secured debt obligations bore interest at fixed rates with a weighted average interest rate of 6.0% while the remaining $282.2 million bore interest at variable rates (with a weighted average interest rate of 4.1%).

As of June 30, 2006, the Operating Partnership had outstanding an aggregate of $1.1 billion in unsecured senior debt securities, which bore a weighted average interest rate of 6.2% and had an average term of 4.4 years. These unsecured senior debt securities include $300.0 million in notes issued in June 1998, $225.0 million of medium-term notes, which were issued under the Operating Partnership’s 2000 medium-term note program, $325.0 million of medium-term notes, which were issued under the Operating Partnership’s 2002 medium-term note program, and approximately $112.5 million of 5.094% Notes Due 2015, which were issued to Teachers Insurance and Annuity Association of America on July 11, 2005 in a private placement, in exchange for the cancelled $100.0 million of notes that were issued in June 1998 resulting in a discount of approximately $12.5 million. The unsecured senior debt securities are subject to various covenants. Also included is a $100.0 million term loan which matures in December 2006. Management believes that the Company and the Operating Partnership were in compliance with their financial covenants as of June 30, 2006.

As of June 30, 2006, the Company had $88.2 million outstanding in other debt which bore a weighted average interest rate of 7.3% and had an average term of 5.7 years. Other debt includes a $65.0 million non-recourse credit facility obtained by AMB Partners II which had a $65.0 million balance outstanding as of June 30, 2006, and the Company also had $23.2 million outstanding in other non-recourse debt.

11

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

On June 1, 2006, the Operating Partnership entered into a third amended and restated $550.0 million (includes Euros, Yen or U.S. Dollar denominated borrowings) unsecured revolving credit agreement that replaced its then-existing $500.0 million credit facility, which was to mature on June 1, 2007. The Company is a guarantor of the Operating Partnership’s obligations under the credit facility. The line, which matures on June 2010, carries a one-year extension option, can be increased up to $700.0 million upon certain conditions. The rate on the borrowings is generally LIBOR plus a margin, based on the Operating Partnership’s long-term debt rating, which was 42.5 basis points as of June 30, 2006, with an annual facility fee of 15 basis points. The Operating Partnership uses its unsecured credit facility principally for acquisitions, funding development activity and general working capital requirements. As of June 30, 2006, the outstanding balance on the credit facility was $380.8 million and the remaining amount available was $143.6 million, net of outstanding letters of credit of $25.6 million.

The outstanding balance included borrowings denominated in Euros, which, using the exchange rate in effect on June 30, 2006, equaled approximately $250.8 million in U.S. dollars. The revolving credit facility contains affirmative covenants, including compliance with financial reporting requirements and maintenance of specified financial ratios, and negative covenants, including limitations on the incurrence of liens and limitations on mergers or consolidations. Management believes that the Company and the Operating Partnership were in compliance with their financial covenants under this revolving line of credit agreement at June 30, 2006.

On June 23, 2006, AMB Japan Finance Y.K., a subsidiary of the Operating Partnership and as the initial borrower, entered into an amended and restated revolving credit agreement for a 45.0 billion Yen unsecured revolving credit facility, which, using the exchange rate in effect on June 30, 2006, equaled approximately $393.0 million U.S. dollars. This replaced the 35.0 billion Yen unsecured revolving credit facility executed on June 29, 2004, as previously amended, which using the exchange rate in effect on June 30, 2006, equaled approximately $306.0 million U.S. dollars. The Company, along with the Operating Partnership guarantees the obligations of AMB Japan Finance Y.K. under the revolving credit facility, as well as the obligations of any other entity in which the Operating Partnership directly or indirectly owns an ownership interest and which is selected from time to time to be a borrower under and pursuant to the revolving credit agreement. The borrowers intend to use the proceeds from the facility to fund the acquisition and development of properties and for other real estate purposes in Japan, China and South Korea. Generally, borrowers under the revolving credit facility have the option to secure all or a portion of the borrowings under the revolving credit facility with certain real estate assets or equity in entities holding such real estate assets. The revolving credit facility matures in June 2010 and has a one-year extension option. The credit facility can be increased up to 55.0 billion Yen, which, using the exchange rate in effect on June 30, 2006, equaled approximately $481.0 million U.S. dollars. The extension option is subject to the satisfaction of certain conditions and the payment of an extension fee equal to 0.15% of the outstanding commitments under the facility at that time. The rate on the borrowings is generally TIBOR plus a margin, which is based on the credit rating of the Operating Partnership’s long-term debt and was 42.5 basis points as of June 30, 2006. In addition, there is an annual facility fee, payable in quarterly amounts, which is based on the credit rating of the Operating Partnership’s long-term debt, and was 15 basis points of the outstanding commitments under the facility as of June 30, 2006. As of June 30, 2006, the outstanding balance on this credit facility, using the exchange rate in effect on June 30, 2006, was $286.7 million in U.S. dollars. The revolving credit facility contains affirmative covenants, including financial reporting requirements and maintenance of specified financial ratios, and negative covenants, including limitations on the incurrence of liens and limitations on mergers or consolidations. Management believes that the Company, the Operating Partnership and AMB Japan Finance Y.K. were in compliance with their financial covenants under this revolving credit agreement at June 30, 2006.

On June 13, 2006, the Operating Partnership and certain of its consolidated subsidiaries entered into a fourth amended and restated credit agreement for a $250.0 million unsecured revolving credit facility, which replaced the third amended and restated credit agreement for a $250.0 million unsecured credit facility. On February 16, 2006, the third amended and restated credit agreement replaced the then-existing $100.0 million unsecured revolving credit facility that was to mature in June 2008. The Company, along with the Operating Partnership, guarantees the obligations for such subsidiaries and other entities controlled by the Company or the Operating Partnership that are

12

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

selected to be borrowers by the Operating Partnership from time to time under and pursuant to the credit facility. The four-year credit facility includes a multi-currency component under which up to $250.0 million can be drawn in U.S. dollars, Hong Kong dollars, Singapore dollars, Canadian dollars and Euros. The line, which matures in February 2010 and carries a one-year extension option, can be increased to up to $350.0 million upon certain conditions and the payment of an extension fee equal to 0.15% of the outstanding commitments. The rate on the borrowings is generally LIBOR plus a margin, based on the credit rating of the Operating Partnership’s senior unsecured long-term debt, which was 60 basis points as of June 30, 2006, with an annual facility fee based on the credit rating of the Operating Partnership’s senior unsecured long-term debt. The credit agreement contains affirmative covenants, including financial reporting requirements and maintenance of specified financial ratios by the Operating Partnership, and negative covenants, including limitations on the incurrence of liens and limitations on mergers or consolidations. Management believes that the Company and the Operating Partnership were in compliance with their financial covenants under this revolving credit agreement at June 30, 2006. The borrowers intend to use the proceeds from the facility to fund the acquisition and development of properties and general working capital requirements. As of June 30, 2006, the outstanding balance on this facility was approximately $237.0 million.

As of June 30, 2006, the scheduled maturities of the Company’s total debt, excluding unamortized secured debt premiums and discounts, were as follows (dollars in thousands):

	Wholly-		Consolidated
	owned		Joint Venture		Unsecured
	Secured		Secured		Senior		Credit		Other
	Debt		Debt		Debt		Facilities		Debt		Total
2006	$	45,567	$	66,699	$	150,000	$	—	$	15,534	$	277,800
2007		13,385		58,356		75,000		—		752		147,493
2008		42,069		179,272		175,000		—		810		397,151
2009		4,044		122,366		100,000		—		873		227,283
2010		69,865		118,834		250,000		904,452		941		1,344,092
2011		21,681		363,111		75,000		—		1,014		460,806
2012		98,749		172,120		—		—		1,093		271,962
2013		26,183		217,175		—		—		65,920		309,278
2014		16,262		5,460		—		—		616		22,338
2015		2,106		118,403		112,491		—		664		233,664
Thereafter		25,906		32,697		125,000		—		—		183,603
Total	$	365,817	$	1,454,493	$	1,062,491	$	904,452	$	88,217	$	3,875,470

7.   Minority Interests in Consolidated Joint Ventures and Preferred Units

Minority interests in the Company represent the limited partnership interests in the Operating Partnership, limited partnership interests in AMB Property II, L.P., a Delaware limited partnership, and interests held by certain third parties in several real estate joint ventures, aggregating approximately 45.1 million square feet, which are consolidated for financial reporting purposes. Such investments are consolidated because the Company exercises significant rights over major operating decisions such as approval of budgets, selection of property managers, asset management, investment activity and changes in financing. These joint venture investments do not meet the variable interest entity criteria under FASB Interpretation No. 46R, Consolidation of Variable Interest Entities.

Through the Operating Partnership, the Company enters into co-investment joint ventures with institutional investors. The Company’s co-investment joint ventures are engaged in the acquisition, ownership, operation, management and, in some cases, the renovation, expansion and development of industrial buildings in target markets in North America.

13

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The Company’s consolidated co-investment joint ventures’ total investment and property debt at June 30, 2006 and December 31, 2005 (dollars in thousands) were:

					Total Investment
		Company’s			in Real Estate(6)				Secured Debt(7)
		Ownership			June 30,		December 31,		June 30,		December 31,
Co-investment Joint Venture	Joint Venture Partner	Percentage			2006		2005		2006		2005
AMB/Erie, L.P.	Erie Insurance Company and affiliates		50	%	$	100,276	$	99,722	$	40,351	$	40,710
AMB Partners II, L.P.	City and County of San Francisco
	Employees’ Retirement System		20	%		657,034		592,115		284,851		291,684
AMB-SGP, L.P.	Industrial JV Pte Ltd (1)		50	%		439,962		436,713		237,589		239,944
AMB Institutional Alliance Fund II, L.P.	AMB Institutional Alliance REIT II, Inc.(2)		20	%		515,590		507,493		248,239		245,056
AMB-AMS, L.P.(3)	PMT, SPW and TNO (4)		39	%		148,501		146,007		62,286		63,143
AMB Institutional Alliance Fund III, L.P.	AMB Institutional Alliance REIT III, Inc.(5)		20	%		927,932		749,634		479,174		421,290
					$	2,789,295	$	2,531,684	$	1,352,490	$	1,301,827

(1)	A subsidiary of the real estate investment subsidiary of the Government of Singapore Investment Corporation.
(2)	Comprised of 14 institutional investors as stockholders and one third-party limited partner as of June 30, 2006.
(3)	AMB-AMS, L.P. is a co-investment partnership with three Dutch pension funds advised by Mn Services NV.
(4)	PMT is Stichting Pensioenfonds Metaal en Techniek, SPW is Stichting Pensioenfonds voor de Woningcorporaties and TNO is Stichting Pensioenfonds TNO.
(5)	AMB Institutional Alliance Fund III, L.P. is an open-ended co-investment partnership formed in 2004 with institutional investors.
(6)	The Company also had other consolidated joint ventures with total investments in real estate of $406.7 million and $378.7 million at June 30, 2006 and December 31, 2005, respectively.
(7)	The Company also had other consolidated joint ventures with secured debt of $109.6 million and $85.7 million at June 30, 2006 and December 31, 2005, respectively.

14

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table distinguishes the minority interests as of June 30, 2006 and December 31, 2005 (dollars in thousands):

	June 30,		December 31,		Redemption/Callable
	2006		2005		Date
Joint Venture Partners	$	950,209	$	853,643	N/A
Limited Partners in the Operating Partnership		86,728		86,164	N/A
Series J preferred units (liquidation preference of $40,000)		38,883		38,883	September 2006
Series K preferred units (liquidation preference of $40,000)		38,932		38,932	April 2007
Held through AMB Property II, L.P.:
Class B Limited Partners		2,977		2,950	N/A
Series D preferred units (liquidation preference of $79,767)		77,684		77,684	May 2004
Series E preferred units (liquidation preference of $11,022)		—		10,788	N/A
Series F preferred units (liquidation preference of $10,057)		9,900		9,900	March 2005
Series H preferred units (liquidation preference of $42,000)		—		40,912	N/A
Series I preferred units (liquidation preference of $25,500)		24,799		24,800	March 2006
Series N preferred units (liquidation preference of $36,479)		—		36,479	N/A
Total minority interests	$	1,230,112	$	1,221,135

The following table distinguishes the minority interests’ share of income, including minority interests’ share of development profits, but excluding minority interests’ share of discontinued operations for the three and six months ended June 30, 2006 and 2005 (dollars in thousands):

	For the Three Months				For the Six Months
	Ended June 30,				Ended June 30,
	2006		2005		2006		2005
Joint Venture Partners’ share of income	$	9,060	$	8,893	$	17,731	$	18,242
Joint Venture Partners’ share of development profits		1,619		284		1,651		10,120
Common limited partners in the Operating Partnership		479		816		1,269		1,335
Series J preferred units (liquidation preference of $40,000)		795		795		1,590		1,590
Series K preferred units (liquidation preference of $40,000)		795		795		1,590		1,590
Held through AMB Property II, L.P.:
Class B common limited partnership units		16		33		42		44
Series D preferred units (liquidation preference of $79,767)		1,546		1,546		3,091		3,091
Series E preferred units (liquidation preference of $11,022)		178		213		392		427
Series F preferred units (liquidation preference of $10,057)		200		200		400		400
Series H preferred units (liquidation preference of $42,000)		—		853		815		1,706
Series I preferred units (liquidation preference of $25,500)		510		510		1,020		1,020
Series N preferred units (liquidation preference of $36,479)		—		456		127		912
Total minority interests’ share of income	$	15,198	$	15,394	$	29,718	$	40,477

The Company has consolidated joint ventures that have finite lives under the terms of the partnership agreements. As of June 30, 2006 and December 31, 2005, the aggregate book value of the minority interests in the

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

accompanying consolidated balance sheets was approximately $950.2 million and $853.6 million, respectively, and the Company believes that the aggregate settlement value of these interests were approximately $1.4 billion and $1.2 billion, respectively. However, there can be no assurance that the aggregate settlement value of the interests will be as such. The aggregate settlement value is based on the estimated liquidation values of the assets and liabilities and the resulting proceeds that the Company would distribute to its joint venture partners upon dissolution, as required under the terms of the respective partnership agreements. There can be no assurance that the estimated liquidation values of the assets and liabilities and the resulting proceeds that the Company distributes upon dissolution will be the same as the actual liquidation values of such assets, liabilities and proceeds distributed upon dissolution. Subsequent changes to the estimated fair values of the assets and liabilities of the consolidated joint ventures will affect the Company’s estimate of the aggregate settlement value. The partnership agreements do not limit the amount that the minority partners would be entitled to in the event of liquidation of the assets and liabilities and dissolution of the respective partnerships.

Effective January 27, 2006, Robert Pattillo Properties, Inc. exercised its rights under its Put Agreement, dated September 24, 2004, with the Operating Partnership, and sold all 729,582 of its 5.00% Series N Cumulative Redeemable Preferred Limited Partnership Units in one of the Company’s subsidiaries, AMB Property II, L.P., to the Operating Partnership for an aggregate price of $36.6 million, including accrued and unpaid distributions. Also on January 27, 2006, AMB Property II, L.P. repurchased all of the 5.00% Series N Cumulative Redeemable Preferred Limited Partnership Units from the Operating Partnership for an aggregate price of $36.6 million and cancelled all of the outstanding series N preferred units as of such date.

On March 21, 2006, AMB Property II, L.P., repurchased all 840,000 of its outstanding 8.125% Series H Cumulative Redeemable Preferred Limited Partnership Units from a single institutional investor for an aggregate price of $42.8 million, including accrued and unpaid distributions. In addition, the Company recognized a reduction of income available to common stockholders of $1.1 million for the related original issuance costs.

On June 30, 2006, AMB Property II, L.P., repurchased all 220,440 of its outstanding 7.75% Series E Cumulative Redeemable Preferred Limited Partnership Units from a single institutional investor for an aggregate price of $10.9 million, including accrued and unpaid distributions. In addition, the Company recognized an increase in income available to common stockholders of $0.1 million for the discount on repurchase, net of original issuance costs.

8.   Investments in Unconsolidated Joint Ventures

The Company’s unconsolidated joint ventures’ net equity investments at June 30, 2006 and December 31, 2005 (dollars in thousands) were:

								Company’s
		Square		June 30,		December 31,		Ownership
Unconsolidated Joint Ventures	Market	Feet		2006		2005		Percentage
Co-Investment Joint Ventures
AMB-SGP Mexico, LLC	Various, Mexico		2,474,745	$	18,863	$	16,218		20	%
AMB Japan Fund I, L.P.	Various, Japan		1,960,480		18,311		10,112		20	%
Other Industrial Operating Joint Ventures			9,720,658		45,949		41,520		52	%
Other Industrial Development Joint Ventures			250,758		1,439		6,176		50	%
Other Investment — G. Accion	Various		n/a		38,545		44,627		39	%
Total Unconsolidated Joint Ventures			14,406,641	$	123,107	$	118,653

On December 30, 2004, the Company formed AMB-SGP Mexico, LLC, a joint venture with Industrial (Mexico) JV Pte Ltd, a real estate investment subsidiary of the Government of Singapore Investment Corporation, in which the Company retained a 20% interest. For the three and six months ended June 30, 2006, the Company recognized development profits of $3.4 million from the contribution of one completed development project for

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

$38.4 million aggregating approximately 0.6 million square feet. For the six months ended June 30, 2005, the Company recognized a gain of $1.3 million from disposition of real estate interests, representing the additional value received from the contribution of properties to AMB-SGP Mexico, LLC during 2004. For the three and six months ended June 30, 2005, the Company recognized development profits of $1.7 million from the contribution of one industrial building for $23.6 million aggregating approximately 0.4 million square feet.

On June 30, 2005, the Company formed AMB Japan Fund I, L.P., a joint venture with 13 institutional investors, in which the Company retained an approximate 20% interest. The 13 institutional investors have committed 49.5 billion Yen (approximately $432.6 million in U.S. dollars, using the exchange rate at June 30, 2006) for an approximate 80% equity interest. For the three and six months ended June 30, 2006, the Company recognized development profits of $43.2 million from the contribution of one completed development project for $243.0 million (using the exchange rate on the date of contribution) aggregating approximately 0.8 million square feet, to this fund. For the three and six months ended June 30, 2005, the Company contributed $106.9 million (using the exchange rate in effect at contribution) in operating properties, consisting of six industrial buildings, aggregating approximately 0.9 million square feet, to this fund. For the three and six months ended June 30, 2005, the Company recognized a gain of $17.6 million on the contribution, representing the portion of its interest in contributed properties acquired by the third-party investors for cash.

Under the agreements governing the joint ventures, the Company and the other parties to the joint ventures may be required to make additional capital contributions and, subject to certain limitations, the joint ventures may incur additional debt.

The Company also has a 0.1% unconsolidated equity interest (with an approximate 33% economic interest) in AMB Pier One, LLC, a joint venture related to the 2000 redevelopment of the pier which houses the Company’s office space in San Francisco. The investment is not consolidated because the Company does not exercise control over major operating decisions such as approval of budgets, selection of property managers, investment activity and changes in financing. The Company has an option to purchase the remaining equity interest beginning January 1, 2007 and expiring December 31, 2009, based on the fair market value as stipulated in the operating agreement. As of June 30, 2006, the Company also had an approximate 39.0% unconsolidated equity interest in G.Accion, a Mexican real estate company. G.Accion provides management and development services for industrial, retail, residential and office properties in Mexico. In addition, as of June 30, 2006, a subsidiary of the Company also had an approximate 5% interest in IAT Air Cargo Facilities Income Fund (IAT), a Canadian income trust specializing in aviation-related real estate at Canada’s leading international airports. This equity investment is included in other assets on the consolidated balance sheets.

9.   Stockholders’ Equity

Holders of common limited partnership units of the Operating Partnership and class B common limited partnership units of AMB Property II, L.P. have the right, commencing generally on or after the first anniversary of the holder becoming a limited partner of the Operating Partnership or AMB Property II, L.P., as applicable (or such other date agreed to by the Operating Partnership or AMB Property II, L.P. and the applicable unit holders), to require the Operating Partnership or AMB Property II, L.P., as applicable, to redeem part or all of their common units or class B common limited partnership units, as applicable, for cash (based upon the fair market value, as defined in the applicable partnership agreement, of an equivalent number of shares of common stock of the Company at the time of redemption) or the Operating Partnership or AMB Property II, L.P. may, in its respective sole and absolute discretion (subject to the limits on ownership and transfer of common stock set forth in the Company’s charter), elect to have the Company exchange those common units or class B common limited partnership units, as applicable, for shares of the Company’s common stock on a one-for-one basis, subject to adjustment in the event of stock splits, stock dividends, issuance of certain rights, certain extraordinary distributions and similar events. With each redemption or exchange of the Operating Partnership’s common units, the Company’s percentage ownership in the Operating Partnership will increase. Common limited partners and class B common

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

limited partners may exercise this redemption right from time to time, in whole or in part, subject to certain limitations. During the six months ended June 30, 2006, the Operating Partnership redeemed 11,318 of its common limited partnership units for an equivalent number of shares of the Company’s common stock.

The Company has authorized 100,000,000 shares of preferred stock for issuance, of which the following series were designated as of June 30, 2006: 1,595,337 shares of series D cumulative redeemable preferred; 220,440 shares of series E cumulative redeemable preferred; 267,439 shares of series F cumulative redeemable preferred; 510,000 shares of series I cumulative redeemable preferred; 800,000 shares of series J cumulative redeemable preferred; 800,000 shares of series K cumulative redeemable preferred; 2,300,000 shares of series L cumulative redeemable preferred, of which 2,000,000 are outstanding; 2,300,000 shares of series M cumulative redeemable preferred, all of which are outstanding; and 3,000,000 shares of series O cumulative redeemable preferred, all of which are outstanding.

The following table sets forth the dividends or distributions paid per share or unit:

		For the				For the
		Three Months				Six Months
		Ended June 30,				Ended June 30,
Paying Entity	Security	2006		2005		2006		2005
AMB Property Corporation	Common stock	$	0.460	$	0.440	$	0.920	$	0.880
AMB Property Corporation	Series L preferred stock	$	0.406	$	0.406	$	0.813	$	0.813
AMB Property Corporation	Series M preferred stock	$	0.422	$	0.422	$	0.844	$	0.844
AMB Property Corporation	Series O preferred stock	$	0.438		n/a	$	0.875		n/a
Operating Partnership	Common limited partnership units	$	0.460	$	0.440	$	0.920	$	0.880
Operating Partnership	Series J preferred units	$	0.994	$	0.994	$	1.988	$	1.988
Operating Partnership	Series K preferred units	$	0.994	$	0.994	$	1.988	$	1.988
AMB Property II, L.P.	Class B common limited partnership units	$	0.460	$	0.440	$	0.920	$	0.880
AMB Property II, L.P.	Series D preferred units	$	0.969	$	0.969	$	1.938	$	1.938
AMB Property II, L.P.	Series E preferred units(1)	$	0.807	$	0.969	$	1.776	$	1.938
AMB Property II, L.P.	Series F preferred units	$	0.994	$	0.994	$	1.988	$	1.988
AMB Property II, L.P.	Series H preferred units(2)		n/a	$	1.016	$	0.970	$	2.031
AMB Property II, L.P.	Series I preferred units	$	1.000	$	1.000	$	2.000	$	2.000
AMB Property II, L.P.	Series N preferred units(3)		n/a	$	0.625	$	0.215	$	1.250

(1)	In June 2006, AMB Property II, L.P. repurchased all of its Series E preferred units.
(2)	In March 2006, AMB Property II, L.P. repurchased all of its Series H preferred units.
(3)	The holder of the series N preferred units exercised its put option in January 2006 and sold all of its series N preferred units to the Operating Partnership and AMB Property II, L.P. repurchased all of such units from the Operating Partnership.

In December 2005, AMB Property Corporation’s board of directors approved a new two-year common stock repurchase program for the discretionary repurchase of up to $200.0 million of its common stock. AMB Property Corporation did not repurchase or retire any of its shares of common stock during the quarter ended June 30, 2006.

10.   Income Per Share

The Company’s only dilutive securities outstanding for the three and six months ended June 30, 2006 and 2005 were stock options and shares of restricted stock granted under its stock incentive plans. The effect on income per share was to increase weighted average shares outstanding. Such dilution was computed using the treasury stock

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

method. The computation of basic and diluted earnings per share (“EPS”) is presented below (dollars in thousands, except share and per share amounts):

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2006			2005			2006			2005
Numerator
Income from continuing operations before cumulative effect of change in accounting principle	$	57,217		$	36,301		$	77,020		$	56,875
Preferred stock dividends		(3,095	)		(1,783	)		(6,191	)		(3,566	)
Preferred unit redemption discount/(issuance costs)		77			—			(1,020	)		—
Income from continuing operations before cumulative effect of change in accounting principle (after preferred stock dividends)		54,199			34,518			69,809			53,309
Total discontinued operations		18,136			4,488			25,717			30,681
Cumulative effect of change in accounting principle		—			—			193			—
Net income available to common stockholders	$	72,335		$	39,006		$	95,719		$	83,990
Denominator
Basic		87,317,494			83,521,538			86,915,959			83,339,366
Stock options and restricted stock dilution(1)		2,818,165			3,554,473			3,231,534			3,506,492
Diluted weighted average common shares		90,135,659			87,076,011			90,147,493			86,845,858
Basic income per common share
Income from continuing operations (after preferred stock dividends) before cumulative effect of change in accounting principle	$	0.62		$	0.42		$	0.80		$	0.64
Discontinued operations		0.21			0.05			0.30			0.37
Cumulative effect of change in accounting principle		—			—			—			—
Net income available to common stockholders	$	0.83		$	0.47		$	1.10		$	1.01
Diluted income per common share
Income from continuing operations (after preferred stock dividends) before cumulative effect of change in accounting principle	$	0.60		$	0.40		$	0.77		$	0.62
Discontinued operations		0.20			0.05			0.29			0.35
Cumulative effect of change in accounting principle		—			—			—			—
Net income available to common stockholders	$	0.80		$	0.45		$	1.06		$	0.97

(1) Excludes anti-dilutive stock options of 740,323 and 548,195 for the three and six months ended June 30, 2006, respectively.

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

11.   Segment Information

The Company operates industrial properties and manages its business by geographic markets. Such industrial properties consist primarily of warehouse distribution facilities suitable for single or multiple customers, and are typically comprised of multiple buildings that are leased to customers engaged in various types of businesses. The Company’s geographic markets for industrial properties are managed separately because each market requires different operating, pricing and leasing strategies. The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based upon property net operating income of the combined properties in each segment.

The other U.S. target markets category includes Austin, Baltimore/Washington D.C., Boston and Minneapolis. The other U.S. non-target markets category captures all of the Company’s other U.S. markets, except for those markets listed individually in the table. The international target markets category includes China, France, Germany, Japan, Mexico and the Netherlands.

Summary information for the reportable segments is as follows (dollars in thousands):

	Rental Revenues						Property NOI(1)
	For the Three Months						For the Three Months
	Ended June 30,						Ended June 30,
Segments	2006			2005			2006			2005
Industrial U.S. hub and gateway markets:
Atlanta	$	5,848		$	5,023		$	4,478		$	3,928
Chicago		13,643			12,740			9,802			8,857
Dallas/Fort Worth		4,029			4,184			2,737			2,991
Los Angeles		27,840			26,218			22,096			20,824
Northern New Jersey/New York		20,400			20,290			14,965			14,659
San Francisco Bay Area		20,980			21,001			16,532			17,180
Miami		10,319			8,966			6,888			6,098
Seattle		9,768			10,837			7,703			8,512
On-Tarmac		13,849			14,071			8,036			8,269
Total industrial U.S. hub markets		126,676			123,330			93,237			91,318
Other U.S. target markets		23,446			25,060			17,107			17,639
Other U.S. non-target markets		5,756			8,667			4,195			5,663
International target markets		13,657			8,528			10,073			6,251
Straight-line rents and amortization of lease intangibles		6,154			4,864			6,154			4,864
Total other markets		3			771			3			611
Discontinued operations		(362	)		(16,850	)		(322	)		(11,892	)
Total	$	175,330		$	154,370		$	130,447		$	114,454

(1) Property net operating income (“NOI”) is defined as rental revenue, including reimbursements, less property operating expenses, which excludes depreciation, amortization, general and administrative expenses and interest expense. For a reconciliation of NOI to net income, see the table on page 19.

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

	Rental Revenues						Property NOI(1)
	For the Six Months						For the Six Months
	Ended June 30,						Ended June 30,
Segments	2006			2005			2006			2005
Industrial U.S. hub and gateway markets:
Atlanta	$	11,205		$	10,479		$	8,644		$	8,177
Chicago		27,272			26,393			19,179			18,107
Dallas/Fort Worth		7,787			8,265			5,259			5,808
Los Angeles		55,255			52,328			44,017			41,632
Northern New Jersey/New York		40,053			39,832			28,389			28,378
San Francisco Bay Area		42,535			42,922			33,572			34,682
Miami		19,570			17,615			13,253			12,113
Seattle		19,122			21,675			14,963			17,028
On-Tarmac		27,904			27,864			16,002			16,325
Total industrial U.S. hub markets		250,703			247,373			183,278			182,250
Other U.S. target markets		47,037			53,396			33,822			37,867
Other U.S. non-target markets		13,668			17,155			11,114			11,184
International target markets		29,924			15,649			21,969			11,997
Straight-line rents and amortization of lease intangibles		11,300			9,361			11,300			9,361
Total other markets		10			1,474			10			1,077
Discontinued operations		(1,408	)		(37,204	)		(659	)		(26,032	)
Total	$	351,234		$	307,204		$	260,834		$	227,704

(1) Property net operating income (“NOI”) is defined as rental revenue, including reimbursements, less property operating expenses, which excludes depreciation, amortization, general and administrative expenses and interest expense. For a reconciliation of NOI to net income, see the table below.

The Company considers NOI to be an appropriate supplemental performance measure because NOI reflects the operating performance of the Company’s real estate portfolio on a segment basis, and the Company uses NOI to make decisions about resource allocations and to assess regional property level performance. However, NOI should not be viewed as an alternative measure of the Company’s financial performance since it does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact the Company’s results from operations. Further, the Company’s NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI.

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table is a reconciliation from NOI to reported net income, a financial measure under GAAP (dollars in thousands):

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2006			2005			2006			2005
Property NOI	$	130,447		$	114,454		$	260,834		$	227,704
Private capital income		4,943			3,438			10,049			6,756
Depreciation and amortization		(44,088	)		(37,764	)		(87,162	)		(72,636	)
Impairment losses		(5,394	)		—			(5,394	)		—
General and administrative		(25,144	)		(20,111	)		(48,191	)		(38,060	)
Other expenses		296			792			(241	)		(738	)
Fund costs		(479	)		(380	)		(1,093	)		(744	)
Equity in earnings of unconsolidated joint ventures		8,278			7,188			10,366			8,430
Other income		1,933			1,667			4,998			1,804
Gains from dispositions of real estate		—			17,622			—			18,923
Development profits, net of taxes		45,698			1,975			46,372			19,924
Interest, including amortization		(44,075	)		(37,186	)		(83,800	)		(74,011	)
Total minority interests’ share of income		(15,198	)		(15,394	)		(29,718	)		(40,477	)
Total discontinued operations		18,136			4,488			25,717			30,681
Cumulative effect of change in accounting principle		—			—			193			—
Net income	$	75,353		$	40,789		$	102,930		$	87,556

The Company’s total assets by market were (dollars in thousands):

	Total Assets as of
	June 30, 2006		December 31, 2005
Industrial U.S. hub and gateway markets:
Atlanta	$	231,452	$	208,751
Chicago		565,924		504,581
Dallas/Fort Worth		136,854		137,112
Los Angeles		1,067,775		930,917
Northern New Jersey/New York		856,540		756,719
San Francisco Bay Area		778,315		789,129
Miami		424,350		372,728
Seattle		403,851		371,029
On-Tarmac		239,359		245,046
Total industrial U.S. hub markets		4,704,420		4,316,012
Other U.S. target markets		694,545		693,287
Other non-target markets		249,549		264,954
International target markets		1,228,702		975,960
Total other markets		—		10,277
Investments in unconsolidated joint ventures		123,107		118,653
Non-segment assets		336,043		423,596
Total assets	$	7,336,366	$	6,802,739

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12.   Commitments and Contingencies

Commitments

Lease Commitments.  The Company holds operating ground leases on land parcels at its on-tarmac facilities, leases on office spaces for corporate use, and a leasehold interest that it holds for investment purposes. The remaining lease terms are from one to 56 years. Operating lease payments are being amortized ratably over the lesser of the terms of the related leases or 40 years.

Standby Letters of Credit.  As of June 30, 2006, the Company had provided approximately $37.1 million in letters of credit, of which $25.6 million were provided under the Operating Partnership’s $550.0 million unsecured credit facility. The letters of credit were required to be issued under certain ground lease provisions, bank guarantees and other commitments.

Guarantees.  Other than parent guarantees associated with the unsecured debt, as of June 30, 2006, the Company had outstanding guarantees in the aggregate amount of $205.8 million in connection with certain acquisitions. As of June 30, 2006, the Company guaranteed $26.1 million and $2.3 million on outstanding loans on two of its consolidated joint ventures and one of its unconsolidated joint ventures, respectively.

Performance and Surety Bonds.  As of June 30, 2006, the Company had outstanding performance and surety bonds in an aggregate amount of $1.0 million. These bonds were issued in connection with certain of its development projects and were posted to guarantee certain tax obligations and the construction of certain real property improvements and infrastructure, such as grading, sewers and streets. Performance and surety bonds are commonly required by public agencies from real estate developers. Performance and surety bonds are renewable and expire upon the payment of the taxes due or the completion of the improvements and infrastructure.

Promoted Interests and Other Contractual Obligations.  Upon the achievement of certain return thresholds and the occurrence of certain events, the Company may be obligated to make payments to certain of joint venture partners pursuant to the terms and provisions of their contractual agreements with the Operating Partnership. From time to time in the normal course of the Company’s business, the Company enters into various contracts with third parties that may obligate it to make payments or perform other obligations upon the occurrence of certain events.

Contingencies

Litigation.  In the normal course of business, from time to time, the Company may be involved in legal actions relating to the ownership and operations of its properties. Management does not expect that the liabilities, if any, that may ultimately result from such legal actions will have a material adverse effect on the consolidated financial position, results of operations or cash flows of the Company.

Environmental Matters.  The Company monitors its properties for the presence of hazardous or toxic substances. The Company is not aware of any environmental liability with respect to the properties that would have a material adverse effect on the Company’s business, assets or results of operations. However, there can be no assurance that such a material environmental liability does not exist. The existence of any such material environmental liability would have an adverse effect on the Company’s results of operations and cash flow. The Company carries environmental insurance and believes that the policy terms, conditions, limits and deductibles are adequate and appropriate under the circumstances, given the relative risk of loss, the cost of such coverage and current industry practice.

General Uninsured Losses.  The Company carries property and rental loss, liability, flood and terrorism insurance. The Company believes that the policy terms, conditions, limits and deductibles are adequate and appropriate under the circumstances, given the relative risk of loss, the cost of such coverage and current industry practice. In addition, certain of the Company’s properties are located in areas that are subject to earthquake activity; therefore, the Company has obtained limited earthquake insurance on those properties. There are, however, certain types of extraordinary losses, such as those due to acts of war that may be either uninsurable or not economically

23

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

insurable. Although the Company has obtained coverage for certain acts of terrorism, with policy specifications and insured limits that it believes are commercially reasonable, there can be no assurance that the Company will be able to collect under such policies. Should an uninsured loss occur, the Company could lose its investment in, and anticipated profits and cash flows from, a property.

Various properties that the Company owns or leases in New Orleans, Louisiana and South Florida suffered damage in 2005 as a result of Hurricanes Katrina and Wilma. Although the Company expects that its insurance will cover losses arising from this damage in excess of the industry standard deductibles paid by the Company, there can be no assurance the Company will be reimbursed for all losses incurred. Management is not aware of circumstances associated with these losses that would have a material adverse effect on the Company’s business, assets or results from operations.

Captive Insurance Company.  In December 2001, the Company formed a wholly-owned captive insurance company, Arcata National Insurance Ltd. (“Arcata”), which provides insurance coverage for all or a portion of losses below the deductible under the Company’s third-party policies. The Company capitalized Arcata in accordance with the applicable regulatory requirements. Arcata established annual premiums based on projections derived from the past loss experience at the Company’s properties. Annually, the Company engages an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs. Premiums paid to Arcata may be adjusted based on this estimate. Premiums paid to Arcata have a retrospective component, so that if expenses, including losses, deductibles and reserves, are less than premiums collected, the excess may be returned to the property owners (and, in turn, as appropriate, to the customers) and conversely, subject to certain limitations, if expenses, including losses, deductibles and reserves, are greater than premiums collected, an additional premium will be charged. As with all recoverable expenses, differences between estimated and actual insurance premiums will be recognized in the subsequent year. Through this structure, the Company believes that it has more comprehensive insurance coverage at an overall lower cost than would otherwise be available in the market.

13.   Stock Incentive Plans

Stock Incentive Plans.  The Company has stock option and incentive plans (“Stock Incentive Plans”) for the purpose of attracting and retaining eligible officers, directors and employees. The Company has reserved for issuance 18,950,000 shares of common stock under its Stock Incentive Plans. As of June 30, 2006, the Company had 7,649,775 non-qualified options outstanding granted to certain directors, officers and employees. Each option is exchangeable for one share of the Company’s common stock. Each option’s exercise price is equal to the Company’s market price on the date of grant. The options have an original ten-year term and generally vest pro rata in annual installments over a three to five-year period from the date of grant.

The Company adopted SFAS No. 123R, Share Based Payment, on January 1, 2006. The Company opted to utilize the modified prospective method of transition in adopting SFAS No. 123R. The effect of this change from applying the original expense recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, had an immaterial effect on income before minority interests and discontinued operations, income from continuing operations, net income and earnings per share. The effect of this change from applying the original provisions of SFAS No. 123 had no effect on cash flow from operating and financing activities. The Company recorded a cumulative effect of change in accounting principle in the amount of $0.2 million as of January 1, 2006 to reflect the change in accounting for forfeitures. The Company values stock options using the Black-Scholes option-pricing model and recognizes this value as an expense over the vesting periods. Under this standard, recognition of expense for stock options is applied to all options granted after the beginning of the year of adoption. In accordance with SFAS No. 123R, the Company will recognize the associated expense over the three to five-year vesting periods. For the three months ended June 30, 2006 and 2005, under SFAS No. 123R, related stock option expense was $1.0 million and $0.9 million, respectively. For the six months ended June 30, 2006 and 2005, related stock option expense was $3.1 million and $3.0 million, respectively. Additionally, the Company awards restricted stock and

24

AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

recognizes this value as an expense over the vesting periods. During the three months ended June 30, 2006 and 2005, related restricted stock compensation expense was $5.1 million and $1.7 million, respectively. During the six months ended June 30, 2006 and 2005, related restricted stock compensation expense was $7.8 million and $3.9 million, respectively. The expense is included in general and administrative expenses in the accompanying consolidated statements of operations. As of June 30, 2006, the Company had $6.9 million of total unrecognized compensation cost related to unvested options granted under the Stock Incentive Plans which is expected to be recognized over a weighted average period of 1.2 years. Results for prior periods have not been restated.

As a result of adopting SFAS No. 123R on January 1, 2006, the Company’s income before income taxes and net income for the three and six months ended June 30, 2006 is $0.1 million and $0.5 million, respectively, higher than if the Company had continued to account for share-based compensation under the original provisions of SFAS No. 123. Basic and diluted earnings per share for the three months ended June 30, 2006 would have been the same as the reported numbers at $0.83 and $0.80, respectively, if the Company had not adopted SFAS No. 123R. Basic and diluted earnings per share for the six months ended June 30, 2006 would have been the same as the reported numbers at $1.10 and $1.06, if the Company had not adopted SFAS No. 123R.

SFAS No. 123R requires the cash flows resulting from tax benefits resulting from tax deductions in excess of the compensation cost recognized for those options (excess tax benefits) to be classified as financing cash flows. The Company does not have any such excess tax benefits.

The fair value of each option grant was estimated at the date of grant using the Black-Scholes option-pricing model. The Company uses historical data to estimate option exercise and employee termination within the valuation model. Expected volatilities are based on historical volatility of the Company’s stock. The risk-free rate for periods within the expected life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The following assumptions are used for grants during the six months ended June 30, 2006 and 2005, respectively: dividend yields of 3.5% and 4.5%; expected volatility of 17.9% and 17.5%; risk-free interest rates of 4.6% and 3.8%; and expected lives of six and seven years, respectively.

Following is a summary of the option activity for the six months ended June 30, 2006 (options in thousands):

						Options
				Weighted		Exercisable
	Shares Under			Average		at Year
	Option			Exercise Price		End
Outstanding as of December 31, 2005		9,148		$	27.14		7,237
Granted		804			51.71
Exercised		(2,250	)		23.26
Forfeited		(52	)		42.18
Outstanding as of June 30, 2006		7,650		$	30.76		6,151
Remaining average contractual life		6.35 years
Fair value of options granted during the period	$	8.54

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes additional information concerning outstanding and exercisable stock options at June 30, 2006 (options in thousands):

					Weighted
					Average		Currently Exercisable
			Weighted		Remaining				Weighted
Range of	Number		Average		Contractual		Number		Average
Exercise Price	of Options		Exercise Price		Life in Years		of Options		Exercise Price
$20.00 - $24.60		1,927	$	22.14		3.5		1,927	$	22.14
$24.64 - $27.12		2,705		26.50		6.1		2,696		26.50
$27.14 - $38.56		2,091		35.61		7.9		1,277		34.52
$39.09 - $54.96		927		50.14		9.5		251		48.59
		7,650						6,151

The following table summarizes additional information concerning unvested stock options at June 30, 2006 (options in thousands):

				Weighted
	Number			Average
	of Options			Exercise Price
Unvested at December 31, 2005		1,912		$	27.14
Granted		804		$	51.71
Vested		(1,164	)	$	36.18
Forfeited		(52	)	$	42.18
Unvested at June 30, 2006		1,500		$	43.18

Cash received from options exercised under the Stock Incentive Plans for the three months ended June 30, 2006 and 2005 was $3.9 million and $5.6 million, respectively. Cash received from options exercised during the six months ended June 30, 2006 and 2005, was $33.4 million and $16.3 million, respectively. There were no excess tax benefits realized for the tax deductions from option exercises during the three and six months ended June 30, 2006 and 2005. The total intrinsic value of options exercised during the three months ended June 30, 2006 and 2005 was $3.3 million and $4.2 million, respectively. The total intrinsic value of options exercised during the six months ended June 30, 2006 and 2005 was $64.3 million and $11.8 million, respectively. The total intrinsic value of options outstanding and exercisable as of June 30, 2006 was $140.8 million.

The Company issued 13,418 and 443,352 shares of restricted stock to certain officers of the Company as part of the performance pay program and in connection with employment with the Company during the three and six months ended June 30, 2006, respectively. The total fair value of restricted shares was $0.7 million and $23.0 million for the three and six months ended June 30, 2006, respectively. As of June 30, 2006, 52,114 shares of restricted stock had been forfeited. The 718,613 outstanding restricted shares are subject to repurchase rights, which generally lapse over a period from three to five years.

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AMB PROPERTY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table summarizes additional information concerning unvested restricted shares at June 30, 2006 (shares in thousands):

				Weighted Average
				Grant Date
Unvested Shares	Shares			Fair Value
Unvested at December 31, 2005		548		$	34.41
Granted		443		$	51.86
Vested		(264	)	$	34.67
Forfeited		(9	)	$	44.63
Unvested at June 30, 2006		718		$	44.96

As of June 30, 2006, there were $28.1 million of total unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Stock Incentive Plans. That cost is expected to be recognized over a weighted average period of 1.87 years. The total fair value of shares vested, based on the market price on the vesting date, during the three months ended June 30, 2006 and 2005 was $4.1 million and $0.6 million, respectively. The total fair value of shares vested during the six months ended June 30, 2006 and 2005 was $13.4 million and $8.7 million, respectively.

14.   Subsequent Events

On July 11, 2006, the Company acquired the 50% interest in AMB BlackPine that the Company did not previously own. The Company has combined the operations of AMB BlackPine with its wholly-owned Japanese subsidiary, AMB Property Japan, creating a unified platform from which the Company will continue to develop, lease, acquire and operate industrial real estate in Japan.

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Item 2.   Management’s Discussion and Analysis of Financial Condition and Results of Operations

Some of the information included in this Quarterly Report on Form 10-Q contains forward-looking statements, which are made pursuant to the safe-harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Because these forward-looking statements involve risks and uncertainties, there are important factors that could cause our actual results to differ materially from those in the forward-looking statements, and you should not rely on the forward-looking statements as predictions of future events. The events or circumstances reflected in forward-looking statements might not occur. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates,” or the negative of these words and phrases, or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indicators of whether, or the time at which, such performance or results will be achieved. There is no assurance that the events or circumstances reflected in forward-looking statements will occur or be achieved. Forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them.

The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

•  changes in general economic conditions or in the real estate sector;

•  defaults on or non-renewal of leases by customers or renewal at lower than expected rent;

•  difficulties in identifying properties to acquire and in effecting acquisitions on advantageous terms and the failure of acquisitions to perform as we expect;

•  risks and uncertainties affecting property development and renovation (including construction delays, cost overruns, our inability to obtain necessary permits and financing and public opposition to these activities);

•  risks of doing business internationally, including unfamiliarity with new markets and currency risks;

•  a downturn in the U.S., California or the global economy or real estate conditions;

•  losses in excess of our insurance coverage;

•  our failure to divest of properties on advantageous terms or to timely reinvest proceeds from any such divestitures;

•  unknown liabilities acquired in connection with acquired properties or otherwise;

•  risks associated with using debt to fund acquisitions and development, including re-financing risks;

•  our failure to obtain necessary financing;

•  changes in local, state and federal regulatory requirements;

•  increases in real property tax rates;

•  increases in interest rates and operating costs or greater than expected capital expenditures;

•  environmental uncertainties; and

•  our failure to qualify and maintain our status as a real estate investment trust under the Internal Revenue Code of 1986, as amended.

Our success also depends upon economic trends generally, various market conditions and fluctuations and those other risk factors discussed under the heading “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2005.

We caution you not to place undue reliance on forward-looking statements, which reflect our analysis only and speak as of the date of this report or as of the dates indicated in the statements. All of our forward-looking

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statements, including those set up in this report, are qualified in their entirety by this statement. We assume no obligation to update or supplement forward-looking statements.

Unless the context otherwise requires, the terms “we,” “us” and “our” refer to AMB Property Corporation, AMB Property, L.P. and their other controlled subsidiaries, and the references to AMB Property Corporation include AMB Property, L.P. and their controlled subsidiaries. We refer to AMB Property, L.P. as the “operating partnership.” The following marks are our registered trademarks: AMB^®; High Throughput Distribution^® (HTD^®); and Strategic Alliance Programs^®.

GENERAL

We commenced operations as a fully integrated real estate company effective with the completion of our initial public offering on November 26, 1997, and elected to be taxed as a real estate investment trust under Sections 856 through 860 of the Internal Revenue Code of 1986 with our initial tax return for the year ended December 31, 1997. AMB Property Corporation and AMB Property, L.P. were formed shortly before the consummation of our initial public offering.

Management’s Overview

The primary source of our revenue and earnings is rent received from customers under long-term (generally three to ten years) operating leases at our properties, including reimbursements from customers for certain operating costs, and from partnership distributions and fees from our private capital business. We also produce earnings from the disposition of operating assets that no longer fit the company’s strategy, from the disposition of projects in our development-for-sale program and from the contributions of properties to our co-investment joint ventures. Our long-term growth is driven by our ability to maintain and increase occupancy rates or increase rental rates at our properties, and by our ability to continue to acquire and develop new properties.

National industrial markets continued to improve during the second quarter of 2006. According to Torto Wheaton Research, the positive trend in demand began in the second quarter of 2004 and reversed 14 prior quarters of negatively trending, or rising, space availability. We believe the protracted period of rising availability created a difficult national leasing environment which over the past quarter has been improving, particularly in large industrial property markets tied to global trade. During the three-and-a-half year period of negatively trending industrial space availability, investor demand for industrial property (as supported by our observation of strong national sales volumes and declining acquisition capitalization rates) remained consistently strong. We believe we capitalized on the demand for acquisition property by accelerating the repositioning of our portfolio through the disposition of non-core properties. We plan to continue selling selected assets on an opportunistic basis or that no longer fit our strategic investment objectives, but believe we have substantially achieved our repositioning goals.

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The table below summarizes key operating and leasing statistics for our consolidated industrial operating properties as of and for the three and six months ended June 30, 2006 and 2005:

	U.S. Hub and			Total Other			Total/Weighted
Property Data	Gateway Markets(1)			Markets			Average
As of and for the three months ended June 30, 2006:
% of total rentable square feet		74.9	%		25.1	%		100.0	%
Occupancy percentage at period end		96.1	%		93.2	%		95.4	%
Same space square footage leased		3,969,267			638,702			4,607,969
Rent increases (decreases) on renewals and rollovers		(0.6	)%		(3.1	)%		(0.9	)%
As of and for the three months ended June 30, 2005:
% of total rentable square feet		75.1	%		24.9	%		100.0	%
Occupancy percentage at period end		94.9	%		93.3	%		94.5	%
Same space square footage leased		2,090,748			733,412			2,824,160
Rent increases (decreases) on renewals and rollovers		(15.9	)%		(9.3	)%		(14.6	)%
As of and for the six months ended June 30, 2006:
% of total rentable square feet		74.9	%		25.1	%		100.0	%
Occupancy percentage at period end		96.1	%		93.2	%		95.4	%
Same space square footage leased		7,536,540			1,799,779			9,336,319
Rent increases (decreases) on renewals and rollovers		(6.4	)%		(4.1	)%		(6.0	)%
As of and for the six months ended June 30, 2005:
% of total rentable square feet		75.1	%		24.9	%		100.0	%
Occupancy percentage at period end		94.9	%		93.3	%		94.5	%
Same space square footage leased		5,753,382			1,275,567			7,028,949
Rent increases (decreases) on renewals and rollovers		(12.7	)%		(5.4	)%		(11.5	)%

(1) Our U.S. hub and gateway markets include on-tarmac and Atlanta, Chicago, Dallas/Fort Worth, Los Angeles, Northern New Jersey/New York City, the San Francisco Bay Area, Miami and Seattle.

Our industrial operating portfolio occupancy rate was 95.4% at June 30, 2006, as compared to 94.7% at March 31, 2006. Rental rates on industrial renewals and rollovers in our portfolio decreased 0.9% during the quarter ended June 30, 2006, as compared to declines of 11.5% in the prior quarter and 14.6% in the second quarter of 2005. These rental rate declines occurred as leases were entered into or renewed at rates consistent with what we believe to be current market levels. We believe this decline in rents on lease renewals and rollovers is largely concentrated in the San Francisco Bay Area, where a significant portion of the square feet that renewed or rolled in the second quarter of 2006 was in leases that commenced between 1999 and 2001 when rental rates were at their prior peaks in most of our markets. Without the effect of the San Francisco portfolio, the rents on lease renewals and rollover in the remainder of the portfolio increased 1.9% during this quarter, which we believe reflects the improving trends in national industrial space availability. We believe that relatively high levels of national industrial space availability caused market rents for industrial properties to decline on average between 10% and 20% from their peak levels in 2001 to 2005 based on our research data. We believe market rental rates are growing in a number of our markets. Occupancy levels in our portfolio were 530 basis points in excess of the national industrial market, as determined by Torto Wheaton Research, by pricing lease renewals and new leases with sensitivity to local market conditions. During periods of decreasing or stabilizing rental rates, we strove to sign leases with shorter terms to prevent

30

locking in lower rent levels for long periods and to be prepared to sign new, longer-term leases during periods of growing rental rates. When we sign leases of shorter duration, we attempt to limit overall leasing costs and capital expenditures by offering different grades of tenant improvement packages, appropriate to the lease term.

We expect development to be a significant driver of our earnings growth as we expand our land and development pipeline, and contribute completed development projects into our co-investment program and recognize development profits. We believe that development, renovation and expansion of well-located, high-quality industrial properties should generally continue to provide us with attractive investment opportunities at a higher rate of return than we may obtain from the purchase of existing properties. We believe that our development opportunities in Mexico, Japan and China are particularly attractive given the current lack of supply of modern industrial distribution facilities in the major metropolitan markets of these countries. Prior to our global expansion, our development pipeline was $106.8 million at the end of 2002. During our global expansion, we have increased our development pipeline to approximately $1.1 billion at June 30, 2006. In addition to our committed development pipeline, we hold a total of 1,524 acres for future development or sale. We believe these 1,524 acres of land could support approximately 27.2 million square feet of future development.

Going forward, we believe that our co-investment program with private-capital investors will continue to serve as a significant source of revenues and capital for new investments. Through these co-investment joint ventures, we typically earn acquisition and development fees, asset management fees and priority distributions, as well as promoted interests and incentive distributions based on the performance of the co-investment joint ventures; however, we can not assure you that we will continue to do so. Through contribution of development properties to our co-investment joint ventures, we expect to recognize value creation from our development pipeline. As of June 30, 2006, we owned approximately 59.5 million square feet of our properties (48.3% of the total operating and development portfolio) through our consolidated and unconsolidated co-investment joint ventures. We may make additional investments through these co-investment joint ventures or new joint ventures in the future and presently plan to do so.

By the end of 2007, we expect to have approximately 15% of our operating portfolio (based on consolidated and unconsolidated annualized base rent) invested in international markets. As of June 30, 2006, our international operating properties comprised 5.6% of our consolidated annualized base rent. When international operating properties owned in unconsolidated joint ventures are included, our annualized base rents from international investments increases to 10.7%. Our North American target markets outside of the United States currently comprise Canada and Mexico. Our European target markets currently comprise Belgium, France, Germany, Italy, Netherlands, Spain and the United Kingdom. Our Asian target markets currently comprise China, Japan, Singapore and South Korea. We expect to add additional target markets outside the United States in the future.

To maintain our qualification as a real estate investment trust, we must pay dividends to our stockholders aggregating annually at least 90% of our taxable income. As a result, we cannot rely on retained earnings to fund our on-going operations to the same extent that other corporations that are not real estate investment trusts can. We must continue to raise capital in both the debt and equity markets to fund our working capital needs, acquisitions and developments. See “Liquidity and Capital Resources” for a complete discussion of the sources of our capital.

Summary of Key Transactions

During the three months ended June 30, 2006, we completed the following significant capital deployment transactions:

•  Acquired 27 buildings in North America and Europe, aggregating approximately 2.5 million square feet, for $246.8 million;

•  Committed to four development projects in North America and Asia totaling 2.0 million square feet with an estimated total investment of approximately $134.6 million;

•  Acquired 129 acres of land for development in North America and Asia for approximately $72.1 million;

•  Sold one land parcel and one approximately 32,000 square foot development project, for an aggregate price of $3.3 million;

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•  Divested ourselves of eight industrial buildings aggregating approximately 0.5 million square feet, for an aggregate price of approximately $37.1 million; and

•  Contributed one completed development project for $243.0 million to AMB Japan Fund I, L.P., and one completed development project for $38.4 million to AMB-SGP Mexico, LLC, both unconsolidated co-investment joint ventures. As a result of these contributions, we recognized an aggregate after-tax gain of $46.6 million, representing the portion of our interest in the contributed properties acquired by the third-party co-investors for cash.

During the six months ended June 30, 2006, we completed the following significant capital deployment transactions:

•  Acquired 59 buildings in North America and Europe, aggregating approximately 4.6 million square feet, for $400.1 million;

•  Committed to eleven development projects in North America and Asia totaling 4.9 million square feet with an estimated total investment of approximately $353.4 million;

•  Acquired 340 acres of land for development in North America and Asia for approximately $165.6 million;

•  Sold two land parcels and one approximately 32,000 square foot development project, for an aggregate price of $8.0 million;

•  Divested ourselves of twelve industrial buildings aggregating approximately 0.9 million square feet, for an aggregate price of approximately $53.9 million, including one industrial building that was sold by one of our unconsolidated joint ventures; and

•  Contributed one completed development project for $243.0 million to AMB Japan Fund I, L.P., and one completed development project for $38.4 million to AMB-SGP Mexico, LLC, both unconsolidated co-investment joint ventures. As a result of these contributions, we recognized an aggregate after-tax gain of $46.6 million, representing the portion of our interest in the contributed properties acquired by the third-party co-investors for cash.

See Part I, Item 1: Notes 3 and 4 of the “Notes to Consolidated Financial Statements” for a more detailed discussion of our acquisition, development and disposition activity.

During the three months ended June 30, 2006, we completed the following significant capital markets and other financing transactions:

•  Obtained long-term secured debt financings for our co-investment joint ventures of $20.3 million with a weighted average interest rate of 6.1%;

•  Assumed $13.1 million of debt for our co-investment joint ventures at a weighted average interest rate of 5.3%;

•  Obtained $38.3 million of debt (using exchange rates in effect at applicable quarter end dates) with a weighted average interest rate of 4.0% for international acquisitions;

•  Completed the early renewal and increase of our senior unsecured revolving line of credit in the amount of $550.0 million, an increase of $50.0 million;

•  Repurchased AMB Property II, L.P.’s 7.75% Series E Cumulative Redeemable Preferred Limited Partnership Units for an aggregate cost of $10.9 million, including accrued and unpaid distributions; and

•  Entered into an amended and restated revolving line of credit agreement for a 45.0 billion Yen (approximately $393.0 million U.S. Dollars, using the exchange rate at June 30, 2006) unsecured revolving credit facility that replaced an existing 35.0 billion Yen (approximately $305.9 million U.S. Dollars, using the exchange rate at June 30, 2006) unsecured revolving credit facility.

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During the six months ended June 30, 2006, we completed the following significant capital markets and other financing transactions:

•  Obtained long-term secured debt financings for our co-investment joint ventures of $48.6 million with a weighted average interest rate of 6.0%;

•  Assumed $13.1 million of debt for our co-investment joint ventures at a weighted average interest rate of 5.3%;

•  Obtained $38.3 million of debt (using exchange rates in effect at applicable quarter end dates) with a weighted average interest rate of 4.0% for international acquisitions;

•  Obtained a $65.0 million floating rate unsecured revolving credit facility for one of our co-investment joint ventures;

•  Entered into a third amended and restated credit agreement for a $250.0 million unsecured multi-currency revolving credit facility which replaced an existing $100.0 million unsecured multi-currency revolving credit facility;

•  Repurchased AMB Property II, L.P.’s 7.75% Series E Cumulative Redeemable Preferred Limited Partnership Units for an aggregate cost of $10.9 million, including accrued and unpaid distributions;

•  Repurchased AMB Property II, L.P.’s 8.125% Series H Cumulative Redeemable Preferred Limited Partnership Units for an aggregate cost of $42.8 million, including accrued and unpaid distributions;

•  Repurchased AMB Property II, L.P.’s 5.0% Series N Cumulative Redeemable Preferred Limited Partnership Units for an aggregate cost of $36.6 million, including accrued and unpaid distributions;

•  Completed the early renewal and increase of our senior unsecured revolving line of credit in the amount of $550.0 million, an increase of $50.0 million; and

•  Entered into an amended and restated revolving line of credit agreement for a 45.0 billion Yen (approximately $393.0 million U.S. Dollars, using the exchange rate at June 30, 2006) unsecured revolving credit facility that replaced an existing 35.0 billion Yen (approximately $305.9 million U.S. Dollars, using the exchange rate at June 30, 2006) unsecured revolving credit facility.

See Part I, Item 1: Notes 6, 7 and 9 of the “Notes to Consolidated Financial Statements” for a more detailed discussion of our capital markets transactions.

Critical Accounting Policies

In the preparation of financial statements, we utilize certain critical accounting policies. Except for SFAS No. 123R discussed below, there have been no material changes in our significant accounting policies, which are included in the notes to our audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2005.

Stock-based Compensation Expense.  The Company adopted SFAS No. 123R, Share Based Payment, on January 1, 2006. The Company opted to utilize the modified prospective method of transition in adopting SFAS No. 123R. The effect of this change from applying the original expense recognition provisions of SFAS No. 123, Accounting for Stock-Based Compensation, had an immaterial effect on income before minority interests and discontinued operations, income from continuing operations, net income and earnings per share, as described in further detail in Note 13 to the consolidated financial statements. The effect of this change from applying the original provisions of SFAS No. 123 had no effect on cash flow from operating and financing activities. The Company recorded a cumulative effect of change in accounting principle in the amount of $0.2 million as of January 1, 2006 to reflect the change in accounting for forfeitures. The Company values stock options using the Black-Scholes option-pricing model and recognizes this value as an expense over the vesting periods. Under this standard, recognition of expense for stock options is applied to all options granted after the beginning of the year of adoption. In accordance with SFAS No. 123R, the Company will recognize the associated expense over the three to five-year vesting periods. Under SFAS No. 123R, related stock option expense was $1.0 million and $0.9 million

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during the three months ended June 30, 2006 and 2005, respectively, and $3.1 million and $3.0 million during the six months ended June 30, 2006 and 2005, respectively. Additionally, the Company awards restricted stock and recognizes this value as an expense over the vesting periods. Related restricted stock compensation expense was $5.1 million and $1.7 million for the three months ended June 30, 2006 and 2005, respectively, and $7.8 million and $3.9 million for the six months ended June 30, 2006 and 2005, respectively. The expense is included in general and administrative expenses in the accompanying consolidated statements of operations. Results for prior periods have not been restated.

THE COMPANY

AMB Property Corporation, a Maryland corporation, acquires, develops and operates industrial properties in key distribution markets throughout North America, Europe and Asia. We use the terms “industrial properties” or “industrial buildings” to describe various types of industrial properties in our portfolio and use these terms interchangeably with the following: logistics facilities, centers or warehouses; distribution facilities, centers or warehouses; High Throughput Distribution^® (HTD^®) facilities; or any combination of these terms.

We commenced operations as a fully integrated real estate company effective with the completion of our initial public offering on November 26, 1997. Our strategy focuses on providing properties for customers who value the efficient movement of goods in the world’s busiest distribution markets: large, supply-constrained locations with proximity to airports, seaports and major highway systems. As of June 30, 2006, we owned or had investments in, on a consolidated basis or through unconsolidated joint ventures, or managed buildings, properties and development projects expected to total approximately 123.1 million rentable square feet (11.4 million square meters) and 1,118 buildings in 41 markets within eleven countries.

Of the approximately 123.1 million rentable square feet as of June 30, 2006:

•  on a consolidated basis, we owned or partially owned 928 industrial buildings, principally warehouse distribution facilities, encompassing approximately 92.2 million rentable square feet that were 95.4% leased;

•  we managed, but did not have an ownership interest in, industrial and other properties, totaling approximately 1.5 million rentable square feet;

•  through unconsolidated joint ventures, we had investments in 88 industrial operating properties, totaling approximately 14.2 million rentable square feet, and in one industrial development project, expected to total approximately 0.2 million rentable square feet;

•  on a consolidated basis, we had investments in 46 industrial development projects which are expected to total approximately 14.0 million rentable square feet upon completion; and

•  on a consolidated basis, we owned four development projects, with a total estimated investment of $89.4 million and approximately 1.0 million rentable square feet, that were available for sale or contribution.

We operate our business primarily through our subsidiary, AMB Property, L.P., a Delaware limited partnership, which we refer to as the “operating partnership”. As of June 30, 2006, we owned an approximate 95.3% general partnership interest in the operating partnership, excluding preferred units. As the sole general partner of the operating partnership, we have the full, exclusive and complete responsibility for and discretion in its day-to-day management and control.

Our strategy is to become a leading provider of industrial properties in supply-constrained submarkets located near key international passenger and cargo airports, highway systems and seaports in major metropolitan areas of North America, Europe and Asia. These submarkets are generally tied to global trade.

Our investment strategy generally targets customers whose businesses are tied to global trade, which, according to the World Trade Organization, has grown more than three times the world gross domestic product growth rate during the last 20 years. To serve the facilities needs of these customers, we seek to invest in major distribution markets, transportation hubs and gateways, both in the U.S. and internationally. Our investment strategy targets markets that are generally characterized by large population densities and typically offer substantial

34

consumer bases, proximity to large clusters of distribution-facility users and significant labor pools. When measured by total consolidated and unconsolidated annualized base rents, 95.4% of our portfolio of industrial properties is located in our target markets, and much of it in in-fill submarkets within our target markets. In-fill locations are characterized by supply constraints on the availability of land for competing projects as well as physical, political or economic barriers to new development.

Further, we focus on HTD^® facilities, which are buildings designed to facilitate the rapid distribution of our customers’ products rather than storage of goods. Our investment focus on HTD^® assets is based on what we believe to be a global trend toward lower inventory levels and expedited supply chains. HTD^® facilities generally have a variety of physical characteristics that allow for the rapid transport of goods from point-to-point. These physical characteristics could include numerous dock doors, shallower building depths, fewer columns, large truck courts and more space for trailer parking. We believe that these building characteristics represent an important success factor for time-sensitive customers such as air express, logistics and freight forwarding companies, and that these facilities function best when located in convenient proximity to transportation infrastructure, such as major airports and seaports.

We are self-administered and self-managed and expect that we have qualified and will continue to qualify as a real estate investment trust for federal income tax purposes beginning with the year ended December 31, 1997. As a self-administered and self-managed real estate investment trust, our own employees perform our corporate administrative and management functions, rather than our relying on an outside manager for these services. We manage our portfolio of properties in a flexible operating model which includes both direct property management and Strategic Alliance Programs^® in which we have established relationships with third-party real estate management firms, brokers and developers that provide property-level administrative and management services under our direction.

Our principal executive office is located at Pier 1, Bay 1, San Francisco, California 94111; our telephone number is (415) 394-9000. We maintain regional offices in Amsterdam, Boston, Chicago, Los Angeles, New Jersey, Shanghai, Singapore, Tokyo and Vancouver. As of June 30, 2006, we employed 339 individuals: 166 in our San Francisco headquarters, 61 in our Boston office and the remainder in our other regional offices. Our website address is www.amb.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available on our website free of charge as soon as reasonably practicable after we electronically file such material with, or furnish it to, the U.S. Securities and Exchange Commission. Information contained on our website is not and should not be deemed a part of this report or any other report or filing filed with the U.S. Securities and Exchange Commission.

Operating Strategy

We base our operating strategy on a variety of operational and service offerings, including in-house acquisitions, development, redevelopment, asset management, property management, leasing, finance, accounting and market research. Our strategy is to leverage our expertise across a large customer base, and complement our internal management resources with long-standing relationships with entrepreneurial real estate management and development firms in our target markets.

We believe that real estate is fundamentally a local business and best operated by local teams in each market comprised of AMB employees, local alliance partners or both. We intend to continue to increase utilization of internal management resources in target markets to achieve both operating efficiencies and to expose our customers to the broadening array of AMB service offerings, including access to multiple locations worldwide and build-to-suit developments. We actively manage our portfolio, whether directly or with an alliance partner, by establishing leasing strategies, negotiating lease terms, pricing, and level and timing of property improvements.

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Growth Strategies

Growth Through Operations

We seek to generate long-term internal growth through rent increases on existing space and renewals on rollover space by working to maintain a high occupancy rate at our properties and to control expenses by capitalizing on the economies of scale inherent in owning, operating and growing a large, global portfolio. During the three months ended June 30, 2006, our average industrial property base rental rates decreased by 0.9% from the rent in place at expiration for that space on leases entered into or renewed during the period. This amount excludes expense reimbursements, rental abatements, percentage rents and straight-line rents. Since 2001, as the industrial property market weakened, we have focused on maintaining occupancy levels. During the three months ended June 30, 2006 cash-basis same-store net operating income (rental revenues less property operating expenses and real estate taxes for properties included in the same-store pool, which is set annually and excludes properties purchased or developments stabilized after December 31, 2004) increased by 3.0% on our industrial properties. Since our initial public offering in November 1997, we have experienced average annual increases in industrial property base rental rates of 4.3% and maintained an average quarter-end occupancy rate of 94.9% in our industrial property operating portfolio. While we believe that it is important to view real estate as a long-term investment, past results are not necessarily an indication of future performance. See “Supplemental Earnings Measures” under this Item for a discussion of net operating income and Part I, Item 1: Note 11 of the “Notes to Consolidated Financial Statements” for detailed segment information, including revenue attributable to each segment, gross investment in each segment and total assets.

Growth Through Development

We believe that development, redevelopment and expansion of well-located, high-quality industrial properties should continue to provide us with attractive investment opportunities at a higher rate of return than we may obtain from the purchase of existing properties. We believe we have the in-house expertise to create value both through new construction and acquisition and management of value-added properties. Value-added conversion projects represent the redevelopment of land or a building site for a more valuable use and may include such activities as rezoning, redesigning, reconstructing and retenanting. Both new development and value-added conversions require significant management attention and capital investment to maximize their return. Completed development properties may be held in our portfolio, sold to third parties or contributed to our co-investment joint ventures. We believe our global market presence and expertise will enable us to continue to generate and capitalize on a diverse range of development opportunities.

We believe that the multidisciplinary backgrounds of our employees should provide us with the skills and experience to capitalize on strategic renovation, expansion and development opportunities. Many of our officers have specific experience in real estate development, both with us and with national development firms, and over the past three years, we have expanded our development staff. We pursue development projects directly and in joint ventures, providing us with the flexibility to pursue development projects independently or in partnerships, depending on market conditions, submarkets or building sites.

Growth Through Acquisitions and Capital Redeployment

We believe that our acquisition experience and our network of property management, leasing and acquisition resources will continue to provide opportunities for growth. In addition to our internal resources, we have long-term relationships with third-party local property management firms, which we believe may give us access to additional acquisition opportunities, as such managers frequently market properties on behalf of sellers. We believe also that our UPREIT structure enables us to acquire land and industrial properties in exchange for limited partnership units in the operating partnership or AMB Property II, L.P., thereby enhancing our attractiveness to owners and developers seeking to transfer properties on a tax-deferred basis. In addition, we seek to redeploy capital from non-strategic assets into properties that better fit our current investment focus.

We are generally engaged in various stages of negotiations for a number of acquisitions and dispositions that may include acquisitions and dispositions of individual properties, large multi-property portfolios or other real estate companies. We cannot assure you that we will consummate any of these transactions. Such transactions, if we

36

consummate them, may be material individually or in the aggregate. Sources of capital for acquisitions may include retained cash flow from operations, borrowings under our unsecured credit facilities, other forms of secured or unsecured debt financing, issuances of debt or preferred or common equity securities by us or the operating partnership (including issuances of units in the operating partnership or its subsidiaries), proceeds from divestitures of properties, assumption of debt related to the acquired properties and private capital from our co-investment partners.

Growth Through Global Expansion

By the end of 2007, we expect to have approximately 15% of our operating portfolio (based on consolidated and unconsolidated annualized base rent) invested in international markets. As of June 30, 2006, our international operating properties comprised 5.6% of our consolidated annualized base rent. When international operating properties owned in unconsolidated joint ventures are included, our annualized base rents from international investments increases to 10.7%. Our North American target markets outside of the United States currently comprise Canada and Mexico. Our European target markets currently comprise Belgium, France, Germany, Italy, Netherlands, Spain and the United Kingdom. Our Asian target markets currently comprise China, Japan, Singapore and South Korea. We expect to add additional target markets outside the United States in the future.

We believe that expansion into international target markets represents a natural extension of our strategy to invest in industrial property markets with high population densities, close proximity to large customer clusters and available labor pools, and major distribution centers serving global trade. Our international expansion strategy mirrors our focus in the United States on supply-constrained submarkets with political, economic or physical constraints to new development. Our international investments extend our offering of HTD^® facilities for customers who value speed-to-market over storage. Specifically, we are focused on customers whose business is derived from global trade. In addition, our investments target major consumer distribution markets and customers. We believe that our established customer relationships, our contacts in the air cargo and logistics industries, our underwriting of markets and investments and our strategic alliances with knowledgeable developers and managers will assist us in competing internationally. For a discussion of the amount of our revenues attributable to the United States and international markets, please see Part I, Item 1: Note 11 of the “Notes to Consolidated Financial Statements.”

Growth Through Co-Investments

We co-invest in properties with private capital investors through partnerships, limited liability companies or joint ventures. Our co-investment joint ventures are managed by our private capital group and typically operate under the same investment strategy that we apply to our other operations. Typically, we will own a 20-50% interest in our co-investment joint ventures. We believe that our co-investment program will continue to serve as a source of capital for acquisitions and developments; however, we cannot assure you that it will continue to do so. In addition, our co-investment joint ventures typically allow us to earn acquisition and development fees, asset management fees or priority distributions, as well as promoted interests or incentive distributions based on the performance of the co-investment joint ventures. As of June 30, 2006, we owned approximately 59.5 million square feet of our properties (48.3% of the total operating and development portfolio) through our consolidated and unconsolidated joint ventures.

RESULTS OF OPERATIONS

The analysis below includes changes attributable to same store growth, acquisitions, development activity and divestitures. Same store properties are those that we owned during both the current and prior year reporting periods, excluding development properties stabilized after December 31, 2004 (generally defined as properties that are 90% leased or properties for which we have held a certificate of occupancy or where building has been substantially complete for at least 12 months).

As of June 30, 2006, same store industrial properties consisted of properties aggregating approximately 79.1 million square feet. The properties acquired during the three months ended June 30, 2006 consisted of 27 buildings, aggregating approximately 2.5 million square feet. The properties acquired during the three months ended June 30, 2005 consisted of 12 buildings, aggregating approximately 2.1 million square feet. During the three

37

months ended June 30, 2006, property divestitures consisted of eight buildings, aggregating approximately 0.5 million square feet. During the three months ended June 30, 2005, property divestitures and contributions consisted of 11 industrial buildings, aggregating approximately 1.7 million square feet.

The properties acquired during the six months ended June 30, 2006 consisted of 59 buildings, aggregating approximately 4.6 million square feet. The properties acquired during the six months ended June 30, 2005 consisted of 18 buildings, aggregating approximately 2.9 million square feet. During the six months ended June 30, 2006, property divestitures consisted of 12 buildings, aggregating approximately 0.9 million square feet. During the six months ended June 30, 2005, property divestitures and contributions consisted of 35 buildings, aggregating approximately 3.2 million square feet. Our future financial condition and results of operations, including rental revenues, may be impacted by the acquisition of additional properties and dispositions. Our future revenues and expenses may vary materially from historical results.

For the Three Months ended June 30, 2006 and 2005 (dollars in millions):

Revenues	2006		2005		$ Change		% Change
Rental revenues
U.S. industrial:
Same store	$	143.5	$	140.0	$	3.5		2.5	%
2006 acquisitions		2.1		—		2.1		—	%
2005 acquisitions		8.8		2.2		6.6		300.0	%
Development		1.4		1.3		0.1		7.7	%
Other industrial		4.1		2.2		1.9		86.4	%
International industrial		15.4		8.7		6.7		77.0	%
Total rental revenues		175.3		154.4		20.9		13.5	%
Private capital income		5.0		3.4		1.6		47.1	%
Total revenues	$	180.3	$	157.8	$	22.5		14.3	%

U.S. industrial same store rental revenues increased $3.5 million from the prior year on a quarter-to-date basis due primarily to improved occupancy and lower levels of free rent in the same store pool. The properties acquired during 2005 consisted of 41 buildings, aggregating approximately 6.9 million square feet. The properties acquired during 2006 consisted of 59 buildings, aggregating approximately 4.6 million square feet. Other industrial revenues include rental revenues from development projects that have reached certain levels of operation and are not yet part of the same store operating pool of properties. In 2005 and 2006, we continued to acquire properties in China, France, Germany, Japan, Mexico and the Netherlands, resulting in increased international revenues. The increase in private capital income of $1.6 million was primarily due to increased asset management fees from additional assets held in co-investment joint ventures and the formation of AMB Japan Fund I, L.P.

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Costs and Expenses	2006			2005			$ Change			% Change
Property operating costs:
Rental expenses	$	24.5		$	21.2		$	3.3			15.6	%
Real estate taxes		20.3			18.7			1.6			8.6	%
Total property operating costs	$	44.8		$	39.9		$	4.9			12.3	%
Property operating costs
U.S. industrial:
Same store	$	38.2		$	36.6		$	1.6			4.4	%
2006 acquisitions		0.5			—			0.5			—	%
2005 acquisitions		2.2			0.4			1.8			450.0	%
Development		0.6			0.5			0.1			20.0	%
Total debt		1.0			0.2			0.8			400.0	%
International industrial		2.3			2.2			0.1			4.5	%
Total property operating costs		44.8			39.9			4.9			12.3	%
Depreciation and amortization		44.1			37.8			6.3			16.8	%
Impairment losses		5.4			—			5.4			—	%
General and administrative		25.1			20.1			5.0			24.9	%
Other expenses		(0.2	)		(0.8	)		(0.6	)		(75.0	)%
Fund costs		0.5			0.4			0.1			25.0	%
Total costs and expenses	$	119.7		$	97.4		$	21.1			21.7	%

Same store properties’ operating expenses showed an increase of $1.6 million from the prior year on a quarter-to-date basis due primarily to increased insurance costs as evidenced by an increase in property and casualty insurance rates of as much as 30% to 40% over the last year due to hurricane-related losses sustained by the insurance industry. The properties acquired during the fiscal year ended December 31, 2005 consisted of 41 buildings, aggregating approximately 6.9 million square feet. The 2006 acquisitions consisted of 59 buildings, aggregating approximately 4.6 million square feet. Other industrial expenses include expenses from development properties that have reached certain levels of operation and are not yet part of the same store operating pool of properties. In 2005 and 2006, we continued to acquire properties in China, France, Germany, Japan, Mexico and the Netherlands, resulting in increased international operating costs. The 2006 impairment loss was taken on several non-core assets as a result of leasing activities and changes in the economic environment and the holding period of certain assets. The increase in depreciation and amortization expense was due to the increase in our net investment in real estate. The increase in general and administrative expenses was primarily due to increased stock-based compensation expense of $3.4 million and additional staffing and expenses for new initiatives, including our international and development expansions. Other expenses decreased approximately $0.6 million from the prior year on a quarter-to-quarter basis due primarily to a decrease in the loss associated with the deferred compensation plan, partially offset by an increase in certain deal costs. Fund costs represent general and administrative costs paid to third parties associated with our co-investment joint ventures.

Other Income and (Expenses)	2006			2005			$ Change			% Change
Equity in earnings of unconsolidated joint ventures, net	$	8.3		$	7.2		$	1.1			15.3	%
Other income		1.9			1.7			0.2			11.8	%
Gains from disposition of real estate interests		—			17.6			(17.6	)		(100.0	)%
Development profits, net of taxes		45.7			2.0			43.7			2,185.0	%
Interest expense, including amortization		(44.1	)		(37.2	)		6.9			18.5	%
Total other income and (expenses), net	$	11.8		$	(8.7	)	$	(20.5	)		(235.6	)%

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The $1.1 million increase in equity in earnings of unconsolidated joint ventures was primarily due to an increase in gains from the disposition of real estate by our unconsolidated joint ventures, partially offset by an increase in expenses by our unconsolidated joint ventures during the quarter. The 2005 gains from disposition of real estate interests resulted from our contribution of $106.9 million in operating properties to our then newly formed unconsolidated co-investment joint venture, AMB Japan Fund I, L.P. Development profits represent gains from the sale or contribution of development projects including land. The increase in development profits was primarily due to increased disposition and contribution volume during the three months ended June 30, 2006. During the three months ended June 30, 2006, we sold an approximately 32,000 square foot development project for $2.9 million, resulting in an after-tax gain of $0.1 million. In addition, we received approximately $0.4 million in connection with the condemnation of a parcel of land resulting in a loss of $1.0 million, $0.8 million of which was the joint venture partner’s share. During the three months ended June 30, 2006, we contributed one completed development project totaling approximately 0.8 million square feet into AMB Japan Fund I, L.P., and one completed development project totaling approximately 0.6 million square feet into AMB-SGP Mexico, LLC, both unconsolidated joint ventures. As a result of these contributions, we recognized an aggregate after-tax gain of $46.6 million representing the portion of our interest in the contributed properties acquired by the third-party co-investors for cash. During the three months ended June 30, 2005, we sold an approximately 19,000 square foot development project for $2.1 million resulting in an after-tax gain of $0.1 million and contributed one completed development project totaling approximately 0.4 million square feet into AMB-SGP Mexico, LLC and recognized a gain of $1.9 million. The increase in interest expense, including amortization, was due primarily to increased borrowings on unsecured credit facilities and other debt.

Discontinued Operations	2006		2005			$ Change		% Change
Income (loss) attributable to discontinued operations, net of minority interests	$	1.1	$	(0.9	)	$	2.0		(222.2	)%
Gains from dispositions of real estate, net of minority interests		17.1		5.4			11.7		216.7	%
Total discontinued operations	$	18.2	$	4.5		$	13.7		304.4	%

During the three months ended June 30, 2006, we divested ourselves of eight industrial buildings, aggregating approximately 0.5 million square feet for $37.1 million, with a resulting net gain of approximately $17.1 million. During the three months ended June 30, 2005, we divested ourselves of four industrial buildings, aggregating approximately 0.3 million square feet for $33.2 million, with a resulting net gain of approximately $5.4 million.

Preferred Stock	2006			2005			$ Change			% Change
Preferred stock dividends	$	(3.1	)	$	(1.8	)	$	1.3			72.2	%
Preferred unit redemption discount		0.1			—			(0.1	)		—	%
Total preferred stock	$	(3.0	)	$	(1.8	)	$	1.2			66.7	%

In December 2005, we issued 3,000,000 shares of 7.0% Series O Cumulative Redeemable Preferred Stock. The increase in preferred stock dividends is due to the newly-issued shares. In addition, during June 2006, AMB Property II, L.P., one of our subsidiaries, redeemed all 220,440 of its outstanding 7.75% Series E Cumulative Redeemable Preferred Limited Partnership Units and we recognized an increase in income available to common stockholders of $0.1 million for the discount on repurchase, net of original issuance costs.

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For the Six Months ended June 30, 2006 and 2005 (dollars in millions):

Revenues	2006		2005		$ Change			% Change
Rental revenues
U.S. industrial:
Same store	$	287.9	$	278.8	$	9.1			3.3	%
2006 acquisitions		2.4		—		2.4			—	%
2005 acquisitions		17.3		2.9		14.4			496.6	%
Development		2.8		2.4		0.4			16.7	%
Other industrial		6.5		7.5		(1.0	)		(13.3	)%
International industrial		34.4		15.6		18.8			120.5	%
Total rental revenues		351.3		307.2		44.1			14.4	%
Private capital income		10.0		6.8		3.2			47.1	%
Total revenues	$	361.3	$	314.0	$	47.3			15.1	%

U.S. industrial same store rental revenues increased $9.1 million from the prior year on a year-to-date basis due primarily to improved occupancy and lower levels of free rent in the same store pool. The properties acquired during 2005 consisted of 41 buildings, aggregating approximately 6.9 million square feet. The properties acquired during 2006 consisted of 59 buildings, aggregating approximately 4.6 million square feet. Other industrial revenues include rental revenues from properties that have been contributed to an unconsolidated joint venture, and accordingly are not classified as discontinued operations in our consolidated financial statements, and development projects that have reached certain levels of operation and are not yet part of the same store operating pool of properties. In 2005 and 2006, we continued to acquire properties in China, France, Germany, Japan, Mexico and the Netherlands, resulting in increased international industrial revenues. The international properties acquired during 2005 consisted of 8 buildings, aggregating approximately 1.5 million square feet. The international properties acquired during 2006 consisted of 19 buildings, aggregating approximately 1.4 million square feet. The increase in private capital income was primarily due to increased asset management fees from additional assets held in co-investment joint ventures.

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Costs and Expenses	2006		2005		$ Change			% Change
Property operating costs:
Rental expenses	$	49.7	$	42.9	$	6.8			15.9	%
Real estate taxes		40.7		36.6		4.1			11.2	%
Total property operating costs	$	90.4	$	79.5	$	10.9			13.7	%
Property operating costs
U.S. industrial:
Same store	$	77.1	$	73.9	$	3.2			4.3	%
2006 acquisitions		0.6		—		0.6			—	%
2005 acquisitions		4.4		0.6		3.8			—	%
Development		1.3		1.1		0.2			18.2	%
Other industrial		1.2		0.3		0.9			300.0	%
International industrial		5.8		3.6		2.2			61.1	%
Total property operating costs		90.4		79.5		10.9			13.7	%
Depreciation and amortization		87.2		72.6		14.6			20.1	%
Impairment losses		5.4		—		5.4			—	%
General and administrative		48.2		38.1		10.1			26.5	%
Other expenses		0.2		0.8		(0.6	)		(75.0	)%
Fund costs		1.1		0.7		0.4			57.1	%
Total costs and expenses	$	232.5	$	191.7	$	40.8			21.3	%

Same store properties’ operating expenses increased $3.2 million from the prior year on a year-to-date basis due primarily to increased insurance costs and real estate taxes. The 2005 acquisitions consist of 41 buildings, aggregating approximately 6.9 million square feet. The 2006 acquisitions consist of 59 buildings, aggregating approximately 4.6 million square feet. Other industrial expenses include expenses from divested properties that have been contributed to an unconsolidated joint venture, and accordingly are not classified as discontinued operations in our consolidated financial statements, and development properties that have reached certain levels of operation and are not yet part of the same store operating pool of properties. In 2005 and 2006, we continued to acquire properties in China, France, Germany, Japan, Mexico and the Netherlands, resulting in increased international industrial property operating costs. The increase in depreciation and amortization expense was due to the increase in our net investment in real estate. The 2006 impairment loss was taken on several non-core assets as a result of leasing activities and changes in the economic environment and the holding period of certain assets. The increase in general and administrative expenses was primarily due to increased stock-based compensation expense of $4.0 million and additional staffing and expenses for new initiatives, including our international and development expansions. Other expenses decreased approximately $0.6 million from the prior year on a year-to-year basis due primarily to a decrease in losses associated with our deferred compensation plan, partially offset by an increase in certain deal costs. Fund costs represent general and administrative costs paid to third parties associated with our co-investment joint ventures.

Other Income and (Expenses)	2006			2005			$ Change			% Change
Equity in earnings of unconsolidated joint ventures, net	$	10.4		$	8.4		$	2.0			23.8	%
Other income		5.0			1.8			3.2			177.8	%
Gains from disposition of real estate interests		—			18.9			(18.9	)		(100.0	)%
Development profits, net of taxes		46.4			19.9			26.5			133.2	%
Interest expense, including amortization		(83.8	)		(74.0	)		9.8			13.2	%
Total other income and (expenses), net	$	(22.0	)	$	(25.0	)	$	(3.0	)		(12.0	)%

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The $2.0 million increase in equity in earnings of unconsolidated joint ventures was primarily due to an increase in gains from the disposition of real estate by our unconsolidated joint ventures, partially offset by an increase in expenses by our unconsolidated joint ventures during the six months ended June 30, 2006. The $3.2 million increase in other income was primarily due to an increase in bank interest income and dividend income related to two of our investments. The 2005 gains from disposition of real estate interests resulted primarily from our contribution of $106.9 million in operating properties to our newly formed unconsolidated co-investment joint venture, AMB Japan Fund I, L.P. Development profits represent gains from the sale or contributions of development projects including land. The increase in development profits was due to increased disposition and contribution volume during the six months ended June 30, 2006. During the six months ended June 30, 2006, we sold one land parcel and an approximately 32,000 square foot development project for an aggregate sale price of $7.6 million, resulting in an after-tax gain of $0.8 million and contributed one completed development project totaling approximately 0.8 million square feet into AMB Japan Fund I, L.P., and one completed development project totaling approximately 0.6 million square feet into AMB-SGP Mexico, LLC. As a result of these contributions, we recognized an aggregate after-tax gain of $46.6 million representing the portion of our interest in the contributed properties acquired by the third-party co-investors for cash. In addition, we received approximately $0.4 million in connection with the condemnation of a parcel of land resulting in a loss of $1.0 million, $0.8 million of which was the joint venture partner’s share. During the six months ended June 30, 2005, we sold two land parcels and two development projects, aggregating approximately 43,000 square feet, as part of our development-for-sale program, for an aggregate price of $45.0 million, resulting in an after-tax gain of $18.0 million. During the six months ended June 30, 2005, we contributed an industrial property for $23.6 million, consisting of one industrial building, aggregating approximately 0.4 million square feet, to our unconsolidated co-investment joint venture, AMB-SGP Mexico, LLC, resulting in an after-tax gain of $1.9 million. The increase in interest expense, including amortization, was due primarily to increased borrowings on unsecured credit facilities and other debt.

Discontinued Operations	2006		2005			$ Change			% Change
Income (loss) attributable to discontinued operations, net of minority interests	$	1.6	$	(2.6	)	$	4.2			161.5	%
Gains from dispositions of real estate, net of minority interests		24.1		33.3			(9.2	)		(27.6	)%
Total discontinued operations	$	25.7	$	30.7		$	(5.0	)		(16.3	)%

During the six months ended June 30, 2006, we divested ourselves of 12 industrial buildings, aggregating approximately 0.9 million square feet, for an aggregate price of $53.9 million, with a resulting net gain of $24.1 million. During the six months ended June 30, 2005, we divested ourselves of 28 industrial buildings, aggregating approximately 1.9 million square feet, for an aggregate price of $175.3 million, with a resulting net gain of $33.3 million.

Preferred Stock	2006			2005			$ Change		% Change
Preferred stock dividends	$	(6.2	)	$	(3.6	)	$	2.6		72.2	%
Preferred unit redemption issuance costs		(1.0	)		—			1.0		—	%
Total preferred stock	$	(7.2	)	$	(3.6	)	$	3.6		100.0	%

In December 2005, we issued 3,000,000 shares of 7.0% Series O Cumulative Redeemable Preferred Stock. The increase in preferred stock dividends is due to the newly-issued shares. In addition, during the six months ended June 30, 2006, AMB Property II, L.P., one of our subsidiaries, redeemed all 840,000 of its outstanding 8.125% Series H Cumulative Redeemable Preferred Limited Partnership Units and all 220,440 of its outstanding 7.75% Series E Cumulative Redeemable Preferred Limited Partnership Units. As a result, we recognized a decrease in income available to common stockholders of $1.0 million for the original issuance costs, net of discount on repurchase.

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LIQUIDITY AND CAPITAL RESOURCES

Balance Sheet Strategy.  In general, we use unsecured lines of credit, unsecured notes, preferred stock and common equity (issued by us and/or the operating partnership and its subsidiaries) to capitalize our 100%-owned assets. Over time, we plan to retire non-recourse, secured debt encumbering our 100%-owned assets and replace that debt with unsecured notes. In managing our co-investment joint ventures, in general, we use non-recourse, secured debt to capitalize our co-investment joint ventures.

We currently expect that our principal sources of working capital and funding for acquisitions, development, expansion and renovation of properties will include:

•  retained earnings and cash flow from operations;

•  private capital from co-investment partners;

•  net proceeds from contribution of properties and completed development projects to our co-investment joint ventures;

•  borrowings under our unsecured credit facilities;

•  other forms of secured or unsecured financing;

•  proceeds from debt or limited partnership unit offerings (including issuances of limited partnership units by our subsidiaries); and

•  net proceeds from divestitures of properties.

We currently expect that our principal funding requirements will include:

•  working capital;

•  development, expansion and renovation of properties;

•  acquisitions, including our global expansion;

•  debt service; and

•  dividends and distributions on outstanding common and preferred stock and limited partnership units.

Cash flows.  For the six months ended June 30, 2006, cash provided by operating activities was $159.9 million as compared to $81.5 million for the same period in 2005. This change is primarily due to increases in rental rates, partially offset by an increase in general and administrative expenses primarily due to additional staffing and expenses for new initiatives, including our international and development expansions and increased occupancy costs related to the expansion of satellite offices. Cash used in investing activities was $643.2 million for the six months ended June 30, 2006, as compared to cash used for investing activities of $236.1 million for the same period in 2005. This change is primarily due to an increase in funds used for property acquisitions and capital expenditures, and a decrease in proceeds from property divestitures, offset by less funds used for additions to interests in unconsolidated joint ventures and an increase in capital distributions received from unconsolidated joint ventures. Cash provided by financing activities was $444.3 million for the six months ended June 30, 2006, as compared to $188.2 million for the same period in 2005. This change is due primarily to an increase in borrowings, net of repayments and issuance of common stock, offset by the cost of the repurchase of preferred units during the six months ended June 30, 2006.

We believe that our sources of working capital, specifically our cash flow from operations, borrowings available under our unsecured credit facilities and our ability to access private and public debt and equity capital, are adequate for us to meet our liquidity requirements for the foreseeable future. The unavailability of capital could adversely affect our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our stock.

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Capital Resources

Property Divestitures.  During the three months ended June 30, 2006 we divested ourselves of eight industrial buildings aggregating approximately 0.5 million square feet, for an aggregate price of $37.1 million, with a resulting net gain of $17.1 million. During the six months ended June 30, 2006, we divested ourselves of 12 industrial buildings, aggregating approximately 0.9 million square feet, for an aggregate price of $53.9 million, with a resulting net gain of $24.1 million.

Development Sales and Contributions.  During the three months ended June 30, 2006, we sold an approximately 32,000 square foot development project for $2.9 million, resulting in an after-tax gain of $0.1 million. In addition, during the three and six months ended June 30, 2006, we received approximately $0.4 million in connection with the condemnation of a parcel of land resulting in a loss of $1.0 million, $0.8 million of which was our joint venture partner’s share. For the six months ended June 30, 2006, we sold one land parcel and an approximately 32,000 square foot development project for an aggregate sale price of $7.6 million, resulting in an after-tax gain of $0.8 million. During the three months ended June 30, 2005, we sold an approximately 19,000 square foot development project for $2.1 million resulting in an after-tax gain of $0.1 million. During the six months ended June 30, 2005, we sold two land parcels and two development projects, aggregating approximately 43,000 square feet, for an aggregate price of $45.0 million, resulting in an after-tax gain of $18.2 million, of which $9.9 million was our joint venture partners’ share. During the three and six months ended June 30, 2006, we contributed one completed development project into AMB Japan Fund I, L.P., and another completed development project into AMB-SGP Mexico, LLC, both unconsolidated co-investment joint ventures. As a result of these contributions, we recognized an aggregate after-tax gain of $46.6 million representing the portion of our interest in the contributed property acquired by the third-party co-investor for cash.

Properties Held for Contribution.  As of June 30, 2006, we held for contribution to a co-investment joint venture three industrial buildings with an aggregate net book value of $72.0 million, which, when contributed to the joint venture, will reduce our current ownership interest from approximately 100% to an expected range of 20-50%. These assets are not being held for divestiture under SFAS No. 144.

Properties Held for Divestiture.  As of June 30, 2006, we held for divestiture five industrial buildings and one land parcel, which are not in our core markets, do not meet our current strategic objectives or which we have included as part of our development-for-sale program. The divestitures of the properties are subject to negotiation of acceptable terms and other customary conditions. As of June 30, 2006, the net carrying value of the properties held for divestiture was $46.9 million. Expected net sales proceeds exceed the net carrying value of the properties.

Co-investment Joint Ventures.  Through the operating partnership, we enter into co-investment joint ventures with institutional investors. These co-investment joint ventures are managed by our private capital group and provide us with an additional source of capital to fund certain acquisitions, development projects and renovation projects, as well as private capital income. We generally consolidate these joint ventures for financial reporting purposes because they are not variable interest entities and because we are the sole managing general partner and control all major operating decisions. However, in certain cases, our co-investment joint ventures are unconsolidated because we do not control all major operating decisions.

Third-party equity interests in the joint ventures are reflected as minority interests in the consolidated financial statements. As of June 30, 2006, we owned approximately 59.5 million square feet of our properties (48.3% of the total operating and development portfolio) through our consolidated and unconsolidated joint ventures. We may

45

make additional investments through these joint ventures or new joint ventures in the future and presently plan to do so. Our consolidated co-investment joint ventures at June 30, 2006 (dollars in thousands):

		Our
		Approximate
		Ownership			Original Planned
Consolidated Co-investment Joint Venture	Joint Venture Partner	Percentage			Capitalization(1)
AMB/Erie, L.P.	Erie Insurance Company and affiliates		50	%	$	200,000
AMB Partners II, L.P.	City and County of San Francisco Employees’ Retirement System		20	%	$	580,000
AMB-SGP, L.P.	Industrial JV Pte Ltd(2)		50	%	$	425,000
AMB Institutional Alliance Fund II, L.P.	AMB Institutional Alliance REIT II, Inc.(3)		20	%	$	489,000
AMB-AMS, L.P.(4)	PMT, SPW and TNO(5)		39	%	$	200,000
AMB Institutional Alliance Fund III, L.P.(6)	AMB Institutional Alliance REIT III, Inc.		20	%		N/A

(1)	Planned capitalization includes anticipated debt and both partners’ expected equity contributions.
(2)	A subsidiary of the real estate investment subsidiary of the Government of Singapore Investment Corporation.
(3)	Comprised of 14 institutional investors as stockholders and one third-party limited partner as of June 30, 2006.
(4)	AMB-AMS, L.P. is a co-investment partnership with three Dutch pension funds advised by Mn Services NV.
(5)	PMT is Stichting Pensioenfonds Metaal en Techniek, SPW is Stichting Pensioenfonds voor de Woningcorporaties and TNO is Stichting Pensioenfonds TNO.
(6)	AMB Institutional Alliance Fund III, L.P. is an open-ended co-investment partnership formed in 2004 with institutional investors, which invest through a private real estate investment trust.

Our unconsolidated joint ventures at June 30, 2006 (dollars in thousands):

		Our
		Approximate
		Ownership			Original Planned
Unconsolidated Co-investment Joint Venture	Joint Venture Partner	Percentage			Capitalization(1)
AMB-SGP Mexico, LLC	Industrial (Mexico) JV Pte Ltd(2)		20	%	$	715,000
AMB Japan Fund I, L.P.	Institutional investors(3)		20	%	$	2,200,000	(4)

(1)	Planned capitalization includes anticipated debt and both partners’ expected equity contributions.
(2)	A subsidiary of the real estate investment subsidiary of the Government of Singapore Investment Corporation.
(3)	Comprised of 13 institutional investors as of June 30, 2006.
(4)	Using the exchange rate at June 30, 2006.

Common and Preferred Equity.  We have authorized for issuance 100,000,000 shares of preferred stock, of which the following series were designated as of June 30, 2006: 1,595,337 shares of series D preferred; 220,440 shares of series E cumulative redeemable preferred; 267,439 shares of series F cumulative redeemable preferred; 510,000 shares of series I cumulative redeemable preferred; 800,000 shares of series J cumulative redeemable preferred; 800,000 shares of series K cumulative redeemable preferred; 2,300,000 shares of series L cumulative redeemable preferred, of which 2,000,000 are outstanding; 2,300,000 shares of series M cumulative redeemable preferred, all of which are outstanding, and 3,000,000 shares of series O cumulative redeemable preferred, all of which are outstanding.

On September 24, 2004, AMB Property II, L.P., a partnership in which Texas AMB I, LLC, a Delaware limited liability company and our indirect subsidiary, owns an approximate 1.0% general partnership interest and the operating partnership owns an approximate 99% common limited partnership interest, issued 729,582 5.0% Series N Cumulative Redeemable Preferred Limited Partnership Units at a price of $50.00 per unit. The series N preferred units were issued to Robert Pattillo Properties, Inc. in exchange for the contribution of certain parcels of land that are located in multiple markets to AMB Property II, L.P. Effective January 27, 2006, Robert Pattillo Properties, Inc. exercised its rights under its Put Agreement, dated September 24, 2004, with the operating

46

partnership, and sold all of its series N preferred units to the operating partnership for an aggregate price of $36.6 million, including accrued and unpaid distributions. Also on January 27, 2006, AMB Property II, L.P. repurchased all of the series N preferred units from the operating partnership at an aggregate price of $36.6 million and cancelled all of the outstanding series N preferred units as of such date.

On March 21, 2006, AMB Property II, L.P., repurchased all 840,000 of its outstanding 8.125% Series H Cumulative Redeemable Preferred Limited Partnership Units from a single institutional investor for an aggregate price of $42.8 million, including accrued and unpaid distributions. In connection with this repurchase, we reclassified all of our outstanding 840,000 8.125% Series H Cumulative Redeemable Preferred Stock as preferred stock.

On June 30, 2006, AMB Property II, L.P., repurchased all 220,440 of its outstanding 7.75% Series E Cumulative Redeemable Preferred Limited Partnership Units from a single institutional investor for an aggregate price of $10.9 million, including accrued and unpaid distributions.

In December 2005, our board of directors approved a new two-year common stock repurchase program for the discretionary repurchase of up to $200.0 million of our common stock. We did not repurchase or retire any shares of our common stock during the three and six months ended June 30, 2006.

Debt.  In order to maintain financial flexibility and facilitate the deployment of capital through market cycles, we presently intend to operate with an our share of total debt-to-our share of total market capitalization ratio of approximately 45% or less. As of June 30, 2006, our share of total debt-to-our share of total market capitalization ratio was 37.1%. (See footnote 1 to the Capitalization Ratios table contained in Part 1, Item 2: “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” below for our definitions of “our share of total market capitalization,” “market equity” and “our share of total debt.”) However, we typically finance our consolidated co-investment joint ventures with secured debt at a loan-to-value ratio of 50-65% per our joint venture partnership agreements. Additionally, we currently intend to manage our capitalization in order to maintain an investment grade rating on our senior unsecured debt. Regardless of these policies, however, our organizational documents do not limit the amount of indebtedness that we may incur. Accordingly, our management could alter or eliminate these policies without stockholder approval or circumstances could arise that could render us unable to comply with these policies.

As of June 30, 2006, the aggregate principal amount of our secured debt was $1.8 billion, excluding unamortized debt premiums of $9.7 million. Of the $1.8 billion of secured debt, $1.5 billion is secured by properties in our joint ventures. The secured debt is generally non-recourse and bears interest at rates varying from 0.8% to 10.4% per annum (with a weighted average rate of 6.0%) and final maturity dates ranging from October 2006 to January 2025. As of June 30, 2006, $1.5 billion of the secured debt obligations bear interest at fixed rates with a weighted average interest rate of 6.0%, while the remaining $282.2 million bear interest at variable rates (with a weighted average interest rate of 4.1%).

As of June 30, 2006, the operating partnership had outstanding an aggregate of $1.1 billion in unsecured senior debt securities, which bore a weighted average interest rate of 6.2% and had a weighted average term of 4.4 years. These unsecured senior debt securities include $300.0 million in notes issued in June 1998, $225.0 million of medium-term notes, which were issued under the operating partnership’s 2000 medium-term note program, $325.0 million of medium-term notes, which were issued under the operating partnership’s 2002 medium-term note program, and approximately $112.5 million of 5.094% Notes Due 2015, which were issued to Teachers Insurance and Annuity Association of America on July 11, 2005 in a private placement, in exchange for the cancellation of $100 million of notes that were issued in June 1998 resulting in a discount of approximately $12.5 million. The unsecured senior debt securities are subject to various covenants. Also included is a $100.0 million term loan which matures in December 2006.

We guarantee the operating partnership’s obligations with respect to its senior debt securities. If we are unable to refinance or extend principal payments due at maturity or pay them with proceeds from other capital transactions, then our cash flow may be insufficient to pay dividends to our stockholders in all years and to repay debt upon maturity. Furthermore, if prevailing interest rates or other factors at the time of refinancing (such as the reluctance of lenders to make commercial real estate loans) result in higher interest rates upon refinancing, then the interest

47

expense relating to that refinanced indebtedness would increase. This increased interest expense would adversely affect our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our stock.

Credit Facilities.  On June 1, 2006, the operating partnership entered into a third amended and restated $550.0 million unsecured revolving credit agreement that replaced its then-existing $500.0 million credit facility, which was to mature on June 1, 2007. We are a guarantor of the operating partnership’s obligations under the credit facility. The line, which matures on June 1, 2010, carries a one-year extension option and can be increased up to $700.0 million upon certain conditions. The rate on the borrowings is generally LIBOR plus a margin, based on the operating partnership’s long-term debt rating, which was 42.5 basis points as of June 30, 2006, with an annual facility fee of 15 basis points. The four year credit facility includes a multi-currency component, under which up to $550.0 million can be drawn in U.S. Dollars, Euros, Yen or British Pounds Sterling. The operating partnership uses its unsecured credit facility principally for acquisitions, funding development activity and general working capital requirements. As of June 30, 2006, the outstanding balance on the credit facility was $380.8 million and the remaining amount available was $143.6 million, net of outstanding letters of credit of $25.6 million. The outstanding balance included borrowings denominated in Euros, which, using the exchange rate in effect on June 30, 2006, would equal approximately $250.8 million U.S. dollars.

On June 23, 2006, AMB Japan Finance Y.K., a subsidiary of the operating partnership and as the initial borrower, entered into an amended and restated revolving credit agreement for a 45.0 billion Yen unsecured revolving credit facility, which, using the exchange rate in effect on June 30, 2006, equaled approximately $393.0 million U.S. dollars. This replaced the 35.0 billion Yen unsecured revolving credit facility executed on June 29, 2004, as previously amended, which using the exchange rate in effect on June 30, 2006, equaled approximately $306.0 million U.S. dollars. We, along with the operating partnership, guarantee the obligations of AMB Japan Finance Y.K. under the revolving credit facility, as well as the obligations of any other entity in which the operating partnership directly or indirectly owns an ownership interest and which is selected from time to time to be a borrower under and pursuant to the revolving credit agreement. The borrowers intend to use the proceeds from the facility to fund the acquisition and development of properties and for other real estate purposes in Japan, China and South Korea. Generally, borrowers under the revolving credit facility have the option to secure all or a portion of the borrowings under the revolving credit facility with certain real estate assets or equity in entities holding such real estate assets. The revolving credit facility matures in June 2010 and has a one-year extension option. The credit facility can be increased up to 55.0 billion Yen, which, using the exchange rate in effect on June 30, 2006, equaled approximately $481.0 million U.S. dollars. The extension option is subject to the satisfaction of certain conditions and the payment of an extension fee equal to 0.15% of the outstanding commitments under the facility at that time. The rate on the borrowings is generally TIBOR plus a margin, which is based on the credit rating of the operating partnership’s long-term debt and was 42.5 basis points as of June 30, 2006. In addition, there is an annual facility fee, payable in quarterly amounts, which is based on the credit rating of the operating partnership’s long-term debt, and was 15 basis points of the outstanding commitments under the facility as of June 30, 2006. As of June 30, 2006, the outstanding balance on this credit facility, using the exchange rate in effect on June 30, 2006, was $286.7 million in U.S. dollars.

On June 13, 2006, the operating partnership and certain of its consolidated subsidiaries entered into a fourth amended and restated credit agreement for a $250.0 million unsecured revolving credit facility, which replaced the third amended and restated credit agreement for a $250.0 million unsecured credit facility. On February 16, 2006, the third amended and restated credit agreement replaced the then-existing $100.0 million unsecured revolving credit facility that was to mature in June 2008. We, along with the operating partnership, guarantee the obligations for such subsidiaries and other entities controlled by us or the Operating Partnership that are selected to be borrowers by the operating partnership from time to time under and pursuant to the credit facility. The four-year credit facility includes a multi-currency component under which up to $250.0 million can be drawn in U.S. dollars, Hong Kong dollars, Singapore dollars, Canadian dollars and Euros. The line, which matures in February 2010 and carries a one-year extension option, can be increased up to $350.0 million upon certain conditions and the payment of an extension fee equal to 0.15% of the outstanding commitments. The rate on the borrowings is generally LIBOR plus a margin, based on the credit rating of the operating partnership’s senior unsecured long-term debt, which was 60 basis points as of June 30, 2006, with an annual facility fee based on the credit rating of the operating

48

partnership’s senior unsecured long-term debt. The credit agreement contains affirmative covenants, including financial reporting requirements and maintenance of specified financial ratios by the operating partnership, and negative covenants, including limitations on the incurrence of liens and limitations on mergers or consolidations. The borrowers intend to use the proceeds from the facility to fund the acquisition and development of properties and general working capital requirements. As of June 30, 2006, the outstanding balance on this facility was approximately $237.0 million.

The tables below summarize our debt maturities and capitalization as of June 30, 2006 (dollars in thousands):

Debt
	Our			Joint			Unsecured
	Secured			Venture			Senior			Credit			Other
	Debt(4)			Debt			Debt			Facilities(1)			Debt			Total Debt
2006	$	45,567		$	66,699		$	150,000		$	—		$	15,534		$	277,800
2007		13,385			58,356			75,000			—			752			147,493
2008		42,069			179,272			175,000			—			810			397,151
2009		4,044			122,366			100,000			—			873			227,283
2010		69,865			118,834			250,000			904,452			941			1,344,092
2011		21,681			363,111			75,000			—			1,014			460,806
2012		98,749			172,120			—			—			1,093			271,962
2013		26,183			217,175			—			—			65,920			309,278
2014		16,262			5,460			—			—			616			22,338
2015		2,106			118,403			112,491			—			664			233,664
Thereafter		25,906			32,697			125,000			—			—			183,603
Subtotal		365,817			1,454,493			1,062,491			904,452			88,217			3,875,470
Unamortized premiums/(discounts)		2,108			7,550			(11,242	)		—			—			(1,584	)
Total consolidated debt		367,925			1,462,043			1,051,249			904,452			88,217			3,873,886
Our share of unconsolidated joint venture debt(2)		—			167,321			—			—			—			167,321
Total debt		367,925			1,629,364			1,051,249			904,452			88,217			4,041,207
Joint venture partners’ share of consolidated joint venture debt		—			(1,005,456	)		—			—			(52,000	)		(1,057,456	)
Our share of total debt(3)	$	367,925		$	623,908		$	1,051,249		$	904,452		$	36,217		$	2,983,751
Weighed average interest rate		4.6	%		6.3	%		6.2	%		3.2	%		7.3	%		5.4	%
Weighed average maturity (in years)		5.3			5.3			4.4			3.8			5.7			4.7

(1)	Includes $394.0 million, $286.7 million and $93.8 million in Euro, Yen and Canadian dollar based borrowings, respectively, translated to U.S. dollars using the functional exchange rates in effect on June 30, 2006.
(2)	The weighted average interest and maturity for the unconsolidated joint venture debt were 4.5% and 4.8 years, respectively.
(3)	Our share of total debt is the pro rata portion of the total debt based on our percentage of equity interest in each of the consolidated or unconsolidated joint ventures holding the debt. We believe that our share of total debt is a meaningful supplemental measure, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. In addition, it allows for a more meaningful comparison of our debt to that of other companies that do not consolidate their joint ventures. Our share of total debt is not intended to reflect our actual liability should there be a default under any or all of such loans or a liquidation of the joint ventures. The above table reconciles our share of total debt to total consolidated debt, a GAAP financial measure.
(4)	Our secured debt and joint venture debt include debt related to international assets in the amount of $267.4 million. Of this, $87.4 million is associated with assets located in Asia and the remaining $180.0 million is related to assets located in Europe.

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Market Equity (dollars in thousands except share and per share data)
	Shares/Units		Market		Market
Security	Outstanding		Price		Value
Common stock		88,099,463	$	50.55	$	4,453,428
Common limited partnership units(1)		4,385,207		50.55		221,672
Total		92,484,670			$	4,675,100

(1)  Includes 145,548 class B common limited partnership units issued by AMB Property II, L.P. in November 2003.

Preferred Stock and Units
	Dividend			Liquidation
Security	Rate			Preference		Redemption/Callable Date
Series D preferred units		7.75	%	$	79,767	May 2004
Series F preferred units		7.95	%		10,057	March 2005
Series I preferred units		8.00	%		25,500	March 2006
Series J preferred units		7.95	%		40,000	September 2006
Series K preferred units		7.95	%		40,000	April 2007
Series L preferred stock		6.50	%		50,000	June 2008
Series M preferred stock		6.75	%		57,500	November 2008
Series O preferred stock		7.00	%		75,000	December 2010
Weighted average/total		7.35	%	$	377,824

Capitalization Ratios as of June 30, 2006
Total debt-to-total market capitalization(1)	44.4	%
Our share of total debt-to-our share of total market capitalization(1)	37.1	%
Total debt plus preferred-to-total market capitalization(1)	48.6	%
Our share of total debt plus preferred-to-our share of total market capitalization(1)	41.8	%
Our share of total debt-to-our share of total book capitalization(1)	56.9	%

(1)  Our definition of “total market capitalization” is total debt plus preferred equity liquidation preferences plus market equity. Our definition of “our share of total market capitalization” is our share of total debt plus preferred equity liquidation preferences plus market equity. Our definition of “market equity” is the total number of outstanding shares of our common stock and common limited partnership units multiplied by the closing price per share of our common stock as of June 30, 2006. Our definition of “preferred” is preferred equity liquidation preferences. Our share of total book capitalization is defined as our share of total debt plus minority interests to preferred unitholders and limited partnership unitholders plus stockholders’ equity. Our share of total debt is the pro rata portion of the total debt based on our percentage of equity interest in each of the consolidated or unconsolidated ventures holding the debt. We believe that our share of total debt is a meaningful supplemental measure, which enables both management and investors to analyze our leverage and to compare our leverage to that of other companies. In addition, it allows for a more meaningful comparison of our debt to that of other companies that do not consolidate their joint ventures. Our share of total debt is not intended to reflect our actual liability should there be a default under any or all of such loans or a liquidation of the joint ventures. For a reconciliation of our share of total debt to total consolidated debt, a GAAP financial measure, please see the table of debt maturities and capitalization above.

Liquidity

As of June 30, 2006, we had $202.3 million in cash and cash equivalents and $263.0 million of additional available borrowings under our credit facilities. As of June 30, 2006, we had $29.6 million in restricted cash.

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Our board of directors declared a regular cash dividend for the quarter ended June 30, 2006 of $0.46 per share of common stock, and the operating partnership announced its intention to pay a regular cash distribution for the quarter ended June 30, 2006 of $0.46 per common unit. The dividends and distributions were payable on July 17, 2006 to stockholders and unitholders of record on July, 7, 2006. The series L, M, and O preferred stock dividends were payable on July 17, 2006 to stockholders of record on July 7, 2006. The series F, J and K preferred unit quarterly distributions were payable on July 17, 2006. The series D and I preferred unit quarterly distributions were paid on June 25, 2006. The series E preferred unit quarterly distributions were paid on its date of repurchase by us on June 30, 2006. The following table sets forth the dividends and distributions paid or payable per share or unit for the three and six months ended June 30, 2006 and 2005:

		For the Three				For the Six
		Months Ended				Months Ended
		June 30,				June 30,
Paying Entity	Security	2006		2005		2006		2005
AMB Property Corporation	Common stock	$	0.460	$	0.440	$	0.920	$	0.880
AMB Property Corporation	Series L preferred stock	$	0.406	$	0.406	$	0.813	$	0.813
AMB Property Corporation	Series M preferred stock	$	0.422	$	0.422	$	0.844	$	0.844
AMB Property Corporation	Series O preferred stock	$	0.438		n/a	$	0.875		n/a
Operating Partnership	Common limited partnership units	$	0.460	$	0.440	$	0.920	$	0.880
Operating Partnership	Series J preferred units	$	0.994	$	0.994	$	1.988	$	1.988
Operating Partnership	Series K preferred units	$	0.994	$	0.994	$	1.988	$	1.988
AMB Property II, L.P.	Class B common limited partnership units	$	0.460	$	0.440	$	0.920	$	0.880
AMB Property II, L.P.	Series D preferred units	$	0.969	$	0.969	$	1.938	$	1.938
AMB Property II, L.P.	Series E preferred units(1)	$	0.807	$	0.969	$	1.776	$	1.938
AMB Property II, L.P.	Series F preferred units	$	0.994	$	0.994	$	1.988	$	1.988
AMB Property II, L.P.	Series H preferred units(2)		n/a	$	1.016	$	0.970	$	2.031
AMB Property II, L.P.	Series I preferred units	$	1.000	$	1.000	$	2.000	$	2.000
AMB Property II, L.P.	Series N preferred units(3)		n/a	$	0.625	$	0.215	$	1.250

(1)	In June 2006, AMB Property II, L.P. repurchased all of its series E preferred units.
(2)	In March 2006, AMB Property II, L.P. repurchased all of its series H preferred units.
(3)	The holder of the series N preferred units exercised its put option in January 2006 and sold all of its series N preferred units to the operating partnership and AMB Property II, L.P. repurchased all of such units from the operating partnership.

The anticipated size of our distributions, using only cash from operations, will not allow us to retire all of our debt as it comes due. Therefore, we intend to also repay maturing debt with net proceeds from future debt or equity financings, as well as property divestitures. However, we may not be able to obtain future financings on favorable terms or at all. Our inability to obtain future financings on favorable terms or at all would adversely affect our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our stock.

Capital Commitments

Developments.  During the three months ended June 30, 2006, we initiated four new industrial development projects in North America and Asia with a total estimated investment of $134.6 million, aggregating an estimated 2.0 million square feet. During the six months ended June 30, 2006, we initiated 11 new industrial development projects in North America and Asia with a total expected investment of $353.4 million, aggregating approximately 4.9 million square feet. As of June 30, 2006, we had 47 projects in our development pipeline representing a total estimated investment of $1.1 billion upon completion, of which one industrial project totaling approximately 0.2 million square feet and with an aggregate estimated investment of $12.6 million upon completion is held in an unconsolidated joint venture. In addition, during the six months ended June 30, 2006, we held four development

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projects available for sale or contribution, representing a total estimated investment of $89.4 million upon completion. Of the total development pipeline, $656.5 million had been funded as of June 30, 2006, and an estimated $487.5 million was required to complete current projects. We expect to fund these expenditures with cash from operations, borrowings under our credit facilities, debt or equity issuances, net proceeds from property divestitures and private capital from co-investment partners, which could have an adverse effect on our cash flow.

Acquisitions.  During the three months ended June 30, 2006, we acquired 27 industrial buildings, aggregating approximately 2.5 million square feet for a total expected investment of $246.8 million. During the six months ended June 30, 2006, we acquired 59 industrial buildings, aggregating approximately 4.6 million square feet for a total expected investment of $400.1 million, of which we acquired 38 buildings through two of our co-investment joint ventures. We generally fund our acquisitions through private capital contributions, borrowings under our credit facilities, cash, debt issuances and net proceeds from property divestitures.

Lease Commitments.  We have entered into operating ground leases on certain land parcels, primarily on-tarmac facilities and office space with remaining lease terms from one to 56 years. These operating lease payments are amortized ratably over the lesser of the terms of the related leases or 40 years.

Co-investment Joint Ventures.  Through the operating partnership, we enter into co-investment joint ventures with institutional investors. These co-investment joint ventures are managed by our private capital group and provide us with an additional source of capital to fund acquisitions, development projects and renovation projects, as well as private capital income. As of June 30, 2006, we had investments in co-investment joint ventures with a gross book value of $2.8 billion, which are consolidated for financial reporting purposes, and net equity investments in two unconsolidated co-investment joint ventures of $37.2 million. As of June 30, 2006, we may make additional capital contributions to current and planned co-investment joint ventures of up to $122.1 million (using the exchange rates at June 30, 2006) pursuant to the terms of the joint venture agreements. From time to time, we may raise additional equity commitments for AMB Institutional Alliance Fund III, L.P., an open-ended consolidated co-investment joint venture formed in 2004 with institutional investors, which invests through a private real estate investment trust. This would increase our obligation to make additional capital commitments. Pursuant to the terms of the partnership agreement of this fund, we are obligated to contribute 20% of the total equity commitments to the fund until such time our total equity commitment is greater than $150.0 million, at which time, our obligation is reduced to 10% of the total equity commitments. We expect to fund these contributions with cash from operations, borrowings under our credit facilities, debt or equity issuances or net proceeds from property divestitures, which could adversely effect our cash flow.

Captive Insurance Company.  In December 2001, we formed a wholly-owned captive insurance company, Arcata National Insurance Ltd., which provides insurance coverage for all or a portion of losses below the deductible under our third-party policies. We capitalized Arcata National Insurance Ltd. in accordance with the applicable regulatory requirements. Arcata National Insurance Ltd. established annual premiums based on projections derived from the past loss experience of our properties. Annually, we engage an independent third party to perform an actuarial estimate of future projected claims, related deductibles and projected expenses necessary to fund associated risk management programs. Premiums paid to Arcata National Insurance Ltd. may be adjusted based on this estimate. Premiums paid to Arcata National Insurance Ltd. have a retrospective component, so that if expenses, including losses, deductibles and reserves, are less than premiums collected, the excess may be returned to the property owners (and, in turn, as appropriate, to the customers). Conversely, subject to certain limitations, if expenses, including losses, deductibles and reserves, are greater than premiums collected, an additional premium will be charged. As with all recoverable expenses, differences between estimated and actual insurance premiums are recognized in the subsequent year. Through this structure, we believe that we have more comprehensive insurance coverage at an overall lower cost than would otherwise be available in the market.

Potential Unknown Liabilities.  Unknown liabilities may include the following:

•  liabilities for clean-up or remediation of undisclosed environmental conditions;

•  claims of customers, vendors or other persons dealing with our predecessors prior to our formation or acquisition transactions that had not been asserted prior to our formation or acquisition transactions;

•  accrued but unpaid liabilities incurred in the ordinary course of business;

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•  tax liabilities; and

•  claims for indemnification by the officers and directors of our predecessors and others indemnified by these entities.

OFF-BALANCE SHEET ARRANGEMENTS

Standby Letters of Credit.  As of June 30, 2006, we had provided approximately $37.1 million in letters of credit, of which $25.6 million was provided under the operating partnership’s $550.0 million unsecured credit facility. The letters of credit were required to be issued under certain ground lease provisions, bank guarantees and other commitments.

Guarantees.  Other than parent guarantees associated with the unsecured debt, as of June 30, 2006, we had outstanding guarantees in the aggregate amount of $205.8 million in connection with certain acquisitions. As of June 30, 2006, we guaranteed $26.1 million and $2.3 million on outstanding loans on two of our consolidated joint ventures and one of our unconsolidated joint ventures, respectively.

Performance and Surety Bonds.  As of June 30, 2006, we had outstanding performance and surety bonds in an aggregate amount of $1.0 million. These bonds were issued in connection with certain of our development projects and were posted to guarantee certain tax obligations and the construction of certain real property improvements and infrastructure, such as grading, sewers and streets. Performance and surety bonds are commonly required by public agencies from real estate developers. Performance and surety bonds are renewable and expire upon the payment of the taxes due or the completion of the improvements and infrastructure.

Promoted Interests and Other Contractual Obligations.  Upon the achievement of certain return thresholds and the occurrence of certain events, we may be obligated to make payments to certain of our joint venture partners pursuant to the terms and provisions of their contractual agreements with us. From time to time in the normal course of our business, we enter into various contracts with third parties that may obligate us to make payments or perform other obligations upon the occurrence of certain events.

SUPPLEMENTAL EARNINGS MEASURES

FFO.  We believe that net income, as defined by GAAP, is the most appropriate earnings measure. However, we consider funds from operations, or FFO, as defined by the National Association of Real Estate Investment Trusts (NAREIT), to be a useful supplemental measure of our operating performance. FFO is defined as net income, calculated in accordance with GAAP, less gains (or losses) from dispositions of real estate held for investment purposes and real estate-related depreciation, and adjustments to derive our pro rata share of FFO of consolidated and unconsolidated joint ventures. Further, we do not adjust FFO to eliminate the effects of non-recurring charges. We believe that FFO, as defined by NAREIT, is a meaningful supplemental measure of our operating performance because historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization expenses. However, since real estate values have historically risen or fallen with market and other conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient. Thus, NAREIT created FFO as a supplemental measure of operating performance for real estate investment trusts that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. We believe that the use of FFO, combined with the required GAAP presentations, has been beneficial in improving the understanding of operating results of real estate investment trusts among the investing public and making comparisons of operating results among such companies more meaningful. We consider FFO to be a useful measure for reviewing our comparative operating and financial performance because, by excluding gains or losses related to sales of previously depreciated operating real estate assets and real estate depreciation and amortization, FFO can help the investing public compare the operating performance of a company’s real estate between periods or as compared to other companies.

While FFO is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an

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alternative to those measures in evaluating our liquidity or operating performance. FFO also does not consider the costs associated with capital expenditures related to our real estate assets nor is FFO necessarily indicative of cash available to fund our future cash requirements. Further, our computation of FFO may not be comparable to FFO reported by other real estate investment trusts that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do.

The following table reflects the calculation of FFO reconciled from net income for the three and six months ended June 30, 2006 and 2005 (dollars in thousands, except per share and unit amounts):

	For the Three Months						For the Six Months
	Ended June 30,						Ended June 30,
	2006			2005			2006			2005
Net income(1)	$	75,353		$	40,789		$	102,930		$	87,556
Gain from dispositions of real estate, net of minority interests		(17,073	)		(22,992	)		(24,087	)		(52,238	)
Depreciation and amortization:
Total depreciation and amortization		44,088			37,764			87,162			72,636
Discontinued operations’ depreciation		350			7,166			544			16,416
Non-real estate depreciation		(1,068	)		(802	)		(2,068	)		(1,547	)
Adjustments to derive FFO from consolidated joint ventures:
Joint venture partners’ minority interests (Net income)		9,060			8,893			17,731			18,242
Limited partnership unitholders’ minority interests (Net income)		495			849			1,311			1,379
Limited partnership unitholders’ minority interests (Development profits)		2,208			94			2,240			552
Discontinued operations’ minority interests (Net income)		(110	)		2,025			(214	)		4,180
FFO attributable to minority interests		(21,748	)		(24,103	)		(42,183	)		(47,690	)
Adjustments to derive FFO from unconsolidated joint ventures:
Our share of net income		(8,278	)		(7,188	)		(10,366	)		(8,430	)
Our share of FFO		2,096			4,469			5,305			7,216
Our share of development profits, net		—			5,441			—			5,441
Preferred stock dividends		(3,095	)		(1,783	)		(6,191	)		(3,566	)
Preferred unit redemption issuance costs		77			—			(1,020	)		—
Funds from operations	$	82,355		$	50,622		$	131,094		$	100,147
Basic FFO per common share and unit	$	0.90		$	0.57		$	1.44		$	1.14
Diluted FFO per common share and unit	$	0.87		$	0.55		$	1.39		$	1.09
Weighted average common shares and units:
Basic		91,702,701			88,241,361			91,302,729			88,060,496
Diluted		94,520,866			91,795,834			94,534,263			91,566,987

(1) Includes (losses) gains from undepreciated land sales of ($0.2) million and $0.0 million for the three months ended June 30, 2006 and 2005, respectively. Includes gains from undepreciated land sales of $0.5 million and $8.4 million for the six months ended June 30, 2006 and 2005, respectively.

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SS NOI.  We believe that net income, as defined by GAAP, is the most appropriate earnings measure. However, we consider same store net operating income (SS NOI) to be a useful supplemental measure of our operating performance. For properties that are considered part of the same store pool, see Item 2: “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations” and “Operating and Leasing Statistics Summary,” page 57, Note 1. In deriving SS NOI, we define NOI as rental revenues (as calculated in accordance with GAAP), including reimbursements, less straight-line rents, property operating expenses and real estate taxes. We exclude straight-line rents in calculating SS NOI because we believe it provides a better measure of actual cash basis rental growth for a year-over-year comparison. In addition, we believe that SS NOI helps the investing public compare the operating performance of a company’s real estate as compared to other companies.

While SS NOI is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by GAAP and should not be considered as an alternative to those measures in evaluating our liquidity or operating performance. SS NOI also does not reflect general and administrative expenses, interest expense, depreciation and amortization costs, capital expenditures and leasing costs, or trends in development and construction activities that could materially impact our results from operations. Further, our computation of SS NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating SS NOI.

The following table reconciles SS NOI from net income for the three and six months ended June 30, 2006 and 2005 (dollars in thousands):

	For the Quarters						For the Six Months
	Ended June 30,						Ended June 30,
	2006			2005			2006			2005
Net income	$	75,353		$	40,789		$	102,930		$	87,556
Private capital income		(4,943	)		(3,438	)		(10,049	)		(6,756	)
Depreciation and amortization		44,088			37,764			87,162			72,636
Impairment losses		5,394			—			5,394			—
General and administrative		25,144			20,111			48,191			38,060
Other expenses		(296	)		(792	)		241			738
Fund costs		479			380			1,093			744
Total other income and expenses		(11,834	)		8,734			22,064			24,930
Total minority interests’ share of income		15,198			15,394			29,718			40,477
Total discontinued operations		(18,136	)		(4,488	)		(25,717	)		(30,681	)
Cumulative effect of change in accounting principle		—			—			(193	)		—
NOI		130,447			114,454			260,834			227,704
Less non same-store NOI		(21,767	)		(7,612	)		(44,631	)		(12,365	)
Less non-cash adjustments(1)		(2,112	)		(3,422	)		(4,707	)		(7,279	)
Cash-basis same-store NOI	$	106,568		$	103,420		$	211,496		$	208,060

(1) Non-cash adjustments include straight line rents and amortization of lease intangibles for the same store pool only.

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OPERATING AND LEASING STATISTICS SUMMARY

The following table summarizes key operating and leasing statistics for all of our industrial properties as of and for the three and six months ended June 30, 2006:

	For the Three			For the Six
	Months Ended			Months Ended
Operating Portfolio(1)	June 30, 2006			June 30, 2006
Square feet owned at June 30, 2006(2)		92,185,403			92,185,403
Occupancy percentage at June 30, 2006		95.4	%		95.4	%
Weighted average lease terms:
Original		6.2 years			6.2 years
Remaining		3.4 years			3.4 years
Tenant retention		66.7	%		67.5	%
Same Space Leasing Activity(3):
Rent decreases on renewals and rollovers		(0.9	)%		(6.0	)%
Same space square footage commencing (millions)		4.6			9.3
Second Generation Leasing Activity(4):
Tenant improvements and leasing commissions per sq. ft.:
Renewals	$	1.23		$	1.25
Re-tenanted		3.21			3.05
Weighted average	$	2.16		$	2.09
Square footage commencing (millions)		5.2			10.1

(1)	Includes all consolidated industrial operating properties and excludes industrial development and renovation projects.
(2)	In addition to owned square feet as of June 30, 2006, we managed, but did not have an ownership interest in, approximately 0.2 million additional square feet of industrial properties. One of our subsidiaries also manages approximately 1.1 million square feet of properties representing the IAT portfolio on behalf of the IAT Air Cargo Facilities Income Fund. We also have investments in approximately 14.2 million square feet of industrial operating properties through our investments in unconsolidated joint ventures.
(3)	Consists of second generation leases renewing or re-tenanting with current and prior lease terms greater than one year.
(4)	Second generation tenant improvements and leasing commissions per square foot are the total cost of tenant improvements, leasing commissions and other leasing costs incurred during leasing of second generation space divided by the total square feet leased. Costs incurred prior to leasing available space are not included until such space is leased. Second generation space excludes newly-developed square footage or square footage vacant at acquisition.

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The following summarizes key same store properties’ operating statistics for our industrial properties as of and for the three and six months ended June 30, 2006:

	For the Three			For the Six
	Months Ended			Months Ended
	June 30, 2006			June 30, 2006
Square feet in same store pool at June 30, 2006(1)		79,143,334			79,143,334
% of total industrial square feet		85.9	%		85.9	%
Occupancy percentage at period end:
June 30, 2006		95.6	%		95.6	%
June 30, 2005		94.5	%		94.5	%
Weighted average lease terms:
Original		6.0 years			6.0 years
Remaining		3.2 years			3.2 years
Tenant retention		66.4	%		67.6	%
Rent decreases on renewals and rollovers		(1.5	)%		(6.4	)%
Same space square footage commencing (millions)		4.5			9.0
Cash basis NOI growth  % increase (decrease):
Revenues		3.2	%		2.3	%
Expenses		3.7	%		4.1	%
Net operating income		3.0	%		1.7	%
Net operating income without lease termination fees		2.9	%		2.2	%

(1) Same store properties are those properties that we owned during both the current and prior year reporting periods, excluding development properties prior to being stabilized (generally defined as properties that are 90% leased or properties for which we have held a certificate of occupancy or building has been substantially complete for at least 12 months).

Item 3.   Quantitative and Qualitative Disclosures about Market Risk

Market risk is the risk of loss from adverse changes in market prices, interest rates and international exchange rates. Our future earnings and cash flows are dependent upon prevailing market rates. Accordingly, we manage our market risk by matching projected cash inflows from operating, investing and financing activities with projected cash outflows for debt service, acquisitions, capital expenditures, distributions to stockholders and unitholders, and other cash requirements. The majority of our outstanding debt has fixed interest rates, which minimizes the risk of fluctuating interest rates. Our exposure to market risk includes interest rate fluctuations in connection with our credit facilities and other variable rate borrowings and our ability to incur more debt without stockholder approval, thereby increasing our debt service obligations, which could adversely affect our cash flows. As of June 30, 2006, we had two outstanding interest rate swaps with aggregate notional amount of $34.3 million (in U.S. dollars).

The table below summarizes the market risks associated with our fixed and variable rate debt outstanding before net unamortized debt discounts of $1.6 million as of June 30, 2006 (dollars in thousands):

	2006			2007			2008			2009			2010			Thereafter			Total
Fixed rate debt(1)	$	205,377		$	129,640		$	375,568		$	189,548		$	437,985		$	1,255,047		$	2,593,165
Average interest rate		5.1	%		7.1	%		7.1	%		5.2	%		6.4	%		5.9	%		6.1	%
Variable rate debt(2)	$	72,423		$	17,853		$	21,583		$	37,735		$	906,107		$	226,604		$	1,282,305
Average interest rate		4.2	%		7.2	%		7.0	%		5.7	%		4.5	%		3.9	%		4.5	%
Interest Payments	$	13,516		$	10,490		$	28,176		$	12,007		$	68,806		$	82,885		$	215,880

(1)	Represents 66.9% of all outstanding debt.
(2)	Represents 33.1% of all outstanding debt.

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If market rates of interest on our variable rate debt increased or decreased by 10%, then the increase or decrease in interest expense on the variable rate debt would be $5.8 million (net of swaps) annually. As of June 30, 2006, the book value and the estimated fair value of our total consolidated debt (both secured and unsecured) was $3.9 billion and $3.7 billion, respectively, based on our estimate of current market interest rates.

As of June 30, 2006 and 2005, variable rate debt comprised 33.1% and 22.0%, respectively, of all our outstanding debt. Variable rate debt was $1.3 billion and $747.9 million, respectively, as of June 30, 2006 and 2005. The increase is primarily due to higher outstanding balances on our credit facilities. This increase in our outstanding variable rate debt increases our risk associated with unfavorable interest rate fluctuations.

Financial Instruments.  We record all derivatives on the balance sheet at fair value as an asset or liability, with an offset to accumulated other comprehensive income or income. For revenues or expenses denominated in non-functional currencies, we may use derivative financial instruments to manage foreign currency exchange rate risk. Our derivative financial instruments in effect at June 30, 2006 were two interest rate swaps hedging cash flows of our variable rate borrowings based on U.S. Libor (USD) and Euribor (Europe). The following table summarizes our financial instruments as of June 30, 2006:

	Maturity Dates
	December 8,			June 8,			Notional		Fair
Related Derivatives (in thousands)	2008			2010			Amount		Value
Interest Rate Swaps:
Plain Interest Rate Swap, USD
Notional Amount (U.S. Dollars)				$	25,000			25,000
Receive Floating(%)					3M LIBOR
Pay Fixed Rate(%)					5.17	%
Fair Market Value										292
Plain Interest Rate Swap, Europe
Notional Amount (U.S. Dollars)	$	9,331						9,331
Receive Floating(%)		3M EURIBOR
Pay Fixed Rate(%)		3.72	%
Fair Market Value										5
Total							$	34,331	$	297

International Operations.  Our exposure to market risk also includes foreign currency exchange rate risk. The U.S. dollar is the functional currency for our subsidiaries operating in the United States and Mexico. The functional currency for our subsidiaries operating outside North America is generally the local currency of the country in which the entity is located, mitigating the effect of foreign exchange gains and losses. Our subsidiaries whose functional currency is not the U.S. dollar translate their financial statements into U.S. dollars. Assets and liabilities are translated at the exchange rate in effect as of the financial statement date. We translate income statement accounts using the average exchange rate for the period and significant nonrecurring transactions using the rate on the transaction date. The losses resulting from the translation are included in accumulated other comprehensive income as a separate component of stockholders’ equity and totaled $1.6 million for the six months ended June 30, 2006.

Our international subsidiaries may have transactions denominated in currencies other than their functional currency. In these instances, non-monetary assets and liabilities are reflected at the historical exchange rate, monetary assets and liabilities are remeasured at the exchange rate in effect at the end of the period and income statement accounts are remeasured at the average exchange rate for the period. For the three and six months ended June 30, 2006, losses from remeasurement and the sale of two foreign exchange agreements included in our results of operations were $0.3 million and $0.2 million, respectively.

We also record gains or losses in the income statement when a transaction with a third party, denominated in a currency other than the entity’s functional currency, is settled and the functional currency cash flows realized are more or less than expected based upon the exchange rate in effect when the transaction was initiated.

58

Item 4.   Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer, president and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, our management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and our management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Also, we have investments in certain unconsolidated entities, which are accounted for using the equity method of accounting. As we do not control or manage these entities, our disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those we maintain with respect to our consolidated subsidiaries.

As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as amended, we carried out an evaluation, under the supervision and with participation of our management, including our chief executive officer, president and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures that were in effect as of the end of the quarter covered by this report. Based on the foregoing, our chief executive officer, president and chief financial officer each concluded that our disclosure controls and procedures were effective at the reasonable assurance level.

There have been no changes in our internal control over financial reporting during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

59

PART II

Item 1.   Legal Proceedings

As of June 30, 2006, there were no pending legal proceedings to which we are a party or of which any of our properties is the subject, the adverse determination of which we anticipate would have a material adverse effect upon our financial condition and results of operations.

Item 1A.   Risk Factors

Except as set forth below, there have been no material changes to the risk factors previously disclosed under Item 1A. of our Annual Report on Form 10-K for the year ended December 31, 2005.

Risks Associated With Our International Business

Our international growth is subject to special risks and we may not be able to effectively manage our international growth.

We have acquired and developed, and expect to continue to acquire and develop, properties outside the United States. Because local markets affect our operations, our international investments are subject to economic fluctuations in the international locations in which we invest. In addition, our international operations are subject to the usual risks of doing business abroad such as revisions in tax treaties or other laws and regulations, including those governing the taxation of our international revenues, restrictions on the transfer of funds, and, in certain parts of the world, uncertainty over property rights and political instability. We cannot predict the likelihood that any of these developments may occur. Further, we have entered, and may in the future enter, into agreements with non-U.S. entities that are governed by the laws of, and are subject to dispute resolution in the courts of, another country or region. We cannot accurately predict whether such a forum would provide us with an effective and efficient means of resolving disputes that may arise. And even if we are able to obtain a satisfactory decision through arbitration or a court proceeding, we could have difficulty enforcing any award or judgment on a timely basis or at all.

We also have offices in many countries outside the United States and, as a result, our operations may be subject to risks that may limit our ability to effectively establish, staff and manage our offices outside the United States, including:

•  Differing employment practices and labor issues;

•  Local business and cultural factors that differ from our usual standards and practices;

•  Regulatory requirements and prohibitions that differ between jurisdictions; and

•  Health concerns.

In addition, payroll expenses are paid in local currencies and, therefore, we are exposed to risks associated with fluctuations in the rate of exchange between the U.S. dollar and these currencies.

Further, our business has grown rapidly and continues to grow through international property acquisitions and developments. If we fail to effectively manage our international growth, then our financial condition, results of operations, cash flow and ability to pay dividends on, and the market price of, our stock could be adversely affected.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.   Defaults Upon Senior Securities

None.

60

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

We held our Annual Meeting of Stockholders on May 11, 2006, at which our stockholders voted to elect ten directors, who are listed below, to our Board of Directors to serve until the next annual meeting of stockholders and until their successors are duly elected and qualified. The stockholders’ votes with respect to the election of directors were as follows:

	For		Withheld
Hamid R. Moghadam		75,177,460		502,075
W. Blake Baird		75,627,003		52,532
Afsaneh M. Beschloss		75,603,369		76,166
T. Robert Burke		75,604,645		74,890
David A. Cole		75,629,115		50,420
Lydia H. Kennard		75,606,307		73,228
J. Michael Losh		72,404,311		3,275,224
Frederick W. Reid		75,616,921		62,614
Jeffrey L. Skelton, Ph.D.		75,609,913		69,622
Thomas W. Tusher		75,629,019		50,516

At our Annual Meeting of Stockholders on May 11, 2006, our stockholders also ratified the selection of PricewaterhouseCoopers LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2006. The stockholders’ votes with respect to the ratification of PricewaterhouseCoopers LLP as our independent registered public accounting firm were as follows:

Item 5.   Other Information

None.

Item 6.   Exhibits

Unless otherwise indicated below, the Commission file number to the exhibit is No. 001-13545.

Exhibit
Number			Description
	3	.1	Articles Supplementary redesignating and reclassifying all 4,600,000 shares of 81/2% Series A Cumulative Redeemable Preferred Stock as Preferred Stock.
	10	.1	Amended and Restated Revolving Credit Agreement, dated as of June 23, 2006, by and among the initial borrower and the initial qualified borrowers listed on the signature pages thereto, AMB Property, L.P., as a guarantor, AMB Property Corporation, as a guarantor, the banks listed on the signature pages thereto, Sumitomo Mitsui Banking Corporation, as administrative agent and sole lead arranger and bookmanager, and each of the other lending institutions that becomes a lender thereunder (incorporated herein by reference to Exhibit 10.1 of AMB Property Corporation’s Current Report on Form 8-K filed on June 29, 2006).
	10	.2	Fourth Amended and Restated Revolving Credit Agreement, dated as of June 13, 2006, by and among the qualified borrowers listed on the signature pages thereto, AMB Property, L.P., as a qualified borrower and guarantor, AMB Property Corporation, as guarantor, the banks listed on the signature pages thereto, Bank of America, N.A., as administrative agent, The Bank of Nova Scotia, as syndication agent, LaSalle Bank National Association and Société Générale, as co-documentation agents, Banc of America Securities Asia Limited, as Hong Kong dollars agent, Bank of America, N.A., acting by its Canada branch, as reference bank, Bank of America, Singapore branch, as Singapore dollars agent, and each of the other lending institutions that becomes a lender thereunder (incorporated herein by reference to Exhibit 10.1 of AMB Property Corporation’s Current Report on Form 8-K filed on June 19, 2006).

61

Exhibit
Number			Description
	10	.3	Third Amended and Restated Revolving Credit Agreement, dated as of June 1, 2006, by and among AMB Property, L.P., as Borrower, the banks listed on the signature pages thereof, JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Europe Limited, as Administrative Agent for Alternate Currencies, Bank of America, N.A., as Syndication Agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers and Joint Bookrunners, Eurohypo AG, New York Branch, Wachovia Bank, N.A. and PNC Bank, National Association, as Documentation Agents, The Bank of Nova Scotia, acting through its San Francisco Agency, Wells Fargo Bank, N.A., ING Real Estate Finance (USA) LLC and LaSalle Bank National Association, as Managing Agents (incorporated herein by reference to Exhibit 10.1 of AMB Property Corporation’s Current Report on Form 8-K filed on June 7, 2006).
	10	.4	Eleventh Amended and Restated Agreement of Limited Partnership of AMB Property, L.P. dated as of August 4, 2006.
	31	.1	Rule 13a-14 (a)/15d-14 (a) Certifications dated August 8, 2006.
	32	.1	18 U.S.C.§ 1350 Certifications dated August 8, 2006. The certifications in this exhibit are being furnished solely to accompany this report pursuant to 18 U.S.C. sec. 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any of our filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

62

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.

AMB Property Corporation

Registrant

By:  /s/  Hamid R. Moghadam

Hamid R. Moghadam
Chairman and CEO
(Duly Authorized Officer and
Principal Executive Officer)

By:  /s/  W. Blake Baird

W. Blake Baird
President and Director
(Duly Authorized Officer)

By:  /s/  Michael A. Coke

Michael A. Coke
CFO and Executive Vice President
(Duly Authorized Officer and Principal
Financial and Accounting Officer)

Date: August 8, 2006

63

INDEX TO EXHIBITS

Exhibit
Number			Description
	3	.1	Articles Supplementary redesignating and reclassifying all 4,600,000 shares of 81/2% Series A Cumulative Redeemable Preferred Stock as Preferred Stock.
	10	.1	Amended and Restated Revolving Credit Agreement, dated as of June 23, 2006, by and among the initial borrower and the initial qualified borrowers listed on the signature pages thereto, AMB Property, L.P., as a guarantor, AMB Property Corporation, as a guarantor, the banks listed on the signature pages thereto, Sumitomo Mitsui Banking Corporation, as administrative agent and sole lead arranger and bookmanager, and each of the other lending institutions that becomes a lender thereunder (incorporated herein by reference to Exhibit 10.1 of AMB Property Corporation’s Current Report on Form 8-K filed on June 29, 2006).
	10	.2	Fourth Amended and Restated Revolving Credit Agreement, dated as of June 13, 2006, by and among the qualified borrowers listed on the signature pages thereto, AMB Property, L.P., as a qualified borrower and guarantor, AMB Property Corporation, as guarantor, the banks listed on the signature pages thereto, Bank of America, N.A., as administrative agent, The Bank of Nova Scotia, as syndication agent, LaSalle Bank National Association and Société Générale, as co-documentation agents, Banc of America Securities Asia Limited, as Hong Kong dollars agent, Bank of America, N.A., acting by its Canada branch, as reference bank, Bank of America, Singapore branch, as Singapore dollars agent, and each of the other lending institutions that becomes a lender thereunder (incorporated herein by reference to Exhibit 10.1 of AMB Property Corporation’s Current Report on Form 8-K filed on June 19, 2006).
	10	.3	Third Amended and Restated Revolving Credit Agreement, dated as of June 1, 2006, by and among AMB Property, L.P., as Borrower, the banks listed on the signature pages thereof, JPMorgan Chase Bank, N.A., as Administrative Agent, J.P. Morgan Europe Limited, as Administrative Agent for Alternate Currencies, Bank of America, N.A., as Syndication Agent, J.P. Morgan Securities Inc. and Banc of America Securities LLC, as Joint Lead Arrangers and Joint Bookrunners, Eurohypo AG, New York Branch, Wachovia Bank, N.A. and PNC Bank, National Association, as Documentation Agents, The Bank of Nova Scotia, acting through its San Francisco Agency, Wells Fargo Bank, N.A., ING Real Estate Finance (USA) LLC and LaSalle Bank National Association, as Managing Agents (incorporated herein by reference to Exhibit 10.1 of AMB Property Corporation’s Current Report on Form 8-K filed on June 7, 2006).
	10	.4	Eleventh Amended and Restated Agreement of Limited Partnership of AMB Property, L.P. dated as of August 4, 2006.
	31	.1	Rule 13a-14 (a)/15d-14 (a) Certifications dated August 8, 2006.
	32	.1	18 U.S.C.§ 1350 Certifications dated August 8, 2006. The certifications in this exhibit are being furnished solely to accompany this report pursuant to 18 U.S.C. sec. 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and are not to be incorporated by reference into any of our filings, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

64

EX-3.1

Exhibit 3.1

AMB PROPERTY CORPORATION

ARTICLES SUPPLEMENTARY

REDESIGNATION AND RECLASSIFICATION OF ALL 4,600,000 SHARES OF 8¹/2%
SERIES A CUMULATIVE REDEEMABLE PREFERRED STOCK
AS PREFERRED STOCK

     AMB Property Corporation, a corporation organized and existing under the laws of the State of Maryland (the “Corporation”), certifies to the State Department of Assessments and Taxation of Maryland (the “SDAT”) that:

     FIRST: Pursuant to the authority expressly vested in the Board of Directors of the Corporation (the “Board”) by Article IV of the Charter of the Corporation and pursuant to Section 2-105 of the Maryland General Corporation Law, the Board, or a duly authorized Committee thereof, adopted resolutions dated June 19, 1998 and caused to be filed with the SDAT on July 23, 1998 Articles Supplementary (the “Series A Articles Supplementary”) classifying and designating 4,600,000 shares of Preferred Stock, par value $0.01 per share (the “Preferred Stock”), as shares of 8¹/2% Series A Cumulative Redeemable Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock”).

     SECOND: Currently, there are no, and from the date of redemption by the Corporation on July 28, 2003 of all then outstanding shares of Series A Preferred Stock, there have been no, shares of Series A Preferred Stock issued or outstanding.

     THIRD: Pursuant to the authority expressly vested in the Board as aforesaid, the Board adopted resolutions on or as of February 16, 2006 (the “Resolutions”) reclassifying, and confirming the prior reclassification of, as applicable, the 4,600,000 shares of Series A Preferred Stock (the “Shares”) previously classified pursuant to the Series A Articles Supplementary, to be and become shares of Preferred Stock of the Corporation as otherwise authorized for issuance under the Charter of the Corporation, without further designation nor any preferences or relative, participating, optional, conversion or other rights appertaining thereto, or voting powers, restrictions, limitations as to dividends, qualifications, terms or conditions of redemption, other than those, if any, applicable to shares of Preferred Stock of the Corporation generally, such that the same, as shares of Preferred Stock otherwise authorized for issuance under the Charter, shall be available for future reclassification and available for issuance upon proper authorization by the Board from time to time.

     FOURTH: The Shares have been redesignated and reclassified by the Board, as contemplated by the Resolutions, under the authority contained in the Charter.

     FIFTH: These Articles Supplementary have been approved by the Board in the manner and by the vote required by law.

     SIXTH: These Articles Supplementary shall be effective at the time the SDAT accepts them for record.

     SEVENTH: The undersigned Executive Vice President and Chief Financial Officer of the Corporation acknowledges these Articles Supplementary to be the act of the Corporation and, as to all matters or facts required to be verified under oath, the undersigned Executive Vice President and Chief Financial Officer acknowledges that to the best of his knowledge, information and belief, these matters and facts are true in all material respects and that this statement is made under the penalties for perjury.

[SIGNATURE PAGE FOLLOWS]

     IN WITNESS WHEREOF, the Corporation has caused these Articles Supplementary to be executed under seal in its name and on its behalf by its Executive Vice President and Chief Financial Officer and attested to by its Secretary on this 16th day of February, 2006.

AMB Property Corporation
By:	/s/ Michael A. Coke
Name: Michael A. Coke
Title: Executive Vice President and Chief Financial Officer

ATTEST:

/s/ Tamra D. Browne

Name: Tamra D. Browne

Title: Secretary

EX-10.4

ELEVENTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

AMB PROPERTY, L.P.

TABLE OF CONTENTS

	Page
ARTICLE 1. DEFINED TERMS AND RULES OF CONSTRUCTION		1
SECTION 1.1 DEFINITIONS		1
SECTION 1.2 RULES OF CONSTRUCTION		20
ARTICLE 2. ORGANIZATIONAL MATTERS		20
SECTION 2.1 ORGANIZATION		21
SECTION 2.2 NAME		21
SECTION 2.3 RESIDENT AGENT; PRINCIPAL OFFICE		21
SECTION 2.4 POWER OF ATTORNEY		21
SECTION 2.5 TERM		23
SECTION 2.6 NUMBER OF PARTNERS		23
ARTICLE 3. PURPOSE		23
SECTION 3.1 PURPOSE AND BUSINESS		23
SECTION 3.2 POWERS		23
SECTION 3.3 PARTNERSHIP ONLY FOR PURPOSES SPECIFIED		24
SECTION 3.4 REPRESENTATIONS AND WARRANTIES BY THE PARTIES		24
SECTION 3.5 CERTAIN ERISA MATTERS		26
ARTICLE 4. CAPITAL CONTRIBUTIONS		26
SECTION 4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS		26
SECTION 4.2 LOANS BY THIRD PARTIES		26
SECTION 4.3 ADDITIONAL FUNDING AND CAPITAL CONTRIBUTIONS		27
SECTION 4.4 STOCK INCENTIVE PLAN		29
SECTION 4.5 NO PREEMPTIVE RIGHTS		29
SECTION 4.6 OTHER CONTRIBUTION PROVISIONS		29

i

	Page
ARTICLE 5. DISTRIBUTIONS		29
SECTION 5.1 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS		29
SECTION 5.2 DISTRIBUTIONS IN KIND		30
SECTION 5.3 DISTRIBUTIONS UPON LIQUIDATION		31
SECTION 5.4 DISTRIBUTIONS TO REFLECT ISSUANCE OF ADDITIONAL PARTNERSHIP INTERESTS		31
SECTION 5.5 CHARACTER OF PLP DISTRIBUTIONS		31
ARTICLE 6. ALLOCATIONS		31
SECTION 6.1 TIMING AND AMOUNT OF ALLOCATIONS OF NET INCOME AND NET LOSS		31
SECTION 6.2 GENERAL ALLOCATIONS		31
SECTION 6.3 ADDITIONAL ALLOCATION PROVISIONS		34
SECTION 6.4 TAX ALLOCATIONS		36
ARTICLE 7. MANAGEMENT AND OPERATIONS OF BUSINESS		37
SECTION 7.1 MANAGEMENT		37
SECTION 7.2 CERTIFICATE OF LIMITED PARTNERSHIP		40
SECTION 7.3 RESTRICTIONS ON GENERAL PARTNER’S AUTHORITY		41
SECTION 7.4 REIMBURSEMENT OF THE GENERAL PARTNER		43
SECTION 7.5 OUTSIDE ACTIVITIES OF THE GENERAL PARTNER		44
SECTION 7.6 CONTRACTS WITH AFFILIATES		45
SECTION 7.7 INDEMNIFICATION		45
SECTION 7.8 LIABILITY OF THE GENERAL PARTNER		47
SECTION 7.9 OTHER MATTERS CONCERNING THE GENERAL PARTNER		48
SECTION 7.10 TITLE TO PARTNERSHIP ASSETS		49
SECTION 7.11 RELIANCE BY THIRD PARTIES		49
ARTICLE 8. RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS		49
SECTION 8.1 LIMITATION OF LIABILITY		49
SECTION 8.2 MANAGEMENT OF BUSINESS		49
SECTION 8.3 OUTSIDE ACTIVITIES OF LIMITED PARTNERS		49

ii

	Page
SECTION 8.4 RETURN OF CAPITAL		50
SECTION 8.5 RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP		50
SECTION 8.6 COMMON LIMITED PARTNER REDEMPTION RIGHTS		51
ARTICLE 9. BOOKS, RECORDS, ACCOUNTING AND REPORTS		54
SECTION 9.1 RECORDS AND ACCOUNTING		54
SECTION 9.2 FISCAL YEAR		54
SECTION 9.3 REPORTS		54
SECTION 9.4 NONDISCLOSURE OF CERTAIN INFORMATION		54
ARTICLE 10. TAX MATTERS		55
SECTION 10.1 PREPARATION OF TAX RETURNS		55
SECTION 10.2 TAX ELECTIONS		55
SECTION 10.3 TAX MATTERS PARTNER		55
SECTION 10.4 ORGANIZATIONAL EXPENSES		56
SECTION 10.5 WITHHOLDING		56
ARTICLE 11. TRANSFERS AND WITHDRAWALS		57
SECTION 11.1 TRANSFER		57
SECTION 11.2 TRANSFER OF GENERAL PARTNER’S PARTNERSHIP INTEREST		58
SECTION 11.3 LIMITED PARTNERS’ RIGHTS TO TRANSFER		59
SECTION 11.4 SUBSTITUTED LIMITED PARTNERS		61
SECTION 11.5 ASSIGNEES		62
SECTION 11.6 GENERAL PROVISIONS		62
ARTICLE 12. ADMISSION OF PARTNERS		65
SECTION 12.1 ADMISSION OF SUCCESSOR GENERAL PARTNER		65
SECTION 12.2 ADMISSION OF ADDITIONAL LIMITED PARTNERS		65
SECTION 12.3 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP		65

iii

	Page
ARTICLE 13. DISSOLUTION AND LIQUIDATION		66
SECTION 13.1 DISSOLUTION		66
SECTION 13.2 WINDING UP		67
SECTION 13.3 COMPLIANCE WITH TIMING REQUIREMENTS OF REGULATIONS		68
SECTION 13.4 DEEMED DISTRIBUTION AND RECONTRIBUTION		68
SECTION 13.5 RIGHTS OF LIMITED PARTNERS		69
SECTION 13.6 NOTICE OF DISSOLUTION		69
SECTION 13.7 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP		69
SECTION 13.8 REASONABLE TIME FOR WINDING-UP		69
SECTION 13.9 WAIVER OF PARTITION		69
ARTICLE 14. AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS		69
SECTION 14.1 AMENDMENTS		69
SECTION 14.2 ACTION BY THE PARTNERS		69
ARTICLE 15. GENERAL PROVISIONS		71
SECTION 15.1 ADDRESSES AND NOTICE		71
SECTION 15.2 TITLES AND CAPTIONS		71
SECTION 15.3 PRONOUNS AND PLURALS		71
SECTION 15.4 FURTHER ACTION		71
SECTION 15.5 BINDING EFFECT		71
SECTION 15.6 CREDITORS		71
SECTION 15.7 WAIVER		71
SECTION 15.8 COUNTERPARTS		72
SECTION 15.9 APPLICABLE LAW		72
SECTION 15.10 INVALIDITY OF PROVISIONS		72
SECTION 15.11 LIMITATION TO PRESERVE REIT STATUS		72
SECTION 15.12 ENTIRE AGREEMENT		73
SECTION 15.13 NO RIGHTS AS STOCKHOLDERS		73

iv

	Page
ARTICLE 16. INTENTIONALLY OMITTED		72
ARTICLE 17. INTENTIONALLY OMITTED		72
ARTICLE 18. SERIES J PREFERRED UNITS		73
SECTION 18.1 DESIGNATION AND NUMBER		73
SECTION 18.2 RANKING		73
SECTION 18.3 DISTRIBUTIONS		74
SECTION 18.4 LIQUIDATION PROCEEDS		75
SECTION 18.5 REDEMPTION		76
SECTION 18.6 VOTING RIGHTS		77
SECTION 18.7 TRANSFER RESTRICTIONS		78
SECTION 18.8 EXCHANGE RIGHTS		79
SECTION 18.9 NO CONVERSION RIGHTS		83
SECTION 18.10 NO SINKING FUND		83
ARTICLE 19. SERIES K PREFERRED UNITS		83
SECTION 19.1 DESIGNATION AND NUMBER		83
SECTION 19.2 RANKING		83
SECTION 19.3 DISTRIBUTIONS		84
SECTION 19.4 LIQUIDATION PROCEEDS		85
SECTION 19.5 REDEMPTION		86
SECTION 19.6 VOTING RIGHTS		87
SECTION 19.7 TRANSFER RESTRICTIONS		88
SECTION 19.8 EXCHANGE RIGHTS		89
SECTION 19.9 NO CONVERSION RIGHTS		93
SECTION 19.10 NO SINKING FUND		93
ARTICLE 20. SERIES L PREFERRED UNITS		92
SECTION 20.1 DESIGNATION AND NUMBER		92
SECTION 20.2 RANKING		93

v

	Page
SECTION 20.3 DISTRIBUTIONS		93
SECTION 20.4 LIQUIDATION PROCEEDS		94
SECTION 20.5 REDEMPTION		95
SECTION 20.6 VOTING RIGHTS		96
SECTION 20.7 TRANSFER RESTRICTIONS		96
SECTION 20.8 NO CONVERSION RIGHTS		96
SECTION 20.9 NO SINKING FUND		96
ARTICLE 21. SERIES M PREFERRED UNITS		97
SECTION 21.1 DESIGNATION AND NUMBER		97
SECTION 21.2 RANKING		97
SECTION 21.3 DISTRIBUTIONS		97
SECTION 21.4 LIQUIDATION PROCEEDS		98
SECTION 21.5 REDEMPTION		99
SECTION 21.6 VOTING RIGHTS		100
SECTION 21.7 TRANSFER RESTRICTIONS		100
SECTION 21.8 NO CONVERSION RIGHTS		100
SECTION 21.9 NO SINKING FUND		101
ARTICLE 22. SERIES O PREFERRED UNITS		97
SECTION 22.1 DESIGNATION AND NUMBER		97
SECTION 22.2 RANKING		97
SECTION 22.3 DISTRIBUTIONS		97
SECTION 22.4 LIQUIDATION PROCEEDS		98
SECTION 22.5 REDEMPTION		99
SECTION 22.6 VOTING RIGHTS		100
SECTION 22.7 TRANSFER RESTRICTIONS		100
SECTION 22.8 NO CONVERSION RIGHTS		100
SECTION 22.9 NO SINKING FUND		101

vi

ELEVENTH AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

AMB PROPERTY, L.P.

     THIS ELEVENTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of August 4, 2006 and effective as of December 13, 2005, is entered into by and among AMB Property Corporation, a Maryland corporation (the “Company”), as the General Partner, and the Persons whose names are set forth on Exhibit A attached hereto, as the Limited Partners (the “Existing Limited Partners”), together with any other Persons who become Partners in the Partnership as provided herein.

     WHEREAS, pursuant to Sections 7.3D(ii) and (iii), the Partnership Agreement may be amended by the General Partner to reflect the issuance of additional Partnership Interests pursuant to Sections 4.3C, 4.3F and 4.4 and to set forth the designations, rights, powers, duties and preferences of the holders of any additional Partnership Interests issued pursuant to Article 4;

     WHEREAS, the General Partner and the Partnership believe it is desirable and in the best interest of the Partnership to amend and restate the Partnership Agreement as set forth herein; and

     NOW, THEREFORE, pursuant to Sections 2.4 and 7.3D(ii) and (iii) of the Partnership Agreement, the General Partner, on its own behalf and as attorney-in-fact for the Limited Partners, hereby amends and restates the Partnership Agreement as follows:

ARTICLE 1.
DEFINED TERMS AND RULES OF CONSTRUCTION

     Section 1.1 Definitions

     The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.

     “Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from time to time, and any successor to such statute.

     “Additional Funds” shall have the meaning set forth in Section 4.3.A.

     “Additional Limited Partner” means a Person admitted to the Partnership as a Limited Partner pursuant to Section 12.2 and who is shown as such on the books and records of the Partnership.

     “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:

(i)	decrease such deficit by any amounts which such Partner is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Regulations Sections 1.704-2(i)(5) and 1.704-2(g); and
(ii)	increase such deficit by the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

     The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

     “Adjustment Date” shall have the meaning set forth in Section 4.3.E.

     “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such Person.

     “Agreed Value” means (i) in the case of any Contributed Property set forth in Exhibit A and as of the time of its contribution to the Partnership, the Agreed Value of such property as set forth in Exhibit A; (ii) in the case of any Contributed Property not set forth in Exhibit A and as of the time of its contribution to the Partnership, the fair market value of such property or other consideration as determined by the General Partner, reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed; and (iii) in the case of any property distributed to a Partner by the Partnership, the fair market value of such property as determined by the General Partner at the time such property is distributed, reduced by any indebtedness either assumed by such Partner upon such distribution or to which such property is subject at the time of the distribution as determined under Section 752 of the Code and the Regulations thereunder.

     “Agreement” means this Eleventh Amended and Restated Agreement of Limited Partnership, as it may be amended, modified, supplemented or restated from time to time.

     “Appraisal” means with respect to any assets, the opinion of an independent third party experienced in the valuation of similar assets, selected by the General Partner in good faith; such opinion may be in the form of an opinion by such independent third party that the value for such asset as set by the General Partner is fair, from a financial point of view, to the Partnership.

     “Assignee” means a Person to whom one or more Partnership Units have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 11.5.

     “Available Cash” means, with respect to any period for which such calculation is being made, (i) the sum of:

     (a) the Partnership’s Net Income or Net Loss (as the case may be) for such period,

     (b) Depreciation and all other noncash charges deducted in determining Net Income or Net Loss for such period,

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     (c) the amount of any reduction in reserves of the Partnership referred to in clause (ii)(f) below (including, without limitation, reductions resulting because the General Partner determines such amounts are no longer necessary),

     (d) the excess of the net proceeds from the sale, exchange, disposition, or refinancing of Partnership property for such period over the gain (or loss, as the case may be) recognized from any such sale, exchange, disposition, or refinancing during such period (excluding Terminating Capital Transactions), and

     (e) all other cash received by the Partnership for such period that was not included in determining Net Income or Net Loss for such period;

     (ii) less the sum of:

     (a) all principal debt payments made during such period by the Partnership,

     (b) capital expenditures made by the Partnership during such period,

     (c) investments in any entity (including loans made thereto) to the extent that such investments are not otherwise described in clauses (ii)(a) or (b),

     (d) all other expenditures and payments not deducted in determining Net Income or Net Loss for such period,

     (e) any amount included in determining Net Income or Net Loss for such period that was not received by the Partnership during such period,

     (f) the amount of any increase in reserves established during such period which the General Partner determines are necessary or appropriate in its sole and absolute discretion, and

     (g) the amount of any working capital accounts and other cash or similar balances which the General Partner determines to be necessary or appropriate in its sole and absolute discretion.

     Notwithstanding the foregoing, Available Cash shall not include any cash received or reductions in reserves, or take into account any disbursements made or reserves established, after commencement of the dissolution and liquidation of the Partnership.

     “Board of Directors” means the Board of Directors of the General Partner.

     “Business Day” means each day, other than a Saturday or a Sunday, which is not a day on which banking institutions in Los Angeles, California or New York, New York are authorized or required by law, regulation or executive order to close.

     “Capital Account” means, with respect to any Partner, the Capital Account maintained for such Partner in accordance with the following provisions:

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     (i) To each Partner’s Capital Account there shall be added such Partner’s Capital Contributions, such Partner’s share of Net Income and any items in the nature of income or gain which are specially allocated pursuant to Section 6.3, and the amount of any Partnership liabilities assumed by such Partner or which are secured by any property distributed to such Partner.

     (ii) From each Partner’s Capital Account there shall be subtracted the amount of cash and the Gross Asset Value of any property distributed to such Partner pursuant to any provision of this Agreement, such Partner’s distributive share of Net Losses and any items in the nature of expenses or losses which are specially allocated pursuant to Section 6.3 hereof, and the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the Partnership.

     (iii) In the event any interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.

     (iv) In determining the amount of any liability for purposes of subsections (i) and (ii) hereof, there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.

     (v) The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Regulations. In the event the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Partnership, the General Partner, or the Limited Partners) are computed in order to comply with such Regulations, the General Partner may make such modification; provided that, it is not likely to have a material effect on the amounts distributable to any Person pursuant to Article 13 of this Agreement upon the dissolution of the Partnership. The General Partner also shall (a) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of Partnership capital reflected on the Partnership’s balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (b) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b) or Section 1.704-2.

     “Capital Contribution” means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership by such Partner.

     “Cash Amount” means, with respect to any Partnership Units subject to a Redemption, an amount of cash equal to the Deemed Partnership Interest Value attributable to such Partnership Units.

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     “Certificate” means the Certificate of Limited Partnership relating to the Partnership filed in the office of the Secretary of State of Delaware, as amended from time to time in accordance with the terms hereof and the Act.

     “Charter” means the Company’s Articles of Incorporation as of November 24, 1997, as amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on July 23, 1998, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on November 12, 1998, as further amended by the Articles Supplementary filed by the Corporation on November 25, 1998, as further amended by the Certificate of Correction filed by the Corporation on March 18, 1999, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on May 5, 1999, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on August 31, 1999, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on March 23, 2000, as further amended by the Articles Supplementary with the Maryland Department of Assessments and Taxation on August 30, 2000, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on September 1, 2000, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on March 21, 2001, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on September 24, 2001, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on December 6, 2001, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on April 17, 2002, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on August 7, 2002 Redesignating and Reclassifying All 20,000 Shares of 7.95% Series G Cumulative Redeemable Preferred Stock as Preferred Stock, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on August 7, 2002 Redesignating and Reclassifying 130,000 Shares of 7.95% Series F Cumulative Redeemable Preferred Stock as Preferred Stock, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on June 20, 2003, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on November 24, 2003, as further amended by the Articles Supplementary filed with the Maryland Department of Assessments and Taxation on December 8, 2003, as further amended by the Articles Supplementary filed with the Department on December 12, 2005, as further amended by the Articles Supplementary filed with the Department on February 17, 2006, as further amended by the Articles Supplementary filed with the Department on March 22, 2006 and as further amended or restated from time to time.

     “Code” means the Internal Revenue Code of 1986, as amended from time to time or any successor statute thereto, as interpreted by the applicable regulations thereunder. Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.

     “Common Unit” means each Partnership Unit that is not entitled to any preference with respect to any other Partnership Unit as to distribution or voluntary or involuntary liquidation, dissolution or winding up of the Partnership.

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     “Consent” means the consent to, approval of, or vote on a proposed action by a Partner given in accordance with Article 14 hereof.

     “Consent of the Limited Partners” means the Consent of a Majority in Interest of the Limited Partners, other than the Preferred Limited Partners, which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by a Majority in Interest of the Limited Partners, unless otherwise expressly provided herein, in their sole and absolute discretion.

     “Consent of the Partners” means the Consent of Partners, other than the Preferred Limited Partners, holding Percentage Interests that in the aggregate are equal to or greater than a majority of the aggregate Percentage Interests of all Partners, other than the Preferred Limited Partners, which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by such Partners, in their sole and absolute discretion.

     “Constructively Own” means ownership under the constructive ownership rules described in Exhibit C.

     “Contributed Property” means each property or other asset, in such form as may be permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership (or, to the extent provided in applicable regulations, deemed contributed by the Partnership on termination and reconstitution thereof pursuant to Section 708 of the Code).

     “Debt” means, as to any Person, as of any date of determination: (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (ii) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds and other similar instruments guaranteeing payment or other performance of obligations by such Person; (iii) all indebtedness for borrowed money or for the deferred purchase price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (iv) lease obligations of such Person which, in accordance with generally accepted accounting principles, should be capitalized.

     “Deemed Partnership Interest Value” means, as of any date with respect to any class of Partnership Interests, the Deemed Value of the Partnership Interests of such class multiplied by the applicable Partner’s Percentage Interest of such class.

     “Deemed Value of the Partnership Interests” means, as of any date with respect to any class or series of Partnership Interests, (i) the total number of Partnership Units of the General Partner in such class or series of Partnership Interests (as provided for in Sections 4.1 and 4.3.C) issued and outstanding as of the close of business on such date multiplied by the Fair Market Value determined as of such date of a share of capital stock of the General Partner which corresponds to such class or series of Partnership Interests, as adjusted pursuant to Section 7.5 (in the event the General Partner acquires material assets, other than on behalf of the Partnership) and for stock dividends and distributions, stock splits and subdivisions, reverse stock splits and combinations, distribution of warrants or options and distributions of evidences of indebtedness

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or assets not received by the General Partner pursuant to a pro rata distribution by the Partnership; (ii) divided by the Percentage Interest of the General Partner in such class or series of Partnership Interests on such date; provided, that if no outstanding shares of capital stock of the General Partner correspond to a class of series of Partnership Interests, the Deemed Value of the Partnership Interests with respect to such class or series shall be equal to an amount reasonably determined by the General Partner.

     “Depreciation” means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for Federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the Federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the Federal income tax depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.

     “Effective Date” means the date of closing of the initial public offering of REIT Shares upon which date contributions set forth on Exhibit A shall become effective.

     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

     “Escrow Agreements” means one or more of the agreements between the Company, the Partnership and one or more of the Performance Investors, dated as of the closing of the date of the initial public offering of the common stock of the General Partner, pursuant to which the Performance Investors have deposited their Performance Shares in escrow for possible transfer to the General Partner or the Partnership (as applicable).

     “Excess Performance Capital” means, with respect to a Performance Partner, an amount equal to the number of Partnership Units held by such Performance Partner, multiplied by the excess of (i) the Capital Account per Partnership Unit for such Performance Partner; over (ii) the Capital Account per Partnership Unit for a Limited Partner which is not a PLP or a Performance Partner. For purposes of (ii) above, it shall be assumed that the Limited Partner has no special arrangements with the Partnership, other than as set forth in this Agreement, which would cause its Capital Account per Partnership Unit to be different from the Capital Account per Partnership Unit of other Limited Partners who are not Performance Partners or PLPs. If the Partner described in (ii) above does not exist, the amount used for purposes of (ii) shall be the projected Capital Account balance per Partnership Unit for such Partner, determined in the reasonable discretion of the General Partner. For purposes of this definition, to the extent the Capital Account of a Partner which owns both Common Units and Preference Units is being considered, such Capital Account shall be equal to such Partner’s Capital Account determined without regard to the adjustments arising from or as a result of the acquisition or ownership of Preference Units by such Partner.

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

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     “Fair Market Value” means, with respect to any share of capital stock of the General Partner, the average of the daily market price for the ten (10) consecutive trading days immediately preceding the date with respect to which “Fair Market Value” must be determined hereunder or, if such date is not a Business Day, the immediately preceding Business Day. The market price for each such trading day shall be (i) if such shares are listed or admitted to trading on any securities exchange or the Nasdaq National Market, the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day, (ii) if such shares are not listed or admitted to trading on any securities exchange or the Nasdaq National Market, the last reported sale price on such day or, if no sale takes place on such day, the average of the closing bid and asked prices on such day, as reported by a reliable quotation source designated by the General Partner or (iii) if such shares are not listed or admitted to trading on any securities exchange or the Nasdaq National Market and no such last reported sale price or closing bid and asked prices are available, the average of the reported high bid and low asked prices on such day, as reported by a reliable quotation source designated by the General Partner, or if there shall be no bid and asked prices on such day, the average of the high bid and low asked prices, as so reported, on the most recent day (not more than ten (10) days prior to the date in question) for which prices have been so reported; provided, that if there are no bid and asked prices reported during the ten (10) days prior to the date in question, the Fair Market Value of such shares shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate. In the event the REIT Shares Amount for such shares includes rights that a holder of such shares would be entitled to receive, then the Fair Market Value of such rights shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate; provided, that in connection with determining the Deemed Value of the Partnership Interests for purposes of determining the number of additional Partnership Units issuable upon a Capital Contribution funded by an underwritten public offering of shares of capital stock of the General Partner, the Fair Market Value of such shares shall be the public offering price per share of such class of capital stock sold. Notwithstanding the foregoing, the General Partner in its reasonable discretion may use a different “Fair Market Value” for purposes of making the determinations under subparagraph (ii) of the definition of “Gross Asset Value” and Section 4.3.E. in connection with the contribution of Property to the Partnership by a third-party, provided such value shall be based upon the value per REIT Share (or per Partnership Unit) agreed upon by the General Partner and such third-party for purposes of such contribution.

     “Funding Debt” means the incurrence of any Debt by or on behalf of the General Partner for the purpose of providing funds to the Partnership.

     “General Partner” means the Company or its successors as general partner of the Partnership.

     “General Partner Interest” means a Partnership Interest held by the General Partner. A General Partner Interest may be expressed as a number of Partnership Units.

     “General Partner Loan” shall have the meaning set forth in Section 4.3.B.

     “General Partner Payment” shall have the meaning set forth in Section 15.11.

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     “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for Federal income tax purposes, except as follows:

     (i) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by the contributing Partner and the General Partner (as set forth on Exhibit A attached hereto, as such Exhibit may be amended from time to time); provided, that if the contributing Partner is the General Partner then, except with respect to the General Partner’s initial Capital Contribution which shall be determined as set forth on Exhibit A, or capital contributions of cash, REIT Shares or other shares of capital stock of the General Partner, the determination of the fair market value of the contributed asset shall be determined by (a) the price paid by the General Partner if the asset is acquired by the General Partner contemporaneously with its contribution to the Partnership or (b) by Appraisal if otherwise acquired by the General Partner.

     (ii) Immediately prior to the times listed below, the Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the General Partner using such reasonable method of valuation as it may adopt; provided, however, that for such purpose, the net value of all of the Partnership assets, in the aggregate, shall be equal to the Deemed Value of the Partnership Interests of all classes of Partnership Interests then outstanding, regardless of the method of valuation adopted by the General Partner:

(a)	the acquisition of an additional interest in the Partnership by a new or existing Partner in exchange for more than a de minimis Capital Contribution, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;
(b)	the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration for an interest in the Partnership if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership; the Partners agree that such an adjustment is appropriate when the Partnership effects a Redemption;
(c)	the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);
(d)	the issuance of Performance Units; and
(e)	at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2.

     (iii) The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross fair market value of such asset on the date of distribution as determined by the distributee and the General Partner; provided, that if the distributee is the General Partner, or if the distributee and the General Partner cannot agree on such a determination, by Appraisal.

9

     (iv) The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (iv) to the extent that the General Partner reasonably determines that an adjustment pursuant to subparagraph (ii) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (iv).

     (v) If the Gross Asset Value of a Partnership asset has been determined or adjusted pursuant to subparagraph (i), (ii) or (iv), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Losses.

     “Holder” means either the Partner or Assignee owning a Partnership Unit.

     “Immediate Family” means, with respect to any natural Person, such natural Person’s estate or heirs or current spouse or former spouse, parents, parents-in-law, children, siblings and grandchildren and any trust or estate, all of the beneficiaries of which consist of such Person or such Person’s spouse, former spouse, parents, parents-in-law, children, siblings or grandchildren.

     “Incapacity” or “Incapacitated” means: (i) as to any individual Partner, death, total physical disability or entry by a court of competent jurisdiction adjudicating him or her incompetent to manage his or her Person or his or her estate; (ii) as to any corporation which is a Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; (iii) as to any partnership which is a Partner, the dissolution and commencement of winding up of the partnership; (iv) as to any estate which is a Partner, the distribution by the fiduciary of the estate’s entire interest in the Partnership; (v) as to any trustee of a trust which is a Partner, the termination of the trust (but not the substitution of a new trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For purposes of this definition, bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner, (c) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors, (d) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s properties, (f) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within one hundred and twenty (120) days after the commencement thereof, (g) the appointment without the Partner’s consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such appointment or (h) an appointment referred to in clause (g) is not vacated within ninety (90) days after the expiration of any such stay.

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     “Indemnitee” means (i) any Person subject to a claim or demand or made or threatened to be made a party to, or involved or threatened to be involved in, an action, suit or proceeding by reason of his or her status as (a) the General Partner or (b) a director, officer, employee or agent of the Partnership or the General Partner and (ii) such other Persons (including Affiliates of the General Partner or the Partnership) as the General Partner may designate from time to time, in its sole and absolute discretion.

     “IRS” means the Internal Revenue Service, which administers the internal revenue laws of the United States.

     “Junior Units” means Partnership Units representing any class or series of Partnership Interest ranking, as to distributions or voluntary or involuntary liquidation, dissolution or winding up of the Partnership, junior to the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units.

     “Limited Partner” means any Person (including any PLP) named as a Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, any Substituted Limited Partner or Additional Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.

     “Limited Partnership Interest” means a Partnership Interest of a Limited Partner representing a fractional part of the Partnership Interests of all Limited Partners and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. A Limited Partnership Interest may be expressed as a number of Partnership Units.

     “Liquidating Events” shall have the meaning set forth in Section 13.1.

     “Liquidator” shall have the meaning set forth in Section 13.2.A.

     “Majority in Interest of the Limited Partners” means Limited Partners (other than the General Partner and any Limited Partner fifty percent (50%) or more of whose equity is owned, directly or indirectly, by the General Partner, and any Preferred Limited Partner) holding Percentage Interests that in the aggregate are greater than fifty percent (50%) of the aggregate Percentage Interests of all Limited Partners (other than the General Partner and any Limited Partner fifty percent (50%) or more of whose equity is owned, directly or indirectly, by the General Partner and any Preferred Limited Partner).

     “Majority in Interest of Partners” means Partners (other than Preferred Limited Partners) holding Percentage Interests that are greater than fifty percent (50%) of the aggregate Percentage Interests of all Partners (other than Preferred Limited Partners).

     “Net Income” or “Net Loss” means for each fiscal year of the Partnership, an amount equal to the Partnership’s taxable income or loss for such fiscal year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:

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     (i) Any income of the Partnership that is exempt from Federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be added to such taxable income or loss;

     (ii) Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be subtracted from such taxable income or loss;

     (iii) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (ii) or (iii) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss; in the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of all Partnership assets in a Terminating Capital Transaction for purposes of computing Net Income or Net Loss as set forth in Article 6;

     (iv) Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for Federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

     (v) In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year;

     (vi) To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and

     (vii) Notwithstanding any other provision of this definition of Net Income or Net Loss, any items which are specially allocated pursuant to Section 6.3 shall not be taken into account in computing Net Income or Net Loss. The amounts of the items of Partnership income, gain, loss, or deduction available to be specially allocated pursuant to Section 6.3 shall be determined by applying rules analogous to those set forth in this definition of Net Income or Net Loss.

     “New Securities” means (i) any rights, options, warrants or convertible or exchangeable securities having the right to subscribe for or purchase REIT Shares or other shares of capital stock of the General Partner, excluding grants under any Stock Incentive Plan or (ii) any Debt issued by the General Partner that provides any of the rights described in clause (i).

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     “Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).

     “Nonrecourse Liability” shall have the meaning set forth in Regulations Section 1.752-1(a)(2).

     “Notice of Redemption” means the Notice of Redemption substantially in the form of Exhibit B to this Agreement.

     “Offering Costs” means the aggregate amounts expended by the General Partner which related to the organization of the Partnership and the General Partner, or to the initial public offering or subsequent offerings of REIT Shares or other shares of capital stock of the General Partner, the net proceeds of which were used to make a contribution to the Partnership, in each case to the extent such expenses of the General Partner were not reimbursed by the Partnership.

     “Parity Preferred Unit” means any class or series of Partnership Interests of the Partnership now or hereafter authorized, issued or outstanding expressly designated by the Partnership to rank on a parity with the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units with respect to distributions or rights upon voluntary or involuntary liquidation, winding up or dissolution of the Partnership, or both, as the context may require.

     “Partner” means a General Partner or a Limited Partner, and “Partners” means the General Partner and the Limited Partners.

     “Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).

     “Partner Nonrecourse Debt” shall have the meaning set forth in Regulations Section 1.704-2(b)(4).

     “Partner Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).

     “Partnership” means the limited partnership formed under the Act and pursuant to this Agreement, and any successor thereto.

     “Partnership Interest” means an ownership interest in the Partnership of either a Limited Partner or the General Partner and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement. There may be one or more classes of Partnership Interests as provided in Section 4.3. A Partnership Interest may be expressed as a number of Partnership Units. Unless otherwise expressly

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provided for by the General Partner at the time of the original issuance of any Partnership Interests, all Partnership Interests (whether of a Limited Partner or a General Partner) shall be of the same class. The Partnership Interests represented by the Common Units (including Performance Units), the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units are the only Partnership Interests and each such type of unit is a separate class of Partnership Interest for all purposes of this Agreement.

     “Partnership Minimum Gain” shall have the meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease in Partnership Minimum Gain, for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(d).

     “Partnership Record Date” means the record date established by the General Partner for the distribution of Available Cash with respect to Common Units pursuant to Section 5.1 which record date shall be the same as the record date established by the General Partner for a distribution to its stockholders of some or all of its portion of such distribution.

     “Partnership Unit” means, with respect to any class of Partnership Interest, a fractional, undivided share of such class of Partnership Interest issued pursuant to Sections 4.1 and 4.3 (including Performance Units). The ownership of Partnership Units may be evidenced by a certificate for units substantially in the form of Exhibit D-1 or D-2 hereto or as the General Partner may determine with respect to any class of Partnership Units issued from time to time under Sections 4.1 and 4.3.

     “Partnership Year” means the fiscal year of the Partnership, which shall be the calendar year.

     “Percentage Interest” means, as to a Partner holding a class of Partnership Interests, its interest in the Partnership as determined by dividing the Partnership Units of such class owned by such Partner by the total number of Partnership Units of such class then outstanding as specified in Exhibit A attached hereto, as such Exhibit may be amended from time to time. If the Partnership issues more than one class of Partnership Interest, the interest in the Partnership among the classes of Partnership Interests shall be determined as set forth in the amendment to the Partnership Agreement setting forth the rights and privileges of such additional classes of Partnership Interest, if any, as contemplated by Section 4.3.C.

     “Performance Amount” means, with respect to a PLP on a specified date, (i) in the case of a Redemption, a number of Performance Units equal to (a) the amount of such PLP’s Capital Account balance immediately following the revaluation of the Partnership’s assets as of such date pursuant to the definitions of “Gross Asset Value” (paragraph (ii) therein) and “Net Income” (paragraph (iii) therein), divided by (b) the Fair Market Value of a REIT Share; and (ii) in the case of an exchange of Performance Units for the REIT Shares Amount, the same number of Performance Units as determined pursuant to subparagraph (i) above.

     “Performance Investors” means shareholders of the General Partner and Limited Partners who are parties to one or more of the Escrow Agreements.

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     “Performance Partners” means Partners which had the number of their Partnership Units reduced pursuant to Section 4.3.F.

     “Performance Shares” means a portion of the REIT Shares or Partnership Units issued to the Performance Investors which were escrowed pursuant to the Escrow Agreements for possible transfer to the General Partner or the Partnership (as applicable), the applicable number of which for each Performance Investor is described in the applicable Escrow Agreement.

     “Performance Units” means those Partnership Units issued pursuant to Section 4.3.F.

     “Permitted Reason” means a termination of employment by reason of death, disability, termination by the employer without “cause,” or termination by a Person of their employment for “good reason.” For purposes of this definition, “cause” shall mean (i) gross negligence or willful misconduct, (ii) breach by the Person of the covenant not to compete provided in their employment agreement during the one year period following the closing of the initial public offering of common stock of the General Partner, (iii) fraud or other conduct against the material best interests of the General Partner, the Partnership or their subsidiaries, or (iv) conviction of a felony if such conviction has a material adverse effect on the General Partner, the Partnership or their subsidiaries. For purposes of this definition, “good reason” means (a) a substantial adverse change in the nature or scope of a Person’s responsibilities or authority under the Person’s employment agreement, or (b) an uncured breach by the employer of any of its material obligations under such employment agreement.

     “Person” means an individual or a corporation, partnership, limited liability company, trust, unincorporated organization, association or other entity.

     “Plan Asset Regulation” means the regulations promulgated by the United States Department of Labor in Title 29, Code of Federal Regulations, Part 2510, Section 101-3, and any successor regulations thereto.

     “Pledge” shall have the meaning set forth in Section 11.3.A.

     “PLP” means at any time, any Person who then owns one or more Performance Units, including Performance Units which have not vested.

     “Preferred Distribution Shortfall” shall have the meaning given to such term in Section 5.1 hereof.

     “Preferred Limited Partner” means any Person holding a Preferred Unit, and named as a Preferred Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substitute Limited Partner or Additional Limited Partner, in such Person’s capacity as a Preferred Limited Partner in the Partnership.

     “Preferred Share” means a share of the General Partner’s preferred stock, par value $.01 per share, with such rights, priorities and preferences as shall be designated by the Board of Directors in accordance with the Charter.

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     “Preferred Unit” means a Partnership Unit representing a Partnership Interest, with such rights, priorities and preferences as shall be designated by the General Partner pursuant to Section 4.3.C hereof, including without limitation, the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units.

     “Priority Return” means with respect to (i) the Series J Preferred Units, the Series J Priority Return, (ii) the Series K Preferred Units, the Series K Priority Return, (iii) the Series L Preferred Units, the Series L Priority Return, (iv) the Series M Preferred Units, the Series M Priority Return and (v) the Series O Preferred Units, the Series O Priority Return.

     “Properties” means such interests in real property and personal property including without limitation, fee interests, interests in ground leases, interests in joint ventures, interests in mortgages, and Debt instruments as the Partnership may hold from time to time.

     “Qualified REIT Subsidiary” means any Subsidiary of the General Partner that is a “qualified REIT subsidiary” within the meaning of Section 856(i) of the Code.

     “Qualified Transferee” means an “Accredited Investor” as defined in Rule 501 promulgated under the Securities Act.

     “Redemption” shall have the meaning set forth in Section 8.6.A.

     “Regulations” means the Income Tax Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).

     “Regulatory Allocations” shall have the meaning set forth in Section 6.3.A(viii).

     “REIT” means a real estate investment trust under Sections 856 through 860 of the Code.

     “REIT Requirements” shall have the meaning set forth in Section 5.1.

     “REIT Share” means a share of common stock, par value $.01 per share, of the General Partner.

     “REIT Shares Amount” means, as of any date, an aggregate number of REIT Shares equal to the number of Tendered Units, or in the case of Section 11.2.B, all Units, as adjusted pursuant to Section 7.5 (in the event the General Partner acquires material assets, other than on behalf of the Partnership) and for stock dividends and distributions, stock splits and subdivisions, reverse stock splits and combinations, distributions of rights, warrants or options, and distributions of evidences of indebtedness or assets relating to assets not received by the General Partner pursuant to a pro rata distribution by the Partnership.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder.

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     “Series J Articles Supplementary” means the Articles Supplementary of the General Partner in connection with its Series J Preferred Shares, as filed with the Maryland Department of Assessments and Taxation on September 24, 2001.

     “Series J Limited Partner” means any Person holding Series J Preferred Units and named as a Series J Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substitute Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.

     “Series J Preferred Capital” means a Capital Account balance equal to the product of (i) the number of Series J Preferred Units then held by the Partner multiplied by (ii) the sum of $50 and any Preferred Distribution Shortfall per Series J Preferred Unit.

     “Series J Preferred Share” means a share of 7.95% Series J Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation preference $50 per share, of the General Partner.

     “Series J Preferred Units” means the Partnership’s 7.95% Series J Cumulative Redeemable Partnership Units.

     “Series J Preferred Unit Distribution Payment Date” shall have the meaning set forth in Section 18.3.A hereof.

     “Series J Priority Return” shall mean an amount equal to 7.95% per annum on an amount equal to $50 per Series J Preferred Unit then outstanding (equivalent to $3.975 per annum). Such amount shall be determined on a daily basis computed on the basis of a 360-day year of twelve 30-day months (or actual days for any month which is shorter than a full monthly period), cumulative from September 21, 2001 to the extent not distributed for any given distribution period pursuant to Sections 5.1 and 18.3 hereof. Notwithstanding the foregoing, distributions on the Series J Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series J Preferred Units will accumulate as of the Preferred Unit Distribution Payment Date on which they first become payable.

     “Series K Articles Supplementary” means the Articles Supplementary of the General Partner in connection with its Series K Preferred Shares, as filed with the Maryland Department of Assessments and Taxation on April 17, 2002.

     “Series K Limited Partner” means any Person holding Series K Preferred Units and named as a Series K Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substitute Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.

     “Series K Preferred Capital” means a Capital Account balance equal to the product of (i) the number of Series K Preferred Units then held by the Partner multiplied by (ii) the sum of $50 and any Preferred Distribution Shortfall per Series K Preferred Unit.

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     “Series K Preferred Share” means a share of 7.95% Series K Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation preference $50 per share, of the General Partner.

     “Series K Preferred Units” means the Partnership’s 7.95% Series K Cumulative Redeemable Partnership Units.

     “Series K Preferred Unit Distribution Payment Date” shall have the meaning set forth in Section 19.3.A hereof.

     “Series K Priority Return” shall mean an amount equal to 7.95% per annum on an amount equal to $50 per Series K Preferred Unit then outstanding (equivalent to $3.975 per annum). Such amount shall be determined on a daily basis computed on the basis of a 360-day year of twelve 30-day months (or actual days for any month which is shorter than a full monthly period), cumulative from April 17, 2002 to the extent not distributed for any given distribution period pursuant to Sections 5.1 and 19.3 hereof. Notwithstanding the foregoing, distributions on the Series K Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series K Preferred Units will accumulate as of the Preferred Unit Distribution Payment Date on which they first become payable.

     “Series L Articles Supplementary” means the Articles Supplementary of the General Partner in connection with its Series L Preferred Shares, as filed with the Maryland Department of Assessments and Taxation on June 20, 2003.

     “Series L Preferred Capital” means a Capital Account balance equal to the product of (i) the number of Series L Preferred Units then held by the Partner multiplied by (ii) the sum of $25 and any Preferred Distribution Shortfall per Series L Preferred Unit.

     “Series L Preferred Share” means a share of 6 1/2% Series L Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation preference $25 per share, of the General Partner.

     “Series L Preferred Units” means the Partnership’s 6 1/2% Series L Cumulative Redeemable Partnership Units.

     “Series L Preferred Unit Distribution Payment Date” shall have the meaning set forth in Section 20.3.A hereof.

     “Series L Priority Return” shall mean an amount equal to 6 1/2% per annum on an amount equal to $25 per Series L Preferred Unit then outstanding (equivalent to $1.625 per annum). Such amount shall be determined on a daily basis computed on the basis of a 360-day year of twelve 30-day months (or actual days for any month which is shorter than a full monthly period), cumulative from June 23, 2003 to the extent not distributed for any given distribution period pursuant to Sections 5.1 and 20.3 hereof. Notwithstanding the foregoing, distributions on the Series L Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership at any time prohibit the current payment of distributions, whether

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or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series L Preferred Units will accumulate as of the Preferred Unit Distribution Payment Date on which they first become payable.

     “Series M Articles Supplementary” means the Articles Supplementary of the General Partner in connection with its Series M Preferred Shares, as filed with the Maryland Department of Assessments and Taxation on November 24, 2003.

     “Series M Preferred Capital” means a Capital Account balance equal to the product of (i) the number of Series M Preferred Units then held by the Partner multiplied by (ii) the sum of $25 and any Preferred Distribution Shortfall per Series M Preferred Unit.

     “Series M Preferred Share” means a share of 6 ³/4% Series M Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation preference $25 per share, of the General Partner.

     “Series M Preferred Units” means the Partnership’s 6 ³/4% Series M Cumulative Redeemable Partnership Units.

     “Series M Preferred Unit Distribution Payment Date” shall have the meaning set forth in Section 21.3.A hereof.

     “Series M Priority Return” shall mean an amount equal to 6 ³/4% per annum on an amount equal to $25 per Series M Preferred Unit then outstanding (equivalent to $1.6875 per annum). Such amount shall be determined on a daily basis computed on the basis of a 360-day year of twelve 30-day months (or actual days for any month which is shorter than a full monthly period), cumulative from November 25, 2003 to the extent not distributed for any given distribution period pursuant to Sections 5.1 and 21.3 hereof. Notwithstanding the foregoing, distributions on the Series M Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series M Preferred Units will accumulate as of the Preferred Unit Distribution Payment Date on which they first become payable.

     “Series O Articles Supplementary” means the Articles Supplementary of the General Partner in connection with its Series O Preferred Shares, as filed with the Maryland Department of Assessments and Taxation on December 12, 2005.

     “Series O Preferred Capital” means a Capital Account balance equal to the product of (i) the number of Series O Preferred Units then held by the Partner multiplied by (ii) the sum of $25 and any Preferred Distribution Shortfall per Series O Preferred Unit.

     “Series O Preferred Share” means a share of 7.00% Series O Cumulative Redeemable Preferred Stock, par value $.01 per share, liquidation preference $25 per share, of the General Partner.

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     “Series O Preferred Units” means the Partnership’s 7.00% Series O Cumulative Redeemable Partnership Units.

     “Series O Preferred Unit Distribution Payment Date” shall have the meaning set forth in Section 22.3.A hereof.

     “Series O Priority Return” shall mean an amount equal to 7.00% per annum on an amount equal to $25 per Series O Preferred Unit then outstanding (equivalent to $1.75 per annum). Such amount shall be determined on a daily basis computed on the basis of a 360-day year of twelve 30-day months (or actual days for any month which is shorter than a full monthly period), cumulative from December 13, 2005 to the extent not distributed for any given distribution period pursuant to Sections 5.1 and 22.3 hereof. Notwithstanding the foregoing, distributions on the Series O Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series O Preferred Units will accumulate as of the Preferred Unit Distribution Payment Date on which they first become payable.

     “Specified Redemption Date” means the day of receipt by the General Partner of a Notice of Redemption.

     “Stock Incentive Plan” means any stock incentive plan of the General Partner.

     “Subsidiary” shall mean, with respect to any person, any corporation, partnership, limited liability company, joint venture or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests, is owned, directly or indirectly, by such person.

     “Subsidiary Partnership” means any partnership or limited liability company that is a Subsidiary of the Partnership.

     “Substituted Limited Partner” means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 11.4.

     “Surviving Partnership” shall have the meaning set forth in Section 11.2.C.

     “Tax Items” shall have the meaning set forth in Section 6.4.A.

     “Tenant” means any tenant from which the General Partner derives rent either directly or indirectly through partnerships, including the Partnership.

     “Tendered Units” shall have the meaning set forth in Section 8.6.A.

     “Tendering Partner” shall have the meaning set forth in Section 8.6.A.

     “Terminating Capital Transaction” means any sale or other disposition of all or substantially all of the assets of the Partnership or a related series of transactions that, taken

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together, result in the sale or other disposition of all or substantially all of the assets of the Partnership.

     “Termination Transaction” shall have the meaning set forth in Section 11.2.B.

     Section 1.2 Rules of Construction

     Unless otherwise indicated, all references herein to “REIT,” “REIT Requirements,” “REIT Shares” and “REIT Shares Amount” with respect to the General Partner shall apply only with reference to the Company.

ARTICLE 2.
ORGANIZATIONAL MATTERS

     Section 2.1 Organization

     The Partnership is a limited partnership formed pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement. Except as expressly provided herein, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act. The Partnership Interest of each Partner shall be personal property for all purposes.

     Section 2.2 Name

     The name of the Partnership is AMB Property, L.P. The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires. The General Partner in its sole and absolute discretion may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.

     Section 2.3 Resident Agent; Principal Office

     The name and address of the resident agent of the Partnership in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808. The address of the principal office of the Partnership in the State of Delaware is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808 at such address. The principal office of the Partnership is located at Pier 1, Bay 1, San Francisco, California 94111, or such other place as the General Partner may from time to time designate by notice to the Limited Partners. The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems advisable.

     Section 2.4 Power of Attorney

     A. Each Limited Partner and each Assignee constitutes and appoints the General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each

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of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:

(i)

execute, swear to, acknowledge, deliver, file and record in the appropriate public offices: (a) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner or the Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (b) all instruments that the General Partner or any Liquidator deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms; (c) all conveyances and other instruments or documents that the General Partner or any Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation; (d) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Articles 11, 12 and 13 or the Capital Contribution of any Partner; and (e) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interests; and

(ii)

execute, swear to, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement.

Nothing contained herein shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Article 14 or as may be otherwise expressly provided for in this Agreement.

     B. The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner and any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or Assignee and the transfer of all or any portion of such Limited Partner’s or Assignee’s Partnership Units and shall extend to such Limited Partner’s or Assignee’s heirs, successors, assigns and personal representatives. Each such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney; and each such Limited Partner or Assignee hereby waives any and all defenses which may be

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available to contest, negate or disaffirm the action of the General Partner or any Liquidator, taken in good faith under such power of attorney. Each Limited Partner or Assignee shall execute and deliver to the General Partner or any Liquidator, within fifteen (15) days after receipt of the General Partner’s or Liquidator’s request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership.

     Section 2.5 Term

     The term of the Partnership commenced on October 15, 1997 and shall continue until December 31, 2096 unless it is dissolved sooner pursuant to the provisions of Article 13 or as otherwise provided by law.

     Section 2.6 Number of Partners

     Without the consent of the General Partner which may be given or withheld in its sole discretion, the Partnership shall not at any time have more than one hundred (100) partners (including as partners those persons indirectly owning an interest in the Partnership through a partnership, limited liability company, S corporation or grantor trust (such entity, a “flow through entity”), but only if substantially all of the value of such person’s interest in the flow through entity is attributable to the flow through entity’s interest (direct or indirect) in the Partnership).

ARTICLE 3.

PURPOSE

     Section 3.1 Purpose and Business

     The purpose and nature of the business to be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act; provided, however, that such business shall be limited to and conducted in such a manner as to permit the General Partner at all times to be classified as a REIT for Federal income tax purposes, unless the General Partner ceases to qualify as a REIT for reasons other than the conduct of the business of the Partnership, (ii) to enter into any partnership, joint venture or other similar arrangement to engage in any of the foregoing or to own interests in any entity engaged, directly or indirectly, in any of the foregoing and (iii) to do anything necessary or incidental to the foregoing. In connection with the foregoing, and without limiting the General Partner’s right in its sole discretion to cease qualifying as a REIT, the Partners acknowledge that the General Partner’s current status as a REIT inures to the benefit of all the Partners and not solely the General Partner.

     Section 3.2 Powers

     The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership, including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness, whether or not secured by mortgage, deed of

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trust, pledge or other lien, acquire and develop real property, and manage, lease, sell, transfer and dispose of real property; provided, however, not withstanding anything to the contrary in this Agreement, the Partnership shall not take, or refrain from taking, any action which, in the judgment of the General Partner, in its sole and absolute discretion, (i) could adversely affect the ability of the General Partner to continue to qualify as a REIT, (ii) absent the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, and except with respect to the distribution of Available Cash to the Series J Limited Partners in accordance with Section 18.3 and the Series K Limited Partners in accordance with Section 19.3, could subject the General Partner to any taxes under Section 857 or Section 4981 of the Code, or (iii) could violate any law or regulation of any governmental body or agency having jurisdiction over the General Partner or its securities, unless any such action (or inaction) under the foregoing clauses (i), (ii) or (iii) shall have been specifically consented to by the General Partner in writing.

     Section 3.3 Partnership Only for Purposes Specified

     The Partnership shall be a partnership only for the purposes specified in Section 3.1, and this Agreement shall not be deemed to create a partnership among the Partners with respect to any activities whatsoever other than the activities within the purposes of the Partnership as specified in Section 3.1. Except as otherwise provided in this Agreement, no Partner shall have any authority to act for, bind, commit or assume any obligation or responsibility on behalf of the Partnership, its properties or any other Partner. No Partner, in its capacity as a Partner under this Agreement, shall be responsible or liable for any indebtedness or obligation of another Partner, nor shall the Partnership be responsible or liable for any indebtedness or obligation of any Partner, incurred either before or after the execution and delivery of this Agreement by such Partner, except as to those responsibilities, liabilities, indebtedness or obligations incurred pursuant to and as limited by the terms of this Agreement and the Act.

     Section 3.4 Representations and Warranties by the Parties

     A. Each Partner that is an individual represents and warrants to each other Partner that (i) such Partner has in the case of any Person other than an individual, the power and authority, and in the case of an individual, the legal capacity, to enter into this Agreement and perform such Partner’s obligations hereunder, (ii) the consummation of the transactions contemplated by this Agreement to be performed by such Partner will not result in a breach or violation of, or a default under, any agreement by which such Partner or any of such Partner’s property is or are bound, or any statute, regulation, order or other law to which such Partner is subject, (iii) such Partner is neither a “foreign person” within the meaning of Section 1445(f) of the Code nor a “foreign partner” within the meaning of Section 1446(e) of the Code and (iv) this Agreement has been duly executed and delivered by such Partner and is binding upon, and enforceable against, such Partner in accordance with its terms.

     B. Each Partner that is not an individual represents and warrants to each other Partner that (i) its execution and delivery of this Agreement and all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary action, including without limitation, that of its general partner(s), committee(s), trustee(s), beneficiaries, directors and/or stockholder(s), as the case may be, as required, (ii) the consummation of such transactions shall not result in a breach or violation of, or a default under, its certificate of limited

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partnership, partnership agreement, trust agreement, limited liability company operating agreement, charter or by-laws, as the case may be, any agreement by which such Partner or any of such Partner’s properties or any of its partners, beneficiaries, trustees or stockholders, as the case may be, is or are bound, or any statute, regulation, order or other law to which such Partner or any of its partners, trustees, beneficiaries or stockholders, as the case may be, is or are subject, (iii) such Partner is neither a “foreign person” within the meaning of Section 1445(f) of the Code nor a “foreign partner” within the meaning of Section 1446(e) of the Code and (iv) this Agreement has been duly executed and delivered by such Partner and is binding upon, and enforceable against, such Partner in accordance with its terms.

     C. Each Partner represents, warrants and agrees that it has acquired and continues to hold its interest in the Partnership for its own account for investment only and not for the purpose of, or with a view toward, the resale or distribution of all or any part thereof, nor with a view toward selling or otherwise distributing such interest or any part thereof at any particular time or under any predetermined circumstances. Each Partner further represents and warrants that it is a sophisticated investor, able and accustomed to handling sophisticated financial matters for itself, particularly real estate investments, and that it has a sufficiently high net worth that it does not anticipate a need for the funds it has invested in the Partnership in what it understands to be a highly speculative and illiquid investment.

     D. Each Partner further represents, warrants and agrees as follows:

     (i) Except as provided in Exhibit E, at any time such Partner actually or Constructively Owns a 25% or greater capital interest or profits interest in the Partnership, it does not and will not, without the prior written consent of the General Partner, actually own or Constructively Own (a) with respect to any Tenant that is a corporation, any stock of such Tenant and (b) with respect to any Tenant that is not a corporation, any interests in either the assets or net profits of such Tenant.

     (ii) Except as provided in Exhibit F, at any time such Partner actually or Constructively Owns a 25% or greater capital interest or profits interest in the Partnership, it does not, and agrees that it will not without the prior written consent of the General Partner, actually own or Constructively Own, any stock in the General Partner, other than any REIT Shares or other shares of capital stock of the General Partner such Partner may acquire (a) as a result of an exchange of Tendered Units pursuant to Section 8.6 or (b) upon the exercise of options granted or delivery of REIT Shares pursuant to any Stock Incentive Plan, in each case subject to the ownership limitations set forth in the General Partner’s Charter.

     (iii) Upon request of the General Partner, it will disclose to the General Partner the amount of REIT Shares or other shares of capital stock of the General Partner that it actually owns or Constructively Owns.

     (iv) It understands that if, for any reason, (a) the representations, warranties or agreements set forth in Section 3.4.D(i) or (ii) are violated or (b) the Partnership’s actual or Constructive Ownership of the REIT Shares or other shares of capital stock of the General Partner violates the limitations set forth in the Charter, then (x) some or all of the Redemption rights or rights of the Limited Partners to exchange

25

Partnership Interests for Series J Preferred Shares or for Series K Preferred Shares may become non-exercisable, and (y) some or all of such shares owned by the Partners and/or some or all of the Partnership Interests owned by the Limited Partners may be automatically transferred to a trust for the benefit of a charitable beneficiary, as provided in the Charter and Exhibit J of this Agreement, respectively.

     E. The representations and warranties contained in Sections 3.4.A, 3.4.B, 3.4.C and 3.4.D shall survive the execution and delivery of this Agreement by each Partner and the dissolution and winding up of the Partnership.

     F. Each Partner hereby acknowledges that no representations as to potential profit, cash flows, funds from operations or yield, if any, in respect of the Partnership or the General Partner have been made by any Partner or any employee or representative or Affiliate of any Partner, and that projections and any other information, including, without limitation, financial and descriptive information and documentation, which may have been in any manner submitted to such Partner shall not constitute any representation or warranty of any kind or nature, express or implied.

     Section 3.5 Certain ERISA Matters

     Each Partner acknowledges that the Partnership is intended to qualify as a “real estate operating company” (as such term is defined in the Plan Asset Regulation). The General Partner will use its reasonable best efforts to structure the investments in, relationships with and conduct with respect to Properties and any other assets of the Partnership so that the Partnership will be a “real estate operating company” (as such term is defined in the Plan Asset Regulation).

ARTICLE 4.
CAPITAL CONTRIBUTIONS

     Section 4.1 Capital Contributions of the Partners

     At the time of their respective execution of this Agreement, the Partners shall make or shall have made Capital Contributions as set forth in Exhibit A to this Agreement. The Partners shall own Partnership Units of the class and in the amounts set forth in Exhibit A and shall have a Percentage Interest in the Partnership as set forth in Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from time to time by the General Partner to the extent necessary to accurately reflect exchanges, redemptions, Capital Contributions, the issuance of additional Partnership Units (including the issuance of Performance Units pursuant to Section 4.3.F) or similar events having an effect on a Partner’s Percentage Interest. Except as required by law or as otherwise provided in Sections 4.3, 4.4 and 10.5, no Partner shall be required or permitted to make any additional Capital Contributions or loans to the Partnership. Unless otherwise specified by the General Partner at the time of the creation of any class of Partnership Interests, the corresponding class of capital stock for any Partnership Units issued shall be REIT Shares.

     Section 4.2 Loans by Third Parties

     Subject to Section 4.3, the Partnership may incur Debt, or enter into other similar credit, guarantee, financing or refinancing arrangements for any purpose (including, without

26

limitation, in connection with any further acquisition of Properties) with any Person that is not the General Partner upon such terms as the General Partner determines appropriate; provided, that the Partnership shall not incur any Debt that is recourse to the General Partner, except to the extent otherwise agreed to by the General Partner in its sole discretion.

     Section 4.3 Additional Funding and Capital Contributions

     A. General. The General Partner may, at any time and from time to time, determine that the Partnership requires additional funds (“Additional Funds”) for the acquisition of additional Properties or for such other Partnership purposes as the General Partner may determine. Additional Funds may be raised by the Partnership, at the election of the General Partner, in any manner provided in, and in accordance with, the terms of this Section 4.3. No Person shall have any preemptive, preferential or similar right or rights to subscribe for or acquire any Partnership Interest, except as set forth in this Section 4.3.

     B. General Partner Loans. The General Partner may enter into a Funding Debt, including, without limitation, Funding Debt that is convertible into REIT Shares, and lend the Additional Funds to the Partnership (a “General Partner Loan”); provided, however, that the General Partner shall not be obligated to lend the net proceeds of any Funding Debt to the Partnership in a manner that would be inconsistent with the General Partner’s ability to remain qualified as a REIT. If the General Partner enters into such a Funding Debt, the General Partner Loan will consist of the net proceeds from such Funding Debt and will be on comparable terms and conditions, including interest rate, repayment schedule and costs and expenses, as shall be applicable with respect to or incurred in connection with such Funding Debt.

     C. Issuance of Additional Partnership Interests. The General Partner may raise all or any portion of the Additional Funds by accepting additional Capital Contributions of cash. The General Partner may also accept additional Capital Contributions of real property or other non-cash assets. In connection with any such additional Capital Contributions (of cash or property), and subject to Sections 18.6 and 19.6 hereof, the General Partner is hereby authorized to cause the Partnership from time to time to issue to Partners (including the General Partner) or other Persons (including, without limitation, in connection with the contribution of property to the Partnership) additional Partnership Units or other Partnership Interests in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers, and duties, including rights, powers, and duties senior to then existing Limited Partnership Interests, all as shall be determined by the General Partner in its sole and absolute discretion subject to Delaware law, and as set forth by amendment to this Agreement, including without limitation: (i) the allocations of items of Partnership income, gain, loss, deduction, and credit to such class or series of Partnership Interests; (ii) the right of each such class or series of Partnership Interests to share in Partnership distributions; (iii) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership; and (iv) the right to vote, including, without limitation, the limited partner approval rights set forth in Section 11.2.A; provided, that no such additional Partnership Units or other Partnership Interests shall be issued to the General Partner unless either (a) the additional Partnership Interests are issued in connection with the grant, award, or issuance of shares of the General Partner pursuant to Section 4.3.D below, which shares have designations, preferences, and other rights (except voting rights) such that the economic interests attributable to such shares are substantially similar to the designations,

27

preferences and other rights of the additional Partnership Interests issued to the General Partner in accordance with this Section 4.3.C or (b) the additional Partnership Interests are issued to all Partners holding Partnership Interests in the same class in proportion to their respective Percentage Interests in such class. In the event that the Partnership issues additional Partnership Interests pursuant to this Section 4.3.C, the General Partner shall make such revisions to this Agreement (including but not limited to the revisions described in Sections 5.4, 6.2.C, and 8.6) as it determines are necessary to reflect the issuance of such additional Partnership Interests.

     D. Issuance of REIT Shares or Other Securities by the General Partner. The General Partner shall not issue any additional REIT Shares (other than REIT Shares issued pursuant to Section 8.6 or pursuant to a dividend or distribution (including any stock split) of REIT Shares to all of its stockholders or all of its stockholders who hold a class of stock of the General Partner), other shares of capital stock of the General Partner (other than in connection with the acquisition of Partnership Interests in exchange for capital stock of the General Partner which corresponds in ranking to the Partnership’s Partnership Interests being acquired) or New Securities unless the General Partner shall make a Capital Contribution of the net proceeds (including, without limitation, cash and Properties) from the issuance of such additional REIT Shares, other shares of capital stock or New Securities, as the case may be, and from the exercise of the rights contained in such additional New Securities, as the case may be. The General Partner’s Capital Account shall be increased by the amount of cash or the value of Properties so contributed.

     E. Percentage Interest Adjustments in the Case of Capital Contributions for Partnership Units. Upon the acceptance of additional Capital Contributions in exchange for any class or series of Partnership Units, the Percentage Interest related thereto shall be equal to a fraction, the numerator of which is equal to the amount of cash and the Agreed Value of the Properties contributed as of the Business Day immediately preceding the date on which the additional Capital Contributions are made (an “Adjustment Date”) and the denominator of which is equal to the sum of (i) the Deemed Value of the Partnership Interests of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) plus (ii) the aggregate amount of cash and the Agreed Value of the Property contributed to the Partnership on such Adjustment Date in respect of such class or series of Partnership Interests. The Percentage Interest of each other Partner holding Partnership Interests of such class or series not making a full pro rata Capital Contribution shall be adjusted to equal a fraction, the numerator of which is equal to the sum of (i) the Deemed Partnership Interest Value of such Limited Partner in respect of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) plus (ii) the amount of cash and the Agreed Value of the Property contributed by such Partner to the Partnership in respect of such class or series as of such Adjustment Date, and the denominator of which is equal to the sum of (a) the Deemed Value of the Partnership Interests of such class (computed as of the Business Day immediately preceding the Adjustment Date), plus (b) the aggregate amount of cash and the Agreed Value of the Property contributed to the Partnership on such Adjustment Date in respect of such class or series. Notwithstanding the foregoing, solely for purposes of calculating a Partner’s Percentage Interest pursuant to this Section 4.3.E, (i) in the case of cash Capital Contributions by the General Partner, such Capital Contributions will be deemed to equal the cash contributed by the General Partner plus, in the case of cash contributions funded by an offering of REIT Shares or other shares of capital stock of the General Partner, the offering costs attributable to the cash contributed to the Partnership, and (ii) in the case of the contribution of Properties (or any portion thereof) by the General

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Partner which were acquired by the General Partner in exchange for REIT Shares immediately prior to such contribution, the General Partner shall be issued a number of Partnership Units equal to the number of REIT Shares issued by the General Partner in exchange for such Properties, the Partnership Units held by the other Partners shall not be adjusted, and the Partners’ Percentage Interests shall be adjusted accordingly. The General Partner shall promptly give each Partner written notice of its Percentage Interest, as adjusted.

     F. Issuance of Performance Units to the PLPs. Pursuant to the terms of the Escrow Agreements, Performance Investors have transferred all or a portion of their Performance Shares to the General Partner or the Partnership (as applicable). To the extent Performance Shares (i.e., REIT Shares) were transferred by Performance Investors to the General Partner pursuant to the Escrow Agreements, the number of Partnership Units held by the General Partner were automatically reduced by such amount on such date. To the extent Performance Shares (i.e., Partnership Units) were transferred by Performance Investors to the Partnership pursuant the Escrow Agreements, the number of Partnership Units held by each such Performance Investor were automatically reduced by such amount on such date. To the extent the Partnership Units held by the General Partner or Performance Investors were reduced as set forth in the preceding two sentences, the Partnership immediately issued an equal number of Performance Units to the Persons listed on Schedule G-1 and Schedule G-2 to Exhibit G in accordance with the allocations set forth on Exhibit G. The adjustments in the number of Partnership Units held by the Performance Partners and the PLPs set forth above did not effect each such Partners’ Capital Account in the Partnership (except with respect to subsequent allocations of items of Partnership income, gain, loss, deduction, and credit made to such Partners and possibly with respect to the reissuance of a Performance Unit subsequent to its forfeiture by a PLP) and no PLP was obligated to make a contribution to the capital of the Partnership in connection with the issuance of Performance Units.

     Section 4.4 Stock Incentive Plan

     If at any time or from time to time the General Partner sells or issues REIT Shares pursuant to any Stock Incentive Plan, the General Partner shall contribute any proceeds therefrom to the Partnership as an additional Capital Contribution and shall receive an amount of additional Partnership Units equal to the number of REIT Shares so sold or issued. The General Partner’s Capital Account shall be increased by the amount of cash so contributed.

     Section 4.5 No Preemptive Rights

     Except to the extent expressly granted by the Partnership pursuant to another agreement, no Person shall have any preemptive, preferential or other similar right with respect to (i) additional Capital Contributions or loans to the Partnership or (ii) issuance or sale of any Partnership Units or other Partnership Interests.

     Section 4.6 Other Contribution Provisions

     In the event that any Partner is admitted to the Partnership and is given (or is treated as having received) a Capital Account in exchange for services rendered to the Partnership, such transaction shall be treated by the Partnership and the affected Partner as if the Partnership had compensated such Partner in cash, and the Partner had contributed such cash to

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the capital of the Partnership. In addition, with the consent of the General Partner, in its sole discretion, one or more Limited Partners may enter into contribution agreements with the Partnership which have the effect of providing a guarantee of certain obligations of the Partnership.

ARTICLE 5.
DISTRIBUTIONS

     Section 5.1 Requirement and Characterization of Distributions

     The General Partner shall cause the Partnership to distribute all, or such portion as the General Partner may in its discretion determine, Available Cash generated by the Partnership (i) first, to the extent that the amount of cash distributed with respect to any Partnership Interests that are entitled to any preference in distribution for any prior distribution period was less than the required distribution for such outstanding Partnership Interests for such prior distribution period, and to the extent such deficiency has not been subsequently distributed pursuant to this Section 5.1 (a “Preferred Distribution Shortfall”), in accordance with the rights of such class of Partnership Interests (and within such class, pro rata in proportion to the respective Percentage Interests on the applicable record date) and to the Partners who are Partners on the applicable record date with respect to such distribution, (ii) second, with respect to any Partnership Interests that are entitled to any preference in distribution, in accordance with the rights of such class of Partnership Interests (and within such class, pro rata in proportion to the respective Percentage Interests on the applicable record date) and (iii) third, with respect to Partnership Interests that are not entitled to any preference in distribution, pro rata to each such class on a quarterly basis and in accordance with the terms of such class to Partners who are Partners of such class on the Partnership Record Date with respect to such distribution (and within each such class, pro rata in proportion with the respective Percentage Interests on such Partnership Record Date). Except as expressly provided for in Article 18 with respect to the Series J Preferred Units, Article 19 with respect to the Series K Preferred Units, Article 20 with respect to the Series L Preferred Units, Article 21 with respect to the Series M Preferred Units, Article 22 with respect to the Series O Preferred Units and in an agreement, if any, entered into in connection with the creation of a new class of Partnership Interests in accordance with Article 4, no Partnership Interest shall be entitled to a distribution in preference to any other Partnership Interest. The General Partner shall take such reasonable efforts, as determined by it in its sole and absolute discretion and consistent with its qualification as a REIT, to cause the Partnership to distribute sufficient amounts to enable the General Partner, for so long as the General Partner has determined to qualify as a REIT, to pay stockholder dividends that will (a) satisfy the requirements for qualifying as a REIT under the Code and Regulations (“REIT Requirements”) and (b) except to the extent otherwise determined by the General Partner, avoid any Federal income or excise tax liability of the General Partner, except to the extent that a distribution pursuant to clause (b) would prevent the Partnership from making a distribution to the holders of Series J Preferred Units in accordance with Section 18.3 and the holders of Series K Preferred Units in accordance with Section 19.3.

     Section 5.2 Distributions in Kind

     Except as expressly provided herein, no right is given to any Partner to demand and receive property other than cash. The General Partner may determine, in its sole and

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absolute discretion, to make a distribution in kind to the Partners of Partnership assets, and such assets shall be distributed in such a fashion as to ensure that the fair market value is distributed and allocated in accordance with Articles 5, 6 and 10; provided, however, that, in such case, the General Partner shall distribute only cash to the Series J Limited Partners and the Series K Limited Partners.

     Section 5.3 Distributions Upon Liquidation

     Notwithstanding Section 5.1, proceeds from a Liquidating Event shall be distributed to the Partners in accordance with Section 13.2.

     Section 5.4 Distributions to Reflect Issuance of Additional Partnership Interests

     In the event that the Partnership issues additional Partnership Interests (other than Performance Units, which shall receive distributions as set forth in Section 5.1) to the General Partner or any Additional Limited Partner pursuant to Section 4.3.C or 4.4, the General Partner shall make such revisions to this Article 5 as it determines are necessary to reflect the issuance of such additional Partnership Interests. In the absence of any agreement to the contrary, an Additional Limited Partner shall be entitled to the distributions set forth in Section 5.1 (without regard to this Section 5.4) with respect to the quarter during which the closing of its contribution to the Partnership occurs, multiplied by a fraction the numerator of which is the number of days from and after the date of such closing through the end of the applicable quarter, and the denominator of which is the total number of days in such quarter.

     Section 5.5 Character of PLP Distributions

     Distributions to each PLP pursuant to this Agreement shall be advances or drawings of money or property against such Partner’s distributive share of Net Income (or items thereof) as described in Treasury Regulation Section 1.731-1(a)(1)(ii).

ARTICLE 6.
ALLOCATIONS

     Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss

     Net Income and Net Loss of the Partnership shall be determined and allocated with respect to each fiscal year of the Partnership as of the end of each such year. Subject to the other provisions of this Article 6, an allocation to a Partner of a share of Net Income or Net Loss shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Income or Net Loss.

     Section 6.2 General Allocations

     A. In General. Except as otherwise provided in this Article 6, Net Income and Net Loss allocable with respect to a class of Partnership Interests, shall be allocated to each

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of the Partners holding such class of Partnership Interests in accordance with their respective Percentage Interest of such class.

     B.1. Net Income. Except as provided in Sections 6.2.B.3 and 6.3, Net Income for any Partnership Year shall be allocated in the following manner and order of priority:

(a)	First, 100% to the General Partner in an amount equal to the remainder, if any, of the cumulative Net Losses allocated to the General Partner pursuant to Section 6.2.B.2(d) for all prior Partnership Years minus the cumulative Net Income allocated to the General Partner pursuant to this Section 6.2.B.1(a) for all prior Partnership Years;
(b)	Second, 100% to each Limited Partner in an amount equal to the remainder, if any, of the cumulative Net Losses allocated to each such Limited Partner pursuant to Section 6.2.B.2(c) for all prior Partnership Years minus the cumulative Net Income allocated to such Limited Partner pursuant to this Section 6.2.B.1(b) for all prior Partnership Years;
(c)	Third, 100% to the General Partner and any Preferred Limited Partners in an amount equal to the remainder, if any, of the cumulative Net Losses allocated to such Partners pursuant to Section 6.2.B.2(b) for all prior Partnership Years minus the cumulative Net Income allocated to such Partners pursuant to this Section 6.2.B.1(c) for all prior Partnership Years;
(d)	Fourth, 100% to the General Partner and the Limited Partners in an amount equal to the remainder, if any, of the cumulative Net Losses allocated to each such Partner pursuant to Section 6.2.B.2(a) for all prior Partnership Years minus the cumulative Net Income allocated to each Partner pursuant to this Section 6.2.B.1(d) for all prior Partnership Years;
(e)	Fifth, 100% to the General Partner and any Preferred Limited Partners in an amount equal to the excess of (i) the cumulative Priority Return on such Partner’s Preferred Units to the last day of the current Partnership Year or to the date of redemption of such Preferred Units, to the extent such Preferred Units are redeemed during such year, over (ii) the cumulative Net Income allocated to the General Partner or such Preferred Limited Partner, as applicable, pursuant to this Section 6.2.B.1(e) for all prior Partnership Years; and
(f)	Sixth, 100% to the General Partner and the Limited Partners in accordance with their respective Percentage Interests in the Common Units.

     To the extent the allocations of Net Income set forth above in any paragraph of this Section 6.2.B.1 are not sufficient to entirely satisfy the allocation set forth in such paragraph, such allocation shall be made in proration to the total amount that would have been allocated pursuant to such paragraph without regard to such shortfall.

     B.2. Net Losses. Except as provided in Sections 6.2.B.3 and 6.3, Net Losses for any Partnership Year shall be allocated in the following manner and order of priority:

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(a)	First, 100% to the General Partner and the Limited Partners in accordance with their respective Percentage Interests in the Common Units (to the extent consistent with this Section 6.2.B.2(a)) until the Adjusted Capital Account (ignoring for this purpose any amounts a Partner is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2) and ignoring the Partner’s Series J Preferred Capital, the Series K Preferred Capital, the Series L Preferred Capital, the Series M Preferred Capital and the Series O Preferred Capital) of each such Partner is zero;
(b)	Second, 100% to the General Partner and any Preferred Limited Partners, pro rata to each such Partner’s Adjusted Capital Account (ignoring for this purpose any amounts a Partner is obligated to contribute to the capital of the Partnership or is deemed obligated to contribute pursuant to Regulations Section 1.704-1(b)(2)(ii)(c)(2)), until the Adjusted Capital Account (as so modified) of each such Partner is zero;
(c)	Third, 100% to the Limited Partners to the extent of, and in proportion to, the positive balance (if any) in their Adjusted Capital Accounts; and
(d)	Fourth, 100% to the General Partner.

     B.3. Terminating Capital Transactions.

(a)	If no Performance Units are outstanding at the time of a Terminating Capital Transaction, any Net Income attributable to such Terminating Capital Transaction shall first be allocated to the General Partner in an amount equal to the Offering Costs, to the extent the General Partner’s Capital Account has not previously been adjusted to account for such amounts.
(b)	If Performance Units are outstanding at the time of a Terminating Capital Transaction —

(1)

any Net Income attributable to such Terminating Capital Transaction shall be allocated as follows: such Net Income shall first be tentatively allocated solely as an interim step in calculating final allocations pursuant to this Section 6.2.B.3(b)(1), among the Partners in accordance with Section 6.2.B.3(a), Section 6.2.A and Section 6.2.B.1. Then the amount so tentatively allocated to each Performance Partner, to the extent of each such Performance Partner’s Excess Performance Capital, shall instead be allocated to the PLPs, pro rata to the number of Performance Units held by each PLP.

(2)

any Net Loss attributable to such Terminating Capital Transaction shall be allocated as follows: such Net Loss shall first be tentatively allocated, solely as an interim step in calculating final allocations pursuant to this Section 6.2.B.3(b)(2), among the

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Partners in accordance with Section 6.2.A and Section 6.2.B.2. Then the amount so tentatively allocated to the PLPs shall instead be allocated to the Performance Partners to the extent of the aggregate Excess Performance Capital of the Performance Partners. Any amounts so allocated away from the PLPs shall be done on a basis which is proportionate to each PLP’s Performance Units. Any amounts so allocated to the Performance Partners shall be done on a basis which is proportionate to each Performance Partner’s Excess Performance Capital.

     C. Allocations to Reflect Issuance of Additional Partnership Interests. In the event that the Partnership issues additional Partnership Interests to the General Partner or any Additional Limited Partner pursuant to Section 4.3 or 4.4, the General Partner shall make such revisions to this Section 6.2 or to Section 12.2.B as it determines are necessary to reflect the terms of the issuance of such additional Partnership Interests, including making preferential allocations to certain classes of Partnership Interests, subject to the terms of the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units. In addition, for any quarter in which Performance Units were issued, Net Income and Net Loss relating to such units shall be allocated among (i) the PLPs who received such units and (ii) the Performance Partners who returned the corresponding Partnership Units to the Partnership, in accordance with any method selected by the General Partner which is permitted under Section 706 of the Code.

     Section 6.3 Additional Allocation Provisions

     Notwithstanding the foregoing provisions of this Article 6:

     A. Regulatory Allocations.

     (i) Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding the provisions of Section 6.2, or any other provision of this Article 6, if there is a net decrease in Partnership Minimum Gain during any fiscal year, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto. The items to be allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3.A(i) is intended to qualify as a “minimum gain chargeback” within the meaning of Regulation Section 1.704-2(f) which shall be controlling in the event of a conflict between such Regulation and this Section 6.3.A(i).

     (ii) Partner Minimum Gain Chargeback. Except as otherwise provided in Regulations Section 1.704-2(i)(4), and notwithstanding the provisions of Section 6.2, or any other provision of this Article 6 (except Section 6.3.A(i)), if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any fiscal year, each Partner who has a share of the Partner Minimum Gain attributable to such

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Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each General Partner and Limited Partner pursuant thereto. The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3.A(ii) is intended to qualify as a “chargeback of partner nonrecourse debt minimum gain” within the meaning of Regulation Section 1.704-2(i) which shall be controlling in the event of a conflict between such Regulation and this Section 6.3.A(ii).

     (iii) Nonrecourse Deductions and Partner Nonrecourse Deductions. Any Nonrecourse Deductions for any fiscal year shall be specially allocated to the Partners in accordance with their respective Percentage Interest in Common Units. Any Partner Nonrecourse Deductions for any fiscal year shall be specially allocated to the Partner(s) who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable, in accordance with Regulations Sections 1.704-2(b)(4) and 1.704-2(i).

     (iv) Qualified Income Offset. If any Partner unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to the Partner in an amount and manner sufficient to eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit of the Partner as quickly as possible provided that an allocation pursuant to this Section 6.3.A(iv) shall be made if and only to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.3.A(iv) were not in the Agreement. It is intended that this Section 6.3.A(iv) qualify and be construed as a “qualified income offset” within the meaning of Regulations 1.704-1(b)(2)(ii)(d), which shall be controlling in the event of a conflict between such Regulations and this Section 6.3.A(iv).

     (v) Gross Income Allocation. In the event any Partner has a deficit Capital Account at the end of any fiscal year which is in excess of the sum of (a) the amount (if any) such Partner is obligated to restore to the Partnership and (b) the amount such Partner is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible; provided, that an allocation pursuant to this Section 6.3.A(v) shall be made if and only to the extent that such Partner would have a deficit Capital Account in excess of such sum after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.3.A(v) and Section 6.3.A(iv) were not in the Agreement.

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     (vi) Limitation on Allocation of Net Loss. To the extent any allocation of Net Loss would cause or increase an Adjusted Capital Account Deficit as to any Partner, such allocation of Net Loss shall be reallocated among the other Partners in accordance with their respective Percentage Interests in Common Units, subject to the limitations of this Section 6.3.A(vi).

     (vii) Section 754 Adjustment. To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Partner in complete liquidation of his interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Partners in accordance with their interests in the Partnership in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.

     (viii) Curative Allocation. The allocations set forth in Sections 6.3.A(i), (ii), (iii), (iv), (v), (vi), and (vii) (the “Regulatory Allocations”) are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Sections 6.1 and 6.2, the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Partners so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Partner shall be equal to the net amount that would have been allocated to each such Partner if the Regulatory Allocations had not occurred.

     B. For purposes of determining a Partner’s proportional share of the “excess nonrecourse liabilities” of the Partnership within the meaning of Regulations Section 1.752-3(a)(3), each Partner’s interest in Partnership profits shall be such Partner’s Percentage Interest in Common Units.

     Section 6.4 Tax Allocations

     A. In General. Except as otherwise provided in this Section 6.4, for income tax purposes each item of income, gain, loss and deduction (collectively, “Tax Items”) shall be allocated among the Partners in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Sections 6.2 and 6.3.

     B. Allocations Respecting Section 704(c) Revaluations. Notwithstanding Section 6.4.A, Tax Items with respect to Partnership property that is contributed to the Partnership by a Partner shall be shared among the Partners for income tax purposes pursuant to Regulations promulgated under Section 704(c) of the Code, so as to take into account the variation, if any, between the basis of the property to the Partnership and its initial Gross Asset Value. With respect to Partnership property that is initially contributed to the Partnership upon its formation pursuant to Section 4.1, such variation between basis and initial Gross Asset Value

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shall be taken into account under the “traditional method” as described in Regulations Section 1.704-3(b). With respect to properties subsequently contributed to the Partnership, the Partnership shall account for such variation under any method approved under Section 704(c) of the Code and the applicable regulations as chosen by the General Partner. In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (ii) of the definition of Gross Asset Value (provided in Article 1), subsequent allocations of Tax Items with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset and its Gross Asset Value in the same manner as under Section 704(c) of the Code and the applicable regulations consistent with the requirements of Regulations Section 1.704-1(b)(2)(iv)(g) using any method approved under 704(c) of the Code and the applicable regulations as chosen by the General Partner.

ARTICLE 7.
MANAGEMENT AND OPERATIONS OF BUSINESS

     Section 7.1 Management

     A. Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership are exclusively vested in the General Partner, and no Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership. The General Partner may not be removed by the Limited Partners with or without cause, except with the consent of the General Partner. In addition to the powers now or hereafter granted a general partner of a limited partnership under the Act and other applicable law or which are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to the other provisions hereof including Section 7.3, shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all powers set forth in Section 3.2 and to effectuate the purposes set forth in Section 3.1, including, without limitation:

(i)

the making of any expenditures, the lending or borrowing of money (including, without limitation, making prepayments on loans and borrowing money to permit the Partnership to make distributions to its Partners in such amounts as will permit the General Partner (for so long as the General Partner has determined to qualify as a REIT) to avoid the payment of any Federal income tax (including, for this purpose, any excise tax pursuant to Section 4981 of the Code) and to make distributions to its stockholders sufficient to permit the General Partner to maintain REIT status), the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness (including the securing of same by mortgage, deed of trust or other lien or encumbrance on all or any of the Partnership’s assets) and the incurring of any obligations it deems necessary for the conduct of the activities of the Partnership;

(ii)

the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership;

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(iii)	subject to the provisions of Section 7.3.D, the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any assets of the Partnership or the merger or other combination of the Partnership with or into another entity;
(iv)	the mortgage, pledge, encumbrance or hypothecation of all or any assets of the Partnership, and the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms it sees fit, including, without limitation, the financing of the conduct or the operations of the General Partner or the Partnership, the lending of funds to other Persons (including, without limitation, the General Partner (if necessary to permit the financing or capitalization of a subsidiary of the General Partner or the Partnership) and any Subsidiaries of the Partnership) and the repayment of obligations of the Partnership, any of its Subsidiaries and any other Person in which it has an equity investment;
(v)	the negotiation, execution, and performance of any contracts, leases, conveyances or other instruments that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement;
(vi)	the distribution of Partnership cash or other Partnership assets in accordance with this Agreement;
(vii)	the selection and dismissal of employees of the Partnership (including, without limitation, employees having titles such as “president,” “vice president,” “secretary” and “treasurer”), and agents, outside attorneys, accountants, consultants and contractors of the Partnership, the determination of their compensation and other terms of employment or hiring, including waivers of conflicts of interest and the payment of their expenses and compensation out of the Partnership’s assets;
(viii)	the maintenance of such insurance for the benefit of the Partnership and the Partners as it deems necessary or appropriate;
(ix)	the formation of, or acquisition of an interest in, and the contribution of property to, any further limited or general partnerships, joint ventures or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to any Subsidiary and any other Person in which it has an equity investment from time to time); provided that, as long as the General Partner has determined to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that would cause the General Partner to fail to qualify as a REIT;
(x)	the control of any matters affecting the rights and obligations of the Partnership, including the conduct of litigation and the incurring of legal

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	expense and the settlement of claims and litigation, and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;
(xi)	the undertaking of any action in connection with the Partnership’s direct or indirect investment in any Person (including, without limitation, contributing or loaning Partnership funds to, incurring indebtedness on behalf of, or guarantying the obligations of any such Persons);
(xii)	subject to the other provisions in this Agreement, the determination of the fair market value of any Partnership property distributed in kind using such reasonable method of valuation as it may adopt; provided that, such methods are otherwise consistent with requirements of this Agreement;
(xiii)	the management, operation, leasing, landscaping, repair, alteration, demolition or improvement of any real property or improvements owned by the Partnership or any Subsidiary of the Partnership or any Person in which the Partnership has made a direct or indirect equity investment;
(xiv)	holding, managing, investing and reinvesting cash and other assets of the Partnership;
(xv)	the collection and receipt of revenues and income of the Partnership;
(xvi)	the exercise, directly or indirectly through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership;
(xvii)	the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person;
(xviii)	the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of any Person in which the Partnership does not have an interest, pursuant to contractual or other arrangements with such Person; and
(xix)	the making, execution and delivery of any and all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or other agreements in writing necessary or appropriate in the judgment of the General Partner for the accomplishment of any of the powers of the General Partner enumerated in this Agreement.

     B. Each of the Limited Partners agrees that the General Partner is authorized to execute, deliver and perform the above-mentioned agreements and transactions on behalf of the Partnership without any further act, approval or vote of the partners, notwithstanding any

39

other provisions of this Agreement (except as provided in Section 7.3), the Act or any applicable law, rule or regulation. The execution, delivery or performance by the General Partner or the Partnership of any agreement authorized or permitted under this Agreement shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement or of any duty stated or implied by law or equity.

     C. At all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain (i) casualty, liability and other insurance (including, without limitation, earthquake insurance) on the properties of the Partnership and (ii) liability insurance for the Indemnities hereunder.

     D. At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain working capital and other reserves in such amounts as the General Partner, in its sole and absolute discretion, deems appropriate and reasonable from time to time.

     E. In exercising its authority under this Agreement, the General Partner may, but other than as set forth in the following sentence and as expressly set forth in the agreements listed on Exhibit I hereto, shall be under no obligation to, take into account the tax consequences to any Partner (including the General Partner) of any action taken by the General Partner. The General Partner, on behalf of the Partnership, shall use commercially reasonable efforts to cooperate with the Limited Partners to minimize any taxes payable in connection with any sale, exchange or any other disposition of assets of the Partnership. The General Partner and the Partnership shall not have liability to a Limited Partner under any circumstances as a result of an income tax liability incurred by such Limited Partner as a result of an action (or inaction) by the General Partner pursuant to its authority under this Agreement.

     F. Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent that Partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Partnership.

     Section 7.2 Certificate of Limited Partnership

     To the extent that such action is determined by the General Partner to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate and do all the things to maintain the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) under the laws of the State of Delaware and to maintain the Partnership’s qualification to do business as a foreign limited partnership in each other state, the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property. Subject to the terms of Section 8.5.A(iv), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate or any amendment thereto to any Limited Partner. The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be

40

reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware, and any other state, or the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property.

     Section 7.3 Restrictions on General Partner’s Authority

     A. The General Partner may not take any action in contravention of this Agreement, including, without limitation:

(i)	take any action that would make it impossible to carry on the ordinary business of the Partnership, except as otherwise provided in this Agreement;
(ii)	possess Partnership property, or assign any rights in specific Partnership property, for other than a Partnership purpose except as otherwise provided in this Agreement;
(iii)	admit a Person as a Partner, except as otherwise provided in this Agreement (including with respect to the PLPs, who shall become Partners upon their receipt of Performance Units);
(iv)	perform any act that would subject a Limited Partner to liability as a general partner in any jurisdiction or any other liability except as provided herein or under the Act; or
(v)	enter into any contract, mortgage, loan or other agreement that prohibits or restricts, or has the effect of prohibiting or restricting, the ability of a Limited Partner to exercise its rights to a Redemption in full, except with the written consent of such Limited Partner.

     B. The General Partner shall not, without the prior Consent of the Partners (in addition to any Consent of the Limited Partners required by any other provision hereof), undertake, on behalf of the Partnership, any of the following actions or enter into any transaction which would have the effect of such transactions:

(i)	except as provided in Section 7.3.D below, amend, modify or terminate this Agreement other than to reflect the admission, substitution, termination or withdrawal of partners pursuant to Article 12;
(ii)	make a general assignment for the benefit of creditors or appoint or acquiesce in the appointment of a custodian, receiver or trustee for all or any part of the assets of the Partnership;
(iii)	institute any proceeding for bankruptcy on behalf of the Partnership;
(iv)	confess a judgment against the Partnership; or

41

(v) enter into a merger (including a triangular merger), consolidation or other combination of the Partnership with or into another entity.

     C. Except in the case of a Liquidating Event pursuant to Section 13.1 (other than Section 13.1.F), the General Partner shall not, without the prior Consent of the Limited Partners, undertake, on behalf of the Partnership, any actions or enter into any transaction which would have the effect of a dissolution of the Partnership, including a sale, exchange, transfer or other disposition of all or substantially all of the Partnership’s assets in a single transaction or a series of related transactions.

     D. Notwithstanding Sections 7.3.B and 7.3.C, but subject to Section 7.3.E, the General Partner shall have the power, without the Consent of the Partners, to amend this Agreement as may be required to facilitate or implement any of the following purposes:

(i)	to add to the obligations of the General Partner or surrender any right or power granted to the General Partner or any Affiliate of the General Partner for the benefit of the Limited Partners;
(ii)	to reflect the issuance of additional Partnership Interests pursuant to Sections 4.3.C, 4.3.F and 4.4, or the admission, substitution, termination, reduction in Partnership Units or withdrawal of Partners in accordance with this Agreement (which may be effected through the replacement of Exhibit A with an amended Exhibit A);
(iii)	to set forth or amend the designations, rights, powers, duties, and preferences of the holders of any additional Partnership Interests issued pursuant to Article 4;
(iv)	to reflect a change that is of an inconsequential nature and does not adversely affect the Limited Partners in any material respect, or to cure any ambiguity in, correct or supplement any provision, or make other changes with respect to matters arising under, this Agreement that will not be inconsistent with law or with the provisions of this Agreement;
(v)	to satisfy any requirements, conditions, or guidelines contained in any order, directive, opinion, ruling or regulation of a Federal, state of local agency or contained in Federal, state or local law.
(vi)	to reflect such changes as are reasonably necessary for the General Partner to maintain its status as a REIT, including changes which may be necessitated due to a change in applicable law (or an authoritative interpretation thereof) or a ruling of the IRS; and
(vii)	to modify, as set forth in the definition of “Capital Account,” the manner in which Capital Accounts are computed.

The General Partner will provide notice to the Limited Partners when any action under this Section 7.3.D is taken.

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     E. Notwithstanding Sections 7.3.B, 7.3.C and 7.3.D, this Agreement shall not be amended, and no action may be taken by the General Partner, including in either case through merger or sale of assets of the Partnership or otherwise, without the Consent of each Common Limited Partner or Preferred Limited Partner adversely affected if such amendment or action would (i) convert a Limited Partner’s interest in the Partnership into a general partner’s interest (except as the result of the General Partner acquiring such interest), (ii) modify the limited liability of a Limited Partner, (iii) alter rights of the Partner to receive distributions pursuant to Article 5, Section 13.2.A(4), Article 18, Article 19, Article 20, Article 21 or Article 22 or the allocations specified in Article 6 (except as permitted pursuant to Section 4.3 and Section 7.3.D), (iv) alter or modify the rights to a Redemption or the REIT Shares Amount as set forth in Section 8.6, and related definitions hereof, (v) alter the redemption or exchange rights as set forth in Sections 18.5, 18.8 19.5 and 19.8 hereof, respectively, or (vi) amend this Section 7.3.E. Further, no amendment may alter the restrictions on the General Partner’s authority set forth elsewhere in this Section 7.3 without the Consent specified in such section. In addition, (a) Section 11.2 of this Agreement shall not be amended, and no action in contravention of Section 11.2 shall be taken, including in either case through merger or sale of assets of the Partnership or otherwise, without the Consent of the Limited Partners and (b) this Agreement shall not be amended, and no action shall be taken, including in either case through merger or sale of assets of the Partnership or otherwise, which would adversely affect the rights of the Persons set forth in Exhibit G to receive Performance Units as described herein.

     F. Other than incident to a transaction pursuant to Sections 11.2.B or 11.2.C, the General Partner shall not undertake to dispose of any Partnership Property specified in the agreements listed in Exhibit H in a taxable sale or taxable exchange prior to the dates specified in such agreements without the prior consent of each Limited Partner which contributed all or any portion of an interest in such Property to the Partnership, as set forth in such agreements.

     Section 7.4 Reimbursement of the General Partner

     A. Except as provided in this Section 7.4 and elsewhere in this Agreement (including the provisions of Articles 5 and 6 regarding distributions, payments and allocations to which it may be entitled), the General Partner shall not be compensated for its services as general partner of the Partnership.

     B. Subject to Section 15.11, the General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine in its sole and absolute discretion, for all expenses it incurs relating to the ownership of interests in and operation of, or for the benefit of, the Partnership. The Limited Partners acknowledge that the General Partner’s sole business is the ownership of interests in and operation of the Partnership and that such expenses are incurred for the benefit of the Partnership; provided that, the General Partner shall not be reimbursed for expenses it incurs relating to the organization of the Partnership and the General Partner, or the initial public offering or subsequent offerings of REIT Shares, other shares of capital stock or Funding Debt by the General Partner, but shall be reimbursed for expenses it incurs with respect to any other issuance of additional Partnership Interests pursuant to the provisions hereof. Such reimbursements shall be in addition to any reimbursement to the General Partner as a result of indemnification pursuant to Section 7.7.

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     C. If and to the extent any reimbursements to the General Partner pursuant to this Section 7.4 constitute gross income of the General Partner (as opposed to the repayment of advances made by the General Partner on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.

     Section 7.5 Outside Activities of the General Partner

     A. Except in connection with a transaction authorized in Section 11.2, without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, enter into or conduct any business, other than in connection with the ownership, acquisition and disposition of Partnership Interests as a General Partner and the management of the business of the Partnership, its operation as a public reporting company with a class (or classes) of securities registered under the Exchange Act, its operation as a REIT and such activities as are incidental to the same. Without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, participate in or otherwise acquire any interest in any real or personal property, except its General Partner Interest, its interest in any Subsidiary Partnership(s) (held directly or indirectly through a Qualified REIT Subsidiary) that the General Partner holds in order to maintain such Subsidiary Partnership’s status as a partnership, and such bank accounts, similar instruments or other short-term investments as it deems necessary to carry out its responsibilities contemplated under this Agreement and the Charter. In the event the General Partner desires to contribute cash to any Subsidiary Partnership to acquire or maintain an interest of 1% or less in the capital of such partnership, the General Partner may acquire such cash from the Partnership in exchange for a reduction in the General Partner’s Units, in an amount equal to the amount of such cash divided by the Fair Market Value of a REIT Share on the day such cash is received by the General Partner. Notwithstanding the foregoing, the General Partner may acquire Properties in exchange for REIT Shares, to the extent such Properties are immediately contributed by the General Partner to the Partnership, pursuant to the terms described in Section 4.3.E. Any Limited Partner Interests acquired by the General Partner, whether pursuant to exercise by a Limited Partner of its right of Redemption, or otherwise, shall be automatically converted into a General Partner Interest comprised of an identical number of Partnership Units with the same rights, priorities and preferences as the class or series so acquired. If, at any time, the General Partner acquires material assets (other than on behalf of the Partnership) the definition of “REIT Shares Amount” and the definition of “Deemed Value of Partnership Interests” shall be adjusted, as reasonably agreed to by the General Partner and the other Limited Partners, to reflect the relative Fair Market Value of a share of capital stock of the General Partner relative to the Deemed Partnership Interest Value of the related Partnership Unit. The General Partner’s General Partner Interest in the Partnership, its minority interest in any Subsidiary Partnership(s) (held directly or indirectly through a Qualified REIT Subsidiary) that the General Partner holds in order to maintain such Subsidiary Partnership’s status as a partnership, and interests in such short-term liquid investments, bank accounts or similar instruments as the General Partner deems necessary to carry out its responsibilities contemplated under this Agreement and the Charter are interests which the General Partner is permitted to acquire and hold for purposes of this Section 7.5.A.

     B. In the event the General Partner exercises its rights under the Charter to purchase REIT Shares or Preferred Shares, then the General Partner shall cause the Partnership

44

to redeem from it a number of Partnership Units of the appropriate class as determined based on, in the case of REIT Shares, the REIT Shares Amount equal to the number of REIT Shares so purchased, or in the case of Preferred Shares an equal number of Preferred Units which correspond in ranking to the Preferred Shares so purchased, in each case on the same terms that the General Partner purchased such REIT Shares or Preferred Shares (as applicable).

     Section 7.6 Contracts with Affiliates

     A. Except as expressly permitted by this Agreement, the Partnership shall not, directly or indirectly, sell, transfer or convey any property to, or purchase any property from, or borrow funds from, or lend funds to, any Partner or any Affiliate of the Partnership that is not also a Subsidiary of the Partnership, except pursuant to transactions that are on terms that are fair and reasonable and no less favorable to the Partnership than would be obtained from an unaffiliated third party.

     B. The General Partner, in its sole and absolute discretion and without the approval of the Limited Partners, may propose and adopt on behalf of the Partnership employee benefit plans funded by the Partnership for the benefit of employees of the General Partner, the Partnership, Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the benefit of the Partnership, the General Partner, or any of the Partnership’s Subsidiaries. The General Partner also is expressly authorized to cause the Partnership to issue to it Partnership Units corresponding to REIT Shares issued by the General Partner pursuant to its Stock Incentive Plan or any similar or successor plan and to repurchase such Partnership Units from the General Partner to the extent necessary to permit the General Partner to repurchase such REIT Shares in accordance with such plan.

     Section 7.7 Indemnification

     A. The Partnership shall indemnify an Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that: (i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii) the Indemnitee actually received an improper personal benefit in money, property or services; or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or potentially having liability for any such indebtedness. The termination of any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 7.7.A. The termination of any proceeding by conviction or upon a plea of nolo

45

contendere or its equivalent, or any entry of an order of probation prior to judgment, creates a rebuttable presumption that the Indemnitee acted in a manner contrary to that specified in this Section 7.7.A. Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, and any insurance proceeds from the liability policy covering the General Partner and any Indemnitee, and neither the General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership or otherwise provide funds to enable the Partnership to fund its obligations under this Section 7.7.

     B. Reasonable expenses incurred by an Indemnitee who is a party to a proceeding may be paid or reimbursed by the Partnership in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in Section 7.7.A has been met and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.

     C. The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity.

     D. The Partnership may purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by any such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.

     E. For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of Section 7.7; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership.

     F. In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.

     G. An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.

     H. The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons. Any amendment, modification or repeal of this Section 7.7

46

or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Partnership’s liability to any Indemnitee under this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

     I. If and to the extent any reimbursements to the General Partner pursuant to this Section 7.7 constitute gross income of the General Partner (as opposed to the repayment of advances made by the General Partner on behalf of the Partnership) such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.

     J. Any indemnification hereunder is subject to, and limited by, the provisions of Section 17-108 of the Act.

     K. In the event the Partnership is made a party to any litigation or otherwise incurs any loss or expense as a result of or in connection with any Partner’s personal obligations or liabilities unrelated to Partnership business, such Partner shall indemnify and reimburse the Partnership for all such loss and expense incurred, including legal fees, and the Partnership Interest of such Partner may be charged therefor. The liability of a Partner under this Section 7.7.K shall not be limited to such Partner’s Partnership Interest, but shall be enforceable against such Partner personally.

     Section 7.8 Liability of the General Partner

     A. Notwithstanding anything to the contrary set forth in this Agreement, none of the General Partner and any of its officers, directors, agents and employees shall be liable or accountable in damages or otherwise to the Partnership, any Partners or any Assignees, or their successors or assigns, for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact or law or any act or omission if the General Partner acted in good faith.

     B. The Limited Partners expressly acknowledge that the General Partner is acting for the benefit of the Partnership, the Limited Partners and the General Partner’s stockholders collectively, that the General Partner is under no obligation to give priority to the separate interests of the Limited Partners or the General Partner’s stockholders (including, without limitation, the tax consequences to Limited Partners or Assignees or to stockholders) in deciding whether to cause the Partnership to take (or decline to take) any actions and that the General Partner shall not be liable to the Partnership or to any Limited Partner for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions; provided, that the General Partner has acted in good faith.

     C. Subject to its obligations and duties as General Partner set forth in Section 7.1.A, the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents. The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by it in good faith. In no event shall the liability of the General Partner and

47

its officers, directors, agents and employees, to the Partnership and the Limited Partners under this Section 7.8 be greater than the Partnership Interest of the General Partner.

     D. Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the General Partner and any of its officers, directors, agents and employees to the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.

     Section 7.9 Other Matters Concerning the General Partner

     A. The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.

     B. The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such General Partner reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.

     C. The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and a duly appointed attorney or attorneys-in-fact. Each such attorney shall, to the extent provided by the General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the General Partner hereunder.

     D. Notwithstanding any other provisions of this Agreement or any non-mandatory provision of the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order to protect the ability of the General Partner, for so long as the General Partner has determined to qualify as a REIT, to (i) continue to qualify as a REIT or (ii) except with respect to the distribution of Available Cash to the Series J Limited Partners in accordance with Section 18.3 and to the Series K Limited Partners in accordance with Section 19.3 avoid the General Partner incurring any taxes under Section 857 or Section 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners.

     E. So long as the Company holds any interest in the Partnership (as either a General Partner or Limited Partner), the Company shall have “management rights” (as such term is defined in the Plan Asset Regulation) with respect to the Partnership and its Properties to the extent necessary to qualify the Company as a “venture capital operating company” (as such term is defined in the Plan Asset Regulation).

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     Section 7.10 Title to Partnership Assets

     Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partners, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner may determine, including Affiliates of the General Partner. The General Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be deemed held by the General Partner or such nominee or Affiliate for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use its best efforts to cause beneficial and record title to such assets to be vested in the Partnership as soon as reasonably practicable. All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held.

     Section 7.11 Reliance by Third Parties

     Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if it were the Partnership’s sole party in interest, both legally and beneficially. Each Limited Partner hereby waives any and all defenses or other remedies which may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing. In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or its representatives. Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.

ARTICLE 8.
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

     Section 8.1 Limitation of Liability

     The Limited Partners shall have no liability under this Agreement except as expressly provided in this Agreement or under the Act.

     Section 8.2 Management of Business

     No Limited Partner or Assignee (other than the General Partner, any of its Affiliates or any officer, director, employee, general partner, agent or trustee of the General

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Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operations, management or control (within the meaning of the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership. The transaction of any such business by the General Partner, any of its Affiliates or any officer, director, employee, general partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement.

     Section 8.3 Outside Activities of Limited Partners

     Subject to any agreements entered into by a Limited Partner or its Affiliates with the General Partner, Partnership or a Subsidiary, any Limited Partner and any officer, director, employee, agent, trustee, Affiliate or stockholder of any Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership or that are enhanced by the activities of the Partnership. Neither the Partnership nor any Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee. Subject to such agreements, none of the Limited Partners nor any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any business ventures of any other Person, other than the Limited Partners benefiting from the business conducted by the General Partner, and such other Person shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures to the Partnership, any Limited Partner or any such other Person, even if such opportunity is of a character which, if presented to the Partnership, any Limited Partner or such other Person, could be taken by such other Person.

     Section 8.4 Return of Capital

     Except pursuant to the rights of Redemption set forth in Section 8.6 and the redemption and exchange rights set forth in Sections 18.5, 18.8 19.5 and 19.8, no Limited Partner shall be entitled to the withdrawal or return of his or her Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon termination of the Partnership as provided herein. Except as expressly set forth herein with respect to the rights, priorities and preferences of the Preferred Limited Partners holding any series of Preferred Units, no Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee either as to the return of Capital Contributions, or as otherwise expressly provided in this Agreement, as to profits, losses, distributions or credits.

     Section 8.5 Rights of Limited Partners Relating to the Partnership

     A. In addition to other rights provided by this Agreement or by the Act, and except as limited by Section 8.5.C, each Limited Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest as a limited partner in the Partnership, upon written demand with a statement of the purpose of such demand and at the Partnership’s expense:

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(i)	to obtain a copy of the most recent annual and quarterly reports filed with the Securities and Exchange Commission by the General Partner pursuant to the Exchange Act, and each communication sent to the stockholders of the General Partner;
(ii)	to obtain a copy of the Partnership’s Federal, state and local income tax returns for each Partnership Year;
(iii)	to obtain a current list of the name and last known business, residence or mailing address of each Partner;
(iv)	to obtain a copy of this Agreement and the Certificate and all amendments thereto, together with executed copies of all powers of attorney pursuant to which this Agreement, the Certificate and all amendments thereto have been executed; and
(v)	to obtain true and full information regarding the amount of cash and a description and statement of any other property or services contributed by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a Partner.

     B. The Partnership shall notify each Common Limited Partner in writing of any adjustment made in the calculation of the REIT Shares Amount within ten (10) Business Days of the date such change becomes effective.

     C. Notwithstanding any other provision of this Section 8.5, the General Partner may keep confidential from the Limited Partners, for such period of time as the General Partner determines in its sole and absolute discretion to be reasonable, any information that (i) the General Partner believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or (ii) the Partnership or the General Partner is required by law or by agreements with unaffiliated third parties to keep confidential.

     Section 8.6 Common Limited Partner Redemption Rights

     A. On or after the date one year after the Effective Date, or on or after such later date as expressly provided in an agreement entered into between the Partnership and any Common Limited Partner, each Common Limited Partner shall have the right (subject to the terms and conditions set forth herein and in any other such agreement, as applicable) to require the Partnership to redeem all or a portion of the Common Partnership Units held by such Common Limited Partner (such Partnership Units being hereafter referred to as “Tendered Units”) in exchange for the Cash Amount (a “Redemption”); provided, that the terms of such Common Partnership Units do not provide that such Common Partnership Units are not entitled to a right of Redemption. Unless otherwise expressly provided in this Agreement or a separate agreement entered into between the Partnership and the holders of such Partnership Units, all Common Partnership Units shall be entitled to a right of Redemption hereunder. Notwithstanding the foregoing, a PLP shall not have the right to require the Partnership to redeem, and the Partnership may not redeem, (i) a number of Performance Units held by such PLP in excess of the Performance Amount; or (ii) any Performance Units prior to the second

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anniversary of their issuance. Any Redemption shall be exercised pursuant to a Notice of Redemption delivered to the General Partner by the Common Limited Partner who is exercising the right (the “Tendering Partner”). The Cash Amount shall be delivered as a certified check payable to the Tendering Partner within ten (10) days of the Specified Redemption Date in accordance with the instructions set forth in the Notice of Redemption.

     B. Notwithstanding Section 8.6.A above, if a Common Limited Partner has delivered to the General Partner a Notice of Redemption then the General Partner may, in its sole and absolute discretion, (subject to the limitations on ownership and transfer of REIT Shares set forth in Article IV.E of the Charter) elect to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the General Partner so elects, the Tendering Partner shall sell the Tendered Units to the General Partner in exchange for the REIT Shares Amount. In such event, the Tendering Partner shall have no right to cause the Partnership to redeem such Tendered Units. The General Partner shall promptly give such Tendering Partner written notice of its election, and the Tendering Partner may elect to withdraw its redemption request at any time prior to the acceptance of the Cash Amount or REIT Shares Amount by such Tendering Partner.

     C. The REIT Shares Amount, if applicable, shall be delivered as duly authorized, validly issued, fully paid and nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than those provided in the Charter, the Bylaws of the General Partner, the Securities Act, relevant state securities or blue sky laws and any applicable registration rights agreement with respect to such REIT Shares entered into by the Tendering Partner. The REIT Shares Amount shall be registered in the name and otherwise delivered as set forth in the Notice of Redemption. Notwithstanding any delay in such delivery (but subject to Section 8.6.E below), the Tendering Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date.

     D. Each Common Limited Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same. Each Common Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Common Limited Partner shall assume and pay such transfer tax.

     E. Notwithstanding the provisions of Sections 8.6.A, 8.6.B, 8.6.C or any other provision of this Agreement, a Common Limited Partner (i) shall not be entitled to effect a Redemption for cash or an exchange for REIT Shares to the extent the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date would cause such Partner or any other Person, or, in the opinion of counsel selected by the General Partner, may cause such Partner or any other Person, to violate the restrictions on ownership and transfer of REIT Shares set forth in Article IV.E of the Charter and (ii) shall have no rights under this Agreement to acquire REIT Shares which would otherwise be prohibited under the Charter. To the extent any attempted Redemption or exchange for REIT Shares would be in violation of this Section 8.6.E, it shall be null and void ab initio and such Common Limited

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Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such redemption or the REIT Shares otherwise issuable upon such exchange.

     F. Notwithstanding anything herein to the contrary (but subject to Section 8.6.E above), with respect to any Redemption or exchange for REIT Shares pursuant to this Section 8.6:

(i)	All Common Partnership Units acquired by the General Partner pursuant thereto shall automatically, and without further action required, be converted into and deemed to be General Partner Interests comprised of the same number and class of Common Partnership Units.
(ii)	Without the consent of the General Partner, each Common Limited Partner may not effect a Redemption for less than 10,000 Partnership Units or, if the Common Limited Partner holds less than 10,000 Partnership Units, all of the Common Partnership Units held by such Common Limited Partner.
(iii)	Without the consent of the General Partner, each Common Limited Partner may not effect a Redemption during the period after the Partnership Record Date with respect to a distribution and before the record date established by the General Partner for a distribution to its common stockholders of some or all of its portion of such distribution.
(iv)	The consummation of any Redemption or exchange for REIT Shares shall be subject to the expiration or termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
(v)	Each Tendering Partner shall continue to own all Common Partnership Units subject to any Redemption or exchange for REIT Shares, and be treated as a Common Limited Partner with respect to such Common Partnership Units for all purposes of this Agreement, until such Common Partnership Units are transferred to the General Partner and paid for or exchanged as of the Specified Redemption Date. Until a Specified Redemption Date, the Tendering Partner shall have no rights as a stockholder of the General Partner with respect to such Tendering Partner’s Common Partnership Units.

     G. In the event that the Partnership issues additional Partnership Interests to any Additional Limited Partner pursuant to Section 4.3.C, the General Partner shall make such revisions to this Section 8.6 as it determines are necessary to reflect the issuance of such additional Partnership Interests.

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ARTICLE 9.
BOOKS, RECORDS, ACCOUNTING AND REPORTS

     Section 9.1 Records and Accounting

     The General Partner shall keep or cause to be kept at the principal office of the Partnership appropriate books and records with respect to the Partnership’s business, including without limitation, all books and records necessary to provide to the Limited Partners any information, lists and copies of documents required to be provided pursuant to Section 9.3. Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on, or be in the form of, punch cards, magnetic tape, photographs, micrographics or any other information storage device; provided, that the records so maintained are convertible into clearly legible written form within a reasonable period of time. The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles.

     Section 9.2 Fiscal Year

     The fiscal year of the Partnership shall be the calendar year.

     Section 9.3 Reports

     A. As soon as practicable, but in no event later than one hundred and five (105) days after the close of each Partnership Year, or such earlier date as they are filed with the Securities and Exchange Commission, the General Partner shall cause to be mailed to each Limited Partner as of the close of the Partnership Year, an annual report containing financial statements of the Partnership, or of the General Partner if such statements are prepared solely on a consolidated basis with the General Partner, for such Partnership Year, presented in accordance with generally accepted accounting principles, such statements to be audited by a nationally recognized firm of independent public accountants selected by the General Partner.

     B. As soon as practicable, but in no event later than forty-five (45) days after the close of each calendar quarter (except the last calendar quarter of each year), or such earlier date as they are filed with the Securities and Exchange Commission, the General Partner shall cause to be mailed to each Limited Partner as of the last day of the calendar quarter, a report containing unaudited financial statements of the Partnership, or of the General Partner, if such statements are prepared solely on a consolidated basis with the General Partner, presented in accordance with the applicable law or regulation, or as the General Partner determines to be appropriate.

     Section 9.4 Nondisclosure of Certain Information

     Notwithstanding the provisions of Sections 9.1 and 9.3, the General Partner may keep confidential from the Limited Partners any information that the General Partner believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or which the Partnership is required by law or by agreements with unaffiliated third parties to keep confidential.

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ARTICLE 10.
TAX MATTERS

     Section 10.1 Preparation of Tax Returns

     The General Partner shall arrange for the preparation and timely filing of all returns of Partnership income, gains, deductions, losses and other items required of the Partnership for Federal and state income tax purposes and shall use all reasonable efforts to furnish, within ninety (90) days of the close of each taxable year, the tax information reasonably required by Limited Partners for Federal and state income tax reporting purposes. Each Limited Partner shall promptly provide the General Partner with such information relating to any Contributed Property contributed by such Limited Partner to the Partnership.

     Section 10.2 Tax Elections

     Except as otherwise provided herein, the General Partner shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code, including the election under Section 754 of the Code. The General Partner shall have the right to seek to revoke any such election (including without limitation, any election under Section 754 of the Code) upon the General Partner’s determination in its sole and absolute discretion that such revocation is the best interests of the Partners.

     Section 10.3 Tax Matters Partner

     A. The General Partner shall be the “tax matters partner” of the Partnership for Federal income tax purposes. Pursuant to Section 6223(c) of the Code, upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Partnership, the tax matters partner shall furnish the IRS with the name, address and profit interest of each of the Limited Partners and Assignees; provided, however, that such information is provided to the Partnership by the Limited Partners and Assignees.

     B. The tax matters partner is authorized, but not required:

(i)

to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of Partnership items required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial review”), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners, except that such settlement agreement shall not bind any Partner (a) who (within the time prescribed pursuant to the Code and Regulations) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner or (b) who is a “notice partner” (as defined in Section 6231 of the Code) or a member of a “notice group” (as defined in Section 6223(b)(2) of the Code);

(ii)

in the event that a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a

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	Partner for tax purposes (a “final adjustment”) is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the United States Claims Court, or the filing of a complaint for refund with the District Court of the United States for the district in which the Partnership’s principal place of business is located;
(iii)	to intervene in any action brought by any other Partner for judicial review of a final adjustment;
(iv)	to file a request for an administrative adjustment with the IRS at any time and, if any part of such request is not allowed by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request;
(v)	to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item required to be taken into account by a Partner for tax purposes, or an item affected by such item; and
(vi)	to take any other action on behalf of the Partners of the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations.

     The taking of any action and the incurring of any expense by the tax matters partner in connection with any such proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner and the provisions relating to indemnification of the General Partner set forth in Section 7.7 shall be fully applicable to the tax matters partner in its capacity as such.

     C. The tax matters partner shall receive no compensation for its services. All third party costs and expenses incurred by the tax matters partner in performing its duties as such (including legal and accounting fees) shall be borne by the Partnership. Nothing herein shall be construed to restrict the Partnership from engaging an accounting firm to assist the tax matters partner in discharging its duties hereunder, so long as the compensation paid by the Partnership for such services is reasonable.

     Section 10.4 Organizational Expenses

     The Partnership shall elect to deduct expenses, if any, incurred by it in organizing the Partnership ratably over a sixty (60) month period as provided in Section 709 of the Code.

     Section 10.5 Withholding

     Each Limited Partner hereby authorizes the Partnership to withhold from or pay on behalf of or with respect to such Limited Partner any amount of Federal, state, local, or foreign taxes that the General Partner determines that the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Limited Partner pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code. Any amount paid on

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behalf of or with respect to a Limited Partner shall constitute a loan by the Partnership to such Limited Partner, which loan shall be repaid by such Limited Partner within fifteen (15) days after notice from the General Partner that such payment must be made unless (i) the Partnership withholds such payment from a distribution which would otherwise be made to the Limited Partner or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Partnership which would, but for such payment, be distributed to the Limited Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as having been distributed to such Limited Partner. Each Limited Partner hereby unconditionally and irrevocably grants to the Partnership a security interest in such Limited Partner’s Partnership Interest to secure such Limited Partner’s obligation to pay to the Partnership any amounts required to be paid pursuant to this Section 10.5. In the event that a Limited Partner fails to pay any amounts owed to the Partnership pursuant to this Section 10.5 when due, the General Partner may, in its sole and absolute discretion, elect to make the payment to the Partnership on behalf of such defaulting Limited Partner, and in such event shall be deemed to have loaned such amount to such defaulting Limited Partner and shall succeed to all rights and remedies of the Partnership as against such defaulting Limited Partner (including, without limitation, the right to receive distributions and the holding of a security interest in such Limited Partner’s Partnership Interest). Any amounts payable by a Limited Partner hereunder shall bear interest at the base rate on corporate loans at large United States money center commercial banks, as published from time to time in the Wall Street Journal, plus two percentage points (but not higher than the maximum lawful rate) from the date such amount is due (i.e., 15 days after demand) until such amount is paid in full. Each Limited Partner shall take such actions as the Partnership or the General Partner shall request in order to perfect or enforce the security interest created hereunder.

ARTICLE 11.
TRANSFERS AND WITHDRAWALS

     Section 11.1 Transfer

     A. The term “transfer,” when used in this Article 11 with respect to a Partnership Interest, shall be deemed to refer to a transaction by which the General Partner purports to assign its General Partner Interest to another Person or by which a Limited Partner purports to assign its Limited Partnership Interest to another Person, and includes a sale, assignment, gift (outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise. Except to the extent otherwise specified, the term “transfer” when used in this Article 11 does not include any Redemption or exchange for REIT Shares pursuant to Section 8.6, any redemption of Preferred Units pursuant to Sections 18.5, 19.5, 20.5, 21.5 or 22.5 or any exchange for Preferred Shares pursuant to Section 18.8 or 19.8. No part of the interest of a Limited Partner shall be subject to the claims of any creditor, any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered, except as may be specifically provided for in this Agreement.

     B. No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article 11. Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article 11 shall be null and void ab initio unless otherwise consented by the General Partner in its sole and absolute discretion.

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     Section 11.2 Transfer of General Partner’s Partnership Interest

     A. The General Partner shall not withdraw from the Partnership and shall not transfer all or any portion of its interest in the Partnership (whether by sale, statutory merger, consolidation, liquidation or otherwise) without the Consent of the Limited Partners which may be given or withheld by each such Limited Partner in its sole and absolute discretion, and only upon the admission of a successor General Partner pursuant to Section 12.1; provided, however, that, subject to Sections 11.2.B, 11.2.C, 11.2.D and 11.2.E, the General Partner may withdraw from the Partnership and transfer all of its interest upon the merger, consolidation or sale of substantially all of the assets of the General Partner without the consent of any Limited Partners. Upon any transfer of a Partnership Interest in accordance with the provisions of this Section 11.2, the transferee shall become a substitute General Partner for all purposes herein, and shall be vested with the powers and rights of the transferor General Partner, and shall be liable for all obligations and responsible for all duties of the General Partner, once such transferee has executed such instruments as may be necessary to effectuate such admission and to confirm the agreement of such transferee to be bound by all the terms and provisions of this Agreement with respect to the Partnership Interest so acquired. It is a condition to any transfer otherwise permitted hereunder that the transferee assumes, by operation of law or express agreement, all of the obligations of the transferor General Partner under this Agreement with respect to such transferred Partnership Interest, and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor General Partner are assumed by a successor corporation by operation of law) shall relieve the transferor General Partner of its obligations under this Agreement without the Consent of the Partners, in their reasonable discretion. In the event the General Partner withdraws from the Partnership, or otherwise dissolves or terminates, or upon the Incapacity of the General Partner, all of the remaining Partners may elect to continue the Partnership business by selecting a substitute General Partner in accordance with the Act.

     B. Neither the General Partner nor the Partnership may engage in any merger, consolidation or other combination with or into another person, or effect any reclassification, recapitalization or change of its outstanding equity interests, and the General Partner may not sell all or substantially all of its assets (each a “Termination Transaction”) unless in connection with the Termination Transaction all holders of Partnership Units either will receive, or will have the right to elect to receive, for each Partnership Unit an amount of cash, securities or other property equal to the product of the REIT Share Amount and the greatest amount of cash, securities or other property paid to the holder of one REIT Share in consideration of one REIT Share pursuant to the Termination Transaction. If, in connection with the Termination Transaction, a purchase, tender or exchange offer shall have been made to and accepted by the holders of the outstanding REIT Shares, each holder of Partnership Units will receive, or will have the right to elect to receive, the greatest amount of cash, securities or other property which such holder would have received had it exercised its rights to Redemption (as set forth in Section 8.6) and received REIT Shares in exchange for its Partnership Units immediately prior to the expiration of such purchase, tender or exchange offer and had thereupon accepted such purchase, tender or exchange offer. The PLPs shall have the benefit of the foregoing provisions with respect to all of their Performance Units, notwithstanding the limitation set forth in Section 8.6.A on a PLPs ability to exercise its rights to a Redemption.

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     C. A Termination Transaction may also occur if the following conditions are met: (i) substantially all of the assets directly or indirectly owned by the surviving entity are held directly or indirectly by the Partnership or another limited partnership or limited liability company which is the survivor of a merger, consolidation or combination of assets with the Partnership (in each case, the “Surviving Partnership”); (ii) the holders of Partnership Units, including the holders of Performance Units issued or to be issued, own a percentage interest of the Surviving Partnership based on the relative fair market value of the net assets of the Partnership and the other net assets of the Surviving Partnership immediately prior to the consummation of such transaction; (iii) the rights, preferences and privileges of such holders in the Surviving Partnership, including the holders of Performance Units issued or to be issued, are at least as favorable as those in effect immediately prior to the consummation of such transaction and as those applicable to any other limited partners or non-managing members of the Surviving Partnership (except, as to Performance Units, for such differences with Partnership Units regarding liquidation, Redemption and exchange as are set forth herein); and (iv) such rights of the Limited Partners, including the holders of Performance Units issued or to be issued, include at least one of the following: (a) the right to redeem their interests in the Surviving Partnership for the consideration available to such persons pursuant to Section 11.2.B; or (b) the right to redeem their Partnership Units for cash on terms equivalent to those in effect with respect to their Partnership Units immediately prior to the consummation of such transaction, or, if the ultimate controlling person of the Surviving Partnership has publicly traded common equity securities, such common equity securities, with an exchange ratio based on the determination of relative fair market value of such securities and the REIT Shares.

     D. In connection with any transaction permitted by Section 11.2.B or 11.2.C the determination of relative fair market values and rights, preferences and privileges of the Limited Partners shall be reasonably determined by the General Partner’s Board of Directors as of the time of the Termination Transaction and, to the extent applicable, the values shall be no less favorable to the holders of Partnership Units than the relative values reflected in the terms of the Termination Transaction.

     E. In the event of a Termination Transaction, the arrangements with respect to Performance Units and Performance Shares will be equitably adjusted to reflect the terms of the transaction, including, to the extent that the REIT Shares are exchanged for consideration other than publicly traded common equity, the transfer or release of remaining Performance Shares pursuant to the Escrow Agreements, and resulting issuance of any Performance Units as set forth in Section 4.3.F.

     Section 11.3 Limited Partners’ Rights to Transfer

     A. Any Limited Partner may, at any time without the consent of the General Partner, (i) transfer all or any portion of its Partnership Interest to the General Partner, (ii) transfer all or any portion of its Partnership Interest to an Affiliate controlled thereby or to an Immediate Family member, subject to the provisions of Section 11.6, (iii) transfer all or any portion of its Partnership Interest to a trust for the benefit of a charitable beneficiary or to a charitable foundation, subject to the provisions of Section 11.6 and (iv) subject to the provisions of Section 11.6, (a) pledge (a “Pledge”) all or any portion of its Partnership Interest to a lending institution, which is not an Affiliate of such Limited Partner, as collateral or security for a bona fide loan or other extension of credit, or (b) transfer such pledged Partnership Interest to such

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lending institution in connection with the exercise of remedies under such loan or extension of credit. In addition, each Limited Partner or Assignee (resulting from a transfer made pursuant to clauses (i)-(iv) of the preceding sentence) shall have the right to transfer all or any portion of its Partnership Interest, subject to the provisions of Section 11.6 and the satisfaction of each of the following conditions:

(a)

General Partner Right of First Refusal. The transferring Partner shall give written notice of the proposed transfer to the General Partner, which notice shall state (x) the identity of the proposed transferee and (y) the amount and type of consideration proposed to be received for the transferred Partnership Units. The General Partner shall have ten (10) days upon which to give the transferring Partner notice of its election to acquire the Partnership Units on the proposed terms. If it so elects, it shall purchase the Partnership Units on such terms within ten (10) days after giving notice of such election. If it does not so elect, the transferring Partner may transfer such Partnership Units to a third party, on economic terms no more favorable to the transferee than the proposed terms, subject to the other conditions of this Section 11.3.

(b)

Qualified Transferee. Any transfer of a Partnership Interest shall be made only to Qualified Transferees.

     It is a condition to any transfer otherwise permitted hereunder that the transferee assumes by operation of law or express agreement all of the obligations of the transferor Limited Partner under this Agreement with respect to such transferred Partnership Interest and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor Partner are assumed by a successor corporation by operation of law) shall relieve the transferor Partner of its obligations under this Agreement without the approval of the General Partner, in its reasonable discretion. Notwithstanding the foregoing, any transferee of any transferred Partnership Interest shall be subject to any and all ownership limitations contained in the Charter, which may limit or restrict such transferee’s ability to exercise its exchange rights set forth in Sections 18.8 and 19.8 and to the representations set forth in Section 3.4.D. Any transferee, whether or not admitted as a Substituted Limited Partner, shall take subject to the obligations of the transferor hereunder. Unless admitted as a Substituted Limited Partner, no transferee, whether by a voluntary transfer, by operation of law or otherwise, shall have any rights hereunder, other than the rights of an Assignee as provided in Section 11.5.

     B. If a Limited Partner is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator, or receiver of such Limited Partner’s estate shall have all the rights of a Limited Partner, but not more rights than those enjoyed by other Limited Partners, for the purpose of settling or managing the estate, and such power as the Incapacitated Limited Partner possessed to transfer all or any part of his or its interest in the Partnership. The Incapacity of a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership.

     C. The General Partner may prohibit any transfer otherwise permitted under this Section 11.3 by a Limited Partner of his or her Partnership Units if, in the opinion of legal counsel to the Partnership, such transfer would require the filing of a registration statement under the Securities Act by the Partnership or would otherwise violate any Federal or state securities laws or regulations applicable to the Partnership or the Partnership Unit.

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     D. No transfer by a Limited Partner of his or her Partnership Units (including any Redemption or exchange for REIT Shares pursuant to Section 8.6, the redemption or exchange rights set forth in Sections 18.5 and 18.8 or Sections 19.5 and 19.8, or any other acquisition of Common Units, Series J Preferred Partnership Units and Series K Preferred Partnership Units by the General Partner or the Partnership) may be made to any person if (i) in the opinion of legal counsel for the Partnership, it could result in the Partnership being treated as an association taxable as a corporation or (ii) absent the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, such transfer could be treated as effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code.

     E. No transfer of any Partnership Units may be made to a lender to the Partnership or any Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose loan constitutes a Nonrecourse Liability, without the consent of the General Partner, in its sole and absolute discretion; provided, that as a condition to such consent, the lender will be required to enter into an arrangement with the Partnership and the General Partner to redeem or exchange for the REIT Shares Amount, or the specified amount of Series J Preferred Shares and Series K Preferred Shares, as the case may be, any Partnership Units in which a security interest is held simultaneously with the time at which such lender would be deemed to be a partner in the Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code.

     F. No Limited Partner may withdraw from the Partnership except as a result of transfer, Redemption or exchange of Partnership Units pursuant hereto.

     G. No PLP (or any transferee described below) shall be entitled to transfer any Performance Units prior to the second anniversary of their issuance, without the consent of the General Partner, which may be given or withheld in its sole discretion; provided, however, no such consent shall be required under this Section 11.3.G (but subject to the other limitations of this Article 11) for a transfer of all or a portion of such Performance Units to an Affiliate, to Immediate Family Members, to a trust described in Section 11.3.A(iii), pursuant to a Pledge, or a transfer of such pledged units to such lending institution in connection with the exercise of remedies under such loan or extension of credit.

     Section 11.4 Substituted Limited Partners

     A. No Limited Partner shall have the right to substitute a transferee as a Limited Partner in his or her place (including any transferee permitted by Section 11.3 above). The General Partner shall, however, have the right to consent to the admission of a permitted transferee of the interest of a Limited Partner, as a Substituted Limited Partner, pursuant to this Section 11.4, which consent may be given or withheld by the General Partner in its sole and absolute discretion. The General Partner’s failure or refusal to permit a transferee of any such interests to become a Substituted Limited Partner shall not give rise to any cause of action against the Partnership or any Partner.

     B. A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article 11 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement. The admission of any

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transferee as a Substituted Limited Partner shall be subject to the transferee executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement (including, without limitation, the provisions of Section 2.4 and such other documents or instruments as may be required to effect the admission, each in form and substance satisfactory to the General Partner) and the acknowledgment by such transferee that each of the representations and warranties set forth in Section 3.4 are true and correct with respect to such transferee as of the date of the transfer of the Partnership Interest to such transferee and will continue to be true to the extent required by such representations and warranties.

     C. Upon the admission of a Substituted Limited Partner, the General Partner shall amend Exhibit A to reflect the name, address, number of Partnership Units, and Percentage Interest of such Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and interest of the predecessor of such Substituted Limited Partner.

     Section 11.5 Assignees

     If the General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee under Section 11.3 as a Substituted Limited Partner, as described in Section 11.4, such transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the rights of an assignee of a limited partnership interest under the Act, including the right to receive distributions from the Partnership and the share of Net Income, Net Losses, gain and loss attributable to the Partnership Units assigned to such transferee, the rights to transfer the Partnership Units provided in this Article 11, the right of Redemption provided in Section 8.6, the right of exchange for Series J Preferred Shares set forth in Section 18.8 and the right of exchange for Series K Preferred Shares set forth in Section 19.8, but shall not be deemed to be a holder of Partnership Units for any other purpose under this Agreement, and shall not be entitled to effect a Consent with respect to such Partnership Units on any matter presented to the Limited Partners for approval (such Consent remaining with the transferor Limited Partner). In the event any such transferee desires to make a further assignment of any such Partnership Units, such transferee shall be subject to all the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner desiring to make an assignment of Partnership Units. Notwithstanding anything contained in this Agreement to the contrary, as a condition to becoming an Assignee, any prospective Assignee must first execute and deliver to the Partnership an acknowledgment that each of the representations and warranties set forth in Section 3.4 hereof are true and correct with respect to such prospective Assignee as of the date of the prospective assignment of the Partnership Interest to such prospective Assignee and will continue to be true to the extent required by such representations or warranties.

     Section 11.6 General Provisions

     A. No Limited Partner may withdraw from the Partnership other than (i) as a result of a permitted transfer of all of such Limited Partner’s Partnership Units in accordance with this Article 11 and the transferee(s) of such Units being admitted to the Partnership as a Substituted Limited Partner(s) or (ii) pursuant to the exercise of its right of Redemption of all of such Limited Partner’s Partnership Units under Section 8.6, its right of exchange of all of such Limited Partner’s Series J Preferred Units under Section 18.8 or its right of exchange of all of such Limited Partner’s Series K Preferred Units under Section 19.8, or upon the redemption of

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all of such Limited Partner’s Series J Preferred Units pursuant to Section 18.5 or the redemption of all of such Limited Partner’s Series K Preferred Units pursuant to Section 19.5; provided that after such transfer, exchange or redemption such Limited Partner owns no Partnership Units.

     B. Any Limited Partner who shall assign all of such Limited Partner’s Partnership Units (i) in a transfer permitted pursuant to this Article 11 where such transferee was admitted as a Substituted Limited Partner, (ii) pursuant to the exercise of (1) its rights of Redemption of all of such Limited Partner’s Partnership Units under Section 8.6, (2) its right of exchange of all of such Limited Partner’s Series J Preferred Units under Section 18.8 or (3) its right of exchange of all of such Limited Partner’s Series K Preferred Units under Section 19.8, or (iii) upon the redemption of all of such Limited Partner’s Series J Preferred Units pursuant to Section 18.5 or the redemption of all of such Limited Partner’s Series K Preferred Units pursuant to Section 19.5 shall cease to be a Limited Partner; provided that after such transfer, exchange or redemption such Limited Partner owns no Partnership Units.

     C. Transfers pursuant to this Article 11 may only be made effective on the last day of the month set forth on the written instrument of transfer, unless the General Partner otherwise agrees.

     D. If any Partnership Interest is transferred, assigned or redeemed during any quarterly segment of the Partnership’s fiscal year in compliance with the provisions of this Article 11 or transferred or redeemed pursuant to Sections 8.6, 18.5 or 19.5, on any day other than the first day of a Partnership Year, then Net Income, Net Losses, each item thereof and all other items attributable to such Partnership Interest for such fiscal year shall be divided and allocated between the transferor Partner and the transferee Partner by taking into account their varying interests during the fiscal year in accordance with Section 706(d) of the Code, using the interim closing of the books method. Except as otherwise required by Section 706(d) of the Code or as otherwise specified in this Agreement or as otherwise determined by the General Partner (to the extent consistent with Section 706(d) of the Code), solely for purposes of making such allocations, each of such items for the calendar month in which the transfer, assignment or redemption occurs shall be allocated among all the Partners and Assignees in a manner determined by the General Partner in its sole discretion.

     E. In addition to any other restrictions on transfer herein contained, including without limitation the provisions of this Article 11 and Section 2.6, in no event may any transfer or assignment of a Partnership Interest by any Partner (including by way of a Redemption or exchange for Series J Preferred Shares or Series K Preferred Shares, or any other acquisition of Common Units, Series J Preferred Units or Series K Preferred Units by the Partnership or the General Partner) be made (i) to any person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, of any component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (iv) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, if in the opinion of legal counsel to the Partnership such transfer would cause a termination of the Partnership for Federal or state income tax purposes (except as a result of the Redemption or exchange for REIT Shares, and a Redemption or exchange for Preferred Shares or cash pursuant to Sections 18.5, 18.8, 19.5 and 19.8, of all Partnership Units held by all

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Limited Partners or pursuant to a Termination Transaction expressly permitted under Section 11.2); (v) if in the opinion of counsel to the Partnership such transfer would cause the Partnership to cease to be classified as a partnership for Federal or state income tax purposes (except as a result of the Redemption or exchange for REIT Shares and a Redemption or exchange for Preferred Shares pursuant to Sections 18.5, 18.8, 19.5 and 19.8 of all Partnership Units held by all Limited Partners); (vi) if such transfer would cause the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(c) of the Code); (vii) if such transfer would, in the opinion of counsel to the Partnership, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101; (viii) if such transfer requires the registration of such Partnership Interest or requires the registration of the exchange of such Partnership Interests for any capital stock pursuant to any applicable Federal or state securities laws; (ix) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, if such transfer is effectuated through an “established securities market” or a “secondary market” (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code or such transfer causes the Partnership to become a “Publicly Traded Partnership,” as such term is defined in Sections 469(k)(2) or 7704(b) of the Code; (x) if such transfer subjects the Partnership to be regulated under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended; (xi) if the transferee or assignee of such Partnership Interest is unable to make the representations set forth in Section 3.4.D or such transfer could otherwise adversely affect the ability of the General Partner to remain qualified as a REIT; or (xii) if in the opinion of legal counsel for the Partnership such transfer would adversely affect the ability of the General Partner to continue to qualify as a REIT or, except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code.

     F. The General Partner shall monitor the transfers of interests in the Partnership (including any acquisition of Common Units, Series J Preferred Units or Series K Preferred Units by the Partnership or the General Partner) to determine (i) if such interests are being traded on an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code and (ii) whether such transfers of interests would result in the Partnership being unable to qualify for at least one of the “safe harbors” set forth in Regulations Section 1.7704-1 (or such other applicable guidance subsequently published by the IRS setting forth safe harbors under which interests will not be treated as “readily tradable on a secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code) (the “Safe Harbors”). The General Partner shall have authority (but shall not be required to) to take any steps it determines are necessary or appropriate in its sole and absolute discretion to prevent any trading of interests which could cause the Partnership to become a “publicly traded partnership,” or any recognition by the Partnership of such transfers, or to insure that at least one of the Safe Harbors is met.

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ARTICLE 12.
ADMISSION OF PARTNERS

     Section 12.1 Admission of Successor General Partner

     A successor to all of the General Partner’s General Partner Interest pursuant to Section 11.2 who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective upon such transfer. Any such transferee shall carry on the business of the Partnership without dissolution. In each case, the admission shall be subject to the successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission. In the case of such admission on any day other than the first day of a Partnership Year, all items attributable to the General Partner Interest for such Partnership Year shall be allocated between the transferring General Partner and such successor as provided in Article 11.

     Section 12.2 Admission of Additional Limited Partners

     A. A Person who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 2.4 and (ii) such other documents or instruments as may be required in the discretion of the General Partner in order to effect such Person’s admission as an Additional Limited Partner.

     B. Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner’s sole and absolute discretion. The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the receipt of the Capital Contribution in respect of such Limited Partner, the documents set forth in this Section 12.2.A and the consent of the General Partner to such admission. If any Additional Limited Partner is admitted to the Partnership on any day other than the first day of a Partnership Year, then Net Income, Net Losses, each item thereof and all other items allocable among Partners and Assignees for such Partnership Year shall be allocated among such Limited Partner and all other Partners and Assignees by taking into account their varying interests during the Partnership Year in accordance with Section 706(d) of the Code, using the interim closing of the books method. Solely for purposes of making such allocations, each of such items for the calendar month in which an admission of an Additional Limited Partner occurs shall be allocated among all the Partners and Assignees, including such Additional Limited Partner, in a manner determined by the General Partner in its sole discretion.

Section 12.3 Amendment of Agreement and Certificate of Limited Partnership

     For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if

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necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment of Exhibit A) and, if required by law, shall prepare and file an amendment to the Certificate and may for this purpose exercise the power of attorney granted pursuant to Section 2.4.

ARTICLE 13.
DISSOLUTION AND LIQUIDATION

     Section 13.1 Dissolution

     The Partnership shall not be dissolved by the admission of Substituted Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement. Upon the withdrawal of the General Partner, any successor General Partner (selected as described in Section 13.1.B below) shall continue the business of the Partnership. The Partnership shall dissolve, and its affairs shall be wound up, upon the first to occur of any of the following (“Liquidating Events”):

     A. the expiration of its term as provided in Section 2.5;

     B. an event of withdrawal of the General Partner, as defined in the Act, unless, within ninety (90) days after the withdrawal, all of the remaining Partners agree in writing, in their sole and absolute discretion, to continue the business of the Partnership and to the appointment, effective as of the date of withdrawal, of a substitute General Partner;

     C. prior to December 31, 2096, an election to dissolve the Partnership made by the General Partner with the consent of Limited Partners who hold ninety percent (90%) of the outstanding Units held by Limited Partners;

     D. subject to the provisions of Section 7.3.C, an election to dissolve the Partnership made by the General Partner in its sole and absolute discretion;

     E. entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act;

     F. the sale or disposition of all or substantially all of the assets and properties of the Partnership;

     G. final and non-appealable judgment is entered by a court of competent jurisdiction ruling that the General Partner is bankrupt or insolvent, or a final and non-appealable order for relief is entered by a court with appropriate jurisdiction against the General Partner, in each case under any Federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless prior to or at the time of the entry of such order or judgment a Majority in Interest of the remaining Limited Partners Consent in writing to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such order or judgment, of a substitute General Partner; or

     H. the Redemption or exchange for REIT Shares, Series J Preferred Shares or Series K Preferred Shares of all Partnership Units (other than those of the General Partner) pursuant to this Agreement.

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     Section 13.2 Winding Up

     A. Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners. No Partner shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership’s business and affairs. The General Partner (or, in the event there is no remaining General Partner, any Person elected by a Majority in Interest of the Limited Partners (the “Liquidator”)) shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership’s liabilities and assets and the Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the General Partner, include shares of stock of the General Partner) shall be applied and distributed in the following order:

(i)	First, to the payment and discharge of all of the Partnership’s debts and liabilities to creditors other than the Partners;
(ii)	Second, to the payment and discharge of all of the Partnership’s debts and liabilities to the General Partner;
(iii)	Third, to the payment and discharge of all of the Partnership’s debts and liabilities to the other Partners; and
(iv)	The balance, if any, to the Partners in accordance with their Capital Account balances determined after giving effect to all contributions and distributions for all periods, and after taking into account all Capital Account adjustments for the Partnership taxable year during which the liquidation occurs (other than those made as a result of the liquidating distribution set forth in this Section 13.2.A(iv)).

The General Partner shall not receive any additional compensation for any services performed pursuant to this Article 13 other than reimbursement of its expenses as provided in Section 7.4.

     B. Notwithstanding the provisions of Section 13.2.A which require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Partners as creditors) and/or distribute to the Partners, in lieu of cash, as tenants in common and in accordance with the provisions of Section 13.2.A, undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in the best interest of the Partners, and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time. The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.

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     C. The Partnership shall be terminated when any notes received in connection with any such sale or disposition referenced in Section 13.1.E above, or in connection with the liquidation of the Partnership have been paid and all of the cash or property available for application and distribution under this Agreement have been applied and distributed in accordance with this Agreement.

     Section 13.3 Compliance with Timing Requirements of Regulations

     In the event the Partnership is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article 13 to the General Partner and Limited Partners who have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in his or her Capital Account (after giving effect to all contributions, distributions and allocations for the taxable years, including the year during which such liquidation occurs), such Partner shall have no obligation to make any contribution to the capital of the Partnership with respect to such deficit, and such deficit shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever, except to the extent otherwise agreed to by such Partner and the General Partner. In the discretion of the Liquidator or the General Partner, a pro rata portion of the distributions that would otherwise be made to the General Partner and Limited Partners pursuant to this Article 13 may be:

     A. distributed to a trust established for the benefit of the General Partner and Limited Partners for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the Partnership or of the General Partner arising out of or in connection with the Partnership. The assets of any such trust shall be distributed to the General Partner and Limited Partners from time to time, in the reasonable discretion of the Liquidator or the General Partner, in the same proportions and the amount distributed to such trust by the Partnership would otherwise have been distributed to the General Partner and Limited Partners pursuant to this Agreement; or

     B. withheld to establish any reserves deemed necessary or appropriate for any contingent or unforeseen liabilities or obligations of the Partnership; and to reflect the unrealized portion of any installment obligations owed to the Partnership; provided that, such withheld amounts shall be distributed to the General Partner and Limited Partners as soon as practicable.

     Section 13.4 Deemed Distribution and Recontribution

     Notwithstanding any other provision of this Article 13, in the event the Partnership is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership’s property shall not be liquidated, the Partnership’s liabilities shall not be paid or discharged, and the Partnership’s affairs shall not be wound up. Instead, the Partnership shall be deemed to have distributed the Partnership property in kind to the General Partner and Limited Partners, who shall be deemed to have assumed and taken such property subject to all Partnership liabilities, all in accordance with their respective Capital Accounts. Immediately thereafter, the General Partner and Limited Partners shall be deemed to have recontributed the Partnership property in kind to the Partnership, which shall be deemed to have assumed and taken such property subject to all such liabilities.

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     Section 13.5 Rights of Limited Partners

     Except as otherwise provided in this Agreement, each Limited Partner shall look solely to the assets of the Partnership for the return of his Capital Contribution and shall have no right or power to demand or receive property from the General Partner. Except as expressly set forth herein with respect to the rights, priorities and preferences of the Preferred Limited Partners holding any series of Preferred Units, no Limited Partner shall have priority over any other Limited Partner as to the return of his Capital Contributions, distributions or allocations.

     Section 13.6 Notice of Dissolution

     In the event a Liquidating Event occurs or an event occurs that would, but for provisions of Section 13.1, result in a dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter, provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business (as determined in the discretion of the General Partner) and shall publish notice thereof in a newspaper of general circulation in each place in which the Partnership regularly conducts business (as determined in the discretion of the General Partner).

     Section 13.7 Cancellation of Certificate of Limited Partnership

     Upon the completion of the liquidation of the Partnership cash and property as provided in Section 13.2, the Partnership shall be terminated and the Certificate and all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than the State of Delaware shall be canceled and such other actions as may be necessary to terminate the Partnership shall be taken.

     Section 13.8 Reasonable Time for Winding-Up

     A reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2, in order to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect between the Partners during the period of liquidation.

     Section 13.9 Waiver of Partition

     Each Partner hereby waives any right to partition of the Partnership property.

ARTICLE 14.
AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS

     Section 14.1 Amendments

     A. The actions requiring consent or approval of the Partners or of the Limited Partners pursuant to this Agreement, including Section 7.3, or otherwise pursuant to applicable law, are subject to the procedures in this Article 14.

     B. Amendments to this Agreement requiring the consent or approval of Limited Partners may be proposed by the General Partner or by Limited Partners holding twenty-

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five percent (25%) or more of the Partnership Interests held by Limited Partners. Following such proposal, the General Partner shall submit any proposed amendment to the Partners or of the Limited Partners, as applicable. The General Partner shall seek the written consent or approval of the Partners or of the Limited Partners on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate. For purposes of obtaining a written consent, the General Partner may require a response within a reasonable specified time, but not less than fifteen (15) days, and failure to respond in such time period shall constitute a consent which is consistent with the General Partner’s recommendation (if so recommended); provided that, an action shall become effective at such time as requisite consents are received even if prior to such specified time.

     Section 14.2 Action by the Partners

     A. Meetings of the Partners may be called by the General Partner and shall be called upon the receipt by the General Partner of a written request by Limited Partners holding twenty-five percent (25%) or more of the Partnership Interests held by the Limited Partners. The call shall state the nature of the business to be transacted. Notice of any such meeting shall be given to all Partners not less than seven days nor more than thirty (30) days prior to the date of such meeting. Partners may vote in person or by proxy at such meeting. Whenever the vote of the Percentage Interests of the Partners, or the Consent of the Partners or Consent of the Limited Partners is permitted or required under this Agreement, such vote or Consent may be given at a meeting of Partners or may be given in accordance with the procedure prescribed in Section 14.1.

     B. Any action required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a written consent setting forth the action so taken is signed by the Percentage Interests as is expressly required by this Agreement for the action in question. Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of the Percentage Interests of the Partners (expressly required by this Agreement). Such consent shall be filed with the General Partner. An action so taken shall be deemed to have been taken at a meeting held on the effective date so certified.

     C. Each Limited Partner may authorize any Person or Persons to act for him by proxy on all matters in which a Limited Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting. Every proxy must be signed by the Limited Partner or his attorney-in-fact. No proxy shall be valid after the expiration of eleven (11) months from the date thereof unless otherwise provided in the proxy. Every proxy shall be revocable at the pleasure of the Limited Partner executing it.

     D. Each meeting of Partners shall be conducted by the General Partner or such other Person as the General Partner may appoint pursuant to such rules for the conduct of the meeting as the General Partner or such other Person deems appropriate.

     E. On matters on which Limited Partners are entitled to vote, each Limited Partner shall have a vote equal to the number of Partnership Units held.

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ARTICLE 15.
GENERAL PROVISIONS

          Section 15.1 Addresses and Notice

          Any notice, demand, request or report required or permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by certified first class United States mail, nationally recognized overnight delivery service or facsimile transmission to the Partner or Assignee at the address set forth in Exhibit A or such other address as the Partners shall notify the General Partner in writing.

          Section 15.2 Titles and Captions

          All article or section titles or captions in this Agreement are for convenience only. They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof. Except as specifically provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement.

          Section 15.3 Pronouns and Plurals

          Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

          Section 15.4 Further Action

          The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.

          Section 15.5 Binding Effect

          This Agreement shall be binding upon and inure to the benefit of the parties hereto including the Persons set forth in Exhibit G, and their heirs, executors, administrators, successors, legal representatives and permitted assigns.

          Section 15.6 Creditors

          Other than as expressly set forth herein with respect to Indemnitees, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.

          Section 15.7 Waiver

          No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.

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          Section 15.8 Counterparts

          This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart. Each party shall become bound by this Agreement immediately upon affixing its signature hereto.

          Section 15.9 Applicable Law

          This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.

          Section 15.10 Invalidity of Provisions

          If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.

          Section 15.11 Limitation to Preserve REIT Status

          To the extent that any amount paid or credited to the General Partner or its officers, directors, employees or agents pursuant to Section 7.4 or 7.7 would constitute gross income to the General Partner for purposes of Sections 856(c)(2) or 856(c)(3) of the Code (a “General Partner Payment”) then, notwithstanding any other provision of this Agreement, the amount of such General Partner Payments for any fiscal year shall not exceed the lesser of:

(i)

an amount equal to the excess, if any, of (a) 4.17% of the General Partner’s total gross income (but not including the amount of any General Partner Payments) for the fiscal year which is described in subsections (A) through (H) of Section 856(c)(2) of the Code over (b) the amount of gross income (within the meaning of Section 856(c)(2) of the Code) derived by the General Partner from sources other than those described in subsections (A) through (H) of Section 856(c)(2) of the Code (but not including the amount of any General Partner Payments); or

(ii)

an amount equal to the excess, if any, of (a) 25% of the General Partner’s total gross income (but not including the amount of any General Partner Payments) for the fiscal year which is described in subsections (A) through (I) of Section 856(c)(3) of the Code over (b) the amount of gross income (within the meaning of Section 856(c)(3) of the Code) derived by the General Partner from sources other than those described in subsections (A) through (I) of Section 856(c)(3) of the Code (but not including the amount of any General Partner Payments);

provided, however, that General Partner Payments in excess of the amounts set forth in subparagraphs (i) and (ii) above may be made if the General Partner, as a condition precedent, obtains an opinion of tax counsel that the receipt of such excess amounts would not adversely affect the General Partner’s ability to qualify as a REIT. To the extent General Partner Payments may not be made in a year due to the foregoing limitations, such General Partner Payments shall

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carry over and be treated as arising in the following year; provided, however, that such amounts shall not carry over for more than five years, and if not paid within such five year period, shall expire; provided, further, that (a) as General Partner Payments are made, such payments shall be applied first to carry over amounts outstanding, if any and (b) with respect to carry over amounts for more than one Partnership Year, such payments shall be applied to the earliest Partnership Year first.

          Section 15.12 Entire Agreement

          This Agreement (together with the agreements listed on Exhibit I hereto as to rights and obligations in respect of the Units held by the Limited Partners who are parties thereto, or their permitted transferees) contains the entire understanding and agreement among the Partners with respect to the subject matter hereof and supersedes any other prior written or oral understandings or agreements among them with respect thereto.

          Section 15.13 No Rights as Stockholders

          Nothing contained in this Agreement shall be construed as conferring upon the holders of Partnership Units any rights whatsoever as stockholders of the General Partner, including without limitation any right to receive dividends or other distributions made to stockholders of the General Partner or to vote or to consent or to receive notice as stockholders in respect of any meeting of stockholders for the election of directors of the General Partner or any other matter.

ARTICLE 16.
INTENTIONALLY OMITTED

ARTICLE 17.
INTENTIONALLY OMITTED

ARTICLE 18.
SERIES J PREFERRED UNITS

          Section 18.1 Designation and Number

          A series of Partnership Units in the Partnership designated as the 7.95% Series J Cumulative Redeemable Preferred Units (the “Series J Preferred Units”) is hereby established. The number of Series J Preferred Units shall be 800,000.

          Section 18.2 Ranking

          The Series J Preferred Units shall, with respect to distribution rights and rights upon voluntary or involuntary liquidation, winding up or dissolution of the Partnership, rank (i) senior to the Common Units and to all Partnership Units the terms of which provide that such Partnership Units shall rank junior to the Series J Preferred Units; (ii) on a parity with the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units, the Series O Preferred Units and all other Parity Preferred Units; and (iii) junior to all Partnership Units which rank senior to the Series J Preferred Units.

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          Section 18.3 Distributions

          A. Payment of Distributions. Subject to the rights of holders of Parity Preferred Units (including the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units) as to the payment of distributions, pursuant to Section 5.1, Section 19.3.A, Section 20.3.A, Section 21.3A and Section 22.3.A hereof, holders of Series J Preferred Units will be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, out of Available Cash, cumulative preferential cash distributions in an amount equal to the Series J Priority Return. Such distributions will be payable (A) quarterly in arrears, on the 15^th day of January, April, July and October of each year and (B) in the event of (i) an exchange of Series J Preferred Units into Series J Preferred Shares, or (ii) a redemption of Series J Preferred Units, on the exchange date or redemption date, as applicable (each a “Series J Preferred Unit Distribution Payment Date”), commencing on the first of such payment dates to occur following their original date of issuance. If any date on which distributions are to be made on the Series J Preferred Units is not a Business Day, then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. Distributions on the Series J Preferred Units will be made to the holders of record of the Series J Preferred Units on the relevant record dates, which will be fifteen (15) days prior to the relevant Preferred Unit Distribution Payment Date (the “Series J Preferred Unit Partnership Record Date”).

          B. Distributions Cumulative. Notwithstanding the foregoing, distributions on the Series J Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series J Preferred Units will accumulate as of the Preferred Unit Distribution Payment Date on which they first become payable.

          C. Priority as to Distributors.

          (i) So long as any Series J Preferred Units are outstanding, no distribution of cash or other property shall be authorized, declared, paid or set apart for payment on or with respect to any class or series of Partnership Interest represented by Junior Units, nor shall any Junior Units or Parity Preferred Units (including the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units) be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Junior Units or Parity Preferred Units) by the Partnership (except by conversion into or exchange for other Junior Units or Parity Preferred Units) unless, in each case, full cumulative distributions have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment thereof set apart for such payment on the Series J Preferred Units and all classes and series of outstanding Parity Preferred Units for all distribution periods. The foregoing sentence will not prohibit (a) distributions payable solely in Junior Units, (b) the exchange of Junior Units or Parity Preferred Units (including the Series K Preferred Units, the Series L Preferred Units, the

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Series M Preferred Units and the Series O Preferred Units) into Partnership Interests of the Partnership ranking junior to the Series J Preferred Units as to distributions, or (c) the redemption of Partnership Interests corresponding to Series J Preferred Shares, Parity Preferred Stock (including Series K Preferred Shares, Series L Preferred Shares, Series M Preferred Shares and Series O Preferred Shares) with respect to distributions or Junior Stock to be purchased by the General Partner pursuant to the Charter to preserve the General Partner’s status as a real estate investment trust, provided that such redemption shall be upon the same terms as the corresponding stock purchase pursuant to the Charter.

          (ii) So long as distributions have not been paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series J Preferred Units and any other Parity Preferred Units (including the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units), all distributions authorized and declared on the Series J Preferred Units and all classes or series of outstanding Parity Preferred Units (including the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units) shall be authorized and declared pro rata so that the amount of distributions authorized and declared per Series J Preferred Unit and such other classes or series of Parity Preferred Units shall in all cases bear to each other the same ratio that accrued distributions per Series J Preferred Unit and such other classes or series of Parity Preferred Units (which shall not include any accumulation in respect of unpaid distributions for prior distribution periods if such class or series of Parity Preferred Units do not have cumulative distribution rights) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any distributions or payments on Series J Preferred Units which may be in arrears.

          (iii) Notwithstanding anything to the contrary set forth herein, distributions on Partnership Interests held by either (a) the General Partner or (b) any other holder of Partnership Interest in the Partnership, in each case ranking junior to or on parity with the Series J Preferred Units may be made, without preserving the priority of distributions described in Sections 18.3.C(i) and (ii), but (i) only to the extent such distributions are required to preserve the real estate investment trust status of the General Partner and (ii) in the case of any holder other than the General Partner only to the extent required by the Partnership Agreement.

          D. No Further Rights. Holders of Series J Preferred Units shall not be entitled to any distributions, whether payable in cash, other property or otherwise, in excess of the full cumulative distributions described herein.

          Section 18.4 Liquidation Proceeds

          A. Distributions. Upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, distributions on the Series J Preferred Units shall be made in accordance with Article 13 of this Agreement.

          B. Notice. Written notice of any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by the General Partner pursuant to Section 13.6 hereof.

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          C. No Further Rights. After payment of the full amount of the liquidating distributions to which they are entitled, Holders of Series J Preferred Units will have no right or claim to any of the remaining assets of the Partnership.

          D. Consolidation, Merger or Certain Other Transactions. None of a consolidation or merger of the Partnership with or into another entity, a merger of another entity with or into the Partnership, or a sale, lease, transfer or conveyance of all or substantially all of the Partnership’s property or business shall be considered a liquidation, dissolution or winding up of the Partnership.

          Section 18.5 Redemption

          A. Redemption. The Series J Preferred Units may not be redeemed prior to September 21, 2006. On or after such date, the Partnership shall have the right to redeem the Series J Preferred Units, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days’ written notice, at a redemption price, payable in cash, equal to the Capital Account balance of the holder of Series J Preferred Units (the “Redemption Price”); provided, however, that no redemption pursuant to this Section 18.5 will be permitted if the Redemption Price does not equal or exceed the original Capital Contribution of such holder plus the cumulative Priority Return to the redemption date to the extent not previously distributed. If fewer than all of the outstanding Series J Preferred Units are to be redeemed, the Series J Preferred Units to be redeemed shall be selected pro rata (as nearly as practicable without creating fractional units).

          B. Limitation on Redemption. (i) The Redemption Price of the Series J Preferred Units (other than the portion thereof consisting of accumulated but unpaid distributions) is payable solely out of the sale proceeds of capital stock of the General Partner, which will be contributed by the General Partner to the Partnership as an additional capital contribution, or out of the sale of limited partner interests in the Partnership and from no other source. For purposes of the preceding sentence, “capital stock” means any equity securities (including Common Stock and Preferred Stock (as such terms are defined in the Charter)), depository shares, interests, participation or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for equity securities) or options to purchase any of the foregoing.

          (ii) The Partnership may not redeem fewer than all of the outstanding Series J Preferred Units unless all accumulated and unpaid distributions have been paid on all Series J Preferred Units for all quarterly distribution periods terminating on or prior to the date of redemption.

          C. Procedures for Redemption. (i) Notice of redemption will be (i) faxed, and (ii) mailed by the Partnership, by certified mail, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the Series J Preferred Units at their respective addresses as they appear on the records of the Partnership. No failure to give or defect in such notice shall affect the validity of the proceedings for the redemption of any Series J Preferred Units except as to the holder to whom such notice was defective or not given. In addition to any information required by law, each such notice shall state: (a) the redemption date, (b) the Redemption Price, (c) the aggregate

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number of Series J Preferred Units to be redeemed and if fewer than all of the outstanding Series J Preferred Units are to be redeemed, the number of Series J Preferred Units to be redeemed held by such holder, which number shall equal such holder’s pro rata share (based on the percentage of the aggregate number of outstanding Series J Preferred Units that the total number of Series J Preferred Units held by such holder represents) of the aggregate number of Series J Preferred Units to be redeemed, (d) the place or places where such Series J Preferred Units are to be surrendered for payment of the Redemption Price, (e) that distributions on the Series J Preferred Units to be redeemed will cease to accumulate on such redemption date and (f) that payment of the Redemption Price will be made upon presentation and surrender of such Series J Preferred Units.

          (ii) If the Partnership gives a notice of redemption in respect of Series J Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New York City time, on the redemption date, the Partnership will deposit irrevocably in trust for the benefit of the Series J Preferred Units being redeemed funds sufficient to pay the applicable Redemption Price and will give irrevocable instructions and authority to pay such Redemption Price to the holders of the Series J Preferred Units upon surrender of the Series J Preferred Units by such holders at the place designated in the notice of redemption. On and after the date of redemption, distributions will cease to accumulate on the Series J Preferred Units or portions thereof called for redemption, unless the Partnership defaults in the payment thereof. If any date fixed for redemption of Series J Preferred Units is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price is improperly withheld or refused and not paid by the Partnership, distributions on such Series J Preferred Units will continue to accumulate from the original redemption date to the date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the applicable Redemption Price.

          Section 18.6 Voting Rights

          A. General. Holders of the Series J Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth below and in Section 7.3.E.

          B. Certain Voting Rights. So long as any Series J Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of at least two-thirds of the Series J Preferred Units outstanding at the time (i) authorize or create, or increase the authorized or issued amount of, any class or series of Partnership Interests ranking prior to the Series J Preferred Units with respect to payment of distributions or rights upon liquidation, dissolution or winding-up or reclassify any Partnership Interests of the Partnership into any such Partnership Interest, or create, authorize or issue any obligations or security convertible into or evidencing the right to purchase any such Partnership Interests, (ii) authorize or create, or increase the authorized or issued amount of any Parity Preferred Units or reclassify any Partnership Interest of the Partnership into any such Partnership Interest or create, authorize or issue any obligations or security convertible into or evidencing the right to purchase any such

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Partnership Interests but only to the extent such Parity Preferred Units are issued to an affiliate of the Partnership, other than the General Partner to the extent the issuance of such interests was to allow the General Partner to issue corresponding preferred stock to persons who are not affiliates of the Partnership or (iii) either consolidate, merge into or with, or convey, transfer or lease its assets substantially as an entirety to, any corporation or other entity or amend, alter or repeal the provisions of the Partnership Agreement (including, without limitation, this Article 18), whether by merger, consolidation or otherwise, in each case in a manner that would materially and adversely affect the powers, special rights, preferences, privileges or voting power of the Series J Preferred Units or the holders thereof; provided, however, that with respect to the occurrence of any event set forth in (iii) above, so long as (a) the Partnership is the surviving entity and the Series J Preferred Units remain outstanding with the terms thereof unchanged, or (b) the resulting, surviving or transferee entity (I) is a partnership, limited liability company or other pass-through entity organized under the laws of any state, (II) is not taxable as a corporation for U.S. federal income tax purposes and (III) substitutes the Series J Preferred Units for other interests in such entity having substantially the same terms and rights as the Series J Preferred Units, including with respect to distributions, voting rights and rights upon liquidation, dissolution or winding-up, then the occurrence of any such event shall not be deemed to materially and adversely affect such rights, privileges or voting powers of the holders of the Series J Preferred Units; and provided further, that any increase in the amount of Partnership Interests or the creation or issuance of any other class or series of Partnership Interests represented by Junior Units or Parity Preferred Units are not issued to an affiliate of the Partnership, other than the General Partner to the extent the issuance of such interests was to allow the General Partner to issue corresponding preferred stock to persons who are not affiliates of the Partnership, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.

          Section 18.7 Transfer Restrictions

          The Series J Preferred Units shall be subject to the provisions of Article 11 hereof; provided, however, that the Series J Preferred Units shall not be subject to the right of first refusal of the General Partner as described in Section 11.3 hereof. No transfer of Series J Preferred Units, or other action by the holder or holders of such Units, is permitted, without the consent of the General Partner which consent may be given or withheld in its sole and absolute discretion, if such transfer or other action would result in more than two partners holding all outstanding Series J Preferred Units within the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to Treasury Regulation Section 1.7704-1(h)(3)(ii)); provided, however, that the General Partner’s consent may not be unreasonably withheld if (a) such transfer or other action would not result in more than five partners holding all outstanding Series J Preferred Units within the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to Treasury Regulation Section 1.7704-1(h)(3)(ii)) and (b) the General Partner cannot rely on Treasury Regulation Section 1.7704-1(h) to avoid classification of Operating Partnership as a PTP. In addition, no transfer may be made to any person if such transfer would cause the exchange of the Series J Preferred Units for Series J Preferred Shares, as provided herein, to be required to be registered under the Securities Act of 1933, as amended, or any state securities laws. If (i) the holders of 51% of the Series J Preferred Units conclude based on results or projected results that there exists (in the reasonable judgment of such holders) an imminent and substantial risk that such holder’s interest in the Partnership represents or will represent more than 19.5% of the total profits or capital interests in the Partnership for a taxable year (the

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“19.5% Limit”), (ii) such holders deliver to the General Partner an opinion of independent counsel to the effect that there is a substantial risk that such holder’s interest in the Partnership represents or will represent more than the 19.5% Limit (determined in accordance with Regulations Section 1.731-2(e)(4)), and (iii) the General Partner agrees with the conclusions referred to in clauses (i) and (ii) of this sentence, such agreement not to be unreasonably withheld, then such holders shall, subject to the above limitations, be permitted to transfer so much of their Series J Preferred Units as may be appropriate to alleviate the risk of not satisfying the 19.5% Limit to the trust described in Exhibit J, with such holders having the rights set forth in such Exhibit.

          Section 18.8 Exchange Rights

          A. Right to Exchange. (i) Series J Preferred Units will be exchangeable in whole but not in part unless expressly otherwise provided herein at anytime on or after September 21, 2011, at the option of the holders of 51% of all outstanding Series J Preferred Units, for authorized but previously unissued Series J Preferred Shares at an exchange rate of one Series J Preferred Share from the General Partner for one Series J Preferred Unit, subject to adjustment as described below (the “Exchange Price”), provided that the Series J Preferred Units will become exchangeable at any time, in whole but not in part unless expressly otherwise provided herein, at the option of the holders of 51% of all outstanding Series J Preferred Units for Series J Preferred Shares (x) if at any time full distributions shall not have been timely made on any Series J Preferred Unit with respect to six (6) prior quarterly distribution periods, whether or not consecutive, provided, however, that a distribution in respect of Series J Preferred Units shall be considered timely made if made within two (2) Business Days after the applicable Preferred Unit Distribution Payment Date if at the time of such late payment there shall not be any prior quarterly distribution periods in respect of which full distributions were not timely made, or (y) at any time (A) the holders of 51% of the Series J Preferred Units conclude (in the reasonable judgment of such holders) that the Partnership, if it otherwise were taxable as a real estate investment trust, either (1) will not or likely will not satisfy the income tests of Section 856 of the Code for the year in which such determination is made or (2) will not or likely will not satisfy the asset tests of Section 856 of the Code as of the end of the calendar quarter in which such determination is made, which failure will not or is unlikely to be (or is subsequently not) cured as permitted under Section 856 of the Code, (B) the holders deliver to the General Partner an opinion of a nationally recognized independent counsel to the effect of the conclusion set forth in clause (A) of this sentence, (C) such failure would create a meaningful risk that a holder of the Series J Preferred Units would fail to maintain its qualification as a real estate investment trust and (D) the General Partner agrees with the conclusions referred to in clauses (A) and (B) of this sentence, such agreement not to be unreasonably withheld. Furthermore, the Series J Preferred Units, if the holders of 51% of all outstanding Series J Preferred Units so determine, may be exchanged in whole but not in part (regardless of whether held by one or more holders) for Series J Preferred Shares if (1) the holders of 51% of all outstanding Series J Preferred Units conclude based on results or projected results that there exists (in the reasonable judgment of such holder) an imminent and substantial risk that the holder’s interest in the Partnership represents or will represent more than the 19.5% Limit, (2) such holders deliver to the General Partner an opinion of independent counsel to the effect that there is a substantial risk that its interest in the Partnership does not or will not satisfy the 19.5% Limit and (3) the General Partner agrees with the conclusions referred to in clauses (1) and (2) of this sentence, such agreement not to be unreasonably withheld; provided, however, that if, as a result of such

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conclusion, such holders’ interest in the Partnership is reduced pursuant to the last sentence of Section 18.7 hereof (which procedure shall be available to such holders to the exclusion of the procedure under this sentence for so long as, on a cumulative basis, sales of 10% or fewer of the Series J Preferred Units originally issued by the Partnership would in the opinion of the above-referenced counsel reduce the risk that such holders’ interest in the Partnership would not satisfy the 19.5% Limit to less than a substantial risk, and thereafter shall be a permitted alternative to the procedure pursuant to this sentence) or the risk of such holder not satisfying the 19.5% Limit otherwise is reduced below a substantial risk, then an exchange in whole under this sentence shall not be permitted unless and until a change in facts occurs and a further determination by such holders is made under this sentence.

          (ii) Notwithstanding anything to the contrary set forth in Section 18.8.A(i), if an Exchange Notice (as defined herein) has been delivered to the General Partner, then the General Partner may, at its option, within ten (10) Business Days after receipt of the Exchange Notice, elect to cause the Partnership to redeem all or a portion of the outstanding Series J Preferred Units for cash in an amount equal to the original Capital Contribution per Series J Preferred Unit and all accrued and unpaid distributions thereon to the date of redemption. If the General Partner elects to redeem fewer than all of the outstanding Series J Preferred Units, the number of Series J Preferred Units held by each holder to be redeemed shall equal such holder’s pro rata share (based on the percentage of the aggregate number of outstanding Series J Preferred Units that the total number of Series J Preferred Units held by such holder represents) of the aggregate number of Series J Preferred Units being redeemed.

          (iii) In the event an exchange of all Series J Preferred Units pursuant to Section 18.8.A would violate the provisions on ownership limitation of the General Partner set forth in Section 7 of the Third Article of the Articles Supplementary to the Charter with respect to Series J Preferred Shares (the “Series J Articles Supplementary”), each holder of Series J Preferred Units shall be entitled to exchange, pursuant to the provisions of Section 18.8.B, a number of Series J Preferred Units which would comply with the provisions on the ownership limitation of the General Partner set forth in such Section 7 of the Series J Articles Supplementary, with respect to such holder, and any Series J Preferred Units not so exchanged (the “Excess Units”) shall be redeemed by the Partnership for cash in an amount equal to the original Capital Contribution per Excess Unit, plus any accrued and unpaid distributions thereon to the date of redemption subject to any restriction thereon contained in any debt instrument or agreement of the Partnership. In the event an exchange would result in Excess Units, as a condition to such exchange, each holder of such units agrees to provide representations and covenants reasonably requested by the General Partner relating to (i) the widely held nature of the interests in such holder, sufficient to assure the General Partner that the holder’s ownership of stock of the General Partner (without regard to the limits described above) will not cause any individual to own in excess of 9.0% of the stock of the General Partner; and (ii) to the extent such holder can so represent and covenant without obtaining information from its owners, the holder’s ownership of tenants of the Partnership and its affiliates. For purposes of determining the number of Excess Units under this Section 18.8.A(iii), the “Beneficial Ownership Limit” and “Constructive Ownership Limit” set forth in the Series J Articles Supplementary shall be deemed to be 9.0%. To the extent the General Partner would not be able to pay the cash set forth above in exchange for the Excess Units, and to the extent consistent with the Charter, the General Partner agrees that it will grant to the holders of the Series J Preferred Units exceptions to the Beneficial Ownership Limit and Constructive Ownership Limit set forth in the Series J Articles

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Supplementary sufficient to allow such holders to exchange all of their Series J Preferred Units for Series J Preferred Stock, provided such holders furnish to the General Partner representations acceptable to the General Partner in its sole and absolute discretion which assure the General Partner that such exceptions will not jeopardize the General Partner’s tax status as a REIT for purposes of federal and applicable state law. Notwithstanding any provision of this Agreement to the contrary, no Series J Limited Partner shall be entitled to effect an exchange of Series J Preferred Units for Series J Preferred Shares to the extent that ownership or right to acquire such shares would cause the Partner or any other Person or, in the opinion of counsel selected by the General Partner, may cause the Partner or any other Person, to violate the restrictions on ownership and transfer of Series J Preferred Shares set forth in the Charter, taking into account any exceptions thereto granted by the Company in accordance with the terms of the Charter. To the extent any such attempted exchange for Series J Preferred Shares would be in violation of the previous sentence, it shall be void ab initio and such Series J Limited Partner shall not acquire any rights or economic interest in the Series J Preferred Shares otherwise issuable upon such exchange.

          (iv) The redemption of Series J Preferred Units described in Section 18.8.A(ii) and (iii) shall be subject to the provisions of Section 18.5.B(i) and Section 18.5.C(ii); provided, however, that the term “Redemption Price” in such Sections 18.5.B(i) and 18.5.C(ii) shall be read to mean the original Capital Contribution per Series J Preferred Unit being redeemed as set forth on Exhibit A plus all accrued and unpaid distributions to the redemption date.

          B. Procedure for Exchange and/or Redemption of Series J Preferred Units.

          (i) Any exchange shall be exercised pursuant to a notice of exchange (the “Exchange Notice”) delivered to the General Partner by the Partners representing at least 51% of the outstanding Series J Preferred Units (or by Contributor in the case of an exchange pursuant to the last sentence of Section 18.8.A.(i) hereof) by (a) fax and (b) by certified mail postage prepaid. The General Partner may effect any exchange of Series J Preferred Units, or exercise its option to cause the Partnership to redeem any portion of the Series J Preferred Units for cash pursuant to Section 18.8.A(ii) or redeem Excess Units pursuant to Section 18.8.A(iii), by delivering to each holder of record of Series J Preferred Units, within ten (10) Business Days following receipt of the Exchange Notice, (a) if the General Partner elects to cause the Partnership to acquire any of the Series J Preferred Units then outstanding, (1) certificates representing the Series J Preferred Shares being issued in exchange for the Series J Preferred Units of such holder being exchanged and (2) a written notice (a “Redemption Notice”) stating (A) the redemption date, which may be the date of such Redemption Notice or any other date which is not later than sixty (60) days following the receipt of the Exchange Notice, (B) the redemption price, (C) the place or places where the Series J Preferred Units are to be surrendered and (D) that distributions on the Series J Preferred Units will cease to accrue on such redemption date, or (b) if the General Partner elects to cause the Partnership to redeem all of the Series J Preferred Units then outstanding in exchange for cash, a Redemption Notice. Series J Preferred Units shall be deemed canceled (and any corresponding Partnership Interest represented thereby deemed terminated) simultaneously with the delivery of shares of Series J Preferred Shares (with respect to Series J Preferred Units exchanged) or simultaneously with the redemption date (with respect to Series J Preferred Units redeemed). Holders of Series J Preferred Units shall deliver any canceled certificates representing Series J Preferred Units which have been exchanged or redeemed to the office of General Partner (which currently is located at Pier 1, Bay 1, San

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Francisco, California 94111) within ten (10) Business Days of the exchange or redemption with respect thereto. Notwithstanding anything to the contrary contained herein, any and all Series J Preferred Units to be exchanged for Series J Preferred Stock pursuant to this Section 18.8 shall be so exchanged in a single transaction at one time. As a condition to exchange, the General Partner may require the holders of Series J Preferred Units to make such representations as may be reasonably necessary for the General Partner to establish that the issuance of Series J Preferred Shares pursuant to the exchange shall not be required to be registered under the Securities Act or any state securities laws. Any Series J Preferred Shares issued pursuant to this Section 18.8 shall be delivered as shares which are duly authorized, validly issued, fully paid and nonassessable, free of any pledge, lien, encumbrance or restriction other than those provided in the Charter, the Bylaws of the General Partner, the Securities Act and relevant state securities or blue sky laws.

          The certificates representing the Series J Preferred Shares issued upon exchange of the Series J Preferred Units shall contain the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND STATE SECURITIES LAWS OR (B) IF THE CORPORATION HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER OF THE SHARES REPRESENTED HEREBY, OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION, THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND STATE SECURITIES LAWS AND THE RULES AND REGULATIONS THEREUNDER.

          (ii) In the event of an exchange of Series J Preferred Units for Series J Preferred Shares, an amount equal to the accrued and unpaid distributions to the date of exchange on any Series J Preferred Units tendered for exchange shall (i) accrue on the Series J Preferred Shares into which such Series J Preferred Units are exchanged, and (ii) continue to accrue on such Series J Preferred Units, which shall remain outstanding following such exchange, with the General Partner as the holder of such Series J Preferred Units. Notwithstanding anything to the contrary set forth herein, in no event shall a holder of a Series J Preferred Unit that was validly exchanged for Series J Preferred Shares pursuant to this section (other than the General Partner holding such Series J Preferred Unit following any such exchange), receive a distribution out of Available Cash of the Partnership, if such holder, after exchange, is entitled to receive a distribution out of Available Cash with respect to the Series J Preferred Shares for which such Series J Preferred Unit was exchanged or redeemed. Further for purposes of the foregoing, in the event of an exchange of Series J Preferred Units for Series J Preferred Shares, if the accrued and unpaid distributions per Series J Preferred Unit is not the same for each Series J Preferred Unit, the accrued and unpaid distributions per Series J Preferred

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Unit for each such Series J Preferred Unit shall be equal to the greatest amount of such accrued and unpaid distributions per Series J Preferred Unit on any such unit.

          (iii) Fractional Series J Preferred Shares are not to be issued upon exchange but, in lieu thereof, the General Partner will pay a cash adjustment based upon the fair market value of the Series J Preferred Shares on the day prior to the exchange date as determined in good faith by the Board of Directors of the General Partner.

          C. Adjustment of Exchange Price. In case the General Partner shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, tender offer for all or substantially all of the General Partner’s capital stock or sale of all or substantially all of the General Partner’s assets), in each case as a result of which the Series J Preferred Shares will be converted into the right to receive shares of capital stock, other securities or other property (including cash or any combination thereof), each Series J Preferred Unit will thereafter be exchangeable into the kind and amount of shares of capital stock and other securities and property receivable (including cash or any combination thereof) upon the consummation of such transaction by a holder of that number of Series J Preferred Shares or fraction thereof into which one Series J Preferred Unit was exchangeable immediately prior to such transaction. The General Partner may not become a party to any such transaction unless the terms thereof are consistent with the foregoing.

          Section 18.9 No Conversion Rights

          The Series J Preferred Units shall not be convertible into any other class or series of interest in the Partnership.

          Section 18.10 No Sinking Fund

          No sinking fund shall be established for the retirement or redemption of Series J Preferred Units.

ARTICLE 19.
SERIES K PREFERRED UNITS

          Section 19.1 Designation and Number

          A series of Partnership Units in the Partnership designated as the 7.95% Series K Cumulative Redeemable Preferred Units (the “Series K Preferred Units”) is hereby established. The number of Series K Preferred Units shall be 800,000.

          Section 19.2 Ranking

          The Series K Preferred Units shall, with respect to distribution rights and rights upon voluntary or involuntary liquidation, winding up or dissolution of the Partnership, rank (i) senior to the Common Units and to all Partnership Units the terms of which provide that such Partnership Units shall rank junior to the Series K Preferred Units; (ii) on a parity with the Series J Preferred Units, the Series L Preferred Units, the Series M Preferred Units, the Series O

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Preferred Units and all other Parity Preferred Units; and (iii) junior to all Partnership Units which rank senior to the Series K Preferred Units.

          Section 19.3 Distributions

          A. Payment of Distributions. Subject to the rights of holders of Parity Preferred Units (including the Series J Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units) as to the payment of distributions, pursuant to Section 5.1, Section 18.3.A, Section 20.3.A, Section 21.3.A and Section 22.3.A hereof, holders of Series K Preferred Units will be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, out of Available Cash, cumulative preferential cash distributions in an amount equal to the Series K Priority Return. Such distributions will be payable (A) quarterly in arrears, on the 15^th day of January, April, July and October of each year and (B) in the event of (i) an exchange of Series K Preferred Units into Series K Preferred Shares, or (ii) a redemption of Series K Preferred Units, on the exchange date or redemption date, as applicable (each a “Series K Preferred Unit Distribution Payment Date”), commencing on the first of such payment dates to occur following their original date of issuance. If any date on which distributions are to be made on the Series K Preferred Units is not a Business Day, then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date. Distributions on the Series K Preferred Units will be made to the holders of record of the Series K Preferred Units on the relevant record dates, which will be fifteen (15) days prior to the relevant Preferred Unit Distribution Payment Date (the “Series K Preferred Unit Partnership Record Date”).

          B. Distributions Cumulative. Notwithstanding the foregoing, distributions on the Series K Preferred Units will accrue whether or not the terms and provisions of any agreement of the Partnership at any time prohibit the current payment of distributions, whether or not the Partnership has earnings, whether or not there are funds legally available for the payment of such distributions and whether or not such distributions are authorized. Accrued but unpaid distributions on the Series K Preferred Units will accumulate as of the Preferred Unit Distribution Payment Date on which they first become payable.

          C. Priority as to Distributors.

          (i) So long as any Series K Preferred Units are outstanding, no distribution of cash or other property shall be authorized, declared, paid or set apart for payment on or with respect to any class or series of Partnership Interest represented by Junior Units, nor shall any Junior Units or Parity Preferred Units (including the Series J Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units) be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Junior Units or Parity Preferred Units) by the Partnership (except by conversion into or exchange for other Junior Units or Parity Preferred Units) unless, in each case, full cumulative distributions have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment thereof set apart for such payment on the Series K Preferred Units and all classes and series of

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outstanding Parity Preferred Units for all distribution periods. The foregoing sentence will not prohibit (a) distributions payable solely in Junior Units, (b) the exchange of Junior Units or Parity Preferred Units (including the Series J Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units) into Partnership Interests of the Partnership ranking junior to the Series K Preferred Units as to distributions, or (c) the redemption of Partnership Interests corresponding to Series K Preferred Shares, Parity Preferred Stock (including Series J Preferred Shares, Series L Preferred Shares, Series M Preferred Shares and Series O Preferred Shares) with respect to distributions or Junior Stock to be purchased by the General Partner pursuant to the Charter to preserve the General Partner’s status as a real estate investment trust, provided that such redemption shall be upon the same terms as the corresponding stock purchase pursuant to the Charter.

          (ii) So long as distributions have not been paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series K Preferred Units and any other Parity Preferred Units (including the Series J Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units), all distributions authorized and declared on the Series K Preferred Units and all classes or series of outstanding Parity Preferred Units (including the Series J Preferred Units, the Series L Preferred Units, the Series M Preferred Units and the Series O Preferred Units) shall be authorized and declared pro rata so that the amount of distributions authorized and declared per Series K Preferred Unit and such other classes or series of Parity Preferred Units shall in all cases bear to each other the same ratio that accrued distributions per Series K Preferred Unit and such other classes or series of Parity Preferred Units (which shall not include any accumulation in respect of unpaid distributions for prior distribution periods if such class or series of Parity Preferred Units do not have cumulative distribution rights) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any distributions or payments on Series K Preferred Units which may be in arrears.

          (iii) Notwithstanding anything to the contrary set forth herein, distributions on Partnership Interests held by either (a) the General Partner or (b) any other holder of Partnership Interest in the Partnership, in each case ranking junior to or on parity with the Series K Preferred Units may be made, without preserving the priority of distributions described in Sections 19.3.C(i) and (ii), but (i) only to the extent such distributions are required to preserve the real estate investment trust status of the General Partner and (ii) in the case of any holder other than the General Partner only to the extent required by the Partnership Agreement.

          D. No Further Rights. Holders of Series K Preferred Units shall not be entitled to any distributions, whether payable in cash, other property or otherwise, in excess of the full cumulative distributions described herein.

          Section 19.4 Liquidation Proceeds

          A. Distributions. Upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, distributions on the Series K Preferred Units shall be made in accordance with Article 13 of this Agreement.

          B. Notice. Written notice of any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the

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place or places where, the amounts distributable in such circumstances shall be payable, shall be given by the General Partner pursuant to Section 13.6 hereof.

          C. No Further Rights. After payment of the full amount of the liquidating distributions to which they are entitled, Holders of Series K Preferred Units will have no right or claim to any of the remaining assets of the Partnership.

          D. Consolidation, Merger or Certain Other Transactions. None of a consolidation or merger of the Partnership with or into another entity, a merger of another entity with or into the Partnership, or a sale, lease, transfer or conveyance of all or substantially all of the Partnership’s property or business shall be considered a liquidation, dissolution or winding up of the Partnership.

          Section 19.5 Redemption

          A. Redemption. The Series K Preferred Units may not be redeemed prior to April 17, 2007. On or after such date, the Partnership shall have the right to redeem the Series K Preferred Units, in whole or in part, at any time or from time to time, upon not less than 30 nor more than 60 days’ written notice, at a redemption price, payable in cash, equal to the Capital Account balance of the holder of Series K Preferred Units (the “Redemption Price”); provided, however, that no redemption pursuant to this Section 19.5 will be permitted if the Redemption Price does not equal or exceed the original Capital Contribution of such holder plus the cumulative Priority Return to the redemption date to the extent not previously distributed. If fewer than all of the outstanding Series K Preferred Units are to be redeemed, the Series K Preferred Units to be redeemed shall be selected pro rata (as nearly as practicable without creating fractional units).

          B. Limitation on Redemption. (i) The Redemption Price of the Series K Preferred Units (other than the portion thereof consisting of accumulated but unpaid distributions) is payable solely out of the sale proceeds of capital stock of the General Partner, which will be contributed by the General Partner to the Partnership as an additional capital contribution, or out of the sale of limited partner interests in the Partnership and from no other source. For purposes of the preceding sentence, “capital stock” means any equity securities (including Common Stock and Preferred Stock (as such terms are defined in the Charter)), depository shares, interests, participation or other ownership interests (however designated) and any rights (other than debt securities convertible into or exchangeable for equity securities) or options to purchase any of the foregoing.

          (ii) The Partnership may not redeem fewer than all of the outstanding Series K Preferred Units unless all accumulated and unpaid distributions have been paid on all Series K Preferred Units for all quarterly distribution periods terminating on or prior to the date of redemption.

          C. Procedures for Redemption. (i) Notice of redemption will be (i) faxed, and (ii) mailed by the Partnership, by certified mail, postage prepaid, not less than 30 nor more than 60 days prior to the redemption date, addressed to the respective holders of record of the Series K Preferred Units at their respective addresses as they appear on the records of the Partnership. No failure to give or defect in such notice shall affect the validity of the

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proceedings for the redemption of any Series K Preferred Units except as to the holder to whom such notice was defective or not given. In addition to any information required by law, each such notice shall state: (a) the redemption date, (b) the Redemption Price, (c) the aggregate number of Series K Preferred Units to be redeemed and if fewer than all of the outstanding Series K Preferred Units are to be redeemed, the number of Series K Preferred Units to be redeemed held by such holder, which number shall equal such holder’s pro rata share (based on the percentage of the aggregate number of outstanding Series K Preferred Units that the total number of Series K Preferred Units held by such holder represents) of the aggregate number of Series K Preferred Units to be redeemed, (d) the place or places where such Series K Preferred Units are to be surrendered for payment of the Redemption Price, (e) that distributions on the Series K Preferred Units to be redeemed will cease to accumulate on such redemption date and (f) that payment of the Redemption Price will be made upon presentation and surrender of such Series K Preferred Units.

          (ii) If the Partnership gives a notice of redemption in respect of Series K Preferred Units (which notice will be irrevocable) then, by 12:00 noon, New York City time, on the redemption date, the Partnership will deposit irrevocably in trust for the benefit of the Series K Preferred Units being redeemed funds sufficient to pay the applicable Redemption Price and will give irrevocable instructions and authority to pay such Redemption Price to the holders of the Series K Preferred Units upon surrender of the Series K Preferred Units by such holders at the place designated in the notice of redemption. On and after the date of redemption, distributions will cease to accumulate on the Series K Preferred Units or portions thereof called for redemption, unless the Partnership defaults in the payment thereof. If any date fixed for redemption of Series K Preferred Units is not a Business Day, then payment of the Redemption Price payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day falls in the next calendar year, such payment will be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date fixed for redemption. If payment of the Redemption Price is improperly withheld or refused and not paid by the Partnership, distributions on such Series K Preferred Units will continue to accumulate from the original redemption date to the date of payment, in which case the actual payment date will be considered the date fixed for redemption for purposes of calculating the applicable Redemption Price.

          Section 19.6 Voting Rights

          A. General. Holders of the Series K Preferred Units will not have any voting rights or right to consent to any matter requiring the consent or approval of the Limited Partners, except as set forth below and in Section 7.3.E.

          B. Certain Voting Rights. So long as any Series K Preferred Units remain outstanding, the Partnership shall not, without the affirmative vote of the holders of at least two-thirds of the Series K Preferred Units outstanding at the time (i) authorize or create, or increase the authorized or issued amount of, any class or series of Partnership Interests ranking prior to the Series K Preferred Units with respect to payment of distributions or rights upon liquidation, dissolution or winding-up or reclassify any Partnership Interests of the Partnership into any such Partnership Interest, or create, authorize or issue any obligations or security convertible into or evidencing the right to purchase any such Partnership Interests, (ii) authorize or create, or

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increase the authorized or issued amount of any Parity Preferred Units or reclassify any Partnership Interest of the Partnership into any such Partnership Interest or create, authorize or issue any obligations or security convertible into or evidencing the right to purchase any such Partnership Interests but only to the extent such Parity Preferred Units are issued to an affiliate of the Partnership, other than the General Partner to the extent the issuance of such interests was to allow the General Partner to issue corresponding preferred stock to persons who are not affiliates of the Partnership or (iii) either consolidate, merge into or with, or convey, transfer or lease its assets substantially as an entirety to, any corporation or other entity or amend, alter or repeal the provisions of the Partnership Agreement (including, without limitation, this Article 19), whether by merger, consolidation or otherwise, in each case in a manner that would materially and adversely affect the powers, special rights, preferences, privileges or voting power of the Series K Preferred Units or the holders thereof; provided, however, that with respect to the occurrence of any event set forth in (iii) above, so long as (a) the Partnership is the surviving entity and the Series K Preferred Units remain outstanding with the terms thereof unchanged, or (b) the resulting, surviving or transferee entity (I) is a partnership, limited liability company or other pass-through entity organized under the laws of any state, (II) is not taxable as a corporation for U.S. federal income tax purposes and (III) substitutes the Series K Preferred Units for other interests in such entity having substantially the same terms and rights as the Series K Preferred Units, including with respect to distributions, voting rights and rights upon liquidation, dissolution or winding-up, then the occurrence of any such event shall not be deemed to materially and adversely affect such rights, privileges or voting powers of the holders of the Series K Preferred Units; and provided further, that any increase in the amount of Partnership Interests or the creation or issuance of any other class or series of Partnership Interests represented by Junior Units or Parity Preferred Units are not issued to an affiliate of the Partnership, other than the General Partner to the extent the issuance of such interests was to allow the General Partner to issue corresponding preferred stock to persons who are not affiliates of the Partnership, shall not be deemed to materially and adversely affect such rights, preferences, privileges or voting powers.

          Section 19.7 Transfer Restrictions

          The Series K Preferred Units shall be subject to the provisions of Article 11 hereof; provided, however, that the Series K Preferred Units shall not be subject to the right of first refusal of the General Partner as described in Section 11.3 hereof. No transfer of Series K Preferred Units, or other action by the holder or holders of such Units, is permitted, without the consent of the General Partner which consent may be given or withheld in its sole and absolute discretion, if such transfer or other action would result in more than two partners holding all outstanding Series K Preferred Units within the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to Treasury Regulation Section 1.7704-1(h)(3)(ii)); provided, however, that the General Partner’s consent may not be unreasonably withheld if (a) such transfer or other action would not result in more than five partners holding all outstanding Series K Preferred Units within the meaning of Treasury Regulation Section 1.7704-1(h)(1)(ii) (without regard to Treasury Regulation Section 1.7704-1(h)(3)(ii)) and (b) the General Partner cannot rely on Treasury Regulation Section 1.7704-1(h) to avoid classification of Operating Partnership as a PTP. In addition, no transfer may be made to any person if such transfer would cause the exchange of the Series K Preferred Units for Series K Preferred Shares, as provided herein, to be required to be registered under the Securities Act of 1933, as amended, or any state securities laws. If (i) the holders of 51% of the Series K Preferred Units conclude based on results or

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projected results that there exists (in the reasonable judgment of such holders) an imminent and substantial risk that such holder’s interest in the Partnership represents or will represent more than 19.5% of the total profits or capital interests in the Partnership for a taxable year (the “19.5% Limit”), (ii) such holders deliver to the General Partner an opinion of independent counsel to the effect that there is a substantial risk that such holder’s interest in the Partnership represents or will represent more than the 19.5% Limit (determined in accordance with Regulations Section 1.731-2(e)(4)), and (iii) the General Partner agrees with the conclusions referred to in clauses (i) and (ii) of this sentence, such agreement not to be unreasonably withheld, then such holders shall, subject to the above limitations, be permitted to transfer so much of their Series K Preferred Units as may be appropriate to alleviate the risk of not satisfying the 19.5% Limit to the trust described in Exhibit J, with such holders having the rights set forth in such Exhibit.

          Section 19.8 Exchange Rights

          A. Right to Exchange. (i) Series K Preferred Units will be exchangeable in whole but not in part unless expressly otherwise provided herein at anytime on or after October 30, 2012, at the option of the holders of 51% of all outstanding Series K Preferred Units, for authorized but previously unissued Series K Preferred Shares at an exchange rate of one Series K Preferred Share from the General Partner for one Series K Preferred Unit, subject to adjustment as described below (the “Exchange Price”), provided that the Series K Preferred Units will become exchangeable at any time, in whole but not in part unless expressly otherwise provided herein, at the option of the holders of 51% of all outstanding Series K Preferred Units for Series K Preferred Shares if at any time full distributions shall not have been timely made on any Series K Preferred Unit with respect to six (6) prior quarterly distribution periods, whether or not consecutive, provided, however, that a distribution in respect of Series K Preferred Units shall be considered timely made if made within two (2) Business Days after the applicable Preferred Unit Distribution Payment Date if at the time of such late payment there shall not be any prior quarterly distribution periods in respect of which full distributions were not timely made. Furthermore, the Series K Preferred Units, if the holders of 51% of all outstanding Series K Preferred Units so determine, may be exchanged in whole but not in part (regardless of whether held by one or more holders) for Series K Preferred Shares if (1) the holders of 51% of all outstanding Series K Preferred Units conclude based on results or projected results that there exists (in the reasonable judgment of such holder) an imminent and substantial risk that the holder’s interest in the Partnership represents or will represent more than the 19.5% Limit, (2) such holders deliver to the General Partner an opinion of independent counsel to the effect that there is a substantial risk that its interest in the Partnership does not or will not satisfy the 19.5% Limit and (3) the General Partner agrees with the conclusions referred to in clauses (1) and (2) of this sentence, such agreement not to be unreasonably withheld; provided, however, that if, as a result of such conclusion, such holders’ interest in the Partnership is reduced pursuant to the last sentence of Section 19.7 hereof (which procedure shall be available to such holders to the exclusion of the procedure under this sentence for so long as, on a cumulative basis, sales of 10% or fewer of the Series K Preferred Units originally issued by the Partnership would in the opinion of the above-referenced counsel reduce the risk that such holders’ interest in the Partnership would not satisfy the 19.5% Limit to less than a substantial risk, and thereafter shall be a permitted alternative to the procedure pursuant to this sentence) or the risk of such holder not satisfying the 19.5% Limit otherwise is reduced below a substantial risk, then an exchange in

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whole under this sentence shall not be permitted unless and until a change in facts occurs and a further determination by such holders is made under this sentence.

          (ii) Notwithstanding anything to the contrary set forth in Section 19.8.A(i), if an Exchange Notice (as defined herein) has been delivered to the General Partner, then the General Partner may, at its option, within ten (10) Business Days after receipt of the Exchange Notice, elect to cause the Partnership to redeem all or a portion of the outstanding Series K Preferred Units for cash in an amount equal to the original Capital Contribution per Series K Preferred Unit and all accrued and unpaid distributions thereon to the date of redemption. If the General Partner elects to redeem fewer than all of the outstanding Series K Preferred Units, the number of Series K Preferred Units held by each holder to be redeemed shall equal such holder’s pro rata share (based on the percentage of the aggregate number of outstanding Series K Preferred Units that the total number of Series K Preferred Units held by such holder represents) of the aggregate number of Series K Preferred Units being redeemed.

          (iii) In the event an exchange of all Series K Preferred Units pursuant to Section 19.8.A would violate the provisions on ownership limitation of the General Partner set forth in Section 7 of the Third Article of the Articles Supplementary to the Charter with respect to Series K Preferred Shares (the “Series K Articles Supplementary”), each holder of Series K Preferred Units shall be entitled to exchange, pursuant to the provisions of Section 19.8.B, a number of Series K Preferred Units which would comply with the provisions on the ownership limitation of the General Partner set forth in such Section 7 of the Series K Articles Supplementary, with respect to such holder, and any Series K Preferred Units not so exchanged (the “Excess Units”) shall be redeemed by the Partnership for cash in an amount equal to the original Capital Contribution per Excess Unit, plus any accrued and unpaid distributions thereon to the date of redemption subject to any restriction thereon contained in any debt instrument or agreement of the Partnership. In the event an exchange would result in Excess Units, as a condition to such exchange, each holder of such units agrees to provide representations and covenants reasonably requested by the General Partner relating to (i) the widely held nature of the interests in such holder, sufficient to assure the General Partner that the holder’s ownership of stock of the General Partner (without regard to the limits described above) will not cause any individual to own in excess of 9.0% of the stock of the General Partner; and (ii) to the extent such holder can so represent and covenant without obtaining information from its owners, the holder’s ownership of tenants of the Partnership and its affiliates. For purposes of determining the number of Excess Units under this Section 19.8.A(iii), the “Beneficial Ownership Limit” and “Constructive Ownership Limit” set forth in the Series K Articles Supplementary shall be deemed to be 9.0%. To the extent the General Partner would not be able to pay the cash set forth above in exchange for the Excess Units, and to the extent consistent with the Charter, the General Partner agrees that it will grant to the holders of the Series K Preferred Units exceptions to the Beneficial Ownership Limit and Constructive Ownership Limit set forth in the Series K Articles Supplementary sufficient to allow such holders to exchange all of their Series K Preferred Units for Series K Preferred Stock, provided such holders furnish to the General Partner representations acceptable to the General Partner in its sole and absolute discretion which assure the General Partner that such exceptions will not jeopardize the General Partner’s tax status as a REIT for purposes of federal and applicable state law. Notwithstanding any provision of this Agreement to the contrary, no Series K Limited Partner shall be entitled to effect an exchange of Series K Preferred Units for Series K Preferred Shares to the extent that ownership or right to acquire such shares would cause the Partner or any other Person or, in the opinion of

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counsel selected by the General Partner, may cause the Partner or any other Person, to violate the restrictions on ownership and transfer of Series K Preferred Shares set forth in the Charter, taking into account any exceptions thereto granted by the Company in accordance with the terms of the Charter. To the extent any such attempted exchange for Series K Preferred Shares would be in violation of the previous sentence, it shall be void ab initio and such Series K Limited Partner shall not acquire any rights or economic interest in the Series K Preferred Shares otherwise issuable upon such exchange.

          (iv) The redemption of Series K Preferred Units described in Section 19.8.A(ii) and (iii) shall be subject to the provisions of Section 19.5.B(i) and Section 19.5.C(ii); provided, however, that the term “Redemption Price” in such Sections 19.5.B(i) and 19.5.C(ii) shall be read to mean the original Capital Contribution per Series K Preferred Unit being redeemed as set forth on Exhibit A plus all accrued and unpaid distributions to the redemption date.

          B. Procedure for Exchange and/or Redemption of Series K Preferred Units.

          (i) Any exchange shall be exercised pursuant to a notice of exchange (the “Exchange Notice”) delivered to the General Partner by the Partners representing at least 51% of the outstanding Series K Preferred Units (or by Contributor in the case of an exchange pursuant to the last sentence of Section 19.8.A.(i) hereof) by (a) fax and (b) by certified mail postage prepaid. The General Partner may effect any exchange of Series K Preferred Units, or exercise its option to cause the Partnership to redeem any portion of the Series K Preferred Units for cash pursuant to Section 19.8.A(ii) or redeem Excess Units pursuant to Section 19.8.A(iii), by delivering to each holder of record of Series K Preferred Units, within ten (10) Business Days following receipt of the Exchange Notice, (a) if the General Partner elects to cause the Partnership to acquire any of the Series K Preferred Units then outstanding, (1) certificates representing the Series K Preferred Shares being issued in exchange for the Series K Preferred Units of such holder being exchanged and (2) a written notice (a “Redemption Notice”) stating (A) the redemption date, which may be the date of such Redemption Notice or any other date which is not later than sixty (60) days following the receipt of the Exchange Notice, (B) the redemption price, (C) the place or places where the Series K Preferred Units are to be surrendered and (D) that distributions on the Series K Preferred Units will cease to accrue on such redemption date, or (b) if the General Partner elects to cause the Partnership to redeem all of the Series K Preferred Units then outstanding in exchange for cash, a Redemption Notice. Series K Preferred Units shall be deemed canceled (and any corresponding Partnership Interest represented thereby deemed terminated) simultaneously with the delivery of shares of Series K Preferred Shares (with respect to Series K Preferred Units exchanged) or simultaneously with the redemption date (with respect to Series K Preferred Units redeemed). Holders of Series K Preferred Units shall deliver any canceled certificates representing Series K Preferred Units which have been exchanged or redeemed to the office of General Partner (which currently is located at Pier 1, Bay 1, San Francisco, California 94111) within ten (10) Business Days of the exchange or redemption with respect thereto. Notwithstanding anything to the contrary contained herein, any and all Series K Preferred Units to be exchanged for Series K Preferred Stock pursuant to this Section 19.8 shall be so exchanged in a single transaction at one time. As a condition to exchange, the General Partner may require the holders of Series K Preferred Units to make such representations as may be reasonably necessary for the General Partner to establish that the issuance of Series K Preferred Shares pursuant to the exchange shall not be required to

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be registered under the Securities Act or any state securities laws. Any Series K Preferred Shares issued pursuant to this Section 19.8 shall be delivered as shares which are duly authorized, validly issued, fully paid and nonassessable, free of any pledge, lien, encumbrance or restriction other than those provided in the Charter, the Bylaws of the General Partner, the Securities Act and relevant state securities or blue sky laws.

          The certificates representing the Series K Preferred Shares issued upon exchange of the Series K Preferred Units shall contain the following legend:

THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND STATE SECURITIES LAWS OR (B) IF THE CORPORATION HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER OF THE SHARES REPRESENTED HEREBY, OR OTHER EVIDENCE SATISFACTORY TO THE CORPORATION, THAT SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND STATE SECURITIES LAWS AND THE RULES AND REGULATIONS THEREUNDER.

          (ii) In the event of an exchange of Series K Preferred Units for Series K Preferred Shares, an amount equal to the accrued and unpaid distributions to the date of exchange on any Series K Preferred Units tendered for exchange shall (i) accrue on the Series K Preferred Shares into which such Series K Preferred Units are exchanged, and (ii) continue to accrue on such Series K Preferred Units, which shall remain outstanding following such exchange, with the General Partner as the holder of such Series K Preferred Units. Notwithstanding anything to the contrary set forth herein, in no event shall a holder of a Series K Preferred Unit that was validly exchanged for Series K Preferred Shares pursuant to this section (other than the General Partner holding such Series K Preferred Unit following any such exchange), receive a distribution out of Available Cash of the Partnership, if such holder, after exchange, is entitled to receive a distribution out of Available Cash with respect to the Series K Preferred Shares for which such Series K Preferred Unit was exchanged or redeemed. Further for purposes of the foregoing, in the event of an exchange of Series K Preferred Units for Series K Preferred Shares, if the accrued and unpaid distributions per Series K Preferred Unit is not the same for each Series K Preferred Unit, the accrued and unpaid distributions per Series K Preferred Unit for each such Series K Preferred Unit shall be equal to the greatest amount of such accrued and unpaid distributions per Series K Preferred Unit on any such unit.

          (iii) Fractional Series K Preferred Shares are not to be issued upon exchange but, in lieu thereof, the General Partner will pay a cash adjustment based upon the fair market value of the Series K Preferred Shares on the day prior to the exchange date as determined in good faith by the Board of Directors of the General Partner.

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          C. Adjustment of Exchange Price. In case the General Partner shall be a party to any transaction (including, without limitation, a merger, consolidation, statutory share exchange, tender offer for all or substantially all of the General Partner’s capital stock or sale of all or substantially all of the General Partner’s assets), in each case as a result of which the Series K Preferred Shares will be converted into the right to receive shares of capital stock, other securities or other property (including cash or any combination thereof), each Series K Preferred Unit will thereafter be exchangeable into the kind and amount of shares of capital stock and other securities and property receivable (including cash or any combination thereof) upon the consummation of such transaction by a holder of that number of Series K Preferred Shares or fraction thereof into which one Series K Preferred Unit was exchangeable immediately prior to such transaction. The General Partner may not become a party to any such transaction unless the terms thereof are consistent with the foregoing.

          Section 19.9 No Conversion Rights

          The Series K Preferred Units shall not be convertible into any other class or series of interest in the Partnership.

          Section 19.10 No Sinking Fund

          No sinking fund shall be established for the retirement or redemption of Series K Preferred Units.

ARTICLE 20.
SERIES L PREFERRED UNITS

          Section 20.1 Designation and Number

          A series of Partnership Units in the Partnership designated as the 6 1/2% Series L Cumulative Redeemable Preferred Units (the “Series L Preferred Units”) is hereby established. The number of Series L Preferred Units shall be 2,300,000.

          Section 20.2 Ranking

          The Series L Preferred Units shall, with respect to distribution rights and rights upon voluntary or involuntary liquidation, winding up or dissolution of the Partnership, rank (i) senior to the Common Units and to all Partnership Units the terms of which provide that such Partnership Units shall rank junior to the Series L Preferred Units; (ii) on a parity with the Series J Preferred Units, the Series K Preferred Units, the Series M Preferred Units, the Series O Preferred Units and all other Parity Preferred Units; and (iii) junior to all Partnership Units which rank senior to the Series L Preferred Units.

          Section 20.3 Distributions

          A. Payments of Distribution. Subject to the rights of holders of Parity Preferred Units (including Series J Preferred Units, Series K Preferred Units, Series M Preferred Units and Series O Preferred Units) as to the payment of distributions, pursuant to Section 5.1, Section 18.3.A, Section 19.3.A, Section 21.3A and Section 22.3.A hereof, the General Partner, as

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holder of the Series L Preferred Units, will be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, out of Available Cash, cumulative preferential cash distributions in an amount equal to the Series L Priority Return. Such distributions will be payable (A) quarterly in arrears, on the 15^th day of January, April, July and October of each year and (B) in the event of a redemption of Series L Preferred Units, on the redemption date (each a “Series L Preferred Unit Distribution Payment Date”), commencing on the first of such payment dates to occur following their original date of issuance. If any date on which distributions are to be made on the Series L Preferred Units is not a Business Day, then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date.

          B. No Distributions in Contravention of Agreements. No distribution on the Series L Preferred Units shall be authorized by the General Partner or made or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the Partnership or the General Partner, including any agreement relating to indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

          C. Priority as to Distributions. (i) Except to the extent set forth in Section 20.3.C(ii), so long as any Series L Preferred Units are outstanding, no distribution of cash or other property shall be authorized, declared, paid or set apart for payment on or with respect to any class or series of Partnership Interest represented by Junior Units, nor shall any Junior Units or Parity Preferred Units (including the Series J Preferred Units, the Series K Preferred Units, the Series M Preferred Units and the Series O Preferred Units) be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Junior Units or Parity Preferred Units) by the Partnership (except by conversion into or exchange for other Junior Units or Parity Preferred Units) unless, in each case, full cumulative distributions have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment thereof set apart for such payment on the Series L Preferred Units for all past distribution periods and the current distribution period. The foregoing sentence will not prohibit (a) distributions payable solely in Junior Units, (b) the exchange of Junior Units or Parity Preferred Units (including Series J Preferred Units, Series K Preferred Units, Series M Preferred Units and Series O Preferred Units) into Partnership Interests of the Partnership ranking junior to the Series L Preferred Units as to distributions, or (c) the redemption of Partnership Interests corresponding to Series L Preferred Shares, Parity Preferred Stock (including Series J Preferred Shares, Series K Preferred Shares, Series M Preferred Shares and Series O Preferred Shares) with respect to distributions or Junior Stock to be purchased by the General Partner pursuant to the Charter to preserve the General Partner’s status as a real estate investment trust, provided that such redemption shall be upon the same terms as the corresponding stock purchase pursuant to the Charter.

          (ii) So long as distributions have not been paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series L Preferred Units and any other Parity Preferred Units (including Series J Preferred Units, Series K Preferred Units, Series M Preferred Units and Series O Preferred Units), all distributions authorized and declared on the Series L

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Preferred Units and all classes or series of outstanding Parity Preferred Units (including the Series J Preferred Units, Series K Preferred Units, Series M Preferred Units and Series O Preferred Units) shall be authorized and declared pro rata so that the amount of distributions authorized and declared per Series L Preferred Unit and such other classes or series of Parity Preferred Units shall in all cases bear to each other the same ratio that accrued distributions per Series L Preferred Unit and such other classes or series of Parity Preferred Units (which shall not include any accumulation in respect of unpaid distributions for prior distribution periods if such class or series of Parity Preferred Units do not have cumulative distribution rights) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any distributions or payments on Series L Preferred Units which may be in arrears.

          D. No Further Rights. The General Partner, as holder of the Series L Preferred Units, shall not be entitled to any distributions, whether payable in cash, other property or otherwise, in excess of the full cumulative distributions described herein. Any distribution payment made on the Series L Preferred Units shall first be credited against the earliest accrued but unpaid distribution due with respect to such Series L Preferred Units which remain payable.

          Section 20.4 Liquidation Proceeds

          A. Upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, distributions on the Series L Preferred Units shall be made in accordance with Article 13 of this Agreement.

          B. Notice. Written notice of any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by the General Partner pursuant to Section 13.6 hereof.

          C. No Further Rights. After payment of the full amount of the liquidating distributions to which they are entitled, the General Partner, as holder of the Series L Preferred Units, will have no right or claim to any of the remaining assets of the Partnership.

          D. Consolidation, Merger or Certain Other Transactions. None of a consolidation or merger of the Partnership with or into another entity, a merger of another entity with or into the Partnership, or a sale, lease, transfer or conveyance of all or substantially all of the Partnership’s property or business shall be considered a liquidation, dissolution or winding up of the Partnership.

          Section 20.5 Redemption

          A. Redemption. The Series L Preferred Units may not be redeemed prior to June 23, 2008. If, on or after such date, the General Partner elects to redeem any of the Series L Preferred Shares, the Partnership shall, on the date set for redemption of such Series L Preferred Shares, redeem the number of Series L Preferred Units equal to the number of Series L Preferred Shares for which the General Partner has given notice of redemption pursuant to Section 5 of Article Third of the Series L Articles Supplementary, at a redemption price, payable in cash, equal to the product of (i) the number of Series L Preferred Units being redeemed, and (ii) the sum of $25 and the Preferred Distribution Shortfall per Series L Preferred Unit, if any.

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          B. Payment of Accumulated Distributions. Immediately prior to any redemption of Series L Preferred Units, the Partnership shall pay, in cash, any accumulated and unpaid distributions on the Series L Preferred Units to be redeemed through the redemption date. Except as provided above, the Partnership will make no payment or allowance for unpaid distributions, whether or not in arrears, on Series L Preferred Units for which a notice of redemption has been given.

          C. Procedures for Redemption. The following provisions set forth the procedures for Redemption:

(i)	Notice of redemption will be given by the General Partner to the Partnership concurrently with the notice of the General Partner sent to the holders of its Series L Preferred Shares in connection with such redemption. Such notice shall state: (A) the redemption date; (B) the redemption price; (C) the number of Series L Preferred Units to be redeemed; (D) the place or places where the Series L Preferred Units are to be surrendered for payment of the redemption price; and (E) that distributions on the Series L Preferred Units to be redeemed will cease to accumulate on such redemption date. If less than all of the Series L Preferred Units are to be redeemed, the notice shall also specify the number of Series L Preferred Units to be redeemed.
(ii)	On or after the redemption date, the General Partner shall present and surrender the certificates, if any, representing the Series L Preferred Units to the Partnership at the place designated in the notice of redemption and thereupon the redemption price of such Units (including all accumulated and unpaid distributions up to the redemption date) shall be paid to the General Partner and each surrendered Unit certificate, if any, shall be canceled. If fewer than all the Units represented by any such certificate representing Series L Preferred Units are to be redeemed, a new certificate shall be issued representing the unredeemed shares.
(iii)	From and after the redemption date (unless the Partnership defaults in payment of the redemption price), all distributions on the Series L Preferred Units designated for redemption in such notice shall cease to accumulate and all rights of the General Partner, except the right to receive the redemption price thereof (including all accumulated and unpaid distributions up to the redemption date), shall cease and terminate, and such Units shall not be deemed to be outstanding for any purpose whatsoever. At its election, the Partnership, prior to a redemption date, may irrevocably deposit the redemption price (including accumulated and unpaid distributions to the redemption date) of the Series L Preferred Units so called for redemption in trust for the General Partner with a bank or trust company, in which case the redemption notice to General Partner shall (A) state the date of such deposit, (B) specify the office of such bank or trust company as the place of payment of the redemption price and (C) require the General Partner to surrender the certificates, if any, representing such Series L Preferred Units at such place on or about the

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date fixed in such redemption notice (which may not be later than the redemption date) against payment of the redemption price (including all accumulated and unpaid distributions to the redemption date). Any monies so deposited which remain unclaimed by the General Partner at the end of two years after the redemption date shall be returned by such bank or trust company to the Partnership.

          E. No Further Rights. Any Series L Preferred Units that shall at any time have been redeemed shall, after such redemption, have the status of authorized but unissued Preferred Units, without designation as to series until such shares are once more designated as part of a particular series by the General Partner.

          Section 20.6 Voting Rights

          The General Partner shall not have any voting or consent rights in respect of its partnership interest represented by the Series L Preferred Units.

          Section 20.7 Transfer Restrictions

          The Series L Preferred Units shall not be transferable.

          Section 20.8 No Conversion Rights

          The Series L Preferred Units shall not be convertible into any other class or series of interest in the Partnership.

          Section 20.9 No Sinking Fund

          No sinking fund shall be established for the retirement or redemption of Series L Preferred Units.

ARTICLE 21.
SERIES M PREFERRED UNITS

          Section 21.1 Designation and Number

          A series of Partnership Units in the Partnership designated as the 6 ³/4% Series M Cumulative Redeemable Preferred Units (the “Series M Preferred Units”) is hereby established. The number of Series M Preferred Units shall be 2,300,000.

          Section 21.2 Ranking

          The Series M Preferred Units shall, with respect to distribution rights and rights upon voluntary or involuntary liquidation, winding up or dissolution of the Partnership, rank (i) senior to the Common Units and to all Partnership Units the terms of which provide that such Partnership Units shall rank junior to the Series M Preferred Units; (ii) on a parity with the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units, the Series O

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Preferred Units and all other Parity Preferred Units; and (iii) junior to all Partnership Units which rank senior to the Series M Preferred Units.

          Section 21.3 Distributions

          A. Payments of Distribution. Subject to the rights of holders of Parity Preferred Units (including Series J Preferred Units, Series K Preferred Units, Series L Preferred Units and Series O Preferred Units) as to the payment of distributions, pursuant to Section 5.1, Section 18.3.A, Section 19.3.A, Section 20.3.A and Section 22.3.A hereof, the General Partner, as holder of the Series M Preferred Units, will be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, out of Available Cash, cumulative preferential cash distributions in an amount equal to the Series M Priority Return. Such distributions will be payable (A) quarterly in arrears, on the 15^th day of January, April, July and October of each year and (B) in the event of a redemption of Series M Preferred Units, on the redemption date (each a “Series M Preferred Unit Distribution Payment Date”), commencing on the first of such payment dates to occur following their original date of issuance. If any date on which distributions are to be made on the Series M Preferred Units is not a Business Day, then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date.

          B. No Distributions in Contravention of Agreements. No distribution on the Series M Preferred Units shall be authorized by the General Partner or made or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the Partnership or the General Partner, including any agreement relating to indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

          C. Priority as to Distributions. (i) Except to the extent set forth in Section 21.3.C(ii), so long as any Series M Preferred Units are outstanding, no distribution of cash or other property shall be authorized, declared, paid or set apart for payment on or with respect to any class or series of Partnership Interest represented by Junior Units, nor shall any Junior Units or Parity Preferred Units (including the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units and the Series O Preferred Units) be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Junior Units or Parity Preferred Units) by the Partnership (except by conversion into or exchange for other Junior Units or Parity Preferred Units) unless, in each case, full cumulative distributions have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment thereof set apart for such payment on the Series M Preferred Units for all past distribution periods and the current distribution period. The foregoing sentence will not prohibit (a) distributions payable solely in Junior Units, (b) the exchange of Junior Units or Parity Preferred Units (including the Series J Preferred Units, Series K Preferred Units, Series L Preferred Units and Series O Preferred Units) into Partnership Interests of the Partnership ranking junior to the Series M Preferred Units as to distributions, or (c) the redemption of Partnership Interests corresponding to Series M Preferred Shares, Parity

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Preferred Stock (including Series J Preferred Shares, Series K Preferred Shares, Series L Preferred Shares and Series O Preferred Shares) with respect to distributions or Junior Stock to be purchased by the General Partner pursuant to the Charter to preserve the General Partner’s status as a real estate investment trust, provided that such redemption shall be upon the same terms as the corresponding stock purchase pursuant to the Charter.

          (ii) So long as distributions have not been paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series M Preferred Units and any other Parity Preferred Units (including the Series J Preferred Units, Series K Preferred Units, Series L Preferred Units and Series O Preferred Units), all distributions authorized and declared on the Series M Preferred Units and all classes or series of outstanding Parity Preferred Units (including the Series J Preferred Units, Series K Preferred Units, Series L Preferred Units and Series O Preferred Units) shall be authorized and declared pro rata so that the amount of distributions authorized and declared per Series M Preferred Unit and such other classes or series of Parity Preferred Units shall in all cases bear to each other the same ratio that accrued distributions per Series M Preferred Unit and such other classes or series of Parity Preferred Units (which shall not include any accumulation in respect of unpaid distributions for prior distribution periods if such class or series of Parity Preferred Units do not have cumulative distribution rights) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any distributions or payments on Series M Preferred Units which may be in arrears.

          D. No Further Rights. The General Partner, as holder of the Series M Preferred Units, shall not be entitled to any distributions, whether payable in cash, other property or otherwise, in excess of the full cumulative distributions described herein. Any distribution payment made on the Series M Preferred Units shall first be credited against the earliest accrued but unpaid distribution due with respect to such Series M Preferred Units which remain payable.

          Section 21.4 Liquidation Proceeds

          A. Upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, distributions on the Series M Preferred Units shall be made in accordance with Article 13 of this Agreement.

          B. Notice. Written notice of any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by the General Partner pursuant to Section 13.6 hereof.

          C. No Further Rights. After payment of the full amount of the liquidating distributions to which they are entitled, the General Partner, as holder of the Series M Preferred Units, will have no right or claim to any of the remaining assets of the Partnership.

          D. Consolidation, Merger or Certain Other Transactions. None of a consolidation or merger of the Partnership with or into another entity, a merger of another entity with or into the Partnership, or a sale, lease, transfer or conveyance of all or substantially all of the Partnership’s property or business shall be considered a liquidation, dissolution or winding up of the Partnership.

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          Section 21.5 Redemption

          A. Redemption. The Series M Preferred Units may not be redeemed prior to November 25, 2008. If, on or after such date, the General Partner elects to redeem any of the Series M Preferred Shares, the Partnership shall, on the date set for redemption of such Series M Preferred Shares, redeem the number of Series M Preferred Units equal to the number of Series M Preferred Shares for which the General Partner has given notice of redemption pursuant to Section 5 of Article Third of the Series M Articles Supplementary, at a redemption price, payable in cash, equal to the product of (i) the number of Series M Preferred Units being redeemed, and (ii) the sum of $25 and the Preferred Distribution Shortfall per Series M Preferred Unit, if any.

          B. Payment of Accumulated Distributions. Immediately prior to any redemption of Series M Preferred Units, the Partnership shall pay, in cash, any accumulated and unpaid distributions on the Series M Preferred Units to be redeemed through the redemption date. Except as provided above, the Partnership will make no payment or allowance for unpaid distributions, whether or not in arrears, on Series M Preferred Units for which a notice of redemption has been given.

          C. Procedures for Redemption. The following provisions set forth the procedures for Redemption:

(i)	Notice of redemption will be given by the General Partner to the Partnership concurrently with the notice of the General Partner sent to the holders of its Series M Preferred Shares in connection with such redemption. Such notice shall state: (A) the redemption date; (B) the redemption price; (C) the number of Series M Preferred Units to be redeemed; (D) the place or places where the Series M Preferred Units are to be surrendered for payment of the redemption price; and (E) that distributions on the Series M Preferred Units to be redeemed will cease to accumulate on such redemption date. If less than all of the Series M Preferred Units are to be redeemed, the notice shall also specify the number of Series M Preferred Units to be redeemed.
(ii)	On or after the redemption date, the General Partner shall present and surrender the certificates, if any, representing the Series M Preferred Units to the Partnership at the place designated in the notice of redemption and thereupon the redemption price of such Units (including all accumulated and unpaid distributions up to the redemption date) shall be paid to the General Partner and each surrendered Unit certificate, if any, shall be canceled. If fewer than all the Units represented by any such certificate representing Series M Preferred Units are to be redeemed, a new certificate shall be issued representing the unredeemed shares.
(iii)	From and after the redemption date (unless the Partnership defaults in payment of the redemption price), all distributions on the Series M Preferred Units designated for redemption in such notice shall cease to accumulate and all rights of the General Partner, except the right to

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receive the redemption price thereof (including all accumulated and unpaid distributions up to the redemption date), shall cease and terminate, and such Units shall not be deemed to be outstanding for any purpose whatsoever. At its election, the Partnership, prior to a redemption date, may irrevocably deposit the redemption price (including accumulated and unpaid distributions to the redemption date) of the Series M Preferred Units so called for redemption in trust for the General Partner with a bank or trust company, in which case the redemption notice to General Partner shall (A) state the date of such deposit, (B) specify the office of such bank or trust company as the place of payment of the redemption price and (C) require the General Partner to surrender the certificates, if any, representing such Series M Preferred Units at such place on or about the date fixed in such redemption notice (which may not be later than the redemption date) against payment of the redemption price (including all accumulated and unpaid distributions to the redemption date). Any monies so deposited which remain unclaimed by the General Partner at the end of two years after the redemption date shall be returned by such bank or trust company to the Partnership.

          E. No Further Rights. Any Series M Preferred Units that shall at any time have been redeemed shall, after such redemption, have the status of authorized but unissued Preferred Units, without designation as to series until such shares are once more designated as part of a particular series by the General Partner.

          Section 21.6 Voting Rights

          The General Partner shall not have any voting or consent rights in respect of its partnership interest represented by the Series M Preferred Units.

          Section 21.7 Transfer Restrictions

          The Series M Preferred Units shall not be transferable.

          Section 21.8 No Conversion Rights

          The Series M Preferred Units shall not be convertible into any other class or series of interest in the Partnership.

          Section 21.9 No Sinking Fund

          No sinking fund shall be established for the retirement or redemption of Series M Preferred Units.

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ARTICLE 22.

SERIES O PREFERRED UNITS

          Section 22.1 Designation and Number

          A series of Partnership Units in the Partnership designated as the 7.00% Series O Cumulative Redeemable Preferred Units (the “Series O Preferred Units”) is hereby established. The number of Series O Preferred Units shall be 3,000,000.

          Section 22.2 Ranking

          The Series O Preferred Units shall, with respect to distribution rights and rights upon voluntary or involuntary liquidation, winding up or dissolution of the Partnership, rank (i) senior to the Common Units and to all Partnership Units the terms of which provide that such Partnership Units shall rank junior to the Series O Preferred Units; (ii) on a parity with the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units, the Series M Preferred Units and all other Parity Preferred Units; and (iii) junior to all Partnership Units which rank senior to the Series O Preferred Units.

          Section 22.3 Distributions

          A. Payments of Distribution. Subject to the rights of holders of Parity Preferred Units (including Series J Preferred Units, Series K Preferred Units, Series L Preferred Units and Series M Preferred Units) as to the payment of distributions, pursuant to Section 5.1, Section 18.3.A, Section 19.3.A, Section 20.3.A and Section 21.3A hereof, the General Partner, as holder of the Series O Preferred Units, will be entitled to receive, when, as and if declared by the Partnership acting through the General Partner, out of Available Cash, cumulative preferential cash distributions in an amount equal to the Series O Priority Return. Such distributions will be payable (A) quarterly in arrears, on the 15^th day of January, April, July and October of each year and (B) in the event of a redemption of Series O Preferred Units, on the redemption date (each a “Series O Preferred Unit Distribution Payment Date”), commencing on the first of such payment dates to occur following their original date of issuance. If any date on which distributions are to be made on the Series O Preferred Units is not a Business Day, then payment of the distribution to be made on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay) except that, if such Business Day is in the next succeeding calendar year, such payment shall be made on the immediately preceding Business Day, in each case with the same force and effect as if made on such date.

          B. No Distributions in Contravention of Agreements. No distribution on the Series O Preferred Units shall be authorized by the General Partner or made or set apart for payment by the Partnership at such time as the terms and provisions of any agreement of the Partnership or the General Partner, including any agreement relating to indebtedness, prohibits such declaration, payment or setting apart for payment or provides that such declaration, payment or setting apart for payment would constitute a breach thereof, or a default thereunder, or if such declaration or payment shall be restricted or prohibited by law.

          C. Priority as to Distributions. (i) Except to the extent set forth in Section 22.3.C(ii), so long as any Series O Preferred Units are outstanding, no distribution of cash or other property shall be authorized, declared, paid or set apart for payment on or with respect to

102

any class or series of Partnership Interest represented by Junior Units, nor shall any Junior Units or Parity Preferred Units (including the Series J Preferred Units, the Series K Preferred Units, the Series L Preferred Units and the Series M Preferred Units) be redeemed, purchased or otherwise acquired for any consideration (or any monies be paid to or made available for a sinking fund for the redemption of any such Junior Units or Parity Preferred Units) by the Partnership (except by conversion into or exchange for other Junior Units or Parity Preferred Units) unless, in each case, full cumulative distributions have been or contemporaneously are authorized and paid or authorized and a sum sufficient for the payment thereof set apart for such payment on the Series O Preferred Units for all past distribution periods and the current distribution period. The foregoing sentence will not prohibit (a) distributions payable solely in Junior Units, (b) the exchange of Junior Units or Parity Preferred Units (including the Series J Preferred Units, Series K Preferred Units, Series L Preferred Units and Series M Preferred Units) into Partnership Interests of the Partnership ranking junior to the Series O Preferred Units as to distributions, or (c) the redemption of Partnership Interests corresponding to Series O Preferred Shares, Parity Preferred Stock (including Series J Preferred Shares, Series K Preferred Shares, Series L Preferred Shares and Series O Preferred Shares) with respect to distributions or Junior Stock to be purchased by the General Partner pursuant to the Charter to preserve the General Partner’s status as a real estate investment trust, provided that such redemption shall be upon the same terms as the corresponding stock purchase pursuant to the Charter.

          (ii) So long as distributions have not been paid in full (or a sum sufficient for such full payment is not so set apart) upon the Series O Preferred Units and any other Parity Preferred Units (including the Series J Preferred Units, Series K Preferred Units, Series L Preferred Units and Series M Preferred Units), all distributions authorized and declared on the Series O Preferred Units and all classes or series of outstanding Parity Preferred Units (including the Series J Preferred Units, Series K Preferred Units, Series L Preferred Units and Series M Preferred Units) shall be authorized and declared pro rata so that the amount of distributions authorized and declared per Series O Preferred Unit and such other classes or series of Parity Preferred Units shall in all cases bear to each other the same ratio that accrued distributions per Series O Preferred Unit and such other classes or series of Parity Preferred Units (which shall not include any accumulation in respect of unpaid distributions for prior distribution periods if such class or series of Parity Preferred Units do not have cumulative distribution rights) bear to each other. No interest, or sum of money in lieu of interest, shall be payable in respect of any distributions or payments on Series O Preferred Units which may be in arrears.

          D. No Further Rights. The General Partner, as holder of the Series O Preferred Units, shall not be entitled to any distributions, whether payable in cash, other property or otherwise, in excess of the full cumulative distributions described herein. Any distribution payment made on the Series O Preferred Units shall first be credited against the earliest accrued but unpaid distribution due with respect to such Series O Preferred Units which remain payable.

          Section 22.4 Liquidation Proceeds

          A. Upon voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, distributions on the Series O Preferred Units shall be made in accordance with Article 13 of this Agreement.

103

          B. Notice. Written notice of any such voluntary or involuntary liquidation, dissolution or winding-up of the Partnership, stating the payment date or dates when, and the place or places where, the amounts distributable in such circumstances shall be payable, shall be given by the General Partner pursuant to Section 13.6 hereof.

          C. No Further Rights. After payment of the full amount of the liquidating distributions to which they are entitled, the General Partner, as holder of the Series O Preferred Units, will have no right or claim to any of the remaining assets of the Partnership.

          D. Consolidation, Merger or Certain Other Transactions. None of a consolidation or merger of the Partnership with or into another entity, a merger of another entity with or into the Partnership, or a sale, lease, transfer or conveyance of all or substantially all of the Partnership’s property or business shall be considered a liquidation, dissolution or winding up of the Partnership.

          Section 22.5 Redemption

          A. Redemption. The Series O Preferred Units may not be redeemed prior to December 13, 2010. If, on or after such date, the General Partner elects to redeem any of the Series O Preferred Shares, the Partnership shall, on the date set for redemption of such Series O Preferred Shares, redeem the number of Series O Preferred Units equal to the number of Series O Preferred Shares for which the General Partner has given notice of redemption pursuant to Section 5 of Article Third of the Series O Articles Supplementary, at a redemption price, payable in cash, equal to the product of (i) the number of Series O Preferred Units being redeemed, and (ii) the sum of $25 and the Preferred Distribution Shortfall per Series O Preferred Unit, if any.

          B. Payment of Accumulated Distributions. Immediately prior to any redemption of Series O Preferred Units, the Partnership shall pay, in cash, any accumulated and unpaid distributions on the Series O Preferred Units to be redeemed through the redemption date. Except as provided above, the Partnership will make no payment or allowance for unpaid distributions, whether or not in arrears, on Series O Preferred Units for which a notice of redemption has been given.

          C. Procedures for Redemption. The following provisions set forth the procedures for Redemption:

(i) Notice of redemption will be given by the General Partner to the Partnership concurrently with the notice of the General Partner sent to the holders of its Series O Preferred Shares in connection with such redemption. Such notice shall state: (A) the redemption date; (B) the redemption price; (C) the number of Series O Preferred Units to be redeemed; (D) the place or places where the Series O Preferred Units are to be surrendered for payment of the redemption price; and (E) that distributions on the Series O Preferred Units to be redeemed will cease to accumulate on such redemption date. If less than all of the Series O Preferred Units are to be redeemed, the notice shall also specify the number of Series O Preferred Units to be redeemed.

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(ii)

On or after the redemption date, the General Partner shall present and surrender the certificates, if any, representing the Series O Preferred Units to the Partnership at the place designated in the notice of redemption and thereupon the redemption price of such Units (including all accumulated and unpaid distributions up to the redemption date) shall be paid to the General Partner and each surrendered Unit certificate, if any, shall be canceled. If fewer than all the Units represented by any such certificate representing Series O Preferred Units are to be redeemed, a new certificate shall be issued representing the unredeemed shares.

(iii)

From and after the redemption date (unless the Partnership defaults in payment of the redemption price), all distributions on the Series O Preferred Units designated for redemption in such notice shall cease to accumulate and all rights of the General Partner, except the right to receive the redemption price thereof (including all accumulated and unpaid distributions up to the redemption date), shall cease and terminate, and such Units shall not be deemed to be outstanding for any purpose whatsoever. At its election, the Partnership, prior to a redemption date, may irrevocably deposit the redemption price (including accumulated and unpaid distributions to the redemption date) of the Series O Preferred Units so called for redemption in trust for the General Partner with a bank or trust company, in which case the redemption notice to General Partner shall (A) state the date of such deposit, (B) specify the office of such bank or trust company as the place of payment of the redemption price and (C) require the General Partner to surrender the certificates, if any, representing such Series O Preferred Units at such place on or about the date fixed in such redemption notice (which may not be later than the redemption date) against payment of the redemption price (including all accumulated and unpaid distributions to the redemption date). Any monies so deposited which remain unclaimed by the General Partner at the end of two years after the redemption date shall be returned by such bank or trust company to the Partnership.

          E. No Further Rights. Any Series O Preferred Units that shall at any time have been redeemed shall, after such redemption, have the status of authorized but unissued Preferred Units, without designation as to series until such shares are once more designated as part of a particular series by the General Partner.

          Section 22.6 Voting Rights

          The General Partner shall not have any voting or consent rights in respect of its partnership interest represented by the Series O Preferred Units.

          Section 22.7 Transfer Restrictions

          The Series O Preferred Units shall not be transferable.

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          Section 22.8 No Conversion Rights

          The Series O Preferred Units shall not be convertible into any other class or series of interest in the Partnership.

          Section 22.9 No Sinking Fund

          No sinking fund shall be established for the retirement or redemption of Series O Preferred Units.

(Signature Page Follows)

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          IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written.

GENERAL PARTNER: AMB PROPERTY CORPORATION, a Maryland corporation
By:	/s/ Michael A. Coke
	Michael A. Coke
	Chief Financial Officer and Executive Vice President
LIMITED PARTNERS: AMB PROPERTY CORPORATION, as attorney-in-fact for each of the Limited Partners
By:	/s/ Michael A. Coke
	Michael A. Coke
	Chief Financial Officer and Executive Vice President
SERIES O LIMITED PARTNER: AMB PROPERTY CORPORATION, a Maryland corporation
By:	/s/ Michael A. Coke
	Michael A. Coke
	Chief Financial Officer and Executive Vice President

S-1

EXHIBIT A

PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS

I. Common Units

						Agreed Value of					Common
	Contribution		Cash			Contributed		Total			Partnership			Percentage
Name of Partner	Date		Contributions			Property		Contributions			Units			Interest
AMB Property Corporation (a)		11/26/97	$	73,798,710		$	1,693,339,826	$	1,767,138,536			85,645,104			92.96379	%
AMB Property Corporation		12/15/98	$	0		$	0	$	0			43,008			0.04668	%
AMB Property Corporation		01/20/99	$	100,000		$	0	$	100,000			100,000			0.10855	%
AMB Property Corporation		01/25/99	$	26,250		$	0	$	26,250			1,250			0.00136	%
AMB Property Corporation		02/11/99	$	131,250		$	0	$	131,250			6,250			0.00678	%
AMB Property Corporation		03/05/99	$	26,250		$	0	$	26,250			1,250			0.00136	%
AMB Property Corporation		04/20/99	$	26,250		$	0	$	26,250			1,250			0.00136	%
AMB Property Corporation		04/23/99	$	0		$	88,290	$	88,290			3,600			0.00391	%
AMB Property Corporation		05/07/99	$	0		$	0	$	0			(932	)		-0.00101	%
AMB Property Corporation		05/12/99	$	0		$	10,125,213	$	10,125,213			482,153			0.52335	%
AMB Property Corporation		05/13/99	$	78,750		$	0	$	78,750			3,750			0.00407	%
AMB Property Corporation		06/04/99	$	26,250		$	0	$	26,250			1,250			0.00136	%
AMB Property Corporation		06/11/99	$	13,125		$	0	$	13,125			625			0.00068	%
AMB Property Corporation		06/30/99	$	13,125		$	0	$	13,125			625			0.00068	%
AMB Property Corporation		07/02/99	$	52,500		$	0	$	52,500			2,500			0.00271	%
AMB Property Corporation		08/03/99	$	0		$	244,000	$	244,000			10,000			0.01085	%
AMB Property Corporation		08/06/99	$	131,250		$	0	$	131,250			6,250			0.00678	%
AMB Property Corporation		09/15/99	$	0		$	840,000	$	840,000			40,000			0.04342	%
AMB Property Corporation		09/15/99	$	0		$	0	$	0			(701	)		-0.00076	%
AMB Property Corporation		12/10/99	($	198,750	)	$	0	($	198,750	)		(10,000	)		-0.01085	%
AMB Property Corporation		12/10/99	($	197,500	)	$	0	($	197,500	)		(10,000	)		-0.01085	%
AMB Property Corporation		12/10/99	($	1,657,500	)	$	0	($	1,657,500	)		(85,000	)		-0.09226	%
AMB Property Corporation		12/13/99	($	1,950,000	)	$	0	($	1,950,000	)		(100,000	)		-0.10855	%
AMB Property Corporation		12/14/99	($	9,500,000	)	$	0	($	9,500,000	)		(500,000	)		-0.54273	%
AMB Property Corporation		12/16/99	($	950,000	)	$	0	($	950,000	)		(50,000	)		-0.05427	%
AMB Property Corporation		12/16/99	($	1,813,888	)	$	0	($	1,813,888	)		(96,100	)		-0.10431	%
AMB Property Corporation		12/17/99	($	937,500	)	$	0	($	937,500	)		(50,000	)		-0.05427	%
AMB Property Corporation		12/17/99	($	8,730,150	)	$	0	($	8,730,150	)		(471,900	)		-0.51223	%
AMB Property Corporation		12/20/99	($	918,750	)	$	0	($	918,750	)		(50,000	)		-0.05427	%
AMB Property Corporation		12/20/99	($	375,950	)	$	0	($	375,950	)		(20,600	)		-0.02236	%
AMB Property Corporation		01/07/00	($	28,777,960	)	$	0	($	28,777,960	)		(1,465,926	)		-1.59119	%
AMB Property Corporation		02/29/00	$	0		$	0	$	0			155,675			0.16898	%
AMB Property Corporation		03/31/00	$	262,500		$	0	$	262,500			12,500			0.01357	%
AMB Property Corporation		05/01/00	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		05/02/00	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		05/03/00	$	26,250		$	0	$	26,250			1,250			0.00136	%
AMB Property Corporation		05/05/00	$	52,500		$	0	$	52,500			2,500			0.00271	%
AMB Property Corporation		05/05/00	$	0		$	0	$	0			1,000			0.00109	%
AMB Property Corporation		05/10/00	$	13,125		$	0	$	13,125			625			0.00068	%
AMB Property Corporation		05/31/00	$	26,250		$	0	$	26,250			1,250			0.00136	%
AMB Property Corporation		06/09/00	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		06/13/00	$	254,334		$	0	$	254,334			11,790			0.01280	%
AMB Property Corporation		07/06/00	$	0		$	4,774,010	$	4,774,010			206,425			0.22406	%
AMB Property Corporation		07/14/00	$	128,747		$	0	$	128,747			6,072			0.00659	%
AMB Property Corporation		07/19/00	$	52,500		$	0	$	52,500			2,500			0.00271	%
AMB Property Corporation		07/21/00	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		07/26/00	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		08/10/00	$	26,250		$	0	$	26,250			1,250			0.00136	%
AMB Property Corporation		08/11/00	$	26,250		$	0	$	26,250			1,250			0.00136	%
AMB Property Corporation		08/25/00	$	157,500		$	0	$	157,500			7,500			0.00814	%
AMB Property Corporation		09/06/00	$	31,594		$	0	$	31,594			1,500			0.00163	%
AMB Property Corporation		09/11/00	$	94,500		$	0	$	94,500			4,500			0.00488	%
AMB Property Corporation		09/12/00	$	5,250		$	0	$	5,250			250			0.00027	%
AMB Property Corporation		09/15/00	$	52,500		$	0	$	52,500			2,500			0.00271	%
AMB Property Corporation		10/01/00	$	0		$	0	$	0			(298	)		-0.00032	%
AMB Property Corporation		11/27/00	$	12,600		$	0	$	12,600			600			0.00065	%
AMB Property Corporation		11/28/00	$	0		$	0	$	0			5,000			0.00543	%
AMB Property Corporation		11/29/00	$	78,750		$	0	$	78,750			3,750			0.00407	%
AMB Property Corporation		12/01/00	$	0		$	0	$	0			622			0.00068	%
AMB Property Corporation		12/05/00	$	250,250		$	0	$	250,250			11,789			0.01280	%
AMB Property Corporation		12/06/00	$	78,750		$	0	$	78,750			3,750			0.00407	%
AMB Property Corporation		12/13/00	$	12,600		$	0	$	12,600			600			0.00065	%
AMB Property Corporation		12/15/00	$	10,500		$	0	$	10,500			500			0.00054	%
AMB Property Corporation		01/30/01	$	12,446		$	0	$	12,446			584			0.00063	%
AMB Property Corporation		02/27/01	$	46,193		$	0	$	46,193			2,053			0.00223	%
AMB Property Corporation		02/27/01	$	0		$	0	$	0			196,517			0.21331	%
AMB Property Corporation		02/28/01	$	107,952		$	0	$	107,952			4,992			0.00542	%
AMB Property Corporation		02/28/01	$	0		$	36,750	$	36,750			1,554			0.00169	%
AMB Property Corporation		03/07/01	$	0		$	872,202	$	872,202			37,115			0.04029	%
AMB Property Corporation		03/07/01	$	13,125		$	0	$	13,125			625			0.00068	%

						Agreed Value of					Common
	Contribution		Cash			Contributed		Total			Partnership			Percentage
Name of Partner	Date		Contributions			Property		Contributions			Units			Interest
AMB Property Corporation		03/08/01	$	774,736		$	0	$	774,736			36,667			0.03980	%
AMB Property Corporation		03/23/01	$	0		$	11,752,188	$	11,752,188			559,268			0.60706	%
AMB Property Corporation		04/18/01		($568,750	)	$	0		($568,750	)		(25,000	)		-0.02714	%
AMB Property Corporation		05/17/01	$	0		$	0	$	0			1,000			0.00109	%
AMB Property Corporation		05/21/01	$	16,800		$	0	$	16,800			800			0.00087	%
AMB Property Corporation		05/22/01	$	0		$	0	$	0			41,204			0.04473	%
AMB Property Corporation		06/14/01	$	95,586		$	0	$	95,586			4,584			0.00498	%
AMB Property Corporation		07/01/01	$	0		$	0	$	0			(461	)		-0.00050	%
AMB Property Corporation		07/12/01	$	23,520		$	0	$	23,520			1,120			0.00122	%
AMB Property Corporation		07/13/01	$	5,094		$	0	$	5,094			250			0.00027	%
AMB Property Corporation		07/16/01	$	286,424		$	0	$	286,424			13,459			0.01461	%
AMB Property Corporation		07/26/01	$	21,000		$	0	$	21,000			1,000			0.00109	%
AMB Property Corporation		07/27/01	$	14,700		$	0	$	14,700			700			0.00076	%
AMB Property Corporation		08/02/01	$	90,300		$	0	$	90,300			4,300			0.00467	%
AMB Property Corporation		08/03/01	$	11,500		$	0	$	11,500			500			0.00054	%
AMB Property Corporation		08/08/01	$	5,000		$	0	$	5,000			250			0.00027	%
AMB Property Corporation		08/09/01	$	5,775		$	0	$	5,775			275			0.00030	%
AMB Property Corporation		08/10/01	$	78,750		$	0	$	78,750			3,750			0.00407	%
AMB Property Corporation		08/14/01	$	11,406		$	0	$	11,406			500			0.00054	%
AMB Property Corporation		08/15/01	$	31,500		$	0	$	31,500			1,500			0.00163	%
AMB Property Corporation		08/17/01	$	14,063		$	0	$	14,063			625			0.00068	%
AMB Property Corporation		08/22/01	$	420,000		$	0	$	420,000			20,000			0.02171	%
AMB Property Corporation		09/18/01	$	0		$	557,838	$	557,838			23,700			0.02573	%
AMB Property Corporation		09/20/01	($	597,500	)	$	0	($	597,500	)		(25,000	)		-0.02714	%
AMB Property Corporation		09/24/01	($	7,087,000	)	$	0	($	7,087,000	)		(298,400	)		-0.32390	%
AMB Property Corporation		09/25/01	($	550,780	)	$	0	($	550,780	)		(23,100	)		-0.02507	%
AMB Property Corporation		09/26/01	($	7,108,893	)	$	0	($	7,108,893	)		(301,200	)		-0.32694	%
AMB Property Corporation		09/27/01	($	5,857,250	)	$	0	($	5,857,250	)		(250,000	)		-0.27136	%
AMB Property Corporation		09/28/01	($	236,000	)	$	0	($	236,000	)		(10,000	)		-0.01085	%
AMB Property Corporation		10/01/01	($	1,069,350	)	$	0	($	1,069,350	)		(45,000	)		-0.04885	%
AMB Property Corporation		10/02/01	($	2,192,275	)	$	0	($	2,192,275	)		(91,900	)		-0.09975	%
AMB Property Corporation		10/19/01	$	11,406		$	0	$	11,406			500			0.00054	%
AMB Property Corporation		10/25/01	($	3,515,636	)	$	0	($	3,515,636	)		(150,000	)		-0.16282	%
AMB Property Corporation		10/26/01	($	32,550	)	$	0	($	32,550	)		(1,400	)		-0.00152	%
AMB Property Corporation		10/29/01	($	4,002,822	)	$	0	($	4,002,822	)		(171,600	)		-0.18626	%
AMB Property Corporation		10/31/01	$	0		$	0	$	0			(340	)		-0.00037	%
AMB Property Corporation		11/02/01	$	14,258		$	0	$	14,258			625			0.00068	%
AMB Property Corporation		11/09/01	$	0		$	337,710	$	337,710			13,801			0.01498	%
AMB Property Corporation		11/12/01	$	10,500		$	0	$	10,500			500			0.00054	%
AMB Property Corporation		11/16/01	$	84,121		$	0	$	84,121			4,167			0.00452	%
AMB Property Corporation		11/19/01	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		11/20/01	$	39,375		$	0	$	39,375			1,875			0.00204	%
AMB Property Corporation		11/23/01	$	5,344		$	0	$	5,344			250			0.00027	%
AMB Property Corporation		11/26/01	$	13,125		$	0	$	13,125			625			0.00068	%
AMB Property Corporation		11/27/01	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		11/28/01	$	52,500		$	0	$	52,500			2,500			0.00271	%
AMB Property Corporation		12/05/01	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		12/07/01	$	77,344		$	0	$	77,344			3,125			0.00339	%
AMB Property Corporation		12/11/01	$	210,000		$	0	$	210,000			10,000			0.01085	%
AMB Property Corporation		12/17/01	$	6,063		$	0	$	6,063			250			0.00027	%
AMB Property Corporation		12/26/01	$	1,346,486		$	0	$	1,346,486			64,009			0.06948	%
AMB Property Corporation		01/01/02	($	780,067	)	$	0	($	780,067	)		(29,945	)		-0.03250	%
AMB Property Corporation		01/02/02	$	88,863		$	0	$	88,863			4,168			0.00452	%
AMB Property Corporation		01/11/02	$	0		$	266,413	$	266,413			10,227			0.01110	%
AMB Property Corporation		01/11/02	$	5,219		$	0	$	5,219			250			0.00027	%
AMB Property Corporation		01/29/02	$	182,128		$	0	$	182,128			8,500			0.00923	%
AMB Property Corporation		01/31/02	$	53,976		$	0	$	53,976			2,496			0.00271	%
AMB Property Corporation		02/01/02	$	0		$	634,825	$	634,825			25,884			0.02810	%
AMB Property Corporation		02/06/02	$	53,275		$	0	$	53,275			2,501			0.00271	%
AMB Property Corporation		02/12/02	$	38,746		$	0	$	38,746			1,917			0.00208	%
AMB Property Corporation		02/26/02	$	0		$	0	$	0			194,585			0.21121	%
AMB Property Corporation		02/27/02	$	28,750		$	0	$	28,750			1,250			0.00136	%
AMB Property Corporation		02/27/02	$	0		$	0	$	0			1,500			0.00163	%
AMB Property Corporation		03/06/02	$	13,125		$	0	$	13,125			625			0.00068	%
AMB Property Corporation		03/13/02	$	70,000		$	0	$	70,000			3,000			0.00326	%
AMB Property Corporation		03/14/02	$	210,000		$	0	$	210,000			10,000			0.01085	%
AMB Property Corporation		03/15/02	$	98,805		$	0	$	98,805			4,834			0.00525	%
AMB Property Corporation		03/18/02	$	25,547		$	0	$	25,547			1,250			0.00136	%
AMB Property Corporation		04/11/02	$	10,313		$	0	$	10,313			500			0.00054	%
AMB Property Corporation		04/12/02	$	2,045,067		$	0	$	2,045,067			96,084			0.10429	%

						Agreed Value of					Common
	Contribution		Cash			Contributed		Total			Partnership			Percentage
Name of Partner	Date		Contributions			Property		Contributions			Units			Interest
AMB Property Corporation		04/15/02	$	439,101		$	0	$	439,101			20,522			0.02228	%
AMB Property Corporation		04/17/02	$	358,965		$	0	$	358,965			16,667			0.01809	%
AMB Property Corporation		04/22/02	$	102,508		$	0	$	102,508			4,167			0.00452	%
AMB Property Corporation		04/30/02	$	5,844		$	0	$	5,844			250			0.00027	%
AMB Property Corporation		05/01/02	$	24,451		$	0	$	24,451			1,084			0.00118	%
AMB Property Corporation		05/02/02	$	115,375		$	0	$	115,375			5,500			0.00597	%
AMB Property Corporation		05/28/02	$	237,098		$	0	$	237,098			10,834			0.01176	%
AMB Property Corporation		05/30/02	$	0		$	0	$	0			7,987			0.00867	%
AMB Property Corporation		06/01/02	$	0		$	0	$	0			(1,445	)		-0.00157	%
AMB Property Corporation		06/03/02	$	119,063		$	0	$	119,063			5,625			0.00611	%
AMB Property Corporation		06/04/02	$	346,298		$	0	$	346,298			15,000			0.01628	%
AMB Property Corporation		06/05/02	$	2,100		$	0	$	2,100			100			0.00011	%
AMB Property Corporation		06/06/02	$	50,400		$	0	$	50,400			2,400			0.00261	%
AMB Property Corporation		06/07/02	$	36,750		$	0	$	36,750			1,750			0.00190	%
AMB Property Corporation		06/11/02	$	28,672		$	0	$	28,672			1,250			0.00136	%
AMB Property Corporation		06/12/02	$	123,000		$	0	$	123,000			5,000			0.00543	%
AMB Property Corporation		06/15/02	$	0		$	0	$	0			(700	)		-0.00076	%
AMB Property Corporation		07/05/02	$	0		$	1,844,967	$	1,844,967			86,529			0.09392	%
AMB Property Corporation		07/11/02	$	37,626		$	0	$	37,626			1,584			0.00172	%
AMB Property Corporation		07/24/02	$	39,900		$	0	$	39,900			1,900			0.00206	%
AMB Property Corporation		07/25/02	($	1,752,651	)	$	0	($	1,752,651	)		(65,000	)		-0.07055	%
AMB Property Corporation		07/26/02	($	6,565,737	)	$	0	($	6,565,737	)		(246,900	)		-0.26800	%
AMB Property Corporation		07/29/02	($	2,574,390	)	$	0	($	2,574,390	)		(100,000	)		-0.10855	%
AMB Property Corporation		07/30/02	$	37,126		$	0	$	37,126			1,584			0.00172	%
AMB Property Corporation		07/30/02	($	559,643	)	$	0	($	559,643	)		(21,300	)		-0.02312	%
AMB Property Corporation		08/01/02	$	2,730,000		$	0	$	2,730,000			130,000			0.14111	%
AMB Property Corporation		08/01/02	$	0		$	0	$	0			(300	)		-0.00033	%
AMB Property Corporation		08/07/02	$	10,250		$	0	$	10,250			500			0.00054	%
AMB Property Corporation		08/08/02	$	210,000		$	0	$	210,000			10,000			0.01085	%
AMB Property Corporation		08/09/02	$	9,906		$	0	$	9,906			500			0.00054	%
AMB Property Corporation		08/20/02	$	5,453		$	0	$	5,453			250			0.00027	%
AMB Property Corporation		08/26/02	$	630,000		$	0	$	630,000			30,000			0.03256	%
AMB Property Corporation		08/27/02	$	59,757		$	0	$	59,757			2,273			0.00247	%
AMB Property Corporation		08/29/02	$	1,071,000		$	0	$	1,071,000			51,000			0.05536	%
AMB Property Corporation		08/30/02	$	1,066,141		$	0	$	1,066,141			50,584			0.05491	%
AMB Property Corporation		09/06/02	$	5,344		$	0	$	5,344			250			0.00027	%
AMB Property Corporation		09/09/02	$	43,066		$	0	$	43,066			2,083			0.00226	%
AMB Property Corporation		09/13/02	$	1,093,980		$	0	$	1,093,980			49,444			0.05367	%
AMB Property Corporation		09/30/02	$	0		$	0	$	0			(734	)		-0.00080	%
AMB Property Corporation		10/04/02	$	17,248		$	0	$	17,248			700			0.00076	%
AMB Property Corporation		10/16/02	($	15,385,933	)	$	0	($	15,385,933	)		(614,700	)		-0.66723	%
AMB Property Corporation		10/17/02	($	7,103,024	)	$	0	($	7,103,024	)		(268,700	)		-0.29166	%
AMB Property Corporation		10/18/02	($	2,073,576	)	$	0	($	2,073,576	)		(78,200	)		-0.08488	%
AMB Property Corporation		10/21/02	$	36,960		$	0	$	36,960			1,500			0.00163	%
AMB Property Corporation		10/21/02	($	3,837,636	)	$	0	($	3,837,636	)		(145,200	)		-0.15761	%
AMB Property Corporation		10/25/02	($	5,296	)	$	0	($	5,296	)		(200	)		-0.00022	%
AMB Property Corporation		10/28/02	$	18,480		$	0	$	18,480			750			0.00081	%
AMB Property Corporation		10/28/02	($	2,269,640	)	$	0	($	2,269,640	)		(86,100	)		-0.09346	%
AMB Property Corporation		11/14/02	$	34,219		$	0	$	34,219			1,500			0.00163	%
AMB Property Corporation		11/20/02	$	11,000		$	0	$	11,000			500			0.00054	%
AMB Property Corporation		11/25/02	($	16,635,272	)	$	0	($	16,635,292	)		(625,900	)		-0.67939	%
AMB Property Corporation		11/26/02	($	4,031,790	)	$	0	($	4,031,790	)		(151,700	)		-0.16466	%
AMB Property Corporation		11/27/02	($	1,081,806	)	$	0	($	1,081,806	)		(40,700	)		-0.04418	%
AMB Property Corporation		11/29/02	$	19,712		$	0	$	19,712			800			0.00087	%
AMB Property Corporation		11/29/02	($	5,497,184	)	$	0	($	5,497,184	)		(207,000	)		-0.22469	%
AMB Property Corporation		12/02/02	$	6,073		$	0	$	6,073			250			0.00027	%
AMB Property Corporation		12/03/02	$	12,183		$	0	$	12,183			500			0.00054	%
AMB Property Corporation		01/01/03	$	0		$	0	$	0			(15,652	)		-0.01699	%
AMB Property Corporation		01/08/03	$	24,600		$	0	$	24,600			1,000			0.00109	%
AMB Property Corporation		01/16/03	$	11,688		$	0	$	11,688			500			0.00054	%
AMB Property Corporation		01/23/03	$	33,632		$	0	$	33,632			1,666			0.00181	%
AMB Property Corporation		01/23/03	($	9,114,230	)	$	0	($	9,114,230	)		(350,000	)		-0.37991	%
AMB Property Corporation		01/24/03	($	3,914,564	)	$	0	($	3,914,564	)		(150,000	)		-0.16282	%
AMB Property Corporation		01/27/03	($	5,236,412	)	$	0	($	5,236,412	)		(200,400	)		-0.21752	%
AMB Property Corporation		01/28/03	($	2,296,872	)	$	0	($	2,296,872	)		(87,400	)		-0.09487	%
AMB Property Corporation		01/30/03	$	312,508		$	0	$	312,508			14,167			0.01538	%
AMB Property Corporation		01/31/03	$	5,703		$	0	$	5,703			250			0.00027	%
AMB Property Corporation		02/03/03	$	18,218		$	0	$	18,218			750			0.00081	%
AMB Property Corporation		02/13/03	$	0		$	0	$	0			253,662			0.27534	%
AMB Property Corporation		02/19/03	$	210,000		$	0	$	210,000			10,000			0.01085	%

						Agreed Value of					Common
	Contribution		Cash			Contributed		Total			Partnership			Percentage
Name of Partner	Date		Contributions			Property		Contributions			Units			Interest
AMB Property Corporation		02/24/03	$	11,250		$	0	$	11,250			500			0.00054	%
AMB Property Corporation		02/26/03	$	5,703		$	0	$	5,703			250			0.00027	%
AMB Property Corporation		02/28/03	$	86,235		$	0	$	86,235			4,000			0.00434	%
AMB Property Corporation		03/14/03	$	434,625		$	0	$	434,625			20,584			0.02234	%
AMB Property Corporation		03/31/03	$	23,875		$	0	$	23,875			1,000			0.00109	%
AMB Property Corporation		04/03/03	$	12,156		$	0	$	12,156			500			0.00054	%
AMB Property Corporation		04/16/03	$	5,156		$	0	$	5,156			250			0.00027	%
AMB Property Corporation		05/09/03	$	6,028		$	0	$	6,028			250			0.00027	%
AMB Property Corporation		05/12/03	$	23,000		$	0	$	23,000			1,000			0.00109	%
AMB Property Corporation		05/15/03	$	1,173,889		$	0	$	1,173,889			49,351			0.05357	%
AMB Property Corporation		05/20/03	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corproation		05/22/03	$	315,000		$	0	$	315,000			15,000			0.01628	%
AMB Property Corporation		05/22/03	$	0		$	0	$	0			8,958			0.00972	%
AMB Property Corporation		05/28/03	$	63,000		$	0	$	63,000			3,000			0.00326	%
AMB Property Corporation		06/02/03	$	894,708		$	0	$	894,708			42,139			0.04574	%
AMB Property Corporation		06/03/03	$	4,953		$	0	$	4,953			250			0.00027	%
AMB Property Corporation		06/05/03	$	52,500		$	0	$	52,500			2,500			0.00271	%
AMB Property Corporation		06/09/03	$	43,825		$	0	$	43,825			1,667			0.00181	%
AMB Property Corporation		06/11/03	$	102,837		$	0	$	102,837			4,251			0.00461	%
AMB Property Corporation		06/13/03	$	41,063		$	0	$	41,063			1,800			0.00195	%
AMB Property Corporation		06/27/03	$	73,881		$	0	$	73,881			3,434			0.00373	%
AMB Property Corporation		07/02/03	$	329,063		$	0	$	329,063			15,000			0.01628	%
AMB Property Corporation		07/15/03	$	23,156		$	0	$	23,156			1,000			0.00109	%
AMB Property Corporation		07/16/03	($	677,210	)	$	0	($	677,210	)		(25,100	)		-0.02724	%
AMB Property Corporation		07/25/03	$	105,000		$	0	$	105,000			5,000			0.00543	%
AMB Property Corporation		07/30/03	$	5,835		$	0	$	5,835			250			0.00027	%
AMB Property Corporation		08/05/03	$	16,688		$	0	$	16,688			750			0.00081	%
AMB Property Corporation		08/11/03	$	12,180		$	0	$	12,180			580			0.00063	%
AMB Property Corporation		08/20/03	$	31,500		$	0	$	31,500			1,500			0.00163	%
AMB Property Corporation		08/29/03	$	47,015		$	0	$	47,015			2,084			0.00226	%
AMB Property Corporation		09/08/03	$	5,344		$	0	$	5,344			250			0.00027	%
AMB Property Corporation		09/09/03	$	12,375		$	0	$	12,375			500			0.00054	%
AMB Property Corporation		09/10/03	$	0		$	58,160	$	58,160			2,000			0.00217	%
AMB Property Corporation		09/12/03	$	78,695		$	0	$	78,695			3,583			0.00389	%
AMB Property Corporation		09/15/03	$	10,313		$	0	$	10,313			500			0.00054	%
AMB Property Corporation		09/18/03	$	0		$	0	$	0			2,000			0.00217	%
AMB Property Corporation		10/08/03	$	252,000		$	0	$	252,000			12,000			0.01303	%
AMB Property Corporation		10/15/03	$	0		$	0	$	0			6,500			0.00706	%
AMB Property Corporation		10/17/03	$	474,375		$	0	$	474,375			21,250			0.02307	%
AMB Property Corporation		10/21/03	$	12,580		$	0	$	12,580			500			0.00054	%
AMB Property Corporation		10/31/03	$	6,028		$	0	$	6,028			250			0.00027	%
AMB Property Corporation		11/03/03	$	330,250		$	0	$	330,250			15,750			0.01710	%
AMB Property Corporation		11/04/03	$	100,938		$	0	$	100,938			5,000			0.00543	%
AMB Property Corporation		11/05/03	$	42,188		$	0	$	42,180			1,875			0.00204	%
AMB Property Corporation		11/06/03	$	5,297		$	0	$	5,297			250			0.00027	%
AMB Property Corporation		11/07/03	$	54,301		$	0	$	54,301			2,300			0.00250	%
AMB Property Corporation		11/10/03	$	0		$	0	$	0			1,500			0.00163	%
AMB Property Corporation		11/11/03	$	30,059		$	0	$	30,059			1,250			0.00136	%
AMB Property Corporation		11/13/03	$	10,188		$	0	$	10,188			500			0.00054	%
AMB Property Corporation		11/14/03	$	42,000		$	0	$	42,000			2,000			0.00217	%
AMB Property Corporation		11/19/03	$	643,993		$	0	$	643,993			29,780			0.03232	%
AMB Property Corporation		11/25/03	$	6,475		$	0	$	6,475			250			0.00027	%
AMB Property Corporation		11/28/03	$	0		$	0	$	0			(357	)		-0.00039	%
AMB Property Corporation		12/01/03	$	14,063		$	0	$	14,063			625			0.00068	%
AMB Property Corporation		12/02/03	$	22,250		$	0	$	22,250			1,000			0.00109	%
AMB Property Corporation		12/04/03	$	11,969		$	0	$	11,969			500			0.00054	%
AMB Property Corporation		12/08/03	$	112,707		$	0	$	112,707			5,367			0.00583	%
AMB Property Corporation		12/11/03	$	5,835		$	0	$	5,835			250			0.00027	%
AMB Property Corporation		12/17/03	$	21,000		$	0	$	21,000			1,000			0.00109	%
AMB Property Corporation		01/01/04	$	0		$	0	$	0			(19,270	)		-0.02092	%
AMB Property Corporation		01/06/04	$	10,313		$	0	$	10,313			500			0.00054	%
AMB Property Corporation		01/08/04	$	16,281		$	0	$	16,281			625			0.00068	%
AMB Property Corporation		01/09/04	$	210,000		$	0	$	210,000			10,000			0.01085	%
AMB Property Corporation		01/16/04	$	185,197		$	0	$	185,197			7,583			0.00823	%
AMB Property Corporation		01/20/04	$	195,418		$	0	$	195,418			8,334			0.00905	%
AMB Property Corporation		01/21/04	$	123,000		$	0	$	123,000			5,000			0.00543	%
AMB Property Corporation		01/21/04	$	0		$	351,702	$	351,702			10,332			0.01121	%
AMB Property Corporation		01/22/04	$	68,948		$	0	$	68,948			2,750			0.00298	%
AMB Property Corporation		01/23/04	$	178,500		$	0	$	178,500			8,500			0.00923	%
AMB Property Corporation		01/26/04	$	123,099		$	0	$	123,099			4,709			0.00511	%

					Agreed Value of				Common
	Contribution		Cash		Contributed		Total		Partnership			Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units			Interest
AMB Property Corporation		01/27/04	$	67,600	$	0	$	67,600		3,000			0.00326	%
AMB Property Corporation		01/27/04	$	0	$	0	$	0		210,255			0.22822	%
AMB Property Corporation		01/28/04	$	6,870	$	0	$	6,870		300			0.00033	%
AMB Property Corporation		01/30/04	$	0	$	0	$	0		(3,079	)		-0.00334	%
AMB Property Corporation		02/02/04	$	2,730,000	$	0	$	2,703,000		130,000			0.14111	%
AMB Property Corporation		02/03/04	$	10,455	$	0	$	10,455		450			0.00049	%
AMB Property Corporation		02/06/04	$	378,885	$	0	$	378,885		15,500			0.01682	%
AMB Property Corporation		02/09/04	$	18,234	$	0	$	18,234		750			0.00081	%
AMB Property Corporation		02/10/04	$	348,757	$	0	$	348,757		16,333			0.01773	%
AMB Property Corporation		02/11/04	$	318,125	$	0	$	318,125		15,000			0.01628	%
AMB Property Corporation		02/12/04	$	357,969	$	0	$	357,969		15,000			0.01628	%
AMB Property Corporation		02/13/04	$	215,500	$	0	$	215,500		10,250			0.01113	%
AMB Property Corporation		02/17/04	$	904,959	$	0	$	904,959		35,417			0.03844	%
AMB Property Corporation		02/18/04	$	39,794	$	0	$	39,794		1,625			0.00176	%
AMB Property Corporation		02/20/04	$	386,386	$	0	$	386,386		16,154			0.01753	%
AMB Property Corporation		02/24/04	$	588,000	$	0	$	588,000		28,000			0.03039	%
AMB Property Corporation		02/25/04	$	357,000	$	0	$	357,000		17,000			0.01845	%
AMB Property Corporation		02/26/04	$	1,107,463	$	0	$	1,107,463		52,874			0.05739	%
AMB Property Corporation		03/01/04	$	253,050	$	0	$	253,050		11,750			0.01275	%
AMB Property Corporation		03/02/04	$	2,201,242	$	0	$	2,201,242		91,129			0.09892	%
AMB Property Corporation		03/03/04	$	67,556	$	0	$	67,556		2,909			0.00316	%
AMB Property Corporation		03/05/04	$	480,764	$	0	$	480,764		19,550			0.02122	%
AMB Property Corporation		03/08/04	$	92,102	$	0	$	92,102		3,834			0.00416	%
AMB Property Corporation		03/09/04	$	6,763	$	0	$	6,763		250			0.00027	%
AMB Property Corporation		03/11/04	$	6,150	$	0	$	6,150		250			0.00027	%
AMB Property Corporation		03/12/04	$	1,495,000	$	0	$	1,495,000		65,000			0.07055	%
AMB Property Corporation		03/26/04	$	0	$	0	$	0		(347	)		-0.00038	%
AMB Property Corporation		04/01/04	$	540,632	$	0	$	540,632		20,428			0.02217	%
AMB Property Corporation		05/19/04	$	84,000	$	0	$	84,000		4,000			0.00434	%
AMB Property Corporation		05/20/04	$	0	$	0	$	0		12,354			0.01341	%
AMB Property Corporation		05/27/04	$	14,335	$	0	$	14,335		500			0.00054	%
AMB Property Corporation		06/09/04	$	18,188	$	0	$	18,188		750			0.00081	%
AMB Property Corporation		06/14/04	$	14,063	$	0	$	14,063		625			0.00068	%
AMB Property Corporation		06/22/04	$	52,500	$	0	$	52,500		2,500			0.00271	%
AMB Property Corporation		06/22/04	$	0	$	105,090	$	105,090		3,000			0.00326	%
AMB Property Corporation		06/24/04	$	223,900	$	0	$	223,900		10,500			0.01140	%
AMB Property Corporation		07/02/04	$	43,359	$	0	$	43,359		1,875			0.00204	%
AMB Property Corporation		07/16/04	$	323,803	$	0	$	323,803		14,917			0.01619	%
AMB Property Corporation		07/19/04	$	19,269	$	0	$	19,269		625			0.00068	%
AMB Property Corporation		07/20/04	$	12,238	$	0	$	12,238		500			0.00054	%
AMB Property Corporation		07/22/04	$	2,100	$	0	$	2,100		100			0.00011	%
AMB Property Corporation		07/29/04	$	63,000	$	0	$	63,000		3,000			0.00326	%
AMB Property Corporation		07/30/04	$	62,875	$	0	$	62,875		2,417			0.00262	%
AMB Property Corporation		08/02/04	$	322,407	$	0	$	322,407		14,909			0.01618	%
AMB Property Corporation		08/03/04	$	22,438	$	0	$	22,438		1,000			0.00109	%
AMB Property Corporation		08/06/04	$	216,250	$	0	$	216,250		10,000			0.01085	%
AMB Property Corporation		08/10/04	$	33,433	$	0	$	33,433		1,334			0.00145	%
AMB Property Corporation		08/20/04	$	22,813	$	0	$	22,813		1,000			0.00109	%
AMB Property Corporation		08/24/04	$	639,379	$	0	$	639,379		27,564			0.02992	%
AMB Property Corporation		08/25/04	$	671,674	$	0	$	671,674		33,167			0.03600	%
AMB Property Corporation		08/27/04	$	84,313	$	0	$	84,313		3,500			0.00380	%
AMB Property Corporation		08/30/04	$	210,000	$	0	$	210,000		10,000			0.01085	%
AMB Property Corporation		08/31/04	$	440,100	$	0	$	440,100		21,018			0.02281	%
AMB Property Corporation		09/03/04	$	23,000	$	0	$	23,000		1,000			0.00109	%
AMB Property Corporation		09/07/04	$	342,929	$	0	$	342,929		15,833			0.01719	%
AMB Property Corporation		09/08/04	$	2,053,563	$	0	$	2,053,563		97,750			0.10610	%
AMB Property Corporation		09/13/04	$	0	$	0	$	0		1,500			0.00163	%
AMB Property Corporation		09/15/04	$	6,150	$	0	$	6,150		250			0.00027	%
AMB Property Corporation		09/16/04	$	246,900	$	0	$	246,900		10,000			0.01085	%
AMB Property Corporation		10/05/04	$	210,000	$	0	$	210,000		10,000			0.01085	%
AMB Property Corporation		10/18/04	$	0	$	102,373	$	102,373		4,354			0.00473	%
AMB Property Corporation		10/18/04	$	0	$	0	$	0		1,000			0.00109	%
AMB Property Corporation		10/19/04	$	210,000	$	0	$	210,000		10,000			0.01085	%
AMB Property Corporation		11/01/04	$	0	$	0	$	0		1,000			0.00109	%
AMB Property Corporation		11/05/04	$	384,006	$	0	$	384,006		18,286			0.01985	%
AMB Property Corporation		11/08/04	$	1,127,991	$	0	$	1,127,991		52,500			0.05699	%
AMB Property Corporation		11/11/04	$	2,565,926	$	0	$	2,565,926		106,751			0.11587	%
AMB Property Corporation		11/12/04	$	22,851	$	0	$	22,851		1,000			0.00109	%
AMB Property Corporation		11/15/04	$	203,050	$	0	$	203,050		7,750			0.00841	%
AMB Property Corporation		11/16/04	$	1,307,354	$	0	$	1,307,354		57,851			0.06279	%

					Agreed Value of				Common
	Contribution		Cash		Contributed		Total		Partnership			Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units			Interest
AMB Property Corporation		11/17/04	$	16,419	$	0	$	16,419		625			0.00068	%
AMB Property Corporation		11/22/04	$	6,745	$	0	$	6,745		250			0.00027	%
AMB Property Corporation		11/24/04	$	525,000	$	0	$	525,000		25,000			0.02714	%
AMB Property Corporation		11/28/04	$	0	$	0	$	0		(357	)		-0.00039	%
AMB Property Corporation		12/01/04	$	369,331	$	0	$	369,331		15,500			0.01682	%
AMB Property Corporation		12/02/04	$	41,408	$	0	$	41,408		1,584			0.00172	%
AMB Property Corporation		12/03/04	$	167,046	$	0	$	167,046		7,166			0.00778	%
AMB Property Corporation		12/08/04	$	21,000	$	0	$	21,000		1,000			0.00109	%
AMB Property Corporation		12/09/04	$	152,549	$	0	$	152,549		6,584			0.00715	%
AMB Property Corporation		12/09/04	$	0	$	0	$	0		1,500			0.00163	%
AMB Property Corporation		12/10/04	$	4,953	$	0	$	4,953		250			0.00027	%
AMB Property Corporation		01/01/05	$	0	$	0	$	0		(35,574	)		-0.03861	%
AMB Property Corporation		01/04/05	$	0	$	0	$	0		2,000			0.00217	%
AMB Property Corporation		01/06/05	$	248,853	$	0	$	248,853		10,000			0.01085	%
AMB Property Corporation		01/10/05	$	0	$	617,934	$	617,934		26,281			0.02853	%
AMB Property Corporation		02/04/05	$	81,344	$	0	$	81,344		2,500			0.00271	%
AMB Property Corporation		02/07/05	$	3,447,347	$	0	$	3,447,347		160,244			0.17394	%
AMB Property Corporation		02/07/05	$	0	$	0	$	0		239,148			0.25958	%
AMB Property Corporation		02/08/05	$	614,623	$	0	$	614,623		28,435			0.03086	%
AMB Property Corporation		02/09/05	$	3,584,954	$	0	$	3,584,954		145,339			0.15776	%
AMB Property Corporation		02/10/05	$	91,083	$	0	$	91,083		4,250			0.00461	%
AMB Property Corporation		02/11/05	$	395,327	$	0	$	395,327		17,334			0.01882	%
AMB Property Corporation		02/14/05	$	997,045	$	0	$	997,045		41,834			0.04541	%
AMB Property Corporation		02/15/05	$	617,238	$	0	$	617,238		27,500			0.02985	%
AMB Property Corporation		02/23/05	$	193,598	$	0	$	193,598		9,000			0.00977	%
AMB Property Corporation		02/27/05	$	0	$	0	$	0		(22	)		-0.00002	%
AMB Property Corporation		03/04/05	$	73,872	$	0	$	73,872		2,500			0.00271	%
AMB Property Corporation		03/07/05	$	582,861	$	0	$	582,861		22,918			0.02488	%
AMB Property Corporation		03/08/05	$	16,975	$	0	$	16,975		625			0.00068	%
AMB Property Corporation		03/14/05	$	9,028	$	0	$	9,028		333			0.00036	%
AMB Property Corporation		03/29/05	$	209,900	$	0	$	209,900		10,000			0.01085	%
AMB Property Corporation		04/01/05	$	0	$	0	$	0		1,000			0.00109	%
AMB Property Corporation		04/01/05	$	0	$	0	$	0		(1,500	)		-0.00163	%
AMB Property Corporation		04/15/05	$	0	$	0	$	0		(762	)		-0.00083	%
AMB Property Corporation		04/15/05	$	0	$	0	$	0		(375	)		-0.00041	%
AMB Property Corporation		04/22/05	$	1,050	$	0	$	1,050		50			0.00005	%
AMB Property Corporation		04/22/05	$	0	$	0	$	0		(500	)		-0.00054	%
AMB Property Corporation		04/26/05	$	28,232	$	0	$	28,232		1,083			0.00118	%
AMB Property Corporation		04/28/05	$	1,234,863	$	0	$	1,234,863		61,200			0.06643	%
AMB Property Corporation		04/29/05	$	278,073	$	0	$	278,073		10,800			0.01172	%
AMB Property Corporation		05/02/05	$	581,789	$	0	$	581,789		24,900			0.02703	%
AMB Property Corporation		05/05/05	$	115,465	$	0	$	115,465		5,000			0.00543	%
AMB Property Corporation		05/06/05	$	58,762	$	0	$	58,762		1,667			0.00181	%
AMB Property Corporation		05/09/05	$	2,255,250	$	0	$	2,255,250		100,000			0.10855	%
AMB Property Corporation		05/10/05	$	131,226	$	0	$	131,226		5,416			0.00588	%
AMB Property Corporation		05/12/05	$	0	$	0	$	0		9,246			0.01004	%
AMB Property Corporation		05/18/05	$	175,209	$	0	$	175,209		6,667			0.00724	%
AMB Property Corporation		05/19/05	$	38,426	$	0	$	38,426		1,167			0.00127	%
AMB Property Corporation		05/23/05	$	11,401	$	0	$	11,401		500			0.00054	%
AMB Property Corporation		05/24/05	$	69,708	$	0	$	69,708		3,225			0.00350	%
AMB Property Corporation		05/31/05	$	77,004	$	0	$	77,004		2,834			0.00308	%
AMB Property Corporation		06/03/05	$	0	$	0	$	0		(500	)		-0.00054	%
AMB Property Corporation		06/07/05	$	170,915	$	0	$	170,915		8,500			0.00923	%
AMB Property Corporation		06/08/05	$	26,340	$	0	$	26,340		1,050			0.00114	%
AMB Property Corporation		06/13/05	$	6,743	$	0	$	6,743		250			0.00027	%
AMB Property Corporation		06/13/05	$	0	$	0	$	0		3,000			0.00326	%
AMB Property Corporation		06/20/05	$	287,335	$	0	$	287,335		10,834			0.01176	%
AMB Property Corporation		07/11/05	$	314,850	$	0	$	314,850		15,000			0.01628	%
AMB Property Corporation		07/15/05	$	10,289,995	$	0	$	10,289,995		417,142			0.45279	%
AMB Property Corporation		07/18/05	$	9,970,412	$	0	$	9,970,412		383,980			0.41679	%
AMB Property Corporation		07/19/05	$	774,467	$	0	$	774,467		27,500			0.02985	%
AMB Property Corporation		07/20/05	$	403,153	$	0	$	403,153		15,750			0.01710	%
AMB Property Corporation		07/20/05	$	0	$	0	$	0		17,670			0.01918	%
AMB Property Corporation		07/22/05	$	296,255	$	0	$	296,255		13,706			0.01488	%
AMB Property Corporation		07/25/05	$	201,775	$	0	$	201,775		10,000			0.01085	%
AMB Property Corporation		07/26/05	$	207,381	$	0	$	207,381		7,026			0.00763	%
AMB Property Corporation		07/27/05	$	52,520	$	0	$	52,520		2,000			0.00217	%
AMB Property Corporation		07/27/05	$	0	$	65,835	$	65,835		2,800			0.00304	%
AMB Property Corporation		07/28/05	$	185,035	$	0	$	185,035		7,084			0.00769	%
AMB Property Corporation		07/29/05	$	236,138	$	0	$	236,138		11,250			0.01221	%

					Agreed Value of				Common
	Contribution		Cash		Contributed		Total		Partnership			Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units			Interest
AMB Property Corporation		08/01/05	$	0	$	0	$	0		3,000			0.00326	%
AMB Property Corporation		08/10/05	$	0	$	580,747	$	580,747		23,801			0.02583	%
AMB Property Corporation		08/12/05	$	38,907	$	0	$	38,907		1,800			0.00195	%
AMB Property Corporation		08/15/05	$	13,485	$	0	$	13,485		500			0.00054	%
AMB Property Corporation		08/22/05	$	0	$	0	$	0		1,000			0.00109	%
AMB Property Corporation		08/24/05	$	0	$	0	$	0		(264	)		-0.00029	%
AMB Property Corporation		08/24/05	$	0	$	0	$	0		(1,225	)		-0.00133	%
AMB Property Corporation		09/01/05	$	0	$	1,806,612	$	1,806,612		77,000			0.08358	%
AMB Property Corporation		09/06/05	$	209,900	$	0	$	209,900		10,000			0.01085	%
AMB Property Corporation		09/09/05	$	12,990	$	0	$	12,990		500			0.00054	%
AMB Property Corporation		09/15/05	$	127,039	$	0	$	127,039		4,686			0.00509	%
AMB Property Corporation		09/16/05	$	24,240	$	0	$	24,240		1,000			0.00109	%
AMB Property Corporation		09/16/05	$	0	$	432,513	$	432,513		18,000			0.01954	%
AMB Property Corporation		09/22/05	$	0	$	0	$	0		1,000			0.00109	%
AMB Property Corporation		09/22/05	$	0	$	432,513	$	432,513		18,000			0.01954	%
AMB Property Corporation		10/01/05	$	0	$	0	$	0		(36,981	)		-0.04014	%
AMB Property Corporation		10/03/05	$	1,146,804	$	0	$	1,146,804		38,476			0.04176	%
AMB Property Corporation		10/03/05	$	0	$	0	$	0		2,000			0.00217	%
AMB Property Corporation		10/06/05	$	0	$	0	$	0		6,733			0.00731	%
AMB Property Corporation		10/12/05	$	0	$	2,325,302	$	2,325,302		98,575			0.10700	%
AMB Property Corporation		10/16/05	$	0	$	0	$	0		(412	)		-0.00045	%
AMB Property Corporation		10/18/05	$	86,460	$	0	$	86,460		4,000			0.00434	%
AMB Property Corporation		10/19/05	$	18,455	$	0	$	18,455		500			0.00054	%
AMB Property Corporation		10/24/05	$	19,695	$	0	$	19,695		750			0.00081	%
AMB Property Corporation		10/26/05	$	0	$	0	$	0		3,409			0.00370	%
AMB Property Corporation		10/27/05	$	20,428	$	0	$	20,428		1,000			0.00109	%
AMB Property Corporation		10/31/05	$	762,690	$	0	$	762,690		31,000			0.03365	%
AMB Property Corporation		11/02/05	$	0	$	0	$	0		(937	)		-0.00102	%
AMB Property Corporation		11/9/05	$	731,369	$	0	$	731,369		21,241			0.02306	%
AMB Property Corporation		11/10/05	$	54,016	$	0	$	54,016		2,499			0.00271	%
AMB Property Corporation		11/11/05	$	49,094	$	0	$	49,094		1,584			0.00172	%
AMB Property Corporation		11/11/05	$	0	$	0	$	0		43,810			0.04755	%
AMB Property Corporation		11/15/05	$	23,069	$	0	$	23,069		625			0.00068	%
AMB Property Corporation		11/17/05	$	13,485	$	0	$	13,485		500			0.00054	%
AMB Property Corporation		11/18/05	$	97,844	$	0	$	97,844		4,467			0.00485	%
AMB Property Corporation		11/21/05	$	825,493	$	0	$	825,493		34,534			0.03749	%
AMB Property Corporation		11/22/05	$	9,228	$	0	$	9,228		250			0.00027	%
AMB Property Corporation		11/23/05	$	151,576	$	0	$	151,576		5,921			0.00643	%
AMB Property Corporation		11/28/05	$	881,479	$	0	$	881,479		41,400			0.04494	%
AMB Property Corporation		11/29/05	$	8,148	$	0	$	8,148		250			0.00027	%
AMB Property Corporation		11/30/05	$	0	$	0	$	0		(432	)		-0.00047	%
AMB Property Corporation		12/01/05	$	471,103	$	0	$	471,103		22,750			0.02469	%
AMB Property Corporation		12/02/05	$	1,118,586	$	0	$	1,118,586		49,550			0.05378	%
AMB Property Corporation		12/06/05	$	15,787	$	0	$	15,787		700			0.00076	%
AMB Property Corporation		12/08/05	$	1,001,245	$	0	$	1,001,245		43,394			0.04710	%
AMB Property Corporation		12/09/05	$	146,150	$	0	$	146,150		5,000			0.00543	%
AMB Property Corporation		12/12/05	$	728,439	$	0	$	728,439		30,800			0.03343	%
AMB Property Corporation		12/12/05	$	0	$	0	$	0		1,000			0.00109	%
AMB Property Corporation		12/14/05	$	146,591	$	0	$	146,591		6,500			0.00706	%
AMB Property Corporation		12/15/05	$	672,562	$	0	$	672,562		28,900			0.03137	%
AMB Property Corporation		12/23/05	$	0	$	0	$	0		10,000			0.01085	%
AMB Property Corporation		12/23/05	$	0	$	82,294	$	82,294		3,500			0.00380	%
AMB Property Corporation		12/23/05	$	0	$	0	$	0		306			0.00033	%
AMB Property Corporation		01/03/06	$	56,557	$	0	$	56,557		2,300			0.00250	%
AMB Property Corporation		01/04/06	$	107,666	$	0	$	107,666		4,100			0.00445	%
AMB Property Corporation		01/05/06	$	78,780	$	0	$	78,780		3,000			0.00326	%
AMB Property Corporation		01/06/06	$	278,084	$	0	$	278,084		11,100			0.01205	%
AMB Property Corporation		01/06/06	$	0	$	0	$	0		(1,556	)		-0.00169	%
AMB Property Corporation		01/09/06	$	1,675,285	$	0	$	1,675,285		67,694			0.07348	%
AMB Property Corporation		01/10/06	$	40,665	$	0	$	40,665		1,500			0.00163	%
AMB Property Corporation		01/11/06	$	27,110	$	0	$	27,110		1,000			0.00109	%
AMB Property Corporation		01/12/06	$	22,610	$	0	$	22,610		834			0.00091	%
AMB Property Corporation		01/13/06	$	55,499	$	0	$	55,499		1,883			0.00204	%
AMB Property Corporation		01/17/06	$	27,110	$	0	$	27,110		1,000			0.00109	%
AMB Property Corporation		01/18/06	$	27,110	$	0	$	27,110		1,000			0.00109	%
AMB Property Corporation		01/19/06	$	62,360	$	0	$	62,360		2,000			0.00217	%
AMB Property Corporation		01/20/06	$	141,000	$	0	$	141,000		4,000			0.00434	%
AMB Property Corporation		01/23/06	$	98,126	$	0	$	98,126		2,992			0.00325	%
AMB Property Corporation		01/23/06	$	0	$	0	$	0		4,000			0.00434	%
AMB Property Corporation		01/24/06	$	54,839	$	0	$	54,839		1,792			0.00195	%

					Agreed Value of				Common
	Contribution		Cash		Contributed		Total		Partnership			Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units			Interest
AMB Property Corporation		01/26/06	$	3,266,601	$	0	$	3,266,601		412,817			0.44809	%
AMB Property Corporation		01/26/06	$	0	$	0	$	0		11,318			0.01229	%
AMB Property Corporation		01/27/06	$	6,166,672	$	0	$	6,166,672		280,995			0.30501	%
AMB Property Corporation		01/30/06	$	224,049	$	0	$	224,049		10,474			0.01137	%
AMB Property Corporation		01/31/06	$	1,448,032	$	0	$	1,448,032		305,888			0.33203	%
AMB Property Corporation		01/31/06	$	0	$	0	$	0		(26,647	)		-0.02892	%
AMB Property Corporation		02/01/06	$	2,227,808	$	0	$	2,227,808		88,667			0.09624	%
AMB Property Corporation		02/02/06	$	450,588	$	0	$	450,588		18,750			0.02035	%
AMB Property Corporation		02/03/06	$	100,888	$	0	$	100,888		5,000			0.00543	%
AMB Property Corporation		02/06/06	$	0	$	0	$	0		424,934			0.46125	%
AMB Property Corporation		02/06/06	$	315,661	$	0	$	315,661		8,778			0.00953	%
AMB Property Corporation		02/15/06	$	135,550	$	0	$	135,550		5,000			0.00543	%
AMB Property Corporation		02/16/06	$	23,069	$	0	$	23,069		625			0.00068	%
AMB Property Corporation		02/22/06	$	1,128,685	$	0	$	1,128,685		44,667			0.04848	%
AMB Property Corporation		02/23/06	$	943,800	$	0	$	943,800		39,000			0.04233	%
AMB Property Corporation		02/21/06	$	0	$	0	$	0		1,000			0.00109	%
AMB Property Corporation		02/24/06	$	20,990	$	0	$	20,990		1,000			0.00109	%
AMB Property Corporation		02/27/06	$	68,852	$	0	$	68,852		2,800			0.00304	%
AMB Property Corporation		02/27/06	$	0	$	0	$	0		(24	)		-0.00003	%
AMB Property Corporation		02/28/06	$	75,041	$	0	$	75,041		3,331			0.00362	%
AMB Property Corporation		03/02/06	$	131,188	$	0	$	131,188		6,250			0.00678	%
AMB Property Corporation		03/03/06	$	629,700	$	0	$	629,700		30,000			0.03256	%
AMB Property Corporation		03/09/06	$	15,420	$	0	$	15,420		400			0.00043	%
AMB Property Corporation		03/10/06	$	989,731	$	0	$	989,731		46,600			0.05058	%
AMB Property Corporation		03/13/06	$	536,780	$	0	$	536,780		21,300			0.02312	%
AMB Property Corporation		03/14/06	$	332,829	$	0	$	332,829		13,100			0.01422	%
AMB Property Corporation		03/15/06	$	3,496,723	$	0	$	3,496,723		140,477			0.15248	%
AMB Property Corporation		03/16/06	$	2,027,595	$	0	$	2,027,595		77,400			0.08401	%
AMB Property Corporation		03/17/06	$	209,900	$	0	$	209,900		10,000			0.01085	%
AMB Property Corporation		03/22/06	$	104,950	$	0	$	104,950		5,000			0.00543	%
AMB Property Corporation		03/23/06	$	99,227	$	0	$	99,227		3,001			0.00326	%
AMB Property Corporation		03/27/06	$	144,831	$	0	$	144,831		6,900			0.00749	%
AMB Property Corporation		03/28/06	$	108,075	$	0	$	108,075		5,000			0.00543	%
AMB Property Corporation		03/29/06	$	106,138	$	0	$	106,138		5,000			0.00543	%
AMB Property Corporation		03/30/06	$	101,730	$	0	$	101,730		5,000			0.00543	%
AMB Property Corporation		03/31/06	$	248,335	$	0	$	248,335		10,000			0.01085	%
AMB Property Corporation		04/01/06	$	0	$	0	$	0		(1,134	)		-0.00123	%
AMB Property Corporation		04/03/06	$	452,967	$	0	$	452,967		16,060			0.01743	%
AMB Property Corporation		04/04/06	$	0	$	0	$	0		500			0.00054	%
AMB Property Corporation		04/12/06	$	0	$	0	$	0		(500	)		-0.00054	%
AMB Property Corporation		04/17/06	$	542,411	$	0	$	542,411		23,800			0.02583	%
AMB Property Corporation		04/17/06	$	0	$	0	$	0		500			0.00054	%
AMB Property Corporation		04/19/06	$	244,600	$	0	$	244,600		10,000			0.01085	%
AMB Property Corporation		04/20/06	$	52,018	$	0	$	52,018		1,459			0.00158	%
AMB Property Corporation		04/30/06	$	0	$	0	$	0		(58	)		-0.00006	%
AMB Property Corporation		05/01/06	$	115,915	$	0	$	115,915		3,417			0.00371	%
AMB Property Corporation		05/03/06	$	135,550	$	0	$	135,550		5,000			0.00543	%
AMB Property Corporation		05/05/06	$	19,618	$	0	$	19,618		584			0.00063	%
AMB Property Corporation		05/08/06	$	17,918	$	0	$	17,918		500			0.00054	%
AMB Property Corporation		05/10/06	$	9,228	$	0	$	9,228		250			0.00027	%
AMB Property Corporation		05/11/06	$	9,263	$	0	$	9,263		250			0.00027	%
AMB Property Corporation		05/11/06	$	0	$	0	$	0		12,418			0.01348	%
AMB Property Corporation		05/15/06	$	0	$	0	$	0		(500	)		-0.00054	%
AMB Property Corporation		05/22/06	$	1,478,840	$	0	$	1,478,840		54,031			0.05865	%
AMB Property Corporation		05/30/06	$	66,434	$	0	$	66,434		1,857			0.00202	%
AMB Property Corporation		05/31/06	$	16,295	$	0	$	16,295		500			0.00054	%
AMB Property Corporation		06/01/06	$	0	$	0	$	0		(338	)		-0.00037	%
AMB Property Corporation		06/01/06	$	0	$	0	$	0		(3,100	)		-0.00336	%
AMB Property Corporation		06/02/06	$	9,263	$	0	$	9,263		250			0.00027	%
AMB Property Corporation		06/05/06	$	19,978	$	0	$	19,978		559			0.00061	%
AMB Property Corporation		06/06/06	$	9,263	$	0	$	9,263		250			0.00027	%
AMB Property Corporation		06/07/06	$	657,000	$	0	$	657,000		25,000			0.02714	%
AMB Property Corporation		06/07/06	$	0	$	0	$	0		(1,937	)		-0.00210	%
AMB Property Corporation		06/09/06	$	9,263	$	0	$	9,263		250			0.00027	%
AMB Property Corporation		06/13/06	$	51,800	$	0	$	51,800		1,875			0.00204	%
AMB Property Corporation		06/23/06	$	9,228	$	0	$	9,228		250			0.00027	%
AMB Property Corporation		06/26/06	$	3,248	$	0	$	3,248		125			0.00014	%
Total General Partner				29,270,592		1,732,675,307		1,761,918,871		87,870,052

					Agreed Value of						Common
	Contribution		Cash		Contributed			Total			Partnership			Percentage
Name of Partner	Date		Contributions		Property			Contributions			Units			Interest
Limited Partners:
David Brown		11/26/97	$	0	$	1,150,359		$	1,150,359			54,779			0.05946	%
Daniel Sarhad		11/26/97	$	0	$	6,174		$	6,174			294			0.00032	%
Craig Duncan		11/26/97	$	0	$	216,447		$	216,447			10,307			0.01119	%
GP Met Phase I		11/26/97	$	0	$	1,774,164		$	1,774,164			84,484			0.09170	%
GP Met 4 & 12		11/26/97	$	0	$	1,486,212		$	1,486,212			70,772			0.07682	%
Holbrook W. Goodale 54 Trust		11/26/97	$	0	$	1,118,754		$	1,118,754			53,274			0.05783	%
Charles R. Wichman 54 Trust		11/26/97	$	0	$	1,118,754		$	1,118,754			53,274			0.05783	%
Frederick B. Wichman 54 Trust		11/26/97	$	0	$	1,118,754		$	1,118,754			53,274			0.05783	%
Holbrook W. Goodale 57 Trust		11/26/97	$	0	$	3,919,734		$	3,919,734			186,654			0.20260	%
Charles R. Wichman 57 Trust		11/26/97	$	0	$	3,919,734		$	3,919,734			186,654			0.20260	%
Frederick B. Wichman 57 Trust		11/26/97	$	0	$	3,919,734		$	3,919,734			186,654			0.20260	%
Holbrook W. Goodale 58 Trust		11/26/97	$	0	$	3,919,734		$	3,919,734			186,654			0.20260	%
Charles R. Wichman 58 Trust		11/26/97	$	0	$	3,919,734		$	3,919,734			186,654			0.20260	%
Frederick B. Wichman 58 Trust		11/26/97	$	0	$	3,919,734		$	3,919,734			186,654			0.20260	%
Allmerica		11/26/97	$	0	$	11,752,188		$	11,752,188			559,628			0.60745	%
Gamble		11/26/97	$	0	$	10,125,213		$	10,125,213			482,153			0.52335	%
Campanelli Investment Properties, LLC		03/30/98	$	0	$	12,435,871		$	12,435,871			517,547			0.56177	%
Campanelli Enterprises (c)		03/30/98	$	0	$	10,334,678		$	10,334,678			438,110			0.47555	%
Steve Liefschultz		03/31/98	$	0	$	1,990,798		$	1,990,798			81,174			0.08811	%
Stephen M. Vincent		03/31/98	$	0	$	634,825		$	634,825			25,884			0.02810	%
Alan Wilensky		03/31/98	$	0	$	266,073		$	266,073			10,849			0.01178	%
Craig Gagnon		03/31/98	$	0	$	806,404		$	806,404			32,880			0.03569	%
Seefried Properties, Inc.		06/04/98	$	0	$	61,250		$	61,250			2,590			0.00281	%
Monique Brouillet Seefried		06/04/98	$	0	$	660,275		$	660,275			27,916			0.03030	%
Robert S. Rakusin		06/04/98	$	0	$	319,725		$	319,725			13,518			0.01467	%
Gerald L. Daws		06/04/98	$	0	$	147,000		$	147,000			6,215			0.00675	%
Thomas Ellis		06/04/98	$	0	$	36,750		$	36,750			1,554			0.00169	%
James E. Hayes as trustee of the James E. Hayes Living Trust under Agreement dated August 22, 1995		06/30/98	$	0	$	580,747		$	580,747			23,801			0.02583	%
Lawrence J. Hayes		06/30/98	$	0	$	580,747		$	580,747			23,801			0.02583	%
Lincoln Property Company No. 238 Ltd.		09/24/98	$	0	$	8,320,955		$	8,320,955			353,520			0.38373	%
Lincoln Property Company No. 287, LTD		09/24/98	$	0	$	2,760,957		$	2,760,957			117,300			0.12732	%
Lincoln Property Company No. 355, LTD		09/24/98	$	0	$	739,600		$	739,600			31,422			0.03411	%
Lincoln Property Company No. 440, LTD		09/24/98	$	0	$	767,640		$	767,640			32,614			0.03540	%
Lincoln Property Company No. 1179		09/24/98	$	0	$	3,883,230		$	3,883,230			164,981			0.17908	%
Alan Wilensky		12/31/98	$	0	($	44,145	)	($	44,145	)		(1,800	)		-0.00195	%
Julie H. Wilensky		12/31/98	$	0	$	22,073		$	22,073			900			0.00098	%
Constance J. Wilensky		12/31/98	$	0	$	22,073		$	22,073			900			0.00098	%
Alan Wilensky		01/31/99	$	0	($	44,145	)	($	44,145	)		(1,800	)		-0.00195	%
Julie H. Wilensky		01/31/99	$	0	$	22,073		$	22,073			900			0.00098	%
Constance J. Wilensky		01/31/99	$	0	$	22,073		$	22,073			900			0.00098	%
William H. Winstead III		02/09/99	$	0	$	2,376		$	2,376			99			0.00011	%
Donald A. Manekin		02/09/99	$	0	$	4,056		$	4,056			169			0.00018	%
Bernard Manekin		02/09/99	$	0	$	2,808		$	2,808			117			0.00013	%
Harold Manekin		02/09/99	$	0	$	2,592		$	2,592			108			0.00012	%
Vivian Manekin		02/09/99	$	0	$	144		$	144			6			0.00001	%
Francine U. Manekin		02/09/99	$	0	$	144		$	144			6			0.00001	%
RA & DM, Inc.		02/09/99	$	0	$	96		$	96			4			0.00000	%
RA & FM, Inc.		02/09/99	$	0	$	888		$	888			37			0.00004	%
Richard M. Alter		02/09/99	$	0	$	7,080		$	7,080			295			0.00032	%
Robert Manekin		02/09/99	$	0	$	1,080		$	1,080			45			0.00005	%
Richard P. Manekin		02/09/99	$	0	$	1,536		$	1,536			64			0.00007	%
Charles H. Manekin		02/09/99	$	0	$	672		$	672			28			0.00003	%
Louis C. LaPenna		02/09/99	$	0	$	432		$	432			18			0.00002	%
Sandye Manekin Sirota		02/09/99	$	0	$	912		$	912			38			0.00004	%
Julie H. Wilensky		04/23/99	$	0	($	44,145	)	($	44,145	)		(1,800	)		-0.00195	%
Constance J. Wilensky		04/23/99	$	0	($	44,145	)	($	44,145	)		(1,800	)		-0.00195	%
William H. Winstead III		04/30/99	$	0	$	888,379		$	888,379			37,016			0.04018	%
Donald A. Manekin		04/30/99	$	0	$	1,479,701		$	1,479,701			61,654			0.06692	%
Bernard Manekin		04/30/99	$	0	$	1,046,686		$	1,046,686			43,612			0.04734	%
Harold Manekin		04/30/99	$	0	$	966,601		$	966,601			40,275			0.04372	%
Vivian Manekin		04/30/99	$	0	$	55,873		$	55,873			2,328			0.00253	%
Francine U. Manekin		04/30/99	$	0	$	55,873		$	55,873			2,328			0.00253	%
RA & DM, Inc.		04/30/99	$	0	$	93,122		$	93,122			3,880			0.00421	%
RA & FM, Inc.		04/30/99	$	0	$	121,732		$	121,732			5,072			0.00551	%
Richard M. Alter		04/30/99	$	0	$	2,777,815		$	2,777,815			115,742			0.12563	%
Robert Manekin		04/30/99	$	0	$	569,904		$	569,904			23,746			0.02578	%
Richard P. Manekin		04/30/99	$	0	$	569,904		$	569,904			23,746			0.02578	%
Charles H. Manekin		04/30/99	$	0	$	246,772		$	246,772			10,282			0.01116	%
Louis C. LaPenna		04/30/99	$	0	$	159,238		$	159,238			6,635			0.00720	%
Sandye Manekin Sirota		04/30/99	$	0	$	343,618		$	343,618			14,317			0.01554	%
Gamble		05/12/99	$	0	($	10,125,213	)	($	10,125,213	)		(482,153	)		-0.52335	%
Campanelli Investment Properties, LLC		05/21/99	$	0	$	450,811		$	450,811			18,638			0.02023	%
CBDV Investors, L.L.C.		05/26/99	$	0	$	5,000,000		$	5,000,000			212,766			0.23095	%
Gerald L. Daws		06/04/99	$	0	($	147,000	)	($	147,000	)		(6,215	)		-0.00675	%
CBDV Investors, L.L.C.		07/30/99	$	0	($	5,000,000	)	($	5,000,000	)		(212,766	)		-0.23095	%
Tiger Lafayette, L.L.C.		07/30/99	$	0	$	3,255,596		$	3,255,596			138,536			0.15037	%
Divco Western Commercial, L.L.C.		07/30/99	$	0	$	872,202		$	872,202			37,115			0.04029	%
ICCL East, L.L.C.		07/30/99	$	0	$	872,202		$	872,202			37,115			0.04029	%
Lawrence J. Hayes		08/03/99	$	0	($	244,000	)	($	244,000	)		(10,000	)		-0.01085	%
GP Met 4 & 12		09/15/99	$	0	($	840,000	)	($	840,000	)		(40,000	)		-0.04342	%
Lincoln Property Company No. 238 Ltd.		09/30/99	$	0	$	282		$	282			12			0.00001	%
Lincoln Property Company No. 287, Ltd		09/30/99	$	0	$	26,668		$	26,668			1,133			0.00123	%
Lincoln Property Company No. 355, Ltd.		09/30/99	$	0	$	45,780		$	45,780			1,945			0.00211	%
Lincoln Property Company No. 440, Ltd.		09/30/99	$	0	$	10,639		$	10,639			452			0.00049	%
Lincoln Property Company No. 1179		09/30/99	$	0	$	2,354		$	2,354			100			0.00011	%
Lincoln Property Company No. 238 Ltd.		09/30/99	$	0	($	8,321,259	)	($	8,321,259	)		(353,532	)		-0.38374	%
Lincoln Property Company No. 287, Ltd		09/30/99	$	0	($	2,508,862	)	($	2,508,862	)		(106,590	)		-0.11570	%
Lincoln Property Company No. 355, Ltd.		09/30/99	$	0	($	765,722	)	($	765,722	)		(32,532	)		-0.03531	%
Lincoln Property Company No. 440, Ltd.		09/30/99	$	0	($	762,733	)	($	762,733	)		(32,405	)		-0.03517	%
Lincoln Property Company No. 1179		09/30/99	$	0	($	3,613,595	)	($	3,613,595	)		(153,525	)		-0.16664	%
Mack Pogue		09/30/99	$	0	$	98,834		$	98,834			4,199			0.00456	%
Edgar M. Thrift, Jr.		09/30/99	$	0	$	2,006,831		$	2,006,831			85,261			0.09255	%
Preston Butcher		09/30/99	$	0	$	6,539,424		$	6,539,424			277,830			0.30157	%
Gary J. Rossi		09/30/99	$	0	$	112,933		$	112,933			4,798			0.00521	%
Stuart L. Leeder		09/30/99	$	0	$	46,698		$	46,698			1,984			0.00215	%
Mack Pogue Inc.		09/30/99	$	0	$	5,073,438		$	5,073,438			215,547			0.23397	%
Edward D. O’Brien		09/30/99	$	0	$	743,761		$	743,761			31,599			0.03430	%
David Brent Pogue		09/30/99	$	0	$	1,350,252		$	1,350,252			57,366			0.06227	%
Lincoln Property Company No. 287, Ltd.		11/30/99	$	0	($	278,763	)	($	278,763	)		(11,843	)		-0.01286	%
Lincoln Property Company No. 355, Ltd.		11/30/99	$	0	($	19,658	)		(19,658	)		(835	)		-0.00091	%
Lincoln Property Company No. 440, Ltd.		11/30/99	$	0	($	15,546	)	($	15,546	)		(661	)		-0.00072	%
Lincoln Property Company No. 1179		11/30/99	$	0	($	271,989	)	($	271,989	)		(11,556	)		-0.01254	%
Douglas D. Abbey (Trust)		01/07/00	$	0	$	0		$	0			312,071			0.33874	%
Luis A. Belmonte (Trust)		01/07/00	$	0	$	0		$	0			37,013			0.04018	%
T. Robert Burke		01/07/00	$	0	$	0		$	0			235,506			0.25563	%
S. Davis Carniglia		01/07/00	$	0	$	0		$	0			62,366			0.06770	%
John H. Diserens		01/07/00	$	0	$	0		$	0			78,988			0.08574	%
Bruce H. Freedman		01/07/00	$	0	$	0		$	0			25,868			0.02808	%
Jean C. Hurley		01/07/00	$	0	$	0		$	0			32,206			0.03496	%
Barbara J. Linn (Trust)		01/07/00	$	0	$	0		$	0			56,028			0.06082	%
Hamid R. Moghadam		01/07/00	$	0	$	0		$	0			388,126			0.42129	%
Craig A. Severance		01/07/00	$	0	$	0		$	0			91,158			0.09895	%
W. Blake Baird		01/07/00	$	0	$	0		$	0			25,569			0.02775	%
Steven J. Callaway		01/07/00	$	0	$	0		$	0			5,114			0.00555	%
Steve E. Campbell		01/07/00	$	0	$	0		$	0			3,409			0.00370	%
Michael A. Coke		01/07/00	$	0	$	0		$	0			8,439			0.00916	%
Martin J. Coyne		01/07/00	$	0	$	0		$	0			3,409			0.00370	%
David G. Doyno		01/07/00	$	0	$	0		$	0			3,409			0.00370	%
David S. Fries		01/07/00	$	0	$	0		$	0			15,257			0.01656	%
Kent D. Greenawalt		01/07/00	$	0	$	0		$	0			5,114			0.00555	%
Jane L. Harris		01/07/00	$	0	$	0		$	0			6,818			0.00740	%
Carlie P. Headapohl		01/07/00	$	0	$	0		$	0			3,409			0.00370	%
Tyler W. Higgins (Trust)		01/07/00	$	0	$	0		$	0			6,818			0.00740	%
Steven T. Kimball		01/07/00	$	0	$	0		$	0			3,409			0.00370	%
John T. Meyer		01/07/00	$	0	$	0		$	0			5,114			0.00555	%
John T. Roberts, Jr.		01/07/00	$	0	$	0		$	0			8,439			0.00916	%
John L. Rossi		01/07/00	$	0	$	0		$	0			3,409			0.00370	%
Cynthia J. Sarver		01/07/00	$	0	$	0		$	0			3,409			0.00370	%
Christine G. Schadlich		01/07/00	$	0	$	0		$	0			6,733			0.00731	%
Andrew N. Singer		01/07/00	$	0	$	0		$	0			5,114			0.00555	%
Gayle P. Starr		01/07/00	$	0	$	0		$	0			5,114			0.00555	%
William Steinberg		01/07/00	$	0	$	0		$	0			6,818			0.00740	%
K.C. Swartzel		01/07/00	$	0	$	0		$	0			6,818			0.00740	%
Celia M. Tanaka		01/07/00	$	0	$	0		$	0			3,409			0.00370	%
Janice G. Thacher		01/07/00	$	0	$	0		$	0			2,045			0.00222	%
GP Met 4 & 12		07/06/00	$	0	($	646,212	)	($	646,212	)		(30,772	)		-0.03340	%
ICCL East, L.L.C.		07/06/00	$	0	($	872,202	)	($	872,202	)		(37,115	)		-0.04029	%
Tiger Lafayette, L.L.C.		07/06/00	$	0	($	3,255,596	)	($	3,255,596	)		(138,536	)		-0.15037	%
AFCO Cargo DFW Limited Partnership		11/07/00	$	0	$	1,046,849		$	1,046,849			44,523			0.04833	%
West*Pac LP, LLP		11/07/00	$	0	$	134,609		$	134,609			5,725			0.00621	%
AFCO Cargo SEA LP, LLP		11/07/00	$	0	$	1,046,848		$	1,046,848			44,523			0.04833	%
Campanelli Investment Properties, LLC		11/09/00	$	0	($	798,804	)	($	798,804	)		(34,046	)		-0.03696	%
Thomas Ellis		02/28/01	$	0	($	36,750	)	($	36,750	)		(1,554	)		-0.00169	%
Divco Western Commercial, L.L.C.		03/07/01	$	0	($	872,202	)	($	872,202	)		(37,115	)		-0.04029	%
Allmerica		03/23/01	$	0	($	11,752,188	)	($	11,752,188	)		(559,628	)		-0.60745	%
Campanelli Investment Properties, LLC		08/17/01	$	0	($	1,597,608	)	($	1,597,608	)		(68,092	)		-0.07391	%
Joseph Campanelli		08/17/01	$	0	$	798,804		$	798,804			34,046			0.03696	%
Nicholas Campanelli		08/17/01	$	0	$	798,804		$	798,804			34,046			0.03696	%
Joseph Campanelli		08/17/01	$	0	($	798,804	)	($	798,804	)		(34,046	)		-0.03696	%
Nicholas Campanelli		08/17/01	$	0	($	798,804	)	($	798,804	)		(34,046	)		-0.03696	%
Campanelli Investment Properties, LLC		09/07/01	$	0	($	8,494,501	)	($	8,494,501	)		(362,046	)		-0.39298	%
Joseph Campanelli		09/07/01	$	0	$	1,923,924		$	1,923,924			82,000			0.08901	%
Nicholas Campanelli		09/07/01	$	0	$	1,923,924		$	1,923,924			82,000			0.08901	%
Alfred Campanelli Revocable Holding Trust		09/07/01	$	0	$	2,722,729		$	2,722,729			116,046			0.12596	%
Trust B u/w Michael Campanelli		09/07/01	$	0	$	1,923,924		$	1,923,924			82,000			0.08901	%
Joseph Campanelli		09/07/01	$	0	($	1,818,750	)	($	1,818,750	)		(75,000	)		-0.08141	%
Nicholas Campanelli		09/07/01	$	0	($	1,818,750	)	($	1,818,750	)		(75,000	)		-0.08141	%
Edward D. O’Brien		09/18/01	$	0	($	557,838	)	($	557,838	)		(23,700	)		-0.02573	%
Lawrence J. Hayes		11/09/01	$	0	($	337,710	)	($	337,710	)		(13,801	)		-0.01498	%
Trust B u/w Michael Campanelli		11/16/01	$	0	($	121,900	)	($	121,900	)		(5,000	)		-0.00543	%
William Steinberg		01/11/02	$	0	($	177,609	)	($	177,609	)		(6,818	)		-0.00740	%
Celia M. Tanaka		01/11/02	$	0	($	88,804	)	($	88,804	)		(3,409	)		-0.00370	%
Stephen M. Vincent		02/01/02	$	0	($	634,825	)	($	634,825	)		(25,884	)		-0.02810	%
Campanelli Enterprises		03/29/02	$	0	($	10,334,678	)	($	10,334,678	)		(438,110	)		-0.47555	%
Joseph Campanelli		03/29/02	$	0	$	2,325,302		$	2,325,302			98,575			0.10700	%
Nicholas Campanelli		03/29/02	$	0	$	2,325,302		$	2,325,302			98,575			0.10700	%
Alfred Campanelli Revocable Holding Trust		03/29/02	$	0	$	2,325,302		$	2,325,302			98,575			0.10700	%
Robert DeMarco		03/29/02	$	0	$	2,325,302		$	2,325,302			98,575			0.10700	%
Ronald Campanelli		03/29/02	$	0	$	1,033,468		$	1,033,468			43,810			0.04755	%
Janice G. Thacher		07/05/02	$	0	($	70,803	)	($	70,803	)		(2,045	)		-0.00222	%
GP Met Phase I-95, Ltd.		07/05/02	$	0	($	1,774,164	)	($	1,774,164	)		(84,484	)		-0.09170	%
AFCO Cargo DFW Limited Partnership		04/16/03	$	0	($	320,644	)	($	320,644	)		(11,524	)		-0.01251	%
Alfred Campanelli Revocable Holding Trust		07/25/03	$	0	($	5,816,229	)	($	5,816,229	)		(214,621	)		-0.23296	%
AFCO Cargo DFW Limited Partnership		09/10/03	$	0	($	58,160	)	($	58,160	)		(2,000	)		-0.00217	%
AFCO Cargo DFW Limited Partnership		01/21/04	$	0	($	192,871	)	($	192,871	)		(5,666	)		-0.00615	%
AFCO Cargo SEA LP, LLP		01/21/04	$	0	($	158,831	)	($	158,831	)		(4,666	)		-0.00506	%
AFCO Cargo SEA LP, LLP		06/22/04	$	0	($	105,090	)	($	105,090	)		(3,000	)		-0.00326	%
Steve E. Campbell		10/05/04	$	0	$	0		$	0			(1,705	)		-0.00185	%
Carla Sue Greathouse		10/05/04	$	0	$	0		$	0			1,705			0.00185	%
AFCO Cargo DFW Limited Partnership		10/18/04	$	0	($	79,943	)	($	79,943	)		(3,400	)		-0.00369	%
West*Pac LP, LLP		10/18/04	$	0	($	22,430	)	($	22,430	)		(954	)		-0.00104	%
AFCO Cargo SEA LP, LLP		01/10/05	$	0	($	613,724	)	($	613,724	)		(26,102	)		-0.02833	%
AFCO Cargo DFW Limited Partnership		01/10/05	$	0	($	262,823	)	($	262,823	)		(11,178	)		-0.01213	%
West*Pac LP, LLP		01/10/05	$	0	($	112,178	)	($	112,178	)		(4,771	)		-0.00518	%
AFCO Cargo DFW Limited Partnership		01/10/05	$	0	($	252,877	)	($	252,877	)		(10,755	)		-0.01167	%
AFCO Cargo SEA LP, LLP		01/10/05	$	0	($	252,877	)	($	252,877	)		(10,755	)		-0.01167	%
Waterview Partnership		01/10/05	$	0	$	320,052		$	320,052			13,612			0.01478	%
Robert W. Stubbs		01/10/05	$	0	$	285,536		$	285,536			12,144			0.01318	%
Thomas A Kendall		01/10/05	$	0	$	270,958		$	270,958			11,524			0.01251	%
Waterview Partnership		07/25/05	$	0	($	65,835	)	($	65,835	)		(2,800	)		-0.00304	%
James E. Hayes as trustee of the James E. Hayes Living Trust under Agreement dated August 22, 1995		08/10/05	$	0	($	580,747	)	($	580,747	)		(23,801	)		-0.02583	%
Trust B u/w Michael Campanelli		09/01/05	$	0	($	1,806,612	)	($	1,806,612	)		(77,000	)		-0.08358	%
Campanelli Investment Properties, LLC		09/15/05	$	0	($	432,513	)	($	432,513	)		(18,000	)		-0.01954	%
Trust B u/w Michael Campanelli		09/15/05	$	0	$	432,513		$	432,513			18,000			0.01954	%
Trust B u/w Michael Campanelli		09/16/05	$	0	($	432,513	)	($	432,513	)		(18,000	)		-0.01954	%
Campanelli Investment Properties, LLC		09/21/05	$	0	($	432,513	)	($	432,513	)		(18,000	)		-0.01954	%
Ronald Campanelli		09/21/05	$	0	$	72,085		$	72,085			3,000			0.00326	%
Francesca Dodd		09/21/05	$	0	$	72,085		$	72,085			3,000			0.00326	%
Russell Campanelli		09/21/05	$	0	$	72,085		$	72,085			3,000			0.00326	%
Ralph Campanelli		09/21/05	$	0	$	72,085		$	72,085			3,000			0.00326	%
Nicole Campanelli		09/21/05	$	0	$	72,085		$	72,085			3,000			0.00326	%
Jon Campanelli		09/21/05	$	0	$	72,085		$	72,085			3,000			0.00326	%
Ronald Campanelli		09/22/05	$	0	($	72,085	)	($	72,085	)		(3,000	)		-0.00326	%
Francesca Dodd		09/22/05	$	0	($	72,085	)	($	72,085	)		(3,000	)		-0.00326	%
Russell Campanelli		09/22/05	$	0	($	72,085	)	($	72,085	)		(3,000	)		-0.00326	%
Ralph Campanelli		09/22/05	$	0	($	72,085	)	($	72,085	)		(3,000	)		-0.00326	%
Nicole Campanelli		09/22/05	$	0	($	72,085	)	($	72,085	)		(3,000	)		-0.00326	%
Jon Campanelli		09/22/05	$	0	($	72,085	)	($	72,085	)		(3,000	)		-0.00326	%
Christine G. Schadlich		10/06/05	$	0	$	0		$	0			(6,733	)		-0.00731	%
Robert DeMarco		10/12/05	$	0	($	2,325,302	)	($	2,325,302	)		(98,575	)		-0.10700	%
Steven T. Kimball		10/26/05	$	0	$	0		$	0			(3,409	)		-0.00370	%
Ronald Campanelli		11/11/05	$	0	($	1,033,468	)	($	1,033,468	)		(43,810	)		-0.04755	%
David S. Fries		12/23/05	$	0	$	0		$	0			(10,000	)		-0.01085	%
AYCO Charitable Foundation		12/23/05	$	0	$	0		$	0			10,000			0.01085	%
AYCO Charitable Foundation		12/23/05	$	0	$	0		$	0			(10,000	)		-0.01085	%
Thomas A Kendall		12/23/05	$	0	($	82,294	)	($	82,294	)		(3,500	)		-0.00380	%
K.C. Swartzel		01/26/06	$	0	$	0		$	0			(6,818	)		-0.00740	%
John T. Roberts, Jr.		01/26/06	$	0	$	0		$	0			(4,500	)		-0.00488	%
Ayco Charitable Foundation		01/26/06	$	0	$	0		$	0			4,500			-0.00488	%
Ayco Charitable Foundation		01/26/06	$	0	$	0		$	0			(4,500	)		(-0.00488	%)
Craig W. Gagnon		05/01/06	$	0	$	0		$	0			(16,440	)		(-0.17845	%)
Pamela Gagnon		05/01/06	$	0	$	0		$	0			16,440			0.17845	%
Total Limited Partners			$	0	$	62,565,525		$	62,565,525			4,257,329			4.62113	%
Total General Partner and Limited Partners				29,270,592		1,795,240,831			1,824,484,396			92,127,381			4.6	%

(a)	Excludes 229,411 of Sub OP and Long Gate LLC shares/units and preferred partnership units.
(b)	Includes 934 units reserved.
(c)	Includes 8,268 units reserved.
(d)	Excludes 204,067 common limited partnership units of IMD Holding Corporation.

Reconciliation:
Total Units per above	92,127,381
Plus Sub OP & Long Gate LLC shares/units excluded (a)	229,411
Plus Issue 12 Sub OP Unit Holders	127,878
Total Shares & Units as of 06/30/06	92,484,670

A-1

EXHIBIT A

PARTNERS, CONTRIBUTIONS, AND PARTNERSHIP INTERESTS

II. Series J Preferred Units

					Agreed Value of
	Contribution		Cash		Contributed		Total		Partnership		Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units		Interest
Limited Partner:
GSEP 2001 Realty Corp.		8/21/01	$	40,000,000	$	0	$	40,000,000		800,000		100.00000	%
Total Series J Preferred Units			$	40,000,000	$	0	$	40,000,000		800,000		100.00000	%

III. Series K Preferred Units

					Agreed Value of
	Contribution		Cash		Contributed		Total		Partnership		Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units		Interest
Limited Partner:
GSEP 2002 Realty Corp.		4/17/02	$	40,000,000	$	0	$	40,000,000		800,000		100	%
Total Series K Preferred Units			$	40,000,000	$	0	$	40,000,000		800,000		100	%

IV. Series L Preferred Units

					Agreed Value of
	Contribution		Cash		Contributed		Total		Partnership		Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units		Interest
General Partner:
AMB Property Corporation		6/23/03	$	48,425,000	$	0	$	48,425,000		2,000,000		100.00000	%
Total Series L Preferred Units			$	48,425,000	$	0	$	48,425,000		2,000,000		100.00000	%

V. Series M Preferred Units

					Agreed Value of
	Contribution		Cash		Contributed		Total		Partnership		Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units		Interest
General Partner:
AMB Property Corporation		11/25/03	$	55,688,750	$	0	$	55,688,750		2,300,000		100.00000	%
Total Series M Preferred Units			$	55,688,750	$	0	$	55,688,750		2,300,000		100.00000	%

A-2

VI. Series O Preferred Units

					Agreed Value of
	Contribution		Cash		Contributed		Total		Partnership		Percentage
Name of Partner	Date		Contributions		Property		Contributions		Units		Interest
General Partner:
AMB Property Corporation		12/13/05	$	72,637,500	$	0	$	72,637,500		3,000,000		100.00000	%
Total Series O Preferred Units			$	72,637,500	$	0	$	72,637,500		3,000,000		100.00000	%

A-3

EXHIBIT B

NOTICE OF REDEMPTION

     The undersigned hereby [irrevocably] (i) exchanges                      Limited Partnership Units in AMB Property, L.P. in accordance with the terms of the Limited Partnership Agreement of AMB Property, L.P. dated as of                                         , as amended, and the rights of Redemption referred to therein, (ii) surrenders such Limited Partnership Units and all right, title and interest therein and (iii) directs that the cash (or, if applicable, REIT Shares) deliverable upon Redemption or exchange be delivered to the address specified below, and if applicable, that such REIT Shares be registered or placed in the name(s) and at the address(es) specified below.

Dated:
	Name of Limited Partner:
		(Signature of Limited Partner)
		(Street Address)
		(City) (State) (Zip Code)
		Signature Guaranteed by:

Issue REIT Shares in the name of:

Please insert social security or identifying number:

Address (if different than above):

B-1

EXHIBIT C

CONSTRUCTIVE OWNERSHIP DEFINITION

          The term “Constructively Owns” means ownership determined through the application of the constructive ownership rules of Section 318 of the Code, as modified by Section 856(d)(5) of the Code. Generally, these rules provide the following:

     a. an individual is considered as owning the Ownership Interest that is owned, actually or constructively, by or for his spouse, his children, his grandchildren, and his parents;

     b. an Ownership Interest that is owned, actually or constructively, by or for a partnership, limited liability company or estate is considered as owned proportionately by its partners, members or beneficiaries;

     c. an Ownership Interest that is owned, actually or constructively, by or for a trust is considered as owned by its beneficiaries in proportion to the actuarial interest of such beneficiaries (provided, however, that in the case of a “grantor trust” the Ownership Interest will be considered as owned by the grantors);

     d. if ten percent (10%) or more in value of the stock in a corporation is owned, actually or constructively, by or for any person, such person shall be considered as owning the Ownership Interest that is owned, actually or constructively, by or for such corporation in that proportion which the value of the stock which such person so owns bears to the value of all the stock in such corporation;

     e. an Ownership Interest that is owned, actually or constructively, by or for a partner or member which actually or constructively owns a 25% or greater capital interest or profits interest in a partnership or limited liability company, or by or for a beneficiary of an estate or trust, shall be considered as owned by the partnership, limited liability company, estate, or trust (or, in the case of a grantor trust, the grantors);

     f. if ten percent (10%) or more in value of the stock in a corporation is owned, actually or constructively, by or for any person, such corporation shall be considered as owning the Ownership Interest that is owned, actually or constructively, by or for such person;

     g. if any person has an option to acquire an Ownership Interest (including an option to acquire an option or any one of a series of such options), such Ownership Interest shall be considered as owned by such person;

     h. an Ownership Interest that is constructively owned by a person by reason of the application of the rules described in paragraphs (a) through (g) above shall, for purposes of applying paragraphs (a) through (g), be considered as actually owned by such person provided, however, that (i) an Ownership Interest constructively owned by an individual by reason of paragraph (a) shall not be considered as owned by him for purposes of again applying paragraph (a) in order to make another the constructive owner of such Ownership Interest, (ii) an Ownership Interest constructively owned by a partnership, estate, trust, or corporation by reason of the application of paragraphs (e) or (f) shall not be considered as owned by it for purposes of applying paragraphs (b), (c), or (d) in order to make another the constructive owner of such Ownership Interest, (iii) if an Ownership Interest may be considered as owned by an individual under paragraphs (a) or (g), it shall be considered as owned by him under paragraph (g) and (iv) for purposes of the above described rules, an S corporation shall be treated as a partnership and any stockholder of the S corporation shall be treated as a partner of such partnership except that this rule shall not apply for purposes of determining whether stock in the S corporation is constructively owned by any person.

     i. For purposes of the above summary of the constructive ownership rules, the term “Ownership Interest” means the ownership of stock with respect to a corporation and, with respect to any other type of entity, the ownership of an interest in either its assets or net profits.

C-1

EXHIBIT D-1

FORM OF PARTNERSHIP UNIT CERTIFICATE

CERTIFICATE FOR PARTNERSHIP UNITS OF

AMB PROPERTY, L.P.

No. UNITS

          AMB Property Corporation as the General Partner of AMB Property, L.P., a Delaware limited partnership (the “Operating Partnership”), hereby certifies that                                          is a Limited Partner of the Operating Partnership whose Partnership Interests therein, as set forth in the Agreement of Limited Partnership of AMB Property, L.P., dated as of                     , 200___(as it may be amended, modified or supplemented from time to time in accordance with its terms, (the “Partnership Agreement”), under which the Operating Partnership is existing and as filed in the office of the Delaware [State Department of Assessments and Taxation] (copies of which are on file at the Operating Partnership’s principal offices at Pier 1, Bay 1, San Francisco, California, 94111, represent                      units of limited partnership interest in the Operating Partnership (the “Partnership Units”).

          THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE OPERATING PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN THE PARTNERSHIP AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR (B) IF THE OPERATING PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER OF THE PARTNERSHIP UNITS REPRESENTED BY THIS CERTIFICATE THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER.

DATED:                                        , 200_.
	AMB PROPERTY CORPORATION
	General Partner of
	AMB Property, L.P.
ATTEST:
By:	By:

D-1

EXHIBIT D-2

FORM OF PARTNERSHIP UNIT CERTIFICATE

CERTIFICATE FOR PERFORMANCE UNITS OF

AMB PROPERTY, L.P.

No. UNITS

          AMB Property Corporation as the General Partner of AMB Property, L.P., a Delaware limited partnership (the “Operating Partnership”), hereby certifies that                                          is a Limited Partner of the Operating Partnership whose Partnership Interests therein, as set forth in the Agreement of Limited Partnership of AMB Property, L.P., dated as of                     , 200___(as it may be amended, modified or supplemented from time to time in accordance with its terms, (the “Partnership Agreement”), under which the Operating Partnership is existing and as filed in the office of the Delaware [State Department of Assessments and Taxation] (copies of which are on file at the Operating Partnership’s principal offices at Pier 1, Bay 1, San Francisco, California 9411, represent                      performance units (as defined in the Partnership Agreement) of limited partnership interest in the Operating Partnership (the “Performance Units”).

          THE PERFORMANCE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT (A COPY OF WHICH IS ON FILE WITH THE OPERATING PARTNERSHIP). EXCEPT AS OTHERWISE PROVIDED IN THE PARTNERSHIP AGREEMENT, NO TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE PERFORMANCE UNITS REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT (A) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR (B) IF THE OPERATING PARTNERSHIP HAS BEEN FURNISHED WITH A SATISFACTORY OPINION OF COUNSEL FOR THE HOLDER OF THE PERFORMANCE UNITS REPRESENTED BY THIS CERTIFICATE THAT SUCH TRANSFER, SALE ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION IS EXEMPT FROM THE PROVISIONS OF SECTION 5 OF THE ACT AND THE RULES AND REGULATIONS IN EFFECT THEREUNDER.

DATED:                                        , 200_.
	AMB PROPERTY CORPORATION
	General Partner of
	AMB Property, L.P.
ATTEST:
By:	By:

D-2

EXHIBIT E

SCHEDULE OF PARTNERS’ OWNERSHIP

WITH RESPECT TO TENANTS

          None.

E-1

EXHIBIT F

SCHEDULE OF REIT SHARES

ACTUALLY OR CONSTRUCTIVELY OWNED BY 25% LIMITED PARTNERS

OTHER THAN THOSE ACQUIRED PURSUANT TO AN EXCHANGE

          None.

F-1

EXHIBIT G

PERFORMANCE UNITS

          The Performance Units issued by the Partnership pursuant to Section 4.3.F. were issued to the following Persons in the following amounts on January 7, 2000:

          1. The first 3,000,000 Performance Units were issued 90% to the “Old PLPs” (as defined below) and 10% to the “New PLPs” (as defined below).

          2. Any Performance Units issued in excess of those set forth in paragraph 1 above were issued 80% to the Old PLPs and 20% to the New PLPs.

          3. The Performance Units allocable to each group of PLPs pursuant to paragraphs 1 and 2 above were allocated among the PLPs within such group in accordance with each PLP’s percentage interest as set forth in the definitions below.

          4. The receipt of Performance Units by a PLP was not subject to any vesting requirements.

Definitions

“Old PLPs” means the Persons set forth on Schedule G-1 attached hereto, with the percentage interest so indicated.

“New PLPs” means the Persons set forth on Schedule G-2 attached hereto, with the percentage interest so indicated.

G-1

SCHEDULE G-1

OLD PLPs

Name of Old PLP	Percentage
Douglas D. Abbey		23.6537	%
Luis A. Belmonte		2.8055	%
T. Robert Burke		17.8504	%
S. Davis Carniglia		4.7271	%
John H. Diserens		5.9870	%
Bruce H. Freedman		1.9607	%
Jean Collier Hurley		2.4411	%
Barbara J. Linn		4.2467	%
Hamid R. Moghadam		29.4184	%
Craig A. Severance		6.9094	%

G-1

SCHEDULE G-2

NEW PLPs

Name of New PLP	Percentage
W. Blake Baird		17.4419	%
Steven J. Callaway		3.4884	%
Steve E. Campbell		2.3256	%
Michael A. Coke		5.7558	%
Martin J. Coyne		2.3256	%
David G. Doyno		2.3256	%
David S. Fries		10.4070	%
Kent D. Greenawalt		3.4884	%
Jane L. Harris		4.6512	%
Carlie P. Headapohl		2.3256	%
Tyler W. Higgins		4.6512	%
Steven T. Kimball		2.3256	%
John T. Meyer		3.4884	%
John T. Roberts, Jr.		5.7558	%
John L. Rossi		2.3256	%
Cynthia J. Sarver		2.3256	%
Christine G. Schadlich		4.5930	%
Andrew N. Singer		3.4884	%
Gayle P. Starr		3.4884	%
William Steinberg		4.6512	%
K.C. Swartzel		4.6512	%
Celia M. Tanaka		2.3256	%
Janice G. Thacher		1.3953	%

G-2

EXHIBIT H

SCHEDULE OF CERTAIN AGREEMENTS RELATING TO

PROPERTIES WITH RESTRICTIONS ON DISPOSITION

PURSUANT TO SECTION 7.3.F

1.    Joint Venture Interest Exchange /Contribution Agreement, dated November 26, 1997, by and among AMB Property, L.P., David Brown, Daniel Sarhad and Craig Duncan.

2.    Joint Venture Interest Exchange/Contribution Agreement, dated November 26, 1997, by and among AMB Property, L.P., GP Met Phase One 95, Ltd. and GP Met 4/12, Ltd.

3.    Agreement for Transfer of Realty and Assets, dated November 26, 1997, by and among AMB Property, L.P. and Holbrook W. Goodale, Charles R. Wichman and Frederick B. Wichman as Trustees for the Wichman Family Trusts.

4.    Contribution Agreement, dated November 26, 1997, between AMB Property, L.P. and Linder Skokie Real Estate Corporation. (Allmerica Portfolio)

5.    Agreement for Transfer of Realty and Assets, dated November 26, 1997, by and among AMB Property, L.P., Launce E. Gamble and George F. Gamble.

6.    Contribution Agreement, dated March 30, 1998, by and among AMB Property, L.P. and the other parties named therein. (Campanelli Portfolio)

7.    Contribution Agreement, dated March 31, 1998, by and among AMB Property, L.P., Steve Liefschultz, Stephen M. Vincent, Alan Wilensky and Craig Gagnon.

8.    Contribution Agreement, dated June 4, 1998 by and among AMB Property, L.P. and the other parties named therein. (Southfield Portfolio)

9.    Amended and Restated Contribution Agreement, dated as of August 6, 1998, by and among AMB Property, L.P., AMB Property Corporation and the other parties named therein. (Willow Park Portfolio)

10. Portfolio Contribution Agreement, dated as of November 17, 1998, by and among AMB Property, L.P., AMB Property Corporation and the individuals named therein, as amended by the First Amendment, dated as of February 1, 1999, and the Second Amendment, dated as of April 30, 1999. (Manekin Portfolio)

11. Purchase and Sale Agreement, dated as of December 4, 1998, by and between AMB Property, L.P. and CBDV Investors, L.L.C. (WOCAC Portfolio)

H-1

EXHIBIT I

SCHEDULE OF CERTAIN AGREEMENTS CONTAINING

LIMITATIONS ON GENERAL PARTNERS GENERAL AUTHORITY

1.    Contribution Agreements, dated March 30, 1998, by and among AMB Property, L.P. and the other parties named therein. (Campanelli Portfolio)

2.    AMB Property, L.P., First Amendment to Amended and Restated Agreement of Limited Partnership, dated as of March 30, 1998.

3.    Contribution Agreement, dated March 31, 1998, by and among AMB Property, L.P. and Steve Liefschultz, Stephen M. Vincent, Alan Wilensky and Craig Gagnon.

4.    AMB Property, L.P., Second Amendment to Amended and Restated Agreement of Limited Partnership, dated as of March 31, 1998.

5.    Contribution Agreement, dated June 4, 1998 by and among AMB Property, L.P. and the other parties named therein. (Southfield Portfolio)

6.    AMB Property, L.P. Third Amendment to Amended and Restated Agreement of Limited Partnership, dated as of June 4, 1998.

7.    Contribution Agreement, dated May 21, 1998, by and among AMB Property, L.P. and the other parties named therein. (Alsip Industrial Portfolio)

8.    AMB Property, L.P. Fourth Amendment to Amended and Restated Agreement of Limited Partnership, dated as of June 30, 1998.

9.    Amended and Restated Contribution Agreement dated as of August 6, 1998, by and among AMB Property, L.P., AMB Property Corporation and the other parties named therein. (Willow Park Portfolio)

10. AMB Property, L.P. First Amendment to Second Amended and Restated Agreement of Limited Partnership, dated as of September 24, 1998.

11. Portfolio Contribution Agreement, dated as of November 17, 1998, by and among AMB Property, L.P., AMB Property Corporation and the individuals named therein, as amended by the First Amendment, dated as of February 1, 1999, and the Second Amendment, dated as of April 30, 1999. (Manekin Portfolio)

12. Purchase and Sale Agreement, dated as of December 4, 1998, by and between AMB Property, L.P. and CBDV Investors, L.L.C. (WOCAC Portfolio)

13. AMB Property, L.P. Fourth Amendment to Third Amended and Restated Agreement of Limited Partnership, dated as of February 1, 1999.

I-1

14. AMB Property, L.P. Fifth Amendment to Third Amended and Restated Agreement of Limited Partnership, dated as of April 30, 1999.

15. AMB Property, L.P. Sixth Amendment to Third Amended and Restated Agreement of Limited Partnership, dated as of May 21, 1999.

16. AMB Property, L.P. Ninth Amendment to Third Amended and Restated Agreement of Limited Partnership, dated as of September 30, 1999.

17. AMB Property, L.P. Fourth Amended and Restated Agreement of Limited Partnership, dated as of August 10, 2000.

18. AMB Property, L.P. First Amendment to Fourth Amended and Restated Agreement of Limited Partnership dated as of November 7, 2000.

19. Assignment and Assumption Agreement dated as of December 31, 2000 by and between the AMB Property Corporation and AMB Property, L.P.

20. AMB Property, L.P. Fifth Amended and Restated Agreement of Limited Partnership, dated as of September 21, 2001.

21. Assignment and Assumption Agreement dated as of September 21, 2001 by and between the AMB Property Corporation and AMB Property, L.P.

22. AMB Property, L.P. First Amendment to Fifth Amended and Restated Agreement of Limited Partnership dated as of January 1, 2002.

23. AMB Property, L.P. Sixth Amended and Restated Agreement of Limited Partnership, dated as of April 17, 2002.

24. Assignment and Assumption Agreement dated as of April 17, 2002 by and between AMB Property Corporation and AMB Property, L.P.

25. AMB Property, L.P. First Amendment to Sixth Amended and Restated Agreement of Limited Partnership dated as of October 30, 2002.

26. AMB Property, L.P. Seventh Amended and Restated Agreement of Limited Partnership, dated as of June 23, 2003.

27. Assignment and Assumption Agreement dated as of June 23, 2003 by and between AMB Property Corporation and AMB Property, L.P.

28. AMB Property, L.P. Eighth Amended and Restated Agreement of Limited Partnership, dated as of July 28, 2003.

29. Assignment and Assumption Agreement dated as of July 28, 2003 by and between AMB Property Corporation and AMB Property, L.P.

30. AMB Property, L.P. Ninth Amended and Restated Agreement of Limited Partnership, dated as of November 25, 2003.

I-2

31. Assignment and Assumption Agreement dated as of November 25, 2003 by and between AMB Property Corporation and AMB Property, L.P.

32. AMB Property, L.P. Tenth Amended and Restated Agreement of Limited Partnership, dated as of November 26, 2003.

33. Assignment and Assumption Agreement dated as of November 26, 2003 by and between AMB Property Corporation and AMB Property, L.P.

34. AMB Property, L.P. Eleventh Amended and Restated Agreement of Limited Partnership, dated as of August 4, 2006.

35. Assignment and Assumption Agreement dated as of August 4, 2006 by and between AMB Property Corporation and AMB Property, L.P.

I-3

EXHIBIT J

RESTRICTIONS ON OWNERSHIP AND TRANSFER TO PRESERVE TAX BENEFIT

     (a) Definitions. for the purposes of this Exhibit J, the following terms shall have the following meanings:

     “Charitable Beneficiary” shall mean one or more beneficiaries of a Trust, as determined pursuant to subsection (c)(vi), each of which shall be an organization described in Sections 170(b)(1)(A), 170(c)(2) and 501(c)(3) of the Code.

     “Code” shall mean the Internal Revenue Code of 1986, as amended.

     “Constructive Ownership” shall mean ownership of Partnership Units by a Person who is or would be treated as an owner of such Partnership Units either actually or constructively through the application of Section 318 of the Code, as modified by Section 856(d)(5) of the Code. The terms “Constructive Owner,” “Constructively Owns” and “Constructively Owned” shall have the correlative meanings.

     “Exempted Person” shall mean any Person exempted from time to time by the General Partner in its sole and absolute discretion.

     “Market Price” shall mean the market price of the Partnership Units on the relevant date as determined in good faith by the General Partner; provided, however, if the General Partner has outstanding shares of capital stock which correspond to such Partnership Units, the Market Price of each such Partnership Unit shall be equal to the Value of a share of such capital stock, subject to adjustment if the right to exchange such Partnership Units for such stock is other than one-to-one.

     “Ownership Limit” shall mean 24.9% of the capital or profits interests of the Partnership.

     “Person” shall mean an individual, corporation, partnership, limited liability company, estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of the Code), a portion of a trust permanently set aside for or to be used exclusively for the purposes described in Section 642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the Code, joint stock company or other entity.

     “Purported Beneficial Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in subsection (b)(ii), the Purported Record Transferee, unless the Purported Record Transferee would have acquired or owned Partnership Units for another Person who is the beneficial transferee or owner of such Partnership Units, in which case the Purported Beneficial Transferee shall be such Person.

J-1

     “Purported Record Transferee” shall mean, with respect to any purported Transfer (or other event) which results in a transfer to a Trust, as provided in subsection (b)(ii), the holder of the Partnership Units as set forth or to be set forth in Exhibit A to the Partnership Agreement, and any Assignee of such Partnership Units, if such Transfer or ownership had been valid under subsection (b)(i).

     “Restriction Termination Date” shall mean the first day after the date hereof on which the General Partner determines, in its sole and absolute discretion, that compliance with subsection (b)(i) is no longer necessary or advisable.

     “Transfer” shall mean any sale, transfer, gift, assignment, devise or other disposition of Partnership Units, (including (i) the granting of any option or entering into any agreement for the sale, transfer or other disposition of Partnership Units or (ii) the sale, transfer, assignment or other disposition of any securities (or rights convertible into or exchangeable for Partnership Units), whether voluntary or involuntary, whether such transfer has occurred of record or beneficially or Constructively (including but not limited to transfers of interests in other entities which results in changes in Constructive Ownership of Partnership Units), and whether such transfer has occurred by operation of law or otherwise.

     “Trust” shall mean each of the trusts provided for in subsection (c).

     “Trustee” shall mean any Person unaffiliated with the Partnership, or a Purported Beneficial Transferee, or a Purported Record Transferee, that is appointed by the Partnership to serve as trustee of a Trust.

Capitalized terms used and not defined herein shall have the meanings ascribed to them in the Fourth Amended and Restated Agreement of Limited Partnership of AMB Property, L.P. (the “Partnership Agreement), as such agreement may be amended from time to time. All references to “Section” refer to the Partnership Agreement.

     (b) Restriction on Ownership and Transfers.

          (i) Prior to the Restriction Termination Date, no Person, other than an Exempted Person, shall at any time Constructively Own Partnership Units in excess of the Ownership Limit if the representations contained in Section 3.4.D are not at such time true and correct.

          (ii) If, prior to the Restriction Termination Date, any Transfer or other event occurs that, if effective, would result in any Person Constructively Owning Partnership Units in violation of subsection (b)(i), (1) then that number of Partnership Units that otherwise would cause such Person to violate subsection (b)(i) (rounded up to the nearest whole Partnership Unit) shall be automatically transferred (provided such Transfer is not in violation of the restrictions on transfer set forth in the Partnership Agreement, except to the extent the General Partner waives such restrictions) to a Trust for the benefit of a Charitable Beneficiary, as described in subsection (c), effective as of the close of business on the business day prior to the date of such Transfer or other event, and such Purported Beneficial Transferee shall thereafter have no rights in such Partnership Units or (2) if, for any reason, the transfer to the Trust described in clause (1) of this sentence is not

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automatically effective as provided therein to prevent any Person from Constructively Owning Partnership Units in violation of subsection (b)(i), then the Transfer of that number of Partnership Units that otherwise would cause any Person to violate subsection (b)(i) shall be void ab initio, and the Purported Beneficial Transferee shall have no rights in such Partnership Units.

     (c) Transfers of Partnership Units in Trust.

          (i) Upon any purported Transfer or other event described in subsection (b)(ii), such Partnership Units shall be deemed to have been transferred to the Trustee in his capacity as trustee of a Trust for the exclusive benefit of one or more Charitable Beneficiaries. Such transfer to the Trustee shall be deemed to be effective as of the close of business on the business day prior to the purported Transfer or other event that results in a transfer to the Trust pursuant to subsection (b)(ii). The Trustee shall be appointed by the Partnership and shall be a Person unaffiliated with the Partnership, any Purported Beneficial Transferee, or any Purported Record Transferee. Each Charitable Beneficiary shall be designated by the Partnership as provided in subsection (c)(vi).

          (ii) Partnership Units held by the Trustee shall be issued and outstanding Partnership Units of the Partnership. The Purported Beneficial Transferee or Purported Record Transferee shall have no rights in the Partnership Units held by the Trustee. The Purported Beneficial Transferee or Purported Record Transferee shall not benefit economically from ownership of any Partnership Units held in trust by the Trustee, shall have no rights to distributions or allocations with respect to Partnership Units held in the Trust and shall not possess any rights to vote or other rights attributable to the Partnership Units held in the Trust.

          (iii) The Trustee shall have all voting rights and rights to distributions and allocations with respect to Partnership Units held in the Trust, which rights shall be exercised for the exclusive benefit of the Charitable Beneficiary. Any distribution paid prior to the discovery by the Partnership that Partnership Units have been transferred to the Trustee shall be paid to the Trustee upon demand, and any distribution with respect to such Partnership Units shall be paid when due to the Trustee. Any distributions so paid over to the Trustee shall be held in trust for the Charitable Beneficiary.

          The Purported Record Transferee and Purported Beneficial Transferee shall have no voting rights with respect to the Partnership Units held in the Trust and, subject to Delaware law, effective as of the date the Partnership Units has been transferred to the Trustee, the Trustee shall have the authority (at the Trustee’s sole discretion) (i) to rescind as void any vote cast by a Purported Record Transferee with respect to such Partnership Units prior to the discovery by the Partnership that the Partnership Units has been transferred to the Trustee and (ii) to recast such vote in accordance with the desires of the Trustee acting for the benefit of the Charitable Beneficiary; provided, however, that if the Partnership has already taken irreversible action, then the Trustee shall not have the authority to rescind and recast such vote. Notwithstanding any other provision of this Exhibit J to the contrary, until the Partnership has received notification that the Partnership Units have been transferred into a Trust, the Partnership shall be entitled to rely on its Partnership Unit transfer and other unitholder records for purposes of preparing Exhibit A to the Partnership Agreement, lists of unitholders entitled to vote at meetings, and otherwise conducting votes of Partners.

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          (iv) Within 20 days of receiving notice from the Partnership that Partnership Units have been transferred to the Trust, the Trustee of the Trust shall, in accordance with the terms of (and subject to the limitations contained in) the Partnership Agreement, sell the Partnership Units held in the Trust to a Person, designated by the Trustee, whose ownership of the Partnership Units will not violate the ownership limitations set forth in subsection (b)(i). Upon such sale, the interest of the Charitable Beneficiary in the Partnership Units sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and to the Charitable Beneficiary as provided in this subsection (c)(iv). The Purported Record Transferee shall receive the lesser of (1) the price paid by the Purported Record Transferee for the Partnership Units in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such Partnership Units at Market Price, the Market Price of such Partnership Units on the day of the event which resulted in the transfer of such Partnership Units to the Trust) and (2) the price per Partnership Unit received by the Trustee (net of any commissions and other expenses of sale) from the sale or other disposition of the Partnership Units held in the Trust. Any net sales proceeds in excess of the amount payable to the Purported Record Transferee shall be immediately paid to the Charitable Beneficiary together with any distributions thereon. If, prior to the discovery by the Partnership that Partnership Units have been transferred to the Trustee, such Partnership Units are sold by a Purported Record Transferee then (i) such Partnership Units shall be deemed to have been sold on behalf of the Trust and (ii) to the extent that the Purported Record Transferee received an amount for such Partnership Units that exceeds the amount that such Purported Record Transferee was entitled to receive pursuant to this subsection (c)(iv), such excess shall be paid to the Trustee upon demand. The expenses described in item (2) above shall include any expenses of administering the Trust, any transfer of Partnership Units thereto or disposition of Partnership Units thereby, which shall be allocated equitably among the Partnership Units which are transferred to the Trust.

          (v) Partnership Units transferred to the Trustee shall be deemed to have been offered for sale to the Partnership, or its designee, at a price per Partnership Unit equal to the lesser of (i) the price paid by the Purported Record Transferee for the Partnership Units in the transaction that resulted in such transfer to the Trust (or, if the event which resulted in the transfer to the Trust did not involve a purchase of such Partnership Units at Market Price, the Market Price of such Partnership Units on the day of the event which resulted in the transfer of such Partnership Units to the Trust) and (ii) the Market Price on the date the Partnership, or its designee, accepts such offer. The Partnership shall have the right to accept such offer until the Trustee has sold the Partnership Units held in the Trust pursuant to subsection (c)(iv). Upon such a sale to the Partnership, the interest of the Charitable Beneficiary in the Partnership Units sold shall terminate and the Trustee shall distribute the net proceeds of the sale to the Purported Record Transferee and any distributions held by the Trustee with respect to such Partnership Units shall thereupon be paid to the Charitable Beneficiary.

          (vi) By written notice to the Trustee, the Partnership shall designate one or more nonprofit organizations to be the Charitable Beneficiary of the interest in the Trust such that the Partnership Units held in the Trust would not violate the restrictions set forth in subsection (b)(i) in the hands of such Charitable Beneficiary.

     (d) Remedies For Breach. If the General Partner shall at any time determine in good faith that a Transfer or other event has taken place in violation of subsection (b) or that a Person intends to acquire, has attempted to acquire or may acquire beneficial ownership (determined

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without reference to any rules of attribution) or Constructive Ownership of any Partnership Units of the Partnership in violation of subsection (b), the General Partner shall take such action as it deems advisable to refuse to give effect or to prevent such Transfer, including, but not limited to, causing the Partnership to redeem Partnership Units, refusing to give effect to such Transfer on the books of the Partnership or instituting proceedings to enjoin such Transfer; provided, however, that any Transfers (or, in the case of events other than a Transfer, ownership or Constructive Ownership) in violation of subsection (b)(i), shall automatically result in the transfer to a Trust as described in subsection (b)(ii).

     (e) Notice of Restricted Transfer. Any Person who acquires or attempts to acquire or own Partnership Units in violation of subsection (b), or any Person who is a Purported Beneficial Transferee such that an automatic transfer to a Trust results under subsection (b)(ii), shall immediately give written notice to the Partnership of such event and shall provide to the Partnership such other information as the Partnership may request in order to determine the effect, if any, of such Transfer or attempted Transfer on such Person’s compliance with subsection (b)(i).

     (f) Owners Required To Provide Information. Prior to the Restriction Termination Date each Person who is a beneficial owner or Constructive Owner of Partnership Units and each Person who is holding Partnership Units for a beneficial owner or Constructive Owner shall provide to the Partnership such information that the Partnership may request, in good faith, in order to determine the Partnership’s status as a partnership (as opposed to a corporation) or the General Partner’s status as a REIT for federal income tax purposes.

     (g) Remedies Not Limited. Nothing contained in this Exhibit J shall limit the authority of the General Partner to take such other action as it deems necessary or advisable to protect the Partnership and the interests of its Partners by preservation of the Partnership’s status as a partnership (as opposed to a corporation) or the General Partner’s status as a REIT for federal income tax purposes.

     (h) Ambiguity. In the case of an ambiguity in the application of any of the provisions of this Exhibit J, including any definition contained in subsection (a), the General Partner shall have the power to determine the application of the provisions of this Exhibit J with respect to any situation based on the facts known to it. In the event that a provision of this Exhibit J requires an action by the General Partner and Exhibit J fails to provide specific guidance with respect to such action, the General Partner shall have the power to determine the action to be taken so long as such action is not contrary to the provisions of Exhibit J. Absent a decision to the contrary by the General Partner (which the General Partner may make in its sole and absolute discretion), if a Person would have (but for the remedies set forth in subsection (b)) acquired Constructive Ownership of Partnership Units in violation of subsection (b)(i), such remedies (as applicable) shall apply first to the Partnership Units which, but for such remedies, would have been actually owned by such Person, and second to Partnership Units which, but for such remedies, would have been Constructively Owned (but not actually owned) by such Person, pro rata among the Persons who actually own such Partnership Units based upon the relative number of the Partnership Units held by each such Person.

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EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, Hamid R. Moghadam, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of AMB Property Corporation;

(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 this report;

(4) The registrant’s other certifying officers 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 controls 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 officers 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: August 8, 2006

By:	/s/ HAMID R. MOGHADAM
	Hamid R. Moghadam
	Chairman and CEO

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I, W. Blake Baird, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of AMB Property Corporation;

(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 this report;

(4) The registrant’s other certifying officers 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 controls 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 officers 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: August 8, 2006

By:	/s/ W. BLAKE BAIRD
	W. Blake Baird
	President and Director

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I, Michael A. Coke, certify that:

(1) I have reviewed this quarterly report on Form 10-Q of AMB Property Corporation;

(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 this report;

(4) The registrant’s other certifying officers 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 controls 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 officers 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: August 8, 2006

By:	/s/ Michael A. Coke
	Michael A. Coke
	CFO and
	Executive Vice President

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EX-32.1

EXHIBIT 32.1

Certification of Chief Executive Officer, President and Chief Financial Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of AMB Property Corporation (the “Company”), hereby certifies, to such officer’s knowledge, that:

     (i) the accompanying Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2006 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

     (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 8, 2006

/s/ HAMID R. MOGHADAM

Hamid R. Moghadam

Chairman and CEO

/s/ W. BLAKE BAIRD

W. Blake Baird

President and Director

/s/ Michael A. Coke

Michael A. Coke

CFO and

Executive Vice President

     The foregoing certification is being furnished solely to accompany the Report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.

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