UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2010

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE TRANSITION PERIOD FROM              TO            

COMMISSION FILE NUMBER: 000-51609

Inland American Real Estate Trust, Inc.

(Exact name of registrant as specified in its charter)

Maryland	34-2019608
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2901 Butterfield Road, Oak Brook, Illinois	60523
(Address of principal executive offices)	(Zip Code)

630-218-8000

(Registrant’s telephone number, including area code)

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

None

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

Common stock, $0.001 par value per share

(Title of Class)

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

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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 the filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ¨    No  ¨

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

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x	Smaller reporting company	¨

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

While there is no established market for the registrant’s shares of common stock, the registrant has completed a follow-on primary offering of its shares of common stock pursuant to a registration statement on Form S-11. In each of its primary offerings, the registrant sold shares of its common stock for $10.00 per share, with discounts available for certain categories of purchasers. The number of shares held by non-affiliates as of June 30, 2010 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately 834,122,708.

As of March 1,2011, there were 850,557,604 shares of the registrant’s common stock outstanding.

INLAND AMERICAN REAL ESTATE TRUST, INC.

TABLE OF CONTENTS

		Page
	Part I
Item 1.	Business		1
Item 1A.	Risk Factors		3
Item 1B.	Unresolved Staff Comments		24
Item 2.	Properties		24
Item 3.	Legal Proceedings		27
Item 4.	Reserved		27
	Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		28
Item 6.	Selected Financial Data		30
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		32
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		63
Item 8.	Consolidated Financial Statements and Supplementary Data		66
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		180
Item 9A.	Controls and Procedures		180
Item 9B.	Other Information		180
	Part III
Item 10.	Directors, Executive Officers and Corporate Governance		181
Item 11.	Executive Compensation		185
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		187
Item 13.	Certain Relationships and Related Transactions, and Director Independence		189
Item 14.	Principal Accounting Fees and Services		191
	Part IV
Item 15.	Exhibits and Financial Statement Schedules		192
	Signatures		193

This Annual Report on Form 10-K includes references to certain trademarks. Courtyard by Marriott^®, Marriott^®, Marriott Suites^®, Residence Inn by Marriott^® and SpringHill Suites by Marriott^® trademarks are the property of Marriott International, Inc. (“Marriott”) or one of its affiliates. Doubletree^®, Embassy Suites^®, Hampton Inn^®, Hilton Garden Inn^®, Hilton Hotels^® and Homewood Suites by Hilton^® trademarks are the property of Hilton Hotels Corporation (“Hilton”) or one or more of its affiliates. Hyatt Place^® trademark is the property of Hyatt Corporation (“Hyatt”). Intercontinental Hotels ^® trademark is the property of IHG. Wyndham ^® and Baymont Inn & Suites ^® trademarks are the property of Wyndham Worldwide. Comfort Inn ^® trademark is the property of Choice Hotels International. The Aloft service name is the property of Starwood. For convenience, the applicable trademark or service mark symbol has been omitted but will be deemed to be included wherever the above-referenced terms are used.

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PART I

Item 1. Business

General

Inland American Real Estate Trust, Inc., a Maryland corporation, was incorporated in October 2004. We have elected to be taxed, and currently qualify, as a real estate investment trust (“REIT”) for federal tax purposes. We acquire, own, operate and develop a diversified portfolio of commercial real estate, including retail, multi-family, industrial, lodging, and office properties, located in the United States. We acquire these assets directly by purchasing the property or through joint ventures, including joint ventures in which we do not own a controlling interest. We do not focus our property acquisitions in any one particular geographic location within the United States. Our investment policies and strategies are very broad and do not require us to invest any specific amount or percentage of assets in any one type of investment. Further, we have not adopted any policies limiting the amount or percentage of assets that we may invest in commercial real estate, entities owning commercial real estate or other real estate assets. We do not intend to acquire real estate assets located outside of the United States and Canada.

Inland American is a diversified REIT, and we focus on maximizing stockholder value by utilizing the depth of our expertise to capitalize on opportunities in the real estate industry. We believe our capacity to identify and react to investment opportunities is one of our biggest strengths.

At December 31, 2010, the Company owned a portfolio of 980 commercial real estate properties. The breakdown by segment is as follows:

Segment	Property Count	Square Feet /Rooms/Units
Retail	735	21,649,521 square feet
Lodging	99	15,380 rooms
Office	47	10,612,479 square feet
Industrial	72	15,959,342 square feet
Multi-Family	27	9,790 units

Segment Data

We have five business segments: Retail, Lodging, Office, Industrial, and Multi-family. We evaluate segment performance primarily based on net property operations. Net property operations of the segments do not include interest expense, depreciation and amortization, general and administrative expenses, noncontrolling interest expense or interest and other investment income from corporate investments. The non-segmented assets include our cash and cash equivalents, investment in marketable securities, construction in progress, investment in unconsolidated entities and notes receivable. Information related to our business segments for the year 2010 is set forth in Note 16 to our consolidated financial statements in Item 8 of this Annual Report on Form 10-K.

Customers

For the year ended December 31, 2010, we generated more than 16% of our rental revenue from two tenants, SunTrust Bank and AT&T, Inc. SunTrust Bank leases multiple properties throughout the United States, which collectively generated approximately 9% of our rental revenue for the year ended December 31, 2010. For the year ended December 31, 2010, approximately 7% of our rental revenue was generated by three properties leased to AT&T, Inc.

Tax Status

We and Minto Builders (Florida), Inc., a majority owned subsidiary, herein referred to as MB REIT, have elected to be taxed as REITs, under Sections 856 through 860 of the Internal Revenue Code of 1986 as amended (the “Code”) beginning with the tax year ended December 31, 2005. Because we and MB REIT qualify for taxation as

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REITs, we and MB REIT generally will not be subject to federal income tax on taxable income that is distributed to stockholders. If we or MB REIT fail to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, we or MB REIT will be subject to federal and state income tax on our taxable income at regular corporate rates. Even if we and MB REIT qualify for taxation as a REIT, we and MB REIT may be subject to certain state and local taxes on our income, property or net worth, respectively, and to Federal income and excise taxes on our or MB REIT’s undistributed income.

Competition

We are subject to significant competition in seeking real estate investments and tenants. We compete with many third parties engaged in real estate investment activities including other REITs, banks, insurance companies, mutual funds, institutional investors, investment banking firms, hedge funds, governmental bodies and other entities. We also face competition from real estate investment programs, including three REITs, sponsored by our sponsor and its affiliates for retail shopping centers and single tenant net-leased properties that may be suitable for our investment.

Employees

We have 99 full-time individuals employed primarily by our multi-family subsidiaries. Our executive officers do not receive any compensation from us for their services as such officers. Our executive officers are officers of one or more of The Inland Group, Inc.’s affiliated entities, including our business manager, and are compensated by these entities, in part, for their services rendered to us. For these purposes, secretary is not considered an “executive officer.”

We have entered into a business management agreement with Inland American Business Manager & Advisor, Inc. to serve as our business manager, with responsibility for overseeing and managing our day-to-day operations, and property management agreements with each of our property managers. We pay fees to each of our business manager and our property managers in consideration for the services they perform for us pursuant to these agreements.

Conflicts of Interest Policies

Our governing documents require a majority of our directors to be independent. Further, any transactions between The Inland Group, Inc. or its affiliates and us must be approved by a majority of our independent directors.

Beginning on page 3 is a discussion of the risks that we believe are material to investors who purchase or own our common stock. You should consider carefully these risks, together with the other information contained in and incorporated by reference in this Annual Report on Form 10-K, and the descriptions included in our consolidated financial statements and accompanying notes.

Environmental Matters

Compliance with federal, state and local environmental laws has not had a material adverse effect on our business, assets, or results of operations, financial condition and ability to pay distributions, and we do not believe that our existing portfolio will require us to incur material expenditures to comply with these laws and regulations. However, we cannot predict the impact of unforeseen environmental contingencies or new or changed laws or regulations on our properties.

Seasonality

The lodging segment is seasonal in nature, reflecting higher revenue and operating income during the second and third quarters. This seasonality can be expected to cause fluctuations in our net property operations for the lodging segment. All of our other segments are not seasonal in nature.

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Access to Company Information

We electronically file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports with the Securities and Exchange Commission (“SEC”). The public may read and copy any of the reports that are filed with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at (800)-SEC-0330. The SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically.

We make available, free of charge, by responding to requests addressed to our customer relations group, the Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports on our website, www.inland-american.com. These reports are available as soon as reasonably practicable after such material is electronically filed or furnished to the SEC.

Certifications

We have filed with the Securities and Exchange Commission the principal executive officer and principal financial officer certifications required pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, which are attached as Exhibits 31.1 and 31.2 to this Annual Report on Form 10-K.

Item 1A. Risk Factors

The occurrence of any of the risks discussed below could have a material adverse affect on our business, financial condition, results of operations and ability to pay distributions to our stockholders.

Risks Related to Our Business

Recent disruptions in the financial markets and current economic conditions could adversely affect our ability to refinance or secure additional debt financing at attractive terms and the values of our investments.

The capital and credit markets have been extremely volatile since the fall of 2008. In particular, the real estate debt markets have experienced volatility as a result of certain factors, including the tightening of underwriting standards by lenders and credit rating agencies, therefore making it more costly to refinance our existing debt and to obtain new financing on attractive terms. If overall borrowing costs continue to increase, either by increases in the index rates or by increases in lender spreads, our operations may generate lower returns.

In addition, the disruptions in the financial markets and recent economic conditions have negatively impacted commercial real estate fundamentals, which could have, and in some cases have already had, various negative impacts on the value of our investments, including:

• the values of our investments in commercial properties could decrease below the amounts paid for such investments; or

• revenues from our properties have decreased, and could continue to decrease, due to lower occupancy and rental rates, which may make it more difficult for us to pay distributions or meet our debt service obligations on debt financing.

There is no assurance that we will be able to continue paying cash distributions or that distributions will increase over time.

We intend to continue paying regular monthly cash distributions to our stockholders. However, there are many factors that can affect the availability and timing of cash distributions to stockholders such as our ability to buy, and earn positive yields on, real estate assets, the yields on securities of other entities in which we invest, our operating expense levels, as well as many other variables. Actual cash available for distributions may vary

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substantially from estimates. There is no assurance that we will be able to continue paying distributions at the current level or that the amount of distributions will increase, or not decrease further, over time. Even if we are able to continue paying distributions, the actual amount and timing of distributions is determined by our board of directors in its discretion and typically depends on the amount of funds available for distribution, which depends on items such as current and projected cash requirements and tax considerations. As a result, our distribution rate and payment frequency may vary from time to time.

Funding distributions from sources other than cash flow from operating activities may negatively impact our ability to sustain or pay distributions and will result in us having less cash available for other uses.

If our cash flow from operating activities is not sufficient to fully fund the payment of distributions, the level of our distributions may not be sustainable and some or all of our distributions will be paid from other sources. For example, from time to time, our business manager has determined, in its sole discretion, to either forgo or defer a portion of the business management fee, which has had the effect of increasing cash flow from operations for the relevant period because we have not had to use that cash to pay any fee or reimbursement which was foregone or deferred during the relevant period. We will, however, need to use cash at some point in the future to pay any fee or reimbursement that is deferred. For the year ended December 31, 2010, we paid a business management fee of $36 million, or approximately 0.32% of our average invested assets on an annual basis, as well as an investment advisory fee of approximately $1.4 million, together which are less than the full 1% fee that the business manager could be paid. There is no assurance that our business manager will forgo or defer any portion of its business management fee in the future. We also may use cash from financing activities, components of which may include borrowings (including borrowings secured by our assets), as well as proceeds from the sales of our properties, to fund distributions. To the extent distributions are paid from financing activities, we will have less money available for other uses, such as cash needed to refinance existing indebtedness.

There is no public market for our shares, and you may not be able to sell your shares, including through our share repurchase program.

There is no public market for our shares and no assurance that one may develop. Our charter does not require our directors to seek stockholder approval to liquidate our assets by a specified date, nor does our charter require our directors to list our shares for trading by a specified date. Further, our amended and restated share repurchase program, which will become effective on April 11, 2011, will permit us to repurchase shares only upon the death of the beneficial owner.

The failure of any bank in which we deposit our funds could reduce the amount of cash we have available to pay distributions and make additional investments.

We have deposited our cash and cash equivalents in several banking institutions in an attempt to minimize exposure to the failure or takeover of any one of these entities. However, the Federal Insurance Deposit Corporation, or “FDIC,” generally only insures limited amounts per depositor per insured bank. At December 31, 2010, we had cash and cash equivalents and restricted cash deposited in interest bearing transaction accounts at certain financial institutions exceeding these federally insured levels. If any of the banking institutions in which we have deposited funds ultimately fails, we may lose our deposits over the federally insured levels. The loss of our deposits could reduce the amount of cash we have available to distribute or invest.

Risks Related to Investments in Real Estate

There are inherent risks with real estate investments.

Investments in real estate assets are subject to varying degrees of risk. For example, an investment in real estate cannot generally be quickly converted to cash, limiting our ability to promptly vary our portfolio in response to changing economic, financial and investment conditions. Investments in real estate assets also are subject to adverse changes in general economic conditions which, for example, reduce the demand for rental space.

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Among the factors that could impact our real estate assets and the value of an investment in us are:

• local conditions such as an oversupply of space or reduced demand for real estate assets of the type that we own or seek to acquire, including, with respect to our lodging facilities, quick changes in supply of and demand for rooms that are rented or leased on a day-to-day basis;

• inability to collect rent from tenants;

• vacancies or inability to rent space on favorable terms;

• inflation and other increases in operating costs, including insurance premiums, utilities and real estate taxes;

• increases in energy costs or airline fares or terrorist incidents which impact the propensity of people to travel and therefore impact revenues from our lodging facilities, although operating costs cannot be adjusted as quickly;

• adverse changes in the federal, state or local laws and regulations applicable to us, including those affecting rents, zoning, prices of goods, fuel and energy consumption, water and environmental restrictions;

• the relative illiquidity of real estate investments;

• changing market demographics;

• an inability to acquire and finance, or refinance, properties on favorable terms, if at all;

• acts of God, such as earthquakes, floods or other uninsured losses; and

• changes or increases in interest rates and availability of financing.

In addition, periods of economic slowdown or recession, or declining demand for real estate, or the public perception that any of these events may occur, could result in a general decline in rents or increased defaults under existing leases.

Increasing vacancy rates for certain classes of real estate assets resulting from the recent economic downturn and disruption in the financial markets could adversely affect the value of our assets.

The U.S. economy is emerging from a severe recessionary contraction, which resulted in increased vacancy rates for certain classes of commercial property, including office, retail and industrial properties, due to increased tenant delinquencies and defaults under leases, generally lower demand for rentable space, as well as potential oversupply of rentable space. Business failures and downsizings led to reduced demand for office and industrial space and reduced consumer demand for retail products and services, which has led to reduced demand for retail space. In addition, declines in corporate travel budgets and consumer demand due to adverse general economic conditions, such as declines in U.S. GDP, risks affecting or reducing travel patterns, lower consumer confidence or adverse political conditions lowered the revenues and profitability of our hotel properties and therefore the net operating profits of the lessees to whom we lease our hotel properties.

If economic conditions do not recover or result in a further downtown, we may be required to increase concessions, tenant improvement expenditures or reduce rental rates to maintain occupancies beyond those anticipated at the time we acquired the properties, and the value of our real estate assets could decrease below the amounts we paid for them. In addition, revenues from properties could decrease due to lower occupancy rates, reduced rental rates and potential increases in uncollectible rent. Additionally, we will incur expenses, such as for maintenance costs, insurances costs and property taxes, even though a property is vacant. The longer the period of significant vacancies for a property, the greater the potential negative impact on our revenues and results of operations.

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We depend on tenants for the majority of our revenue, and lease terminations or the exercise of any co-tenancy rights could have an adverse effect.

From time to time certain of our tenants have failed to pay their rent, causing us to lose the revenue associated with the relevant lease. If these defaults become significant, we will be forced to use other funds to make payments on the mortgage indebtedness secured by the impacted property to prevent a foreclosure action. If a tenant defaults, we may experience delays in enforcing our rights as a landlord and may incur substantial costs in protecting our investment. We would face increased difficulties with respect to a lease containing co-tenancy provisions where a failure by one tenant gives another tenant the right to abate minimum rent, reduce its share or the amount of its payments of common area operating expenses and property taxes or cancel its lease. In addition, if a tenant at one of our “single-user facilities,” properties designed or built primarily for a particular tenant or a specific type of use, fails to renew its lease or defaults on its lease obligations, we may not be able to readily market a single-user facility to a new tenant without making substantial capital improvements or incurring other significant re-leasing costs.

We may suffer adverse consequences due to the financial difficulties, bankruptcy or insolvency of our tenants.

Recent economic conditions have caused, and may continue to cause, our tenants to experience financial difficulties, including bankruptcy, insolvency or a general downturn in their business. The retail sector in particular has been, and could continue to be, adversely affected by weakness in the national, regional and local economies, the level of consumer spending and consumer confidence, the adverse financial condition of some large retailing companies, the ongoing consolidation in the retail sector, the excess amount of retail space in a number of markets and increasing competition from discount retailers, outlet malls, internet retailers and other online businesses. We cannot provide assurance that any tenant that files for bankruptcy protection will continue to pay us rent. A bankruptcy filing by, or relating to, one of our tenants or a lease guarantor would bar efforts by us to collect pre-bankruptcy debts from that tenant or lease guarantor, or its property, unless we receive an order permitting us to do so from the bankruptcy court. In addition, we cannot evict a tenant solely because of bankruptcy. The bankruptcy of a tenant or lease guarantor could delay our efforts to collect past due balances under the relevant leases, and could ultimately preclude collection of these sums. If a lease is assumed by the tenant in bankruptcy, all pre-bankruptcy balances due under the lease must be paid to us in full. If, however, a lease is rejected by a tenant in bankruptcy, we would have only a general, unsecured claim for damages. An unsecured claim would only be paid to the extent that funds are available and only in the same percentage as is paid to all other holders of general, unsecured claims. Restrictions under the bankruptcy laws further limit the amount of any other claims that we can make if a lease is rejected. As a result, it is likely that we would recover substantially less than the full value of the remaining rent during the term.

We may be unable to secure funds for future tenant improvements.

We may be required to expend substantial funds to improve leasable space either to maintain existing tenants or to attract new tenants. Although we have established reserves for capital improvements, these reserves may not be sufficient, thus requiring us to seek funds from other sources. We cannot assure you that sufficient financing will be available or, if available, will be available on terms acceptable to us, if at all. Moreover, certain reserves required by lenders may be designated for specific uses and may not be available to use for tenant improvements. Additional borrowing for capital improvements will increase our interest expense. Failure to make these improvements could have a material adverse effect on the value of the impacted properties and the revenues generated by those properties.

We may be restricted from re-leasing space.

In the case of leases with retail tenants, the majority of the leases contain provisions giving the particular tenant the exclusive right to sell particular types of merchandise or provide specific types of services within the particular retail center. These provisions may limit the number and types of prospective tenants interested in leasing space in a particular retail property.

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Two of our tenants generated a significant portion of our revenue, and rental payment defaults by these significant tenants could adversely affect our results of operations.

For the year ended December 31, 2010, approximately 9% of our rental revenue was generated by over 400 retail banking properties leased to SunTrust Bank. Also, for the year ended December 31, 2010, approximately 7% of our rental revenue was generated by three properties leased to AT&T, Inc. As a result of the concentration of revenue generated from these properties, if either SunTrust or AT&T were to cease paying rent or fulfilling its other monetary obligations, we could have significantly reduced rental revenues or higher expenses until the defaults were cured or the properties were leased to a new tenant or tenants.

In addition to these tenants, our retail shopping center properties typically are anchored by large, nationally recognized tenants. At any time, our tenants may experience a downturn in their business that may weaken significantly their financial condition. Further, mergers or consolidations among large retail establishments could result in the closure of existing stores or duplicate or geographically overlapping store locations, which could include stores at our retail properties. Loss of, or a store closure by, an anchor or major tenant could significantly reduce our occupancy level or the rent we receive from our retail properties.

Geographic concentration of our portfolio may make us particularly susceptible to adverse economic developments in the real estate markets of those areas or natural disasters in those areas.

Because our properties are concentrated in certain geographic areas, our operating results are likely to be impacted by economic changes affecting the real estate markets in those areas. As of December 31, 2010, approximately, 4%, 4%, 7% and 13% of our base rental income of our consolidated portfolio, excluding our lodging facilities, was generated by properties located in the Dallas, Minneapolis, Chicago and Houston metropolitan areas, respectively.

Additionally, at December 31, 2010, 34 of our lodging facilities, or approximately 34% of our lodging portfolio, were located in Washington D.C. and the eight eastern seaboard states ranging from Connecticut to Florida, including 11 hotels located in North Carolina. Additionally, 22% of our facilities were located in Texas. Adverse events in these areas, such as recessions, hurricanes or other natural disasters, could cause a loss of revenues from these hotels. Further, several of the hotels are located near the water and are exposed to more severe weather than hotels located inland. Elements such as salt water and humidity can increase or accelerate wear on the hotels’ weatherproofing and mechanical, electrical and other systems, and cause mold issues. As a result, we may incur additional operating costs and expenditures for capital improvements at these hotels. Geographic concentration also exposes us to risks of oversupply and competition in these markets. Significant increases in the supply of certain property types, including hotels, without corresponding increases in demand could have a material adverse effect on our financial condition, results of operations and our ability to pay distributions.

To qualify as a REIT, we must rely on third parties to operate our hotels.

To continue qualifying as a REIT, we may not, among other things, operate any hotel, or directly participate in the decisions affecting the daily operations of any hotel. Thus, we have retained third party managers to operate our hotel properties. We do not have the authority to directly control any particular aspect of the daily operations of any hotel, such as setting room rates. Thus, even if we believe our hotels are being operated in an inefficient or sub-optimal manner, we may not be able to require an immediate change to the method of operation. Our only alternative for changing the operation of our hotels may be to replace the third party manager of one or more hotels in situations where the applicable management agreement permits us to terminate the existing manager. Certain of these agreements may not be terminated without cause, which generally includes fraud, misrepresentation and other illegal acts. Even if we terminate or replace any manager, there is no assurance that we will be able to find another manager or that we will be able to enter into new management agreements favorable to us. Any change of hotel management would cause a disruption in operations.

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Conditions of franchise agreements could adversely affect us.

Our lodging properties are operated under franchises with nationally recognized franchisors including Marriott International, Inc., Hilton Hotels Corporation, Intercontinental Hotels Group PLC, Hyatt Corporation, Wyndham Worldwide Corporation and Choice Hotels International. These agreements generally contain specific standards for, and restrictions and limitations on, the operation and maintenance of a hotel in order to maintain uniformity within the franchisor’s system. These standards are subject to change over time, in some cases at the discretion of the franchisor, and may restrict our ability to make improvements or modifications to a hotel without the consent of the franchisor. Conversely, these standards may require us to make certain improvements or modifications to a hotel, even if we do not believe the capital improvements are necessary or desirable or will result in an acceptable return on our investment. Compliance with these standards could require us to incur significant expenses or capital expenditures.

These agreements also permit the franchisor to terminate the agreement in certain cases such as a failure to pay royalties and fees or perform our other covenants under the franchise agreement, bankruptcy, abandonment of the franchise, commission of a felony, assignment of the franchise without the consent of the franchisor or failure to comply with applicable law or maintain applicable standards in the operation and condition of the relevant hotel. If a franchise license terminates due to our failure to make required improvements or to otherwise comply with its terms, we may be liable to the franchisor for a termination payment. These payments vary. Also, these franchise agreements do not renew automatically.

Actions of our joint venture partners could negatively impact our performance.

As of December 31, 2010, we had entered into joint venture agreements with sixteen entities to fund the investment of office, industrial/distribution, retail, lodging, healthcare and mixed use properties. The carrying value of our investment in these joint ventures, which we do not consolidate for financial reporting purposes, was $573.2 million. For the year ended December 31, 2010, we recognized losses of $18.7 million and impairment of $11.2 million associated with these ventures.

With respect to these investments, we are not in a position to exercise sole decision-making authority regarding the property, partnership, joint venture or other entity. Consequently, our joint venture investments may involve risks not otherwise present with other methods of investment in real estate. For example, our co-member, co-venturer or partner may have economic or business interests or goals which are or which become inconsistent with our business interests or goals or may take action contrary to our instructions or requests or contrary to our policies or objectives. We have experienced these events from time to time with our current venture partners, which in some cases has resulted in litigation with these partners. There can be no assurance that an adverse outcome in any future lawsuit will not have a material effect on our results of operations for any particular period. In addition, any litigation increases our expenses and prevents our officers and directors from focusing their time and effort on other aspects of our business. We also face the risk that our venture partners may become bankrupt, which would mean that we and any other remaining venture partners would generally remain liable for the joint venture’s liabilities, and the risk that that our partners may fail to fund their share of any required capital contributions, which could result in us having to contribute that capital. In addition, our relationships with our venture partners are contractual in nature. These agreements may restrict our ability to sell our interest when we desire or on advantageous terms and, on the other hand, may be terminated or dissolved under the terms of the agreements and, in each event, we may not continue to own or operate the interests or assets underlying the relationship or may need to purchase these interests or assets at an above-market price to continue ownership.

Current credit market disruptions and recent economic trends may increase the likelihood of a commercial developer defaulting on its obligations with respect to our development projects, including projects where we have notes receivable, or becoming bankrupt or insolvent.

We have entered into, and may continue to enter into, projects that are in various stages of pre-development and development. Investing in properties under development, and in lodging facilities, which typically must be renovated or otherwise improved on a regular basis, including renovations and improvements required by

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existing franchise agreements, subjects us to uncertainties such as the ability to achieve desired zoning for development, environmental concerns of governmental entities or community groups, ability to control construction costs or to build in conformity with plans, specifications and timetables. The current economic climate has continued to impact real estate developments as well. The current slow-down in consumer spending has negatively impacted the retail environment in particular, and is causing many retailers to pull back from new leasing and expansion plans. We believe that our retail developments will experience longer lease-up periods and future leasing will be at leasing rates less than originally underwritten.

In addition, recent economic conditions have caused an increase in developer failures. The developers of the projects in which we have invested are exposed to risks not only with respect to our projects, but also other projects in which they are involved. A default by a developer in respect of one of our development project investments, or the bankruptcy, insolvency or other failure of a developer for one of these projects, may require that we determine whether we want to assume the senior loan, fund monies beyond what we are contractually obligated to fund, take over development of the project, find another developer for the project, or sell our interest in the project. Developer failures could give tenants the right to terminate pre-construction leases, delay efforts to complete or sell the development project and could ultimately preclude us from realizing our anticipated returns. These events could cause a decrease in the value of our assets and compel us to seek additional sources of liquidity, which may or may not be available, in order to hold and complete the development project.

Generally, under bankruptcy law and our bankruptcy guarantees with our joint venture development partners, we may seek recourse from the developer-guarantor to complete our development project with a substitute developer partner. However, in the event of a bankruptcy by the developer-guarantor, we cannot provide assurance that the developer or its trustee will satisfy its obligations. The bankruptcy of any developer and the rejection of its development obligations would likely cause us to have to complete the development on our own or find a replacement developer, which could result in delays and increased costs. We cannot provide assurance that we would be able to complete the development on terms as favorable as when we first entered into the project. If we are not able to, or elected not to, proceed with a development opportunity, the development costs ordinarily would be charged against income for the then-current period if we determine our costs are not recoverable.

Sale leaseback transactions may be recharacterized in a manner unfavorable to us.

From time to time we have entered into a sale leaseback transaction where we purchase a property and then lease the property to the seller. These transactions could, however, be characterized as a financing instead of a sale in the case of the seller’s bankruptcy. In this case, we would not be treated as the owner of the property but rather as a creditor with no interest in the property itself. The seller may have the ability in a bankruptcy proceeding to restructure the financing by imposing new terms and conditions. The transaction also may be recharacterized as a joint venture. In this case, we would be treated as a joint venturer with liability, under some circumstances, for debts incurred by the seller relating to the property.

We may be unable to sell assets if or when we decide to do so.

Our ability to sell real estate assets is limited by many factors, such as limitations imposed by the Code on REITs, general economic conditions, the availability of financing to the purchaser, interest rates and the supply and demand for the particular asset type. Specifically, as a result of recent economic conditions, potential purchasers may be unable to obtain financing on acceptable terms, if at all, thereby delaying our ability to sell our real estate investments. In addition, the capitalization rates at which properties may be sold could rise, thereby reducing our potential proceeds from sale. In addition, if we sell properties by providing financing to purchasers, we will bear the risk of default by the purchaser and may incur significant litigation costs in enforcing our rights against the purchaser. We cannot predict whether we will be able to sell any real estate asset on favorable terms and conditions, if at all, or the length of time needed to sell an asset.

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An increase in real estate taxes may decrease our income from properties.

From time to time, the amount we pay for property taxes increases as either property values increase or assessment rates are adjusted. Increases in a property’s value or in the assessment rate result in an increase in the real estate taxes due on that property. If we are unable to pass the increase in taxes through to our tenants, our net operating income for the property decreases.

Uninsured losses or premiums for insurance coverage may adversely affect a stockholder’s returns.

We attempt to adequately insure all of our properties against casualty losses. There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders sometimes require commercial property owners to purchase specific coverage against terrorism as a condition for providing mortgage loans. These policies may not be available at a reasonable cost, if at all, which could inhibit our ability to finance or refinance our properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. If we incur any casualty losses not fully covered by insurance, the value of our assets will be reduced by the amount of the uninsured loss. In addition, other than any reserves we may establish, we have no source of funding to repair or reconstruct any uninsured damaged property, and we cannot provide assurance that any of these sources of funding will be available to us in the future.

Terrorist attacks and other acts of violence or war may affect the markets in which we operate, our operations and our profitability.

We may acquire real estate assets located in areas that are susceptible to attack. These attacks may directly impact the value of our assets through damage, destruction, loss or increased security costs. Although we may obtain terrorism insurance, we may not be able to obtain sufficient coverage to fund any losses we may incur. Risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Further, certain losses resulting from these types of events are uninsurable or not insurable at reasonable costs.

More generally, any terrorist attack, other act of violence or war, including armed conflicts, could result in increased volatility in, or damage to, the United States and worldwide financial markets and economy. Any terrorist incident may, for example, deter people from traveling, which could affect the ability of our hotels to generate operating income and therefore our ability to pay distributions. Additionally, increased economic volatility could adversely affect our tenants’ ability to pay rent on their leases or our ability to borrow money or issue capital stock at acceptable prices.

The cost of complying with environmental and other governmental laws and regulations may adversely affect us.

All real property and the operations conducted on real property are subject to federal, state and local laws and regulations (including those of foreign jurisdictions) relating to environmental protection and human health and safety. These laws and regulations generally govern wastewater discharges, air emissions, the operation and removal of underground and above-ground storage tanks, the use, storage, treatment, transportation and disposal of solid and hazardous materials, and the remediation of contamination associated with disposals. We also are required to comply with various local, state and federal fire, health, life-safety and similar regulations. Some of these laws and regulations may impose joint and several liability on tenants or owners for the costs of investigating or remediating contaminated properties. These laws and regulations often impose liability whether or not the owner knew of, or was responsible for, the presence of the hazardous or toxic substances. The cost of

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removing or remediating could be substantial. In addition, the presence of these substances, or the failure to properly remediate these substances, may adversely affect our ability to sell or rent a property or to use the property as collateral for borrowing.

Environmental laws and regulations also may impose restrictions on the manner in which properties may be used or businesses may be operated, and these restrictions may require substantial expenditures by us. Environmental laws and regulations provide for sanctions in the event of noncompliance and may be enforced by governmental agencies or, in certain circumstances, by private parties. Third parties may seek recovery from owners of real properties for personal injury or property damage associated with exposure to released hazardous substances. Compliance with new or more stringent laws or regulations or stricter interpretations of existing laws may require material expenditures by us. For example, various federal, regional and state laws and regulations have been implemented or are under consideration to mitigate the effects of climate change caused by greenhouse gas emissions. Among other things, “green” building codes may seek to reduce emissions through the imposition of standards for design, construction materials, water and energy usage and efficiency, and waste management. We are not aware of any such existing requirements that we believe will have a material impact on our current operations. However, future requirements could increase the costs of maintaining or improving our existing properties or developing new properties.

Our properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.

The presence of mold at any of our properties could require us to undertake a costly program to remediate, contain or remove the mold. Mold growth may occur when moisture accumulates in buildings or on building materials. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing because exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. The presence of mold could expose us to liability from our tenants, their employees and others if property damage or health concerns arise.

We may incur significant costs to comply with the Americans With Disabilities Act.

Investment in real estate assets also may be subject to the Americans With Disabilities Act of 1990, as amended. Under this act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The act’s requirements could require us to remove access barriers and could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages.

A proposed change in U.S. accounting standards for leases could reduce the overall demand to lease our properties.

The existing accounting standards for leases require lessees to classify their leases as either capital or operating leases. Under a capital lease, both the leased asset, which represents the tenant’s right to use the property, and the contractual lease obligation are recorded on the tenant’s balance sheet if one of the following criteria are met: (i) the lease transfers ownership of the property to the lessee by the end of the lease term; (ii) the lease contains a bargain purchase option; (iii) the non-cancellable lease term is more than 75% of the useful life of the asset; or (iv) if the present value of the minimum lease payments equals 90% or more of the leased property’s fair value. If the terms of the lease do not meet these criteria, the lease is considered an operating lease, and no leased asset or contractual lease obligation is recorded by the tenant.

In order to address concerns raised by the SEC regarding the transparency of contractual lease obligations under the existing accounting standards for operating leases, the U.S. Financial Accounting Standards Board (the “FASB”) and the International Accounting Standards Board (the “IASB”) initiated a joint project to develop new

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guidelines to lease accounting. The FASB and IASB (collectively, the “Boards”) issued an Exposure Draft on August 17, 2010 (the “Exposure Draft”), which proposes substantial changes to the current lease accounting standards, primarily by eliminating the concept of operating lease accounting. As a result, a lease asset and obligation will be recorded on the tenant’s balance sheet for all lease arrangements. In addition, the Exposure Draft will impact the method in which contractual lease payments will be recorded. In order to mitigate the effect of the proposed lease accounting, tenants may seek to negotiate certain terms within new lease arrangements or modify terms in existing lease arrangements, such as shorter lease terms or fewer extension options, which would generally have less impact on tenant balance sheets. Also, tenants may reassess their lease-versus-buy strategies. This could result in a greater renewal risk or shorter lease terms, either of which may negatively impact our operations and ability to pay distributions.

The Exposure Draft does not include a proposed effective date; however, the Boards plan to issue a final standard regarding lease accounting in 2011.

Risks Related to Investments in Other Real Estate Assets

Our investments in equity and debt securities have materially impacted, and may in the future materially impact, our results.

We have invested, and may continue to invest, in real estate related securities of both publicly traded and private real estate companies. Real estate related equity securities are always unsecured and subordinated to other obligations of the issuer. Investments in real estate related equity securities are subject to risks of: (1) limited liquidity in the secondary trading market in the case of unlisted or thinly traded securities; (2) substantial market price volatility resulting from changes in prevailing interest rates in the case of traded equity securities; (3) subordination to the liabilities of the entity; (4) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to redeem the securities; and (5) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations. In addition, investments in real estate related securities will involve special risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer. Issuers of real estate related securities generally invest in real estate or real estate related assets and are subject to the inherent risks associated with real estate related investments.

As of December 31, 2010, we had investments valued at $268.7 million in real estate related equity and debt securities. Many of the entities that we have invested in have reduced the dividends paid on their stocks. The stock prices for these entities have declined since our initial purchase, and in certain cases we have sold these investments at a loss. There is no assurance that the stock market in general, and the market for REIT stocks, in particular, will improve in the near future.

Any mortgage loans that we originate or purchase are subject to the risks of delinquency and foreclosure.

We may originate and purchase mortgage loans. These loans are subject to risks of delinquency and foreclosure, and risks of loss. The ability of a borrower to repay a loan secured by an income-producing property depends primarily upon the successful operation of the property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to repay the loan may be impaired. A property’s net operating income can be affected by, among other things:

• increased costs, including, with respect to our lodging facilities, added costs imposed by franchisors for improvements or operating changes required, from time to time, under the franchise agreements;

• poor property management decisions;

• property location and condition;

• competition from comparable types of properties;

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• changes in specific industry segments;

• declines in regional or local real estate values, or occupancy rates; and

• increases in interest rates, real estate tax rates and other operating expenses.

We bear the risks of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage loan. In the event of the bankruptcy of a mortgage loan borrower, the mortgage loan to that borrower will be deemed to be collateralized only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure of a mortgage loan can be an expensive and lengthy process that could have a substantial negative effect on our anticipated return on the foreclosed mortgage loan. We may also be forced to foreclose on certain properties, be unable to sell these properties and be forced to incur substantial expenses to improve operations at the property.

We may make a mortgage loan to affiliates of, or entities sponsored by, our sponsor.

If we have excess working capital, we may, from time to time, and subject to the conditions in our articles, make a mortgage loan to affiliates of, or entities sponsored by, our sponsor. These loan arrangements will not be negotiated at arm’s length and may contain terms and conditions that are not in our best interest and would not otherwise be applicable if we entered into arrangements with a third-party borrower not affiliated with these entities.

Risks Associated with Debt Financing

Borrowings may reduce the funds available for distribution and increase the risk of loss since defaults may cause us to lose the properties securing the loans.

In some instances, we acquire real estate assets by using either existing financing or borrowing new monies. Our articles generally limit the total amount we may borrow to 300% of our net assets. In addition, we may obtain loans secured by some or all of our properties or other assets to fund additional acquisitions or operations including to satisfy the requirement that we distribute at least 90% of our annual “REIT taxable income” (subject to certain adjustments) to our stockholders, or as is otherwise necessary or advisable to assure that we qualify as a REIT for federal income tax purposes. Payments required on any amounts we borrow reduce the funds available for, among other things, distributions to our stockholders because cash otherwise available for distribution is required to pay principal and interest associated with amounts we borrow.

Defaults on loans secured by a property we own may result in us losing the property or properties securing the loan that is in default as a result of foreclosure actions initiated by a lender. For tax purposes, a foreclosure would be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the property. If the outstanding balance of the debt exceeds our tax basis in the property, we would recognize taxable gain on the foreclosure but would not receive any cash proceeds. We also may fully or partially guarantee any monies that subsidiaries borrow to purchase or operate real estate assets. In these cases, we will be responsible to the lender for repaying the loans if the subsidiary is unable to do so. If any mortgage contains cross-collateralization or cross-default provisions, more than one property may be affected by a default.

Lenders may restrict certain aspects of our operations, which could, among other things, limit our ability to make distributions.

The terms and conditions contained in any of our loan documents may require us to maintain cash reserves, limit the aggregate amount we may borrow on a secured and unsecured basis, require us to satisfy restrictive financial covenants, prevent us from entering into certain business transactions, such as a merger, sale of assets or other business combination, restrict our leasing operations or require us to obtain consent from the lender to complete

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transactions or make investments that are ordinarily approved only by our board of directors. In addition, secured lenders typically restrict our ability to discontinue insurance coverage on a mortgaged property even though we may believe that the insurance premiums paid to insure against certain losses, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters, are greater than the potential risk of loss.

Interest-only indebtedness may increase our risk of default.

We have financed, and may continue to finance, our property acquisitions or any re-financings using interest-only mortgage indebtedness. During the interest only period, the amount of each scheduled payment is less than that of a traditional amortizing mortgage loan. The principal balance of the mortgage loan is not reduced (except in the case of prepayments) because there are no scheduled monthly payments of principal during this period. After the interest-only period, we are required either to make scheduled payments of amortized principal and interest or to make a lump-sum or “balloon” payment at maturity. These required principal or balloon payments increase the amount of our scheduled payments and may increase our risk of default under the related mortgage loan and reduce the funds available for distribution to our stockholders.

Increases in interest rates could increase the amount of our debt payments.

We have borrowed money that bears interest at variable rates. To date, we have effectively converted some of our variable rate debt into fixed rate debt through the use of swap agreements. Increases in interest rates in variable rate debt that has not otherwise been hedged through the use of swap agreements reduce the funds available for other needs, including distribution to our stockholders. In addition, if rising interest rates cause us to need additional capital to repay indebtedness, we may be forced to sell one or more of our properties or investments in real estate at times which may not permit us to realize the return on the investments we would have otherwise realized.

To hedge against interest rate fluctuations, we use derivative financial instruments, which may be costly and ineffective.

From time to time, we use derivative financial instruments to hedge exposures to changes in interest rates on certain loans secured by our assets. Our derivative instruments currently consist of interest rate swap contracts but may, in the future, include, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements. Our actual hedging decisions are determined in light of the facts and circumstances existing at the time of the hedge. There is no assurance that our hedging strategy will achieve our objectives. We may be subject to costs, such as transaction fees or breakage costs, if we terminate these arrangements.

To the extent that we use derivative financial instruments to hedge against interest rate fluctuations, we are exposed to credit risk, basis risk and legal enforceability risks. In this context, credit risk is the failure of the counterparty to perform under the terms of the derivative contract. Basis risk occurs when the index upon which the contract is based is more or less variable than the index upon which the hedged asset or liability is based, thereby making the hedge less effective. Finally, legal enforceability risks encompass general contractual risks including the risk that the counterparty will breach the terms of, or fail to perform its obligations under, the derivative contract. A counterparty could fail, shut down, file for bankruptcy or be unable to pay out contracts. The business failure of a hedging counterparty with whom we enter into a hedging transaction will most likely result in a default. Default by a party with whom we enter into a hedging transaction may result in the loss of unrealized profits and force us to cover our resale commitments, if any, at the then current market price. Although generally we will seek to reserve the right to terminate our hedging positions, it may not always be possible to dispose of or close out a hedging position without the consent of the hedging counterparty, and we may not be able to enter into an offsetting contract to cover our risk. We cannot provide assurance that a liquid secondary market will exist for hedging instruments purchased or sold, and we may be required to maintain a position until exercise or expiration, which could result in losses.

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Further, the REIT provisions of the Code may limit our ability to hedge the risks inherent to our operations. We may be unable to manage these risks effectively.

We may be contractually obligated to purchase property even if we are unable to secure financing for the acquisition.

We typically finance a portion of the purchase price for each property that we acquire. However, to ensure that our offers are as competitive as possible, we generally do not enter into contracts to purchase property that include financing contingencies. Thus, we may be contractually obligated to purchase a property even if we are unable to secure financing for the acquisition. In this event, we may choose to close on the property by using cash on hand, which would result in less cash available for our operations and distributions to stockholders. Alternatively, we may choose not to close on the acquisition of the property and default on the purchase contract. If we default on any purchase contract, we could lose our earnest money and become subject to liquidated or other contractual damages and remedies.

Risks Related to Conflicts of Interest

There are conflicts of interest between us and affiliates of our sponsor that may affect our acquisition of properties and financial performance.

Our operation and management may be influenced or affected by conflicts of interest arising out of our relationship with entities sponsored by our sponsor. Specifically, our sponsor has sponsored another REIT, Inland Diversified Real Estate Trust, Inc., which relies on an affiliate of our business manager to serve as its business manager. Inland Diversified invests in the same broad range of asset types as us. As a result, we may be seeking to buy properties and other real estate assets at the same time as Inland Diversified. The resolution of conflicts in favor of Inland Diversified and any other entities sponsored by our sponsor could result in us losing investment opportunities, losing tenants or suffering from delays in locating replacement tenants.

We do not have our own acquisition group.

Except for the persons employed by our student housing subsidiaries, we do not employ directly any persons responsible for identifying and acquiring properties or other real estate assets. Instead, we rely on entities affiliated with our sponsor such as IREA and Inland Institutional Capital Partners Corporation to identify and acquire other real estate assets. Other entities formed and organized by our sponsor likewise utilize these entities to identify and acquire real estate assets, including the type of assets that we seek to acquire. IREA is a wholly owned indirect subsidiary of The Inland Group, Inc. Mr. Parks is a director of The Inland Group and Mr. Parks and Ms. Gujral are both directors of our sponsor and two of the other REITs formed and organized by our sponsor. Under the property acquisition agreement we have entered into with IREA, we have been granted certain rights to acquire all properties, REITs or real estate operating companies IREA identifies, acquires or obtains the right to acquire. This right is subject to prior rights granted by IREA to other REITs formed and organized by our sponsor, which grant these entities rights superior to ours to acquire neighborhood retail facilities, community centers or single-user properties located throughout the United States. The agreement with IREA may result in a property being offered to another entity, even though we may also be interested in, and have the ability to acquire, the subject property.

We do not have arm’s-length agreements with our business manager, property managers or any other affiliates of our sponsor.

None of the agreements and arrangements with our business manager, property managers and other affiliates of our sponsor was negotiated at arm’s length. These agreements may contain terms and conditions that would not otherwise be applicable if we entered into arm’s-length agreements with third parties.

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Our business manager receives fees based upon our invested assets and, in certain cases, the purchase price for these assets, and may recommend that we make investments in an attempt to increase its fees.

Our business manager receives fees based on the aggregate book value, including acquired intangibles, of our invested assets and on the purchase price paid to acquire controlling interests in REITs or other real estate operating companies. The book value of our assets includes amounts borrowed to acquire these assets. Also, we will pay our business manager a fee each time we acquire a REIT or other real estate operating company and an affiliate of our business manager receives fees for managing our portfolio of marketable securities. Our business manager may, therefore: (1) borrow more money than prudent to increase the amount we can invest or (2) retain instead of sell assets. Further, because we will pay our business manager a fee when we acquire a controlling interest in a REIT or other real estate operating company but not a fee interest in real estate, our business manager may focus on, and recommend, acquiring REITs or other real estate operating companies even if fee interests in real estate assets generate better returns.

We pay significant fees to our business manager, property managers and other affiliates of our sponsor.

We pay significant fees to our business manager, property managers and other affiliates of our sponsor for services provided to us. In addition, because employees of our business manager are given broad discretion to determine when to consummate a particular real estate transaction, we rely on these persons to dictate the level of our business activity. Fees paid to our business manager, property managers and other affiliates of our sponsor reduce funds available for distribution. We have also issued stock to our business manager in consideration of acquisition fees earned by the business manager. These issuances have the effect of reducing the percentage of our outstanding shares owned by our stockholders.

Our sponsor may face a conflict of interest in allocating personnel and resources between its affiliates, our business manager and property managers.

We rely on persons employed by our business manager and property managers to manage our day-to-day operations. Some of these individuals, including two of our directors, Ms. Gujral and Mr. Parks, who serve as our president and chairman of the board, respectively, also are employed by our sponsor or its affiliates, and may provide services to one or more other investment programs sponsored by our sponsor. These individuals face competing demands for their time and service and may have conflicts in allocating their time between our business and the business of our sponsor, its affiliates and the other entities formed and organized by our sponsor. These individuals may not be able to devote all of their time and resources to our business even if needed.

We acquire real estate assets from affiliates of our sponsor in transactions in which the price is not the result of arm’s length negotiations.

We have acquired real estate assets from affiliates of our sponsor, and may do so in the future. Although the purchase price we paid for the assets was equal to the price paid for the assets by the affiliate plus any costs incurred by the affiliate in acquiring or financing the property or asset, it is possible that we could have negotiated a better price if we had negotiated directly with the seller.

From time to time, we purchase real estate assets from persons who have prior business relationships with affiliates of our sponsor. Our interests in these transactions may be different from the interests of affiliates in these transactions.

From time to time, we purchase real estate assets from third parties who have existing or previous business relationships with entities affiliated with our sponsor. The officers, directors or employees of our business manager, our property managers, IREA or Inland Institutional Capital Partners Corporation who also perform services for our sponsor or these other affiliates may have a conflict in representing our interests in these transactions on the one hand and the interests of our sponsor and its affiliates in preserving or furthering their respective relationships on the other hand. We may, therefore, end up paying a higher price to acquire the asset or sell the asset for a lower price than we would if these other relationships did not exist.

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Risks Related to Our Corporate Structure

Stockholders’ interest in us will be diluted if we issue additional shares.

Stockholders do not have preemptive rights to any shares issued by us in the future. Our articles authorize us to issue up to 1.5 billion shares of capital stock, of which 1.46 billion shares are designated as common stock and 40 million are designated as preferred stock. Future issuances of common stock, including issuances through the DRP, will reduce the percentage of our shares owned by our current stockholders who do not participate in future stock issuances. Stockholders generally will not be entitled to vote on whether or not we issue additional shares. In addition, depending on the terms and pricing of an additional offering of our shares and the value of our properties, our stockholders may experience dilution in both the book value and fair value of their shares. Further, our board could authorize the issuance of stock with terms and conditions that could subordinate the rights of the holders of our current common stock or have the effect of delaying, deferring or preventing a change in control in us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price for our stockholders.

Stockholders’ returns may be reduced if we are required to register as an investment company under the Investment Company Act.

We are not registered, and do not intend to register our company or any of our subsidiaries, as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”). If we become obligated to register our company or any of our subsidiaries as an investment company, the registered entity would have to comply with a variety of substantive requirements under the Investment Company Act imposing, among other things:

• limitations on capital structure;

• restrictions on specified investments;

• prohibitions on transactions with affiliates; and

• compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly change our operations.

We intend to continue conducting our operations, directly and through wholly or majority-owned subsidiaries, so that we and each of our subsidiaries continue to be exempt from registration as an investment company under the Investment Company Act. Under Section 3(a)(1)(A) of the Investment Company Act, a company is not deemed to be an “investment company” if it neither is, nor holds itself out as being, engaged primarily, nor proposes to engage primarily, in the business of investing, reinvesting or trading in securities. Under Section 3(a)(1)(C) of the Investment Company Act, a company is not deemed to be an “investment company” if it neither is engaged, nor proposes to engage, in the business of investing, reinvesting, owning, holding or trading in securities and does not own or propose to acquire “investment securities” having a value exceeding 40% of the value of its total assets on an unconsolidated basis, which we refer to as the “40% test.”

We believe that we and most, if not all, of our wholly and majority-owned subsidiaries are not considered investment companies under either Section 3(a)(1)(A) or Section 3(a)(1)(C) of the Investment Company Act. In the event that the company or any of its wholly or majority-owned subsidiaries would ever inadvertently fall within one of the definitions of “investment company,” we intend to rely on the exception provided by Section 3(c)(5)(C) of the Investment Company Act.

Under Section 3(c)(5)(C), the SEC staff generally requires us to maintain at least 55% of our assets directly in qualifying assets to qualify for this exception. Mortgage-backed securities may or may not constitute qualifying assets, depending on the characteristics of the mortgage-backed securities, including the rights that we have with respect to the underlying loans. Our ownership of mortgage-backed securities, therefore, is limited by provisions of the Investment Company Act and SEC staff interpretations.

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The method we use to classify our assets for purposes of the Investment Company Act is based in large measure upon no-action positions taken by the SEC staff in the past. These no-action positions were issued in accordance with factual situations that may be substantially different from the factual situations we may face, and a number of these no-action positions were issued more than ten years ago. No assurance can be given that the SEC staff will concur with our classification of our assets. In addition, the SEC staff may, in the future, issue further guidance that may require us to re-classify our assets for purposes of qualifying for exemption from regulation under the Investment Company Act. If we are required to re-classify our assets, we may no longer be in compliance with the exclusion from the definition of an “investment company” provided by Section 3(c)(5)(C) of the Investment Company Act.

A change in the value of any of our assets could cause us to fall within the definition of “investment company” and negatively affect our ability to maintain our exemption from regulation under the Investment Company Act. To avoid being required to register our company or any of our subsidiaries as an investment company under the Investment Company Act, we may be unable to sell assets we would otherwise want to sell and may need to sell assets we would otherwise wish to retain. In addition, we may have to acquire additional income- or loss-generating assets that we might not otherwise have acquired or may have to forgo opportunities to acquire interests in companies that we would otherwise want to acquire and would be important to our investment strategy.

If we were required to register the company as an investment company but failed to do so, we would be prohibited from engaging in our business, and criminal and civil actions could be brought against us. In addition, our contracts would be unenforceable unless a court required enforcement, and a court could appoint a receiver to take control of us and liquidate our business.

Maryland law and our organizational documents limit a stockholder’s right to bring claims against our officers and directors.

Subject to the limitations set forth in our articles, a director will not have any liability for monetary damages under Maryland law so long as he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interest, and with the care that an ordinary prudent person in a like position would use under similar circumstances. In addition, our articles, in the case of our directors, officers, employees and agents, and the business management agreement and the property management agreements, with our business manager and property managers, respectively, require us to indemnify these persons for actions taken by them in good faith and without negligence or misconduct, or, in the case of our independent directors, actions taken in good faith without gross negligence or willful misconduct. Moreover, we may enter into separate indemnification agreements with each of our directors and some of our executive officers. As a result, we and our stockholders may have more limited rights against these persons than might otherwise exist under common law. In addition, we may be obligated to fund the defense costs incurred by these persons in some cases.

Our board of directors may, in the future, adopt certain measures under Maryland law without stockholder approval that may have the effect of making it less likely that stockholders would receive a “control premium” for their shares.

Corporations organized under Maryland law are permitted to protect themselves from unsolicited proposals or offers to acquire the company. Although we are not subject to these provisions, our stockholders could approve an amendment to our articles eliminating this restriction. If we do become subject to these provisions, our board of directors would have the power under Maryland law to, among other things, amend our articles without stockholder approval to:

• stagger our board of directors into three classes;

• require a two-thirds vote of stockholders to remove directors;

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• empower only remaining directors to fill any vacancies on the board;

• provide that only the board can fix the size of the board;

• provide that all vacancies on the board, regardless of how the vacancy was created, may be filled only by the affirmative vote of a majority of the remaining directors in office; and

• require that special stockholders meetings be called only by holders of a majority of the voting shares entitled to be cast at the meeting.

These provisions may discourage an extraordinary transaction, such as a merger, tender offer or sale of all or substantially all of our assets, all of which might provide a premium price for a stockholder’s shares.

Further, under the Maryland Business Combination Act, we may not engage in any merger or other business combination with an “interested stockholder” or any affiliate of that interested stockholder for a period of five years after the most recent purchase of stock by the interested stockholder. After the five-year period ends, any merger or other business combination with the interested stockholder must be recommended by our board of directors and approved by the affirmative vote of at least:

• 80% of all votes entitled to be cast by holders of outstanding shares of our voting stock; and

• two-thirds of all of the votes entitled to be cast by holders of outstanding shares of our voting stock other than those shares owned or held by the interested stockholder unless, among other things, our stockholders receive a minimum payment for their common stock equal to the highest price paid by the interested stockholder for its common stock.

Our articles exempt any business combination involving us and The Inland Group or any affiliate of The Inland Group, including our business manager and property managers, from the provisions of this law.

Our articles place limits on the amount of common stock that any person may own without the prior approval of our board of directors.

To qualify as a REIT, no more than 50% of the outstanding shares of our common stock may be beneficially owned, directly or indirectly, by five or fewer individuals at any time during the last half of each taxable year. Our articles prohibit any persons or groups from owning more than 9.8% of our common stock without the prior approval of our board of directors. These provisions may have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction such as a merger, tender offer or sale of all or substantially all of our assets that might involve a premium price for holders of our common stock. Further, any person or group attempting to purchase shares exceeding these limits could be compelled to sell the additional shares and, as a result, to forfeit the benefits of owning the additional shares.

Our articles permit our board of directors to issue preferred stock on terms that may subordinate the rights of the holders of our current common stock or discourage a third party from acquiring us.

Our board of directors is permitted, subject to certain restrictions set forth in our articles, to issue up to forty million shares of preferred stock without stockholder approval. Further, subject to certain restrictions set forth in our articles, our board may classify or reclassify any unissued preferred stock and establish the preferences, conversions or other rights, voting powers, restrictions, limitations as to dividends and other distributions, qualifications, and terms or conditions of redemption of any preferred stock. Thus, our board of directors could authorize us to issue shares of preferred stock with terms and conditions that could subordinate the rights of the holders of our common stock or have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction such as a merger, tender offer or sale of all or substantially all of our assets, that might provide a premium price for holders of our common stock.

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Maryland law limits, in some cases, the ability of a third party to vote shares acquired in a “control share acquisition.”

Under the Maryland Control Share Acquisition Act, persons or entities owning “control shares” of a Maryland corporation acquired in a “control share acquisition” have no voting rights with respect to those shares except to the extent approved by a vote of two-thirds of the corporation’s disinterested stockholders. Shares of stock owned by the acquirer or by officers or directors who are employees of the corporation, are not considered disinterested for these purposes. “Control shares” are shares of stock that, taken together with all other shares of stock the acquirer previously acquired, would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of voting power:

• one-tenth or more but less than one-third of all voting power;

• one-third or more but less than a majority of all voting power; or

• a majority or more of all voting power.

Control shares do not include shares of stock the acquiring person is entitled to vote as a result of having previously obtained stockholder approval. A “control share acquisition” means the acquisition of control shares, subject to certain exceptions. The Control Share Acquisition Act does not apply to (1) shares acquired in a merger, consolidation or share exchange if the corporation is a party to the transaction or (2) acquisitions approved or exempted by our articles or bylaws. Our articles exempt transactions between us and The Inland Group and its affiliates, including our business manager and property managers, from the limits imposed by the Control Share Acquisition Act. This statute could have the effect of discouraging offers from third parties to acquire us and increase the difficulty of successfully completing this type of offer by anyone other than The Inland Group and its affiliates.

Federal Income Tax Risks

If we fail to qualify as a REIT, our operations and distributions to stockholders will be adversely affected.

Our qualification as a REIT depends on our ability to meet requirements regarding our organization and ownership, distributions of our income, the nature and diversification of our income and assets as well as other tests imposed by the Internal Revenue Code of 1986, as amended (the “Internal Revenue Code”). We cannot assure you that our actual operations for any one taxable year will satisfy these requirements. Further, new legislation, regulations, administrative interpretations or court decisions could significantly change the laws, rules and regulations impacting our ability to qualify as a REIT or the federal income tax consequences of qualification. If we were to fail to qualify as a REIT, without the benefit of certain relief provisions, in any taxable year:

• we would not be allowed to deduct distributions paid to stockholders when computing our taxable income;

• we would be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates;

• we would be disqualified from being taxed as a REIT for the four taxable years following the year during which we failed to qualify, unless entitled to relief under certain statutory provisions;

• we would have less cash to pay distributions to stockholders; and

• we may be required to borrow additional funds or sell some of our assets in order to pay corporate tax obligations we may incur as a result of being disqualified.

In addition, if we were to fail to qualify as a REIT, we would not be required to pay distributions to stockholders, and all distributions to stockholders that we did pay would be subject to tax as regular corporate dividends to the extent of our current and accumulated earnings and profits. This means that, under current law, which is subject to change, our U.S. stockholders who are taxed as individuals would be taxed on our dividends at long-term

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capital gains rates through 2012 and that our corporate stockholders generally would be entitled to the dividends received deduction with respect to such dividends, subject, in each case, to applicable limitations under the Internal Revenue Code.

To maintain REIT status, we may be forced to borrow funds during unfavorable market conditions to make distributions to our stockholders, which could increase our operating costs and decrease the value of an investment in our company.

To qualify as a REIT, we must distribute 90% of our REIT taxable income (which is determined without regard to the dividends-paid deduction or net capital gain) to our stockholders each year. At times, we may not have sufficient funds to satisfy these distribution requirements and may need to borrow funds to make these distributions and maintain our REIT status and avoid the payment of income and excise taxes. These borrowing needs could result from (1) differences in timing between the actual receipt of cash and inclusion of income for federal income tax purposes; (2) the effect of non-deductible capital expenditures; (3) the creation of reserves; or (4) required debt amortization payments. We may need to borrow funds at times when market conditions are unfavorable. Further, if we are unable to borrow funds when needed for this purpose, we would have to fund alternative sources of funding or risk losing our status as a REIT.

Certain of our business activities are potentially subject to the prohibited transaction tax, which could reduce the return on an investment in our company.

Our ability to dispose of property during the first two years following acquisition is restricted to a substantial extent as a result of our REIT status. Under applicable provisions of the Internal Revenue Code regarding prohibited transactions by REITs, we will be subject to a 100% tax on any gain realized on the sale or other disposition of any property (other than foreclosure property) we own, directly or through any subsidiary entity, excluding our taxable REIT subsidiaries, that is deemed to be inventory or property held primarily for sale to customers in the ordinary course of trade or business. Determining whether property is inventory or otherwise held primarily for sale to customers in the ordinary course of a trade or business depends on the particular facts and circumstances surrounding each property. We cannot provide assurance that any particular property we own, directly or through any subsidiary entity, excluding our taxable REIT subsidiaries, will not be treated as inventory or property held primarily for sale to customers in the ordinary course of a trade or business.

Certain fees paid to us may affect our REIT status.

Income received in the nature of rental subsidies or rent guarantees, in some cases, may not qualify as rental income from real estate and could be characterized by the Internal Revenue Service as non-qualifying income for purposes of satisfying the 75% and 95% gross income tests required for REIT qualification. If the aggregate of non-qualifying income under the 95% gross income test in any taxable year ever exceeded 5% of our gross revenues for the taxable year or non-qualifying income under the 75% gross income test in any taxable year ever exceeded 25% of our gross revenues for the taxable year, we could lose our REIT status for that taxable year and the four taxable years following the year of losing our REIT status.

Complying with the REIT requirements may force us to liquidate otherwise attractive investments.

To maintain qualification as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets, including shares of stock in other REITs, certain mortgage loans and mortgage backed securities. The remainder of our investment in securities (other than governmental securities, qualified real estate assets and taxable REIT subsidiaries) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities, qualified real estate assets and taxable REIT subsidiaries) can consist of the securities of any one issuer, and no more than 25% of the value of our total securities can be represented by securities of one or more taxable REIT subsidiaries. If we fail to comply with

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these requirements at the end of any calendar quarter, we must correct the failure within thirty days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments, which, in the case of foreign stockholders, may impose a withholding tax obligation on us.

If our leases are not respected as true leases for federal income tax purposes, each of Inland American and its subsidiary REITs would fail to qualify as a REIT.

To qualify as a REIT, Inland American must satisfy two gross income tests, pursuant to which specified percentages of our gross income must be passive income such as rent. For the rent paid pursuant to the hotel leases with our TRS subsidiaries, Inland American and each of our subsidiary REITs’ gross income, to qualify for purposes of the gross income tests, the leases must be respected as true leases for federal income tax purposes and must not be treated as service contracts, joint ventures or some other type of arrangement. We believe that the leases will be respected as true leases for federal income tax purposes. There can be no assurance, however, that the IRS will agree with this characterization. If the leases were not respected as true leases for federal income tax purposes, neither Inland American nor any of our subsidiary REITs would be able to satisfy either of the two gross income tests applicable to REITs and each would likely lose its REIT status.

The “taxable mortgage pool” rules may increase the taxes that we or our stockholders incur and may limit the manner in which we conduct securitizations.

We may make investments in entities that own or are deemed to be taxable mortgage pools. Similarly, if we securitize mortgages, certain of our securitizations could be considered to result in the creation of taxable mortgage pools for federal income tax purposes. As a REIT, provided that we own 100% of the equity interests in a taxable mortgage pool, we generally would not be adversely affected by the characterization of the securitization as a taxable mortgage pool. Certain categories of stockholders, however, such as foreign stockholders eligible for treaty or other benefits, stockholders with net operating losses, and certain tax-exempt stockholders that are subject to unrelated business income tax, could be subject to increased taxes on a portion of their dividend income from us that is attributable to the taxable mortgage pool, which, in the case of foreign stockholders, may be imposed as a withholding tax obligation on us. In addition, to the extent that our stock is owned by tax-exempt “disqualified organizations,” such as certain government-related entities and charitable remainder trusts that are not subject to tax on unrelated business income, we will incur a corporate-level tax on a portion of our income from the taxable mortgage pool. In that case, we are authorized to reduce and intend to reduce the amount of our distributions to any disqualified organization whose stock ownership gave rise to the tax. Moreover, we would be precluded from selling equity interests in these securitizations to outside investors, or selling any debt securities issued in connection with these securitizations that might be considered to be equity interests for federal income tax purposes. These limitations may prevent us from using certain techniques to maximize our returns from securitization transactions.

Stockholders may have tax liability on distributions that they elect to reinvest in our common stock.

Stockholders that participate in our distribution reinvestment plan will be deemed to have received, and for income tax purposes will be taxed on, the fair market value of the share of our common stock that they receive in lieu of cash distributions. As a result, unless the stockholder is a tax-exempt entity, he or she will have to use funds from other sources to pay his or her tax liability.

In certain circumstances, we may be subject to federal, state and local income taxes as a REIT, which would reduce our cash available to pay distributions.

Even if we qualify and maintain our status as a REIT, we may become subject to federal, state and local income taxes. For example:

• We will be subject to tax on any undistributed income. We will be subject to a 4% nondeductible excise tax on the amount, if any, by which distributions we pay in any calendar year plus amounts

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retained for which federal income tax was paid are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from prior years.

• If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we must pay a tax on that income at the highest corporate income tax rate.

• If we sell a property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, our gain would be subject to the 100% “prohibited transaction” tax.

• We will be subject to a 100% penalty tax on certain amounts if the economic arrangements of our tenants, our taxable REIT subsidiaries and us are not comparable to similar arrangements among unrelated parties.

Certain equity participation in mortgage loans may result in taxable income and gains from these properties, which could adversely impact our REIT status.

If we participate under a mortgage loan in any appreciation of the properties securing the mortgage loan or its cash flow and the Internal Revenue Service characterizes this participation as “equity,” we might have to recognize income, gains and other items from the property. This could affect our ability to maintain our status as a REIT.

Complying with REIT requirements may limit our ability to hedge effectively.

The REIT provisions of the Internal Revenue Code may limit our ability to hedge the risks inherent to our operations. Under current law, any income that we generate from derivatives or other transactions intended to hedge our interest rate risk generally will not constitute gross income for purposes of the 75% and 95% income requirements applicable to REITs. In addition, any income from other hedging transactions would generally not constitute gross income for purposes of both the 75% and 95% income tests. However, we may have to limit the use of hedging techniques that might otherwise be advantageous, which could result in greater risks associated with interest rate or other changes than we would otherwise incur.

Legislative or regulatory action could adversely affect investors.

Changes to the tax laws are likely to occur, and these changes may adversely affect the taxation of a stockholder. Any such changes could have an adverse effect on an investment in our shares or on the market value or the resale potential of our assets. You are urged to consult with your own tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in our shares.

The maximum tax rate on qualified dividends paid by corporations to individuals is 15% through 2012. REIT dividends, however, generally do not constitute qualified dividends and consequently are not eligible for favorable capital gains tax rates. Therefore, our stockholders will pay federal income tax on our dividends (other than capital gains dividends, dividends designated as qualified dividends (generally, qualified dividend income received by us from a taxable REIT subsidiary or other corporate investment or previously taxable to us in a prior year as undistributed income) or distributions which represent a return of capital or in excess of tax basis for tax purposes) at the applicable “ordinary income” rate, the maximum of which is 35% through 2012. However, as a REIT, we generally would not be subject to federal or state corporate income taxes on that portion of our ordinary income or capital gain that we distribute currently to our stockholders, and we thus expect to avoid the “double taxation” to which other corporations are typically subject.

Future legislation might result in a REIT having fewer tax advantages, and it could become more advantageous for a company that invests in real estate to elect to be taxed, for federal income tax purposes, as a corporation. As

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a result, our charter provides our board of directors with the power, under certain circumstances, to revoke or otherwise terminate our REIT election and cause us to be taxed as a corporation, without the vote of our stockholders. Our board of directors has fiduciary duties to us and our stockholders and could only cause changes in our tax treatment if it determines in good faith that such changes are in the best interest of our stockholders.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

General

We own interests in retail, office, industrial, multi-family and lodging properties. As of December 31, 2010, we, directly or indirectly, including through joint ventures in which we have a controlling interest, owned an interest in 881 properties, excluding our lodging and development properties, located in 35 states and the District of Columbia. In addition, we, through our wholly-owned subsidiaries, Inland American Winston Hotels, Inc., Inland American Orchard Hotels, Inc., Inland American Urban Hotels, Inc., and Inland American Lodging Corporation, own 99 lodging properties in 25 states and the District of Columbia.

The following table sets forth information regarding the 10 individual tenants comprising the greatest 2010 annualized base rent based on the properties owned as of December 31, 2010 excluding our lodging and development properties. (Dollar amounts stated in thousands, except for revenue per available room and average daily rate).

Tenant Name	Type	Annualized Base Rental Income ($)		% of Total Portfolio Annualized Income			Square Footage		% of Total Portfolio Square Footage
SunTrust Bank	Retail/Office		54,589		8.59	%		2,269,901		4.06	%
AT&T, Inc.	Office		45,525		7.16	%		3,545,004		6.35	%
Citizens Banks	Retail		20,326		3.20	%		986,378		1.77	%
Sanofi-Aventis	Office		16,073		2.53	%		736,572		1.32	%
United Healthcare Services	Office		15,920		2.51	%		1,210,670		2.17	%
C&S Wholesalers	Industrial/Distribution		14,886		2.34	%		3,031,295		5.43	%
Atlas Cold Storage	Industrial/Distribution		12,974		2.04	%		1,896,815		3.40	%
Stop N Shop	Retail		10,195		1.60	%		601,652		1.08	%
Cornell Corrections	Industrial/Distribution		10,024		1.58	%		301,029		0.54	%
Lockheed Martin Corporation	Office		9,854		1.55	%		342,516		0.61	%

The following tables set forth certain summary information about the character of the properties that we owned at December 31, 2010. Certain of the Company’s properties are encumbered by mortgages, totaling $5,462,124, and additional detail can be found on Schedule III – Real Estate and Accumulated Depreciation. (Dollar amounts stated in thousands, except for revenue per available room, average daily rate and average rent per square foot).

Retail Segment

Our retail segment consists of 735 properties. Our retail segment is centered on multi-tenant properties with fewer than 120,000 square feet of total space, located in stable communities, primarily in the southwest and southeast regions of the country. Our retail tenants are largely necessity-based retailers such as grocery, pharmacy, moderate-fashion shoes and clothing, and services such as banking and are located in the following types of retail centers:

• The majority of our single tenant retail properties are bank branches operated by SunTrust Bank or Citizens Bank. The bank branches typically offer a wide range of face-to-face or automated banking services to its customers. Typically, these tenants pay rents with contractual increases over time and bear virtually all expenses associated with operating the facility.

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• Community or neighborhood centers are generally unenclosed and designed for tenants that offer a larger array of apparel and other soft goods. Typically, these centers contain anchor stores and other national retail tenants. Our neighborhood shopping centers are generally straight-line strip center with a grocery store anchor, a drugstore, and other small retailers. Tenants of these centers typically offer necessity-based products.

• Power centers consist of several freestanding or unconnected anchors, such as department stores, off-price stores, warehouse clubs or stores that offer a large selection of merchandise. Typically, the number of specialty tenants is limited.

Retail Properties	Number of Properties		Total Gross Leasable Area		% of Financial Occupancy as of December 31, 2010			Total # of Financially Active Leases as of December 31, 2010		Sum of Annualized Rent ($)		Average of Rent PSF ($)
Single Tenant		598		3,948,210		99	%		598		86,297,139		22.14
Community & Neighborhood Center		88		7,793,466		90	%		1,226		97,774,956		13.90
Power Center		49		9,907,845		93	%		965		119,069,632		12.97
		735		21,649,521		93	%		2,789		303,141,727		15.07

Lodging Segment

Lodging facilities have characteristics different from those found in office, retail, industrial, and multi-family properties (also known as “traditional asset classes”). Revenue, operating expenses, and net income are directly tied to the daily hotel sales operation whereas other traditional asset classes generate revenue from medium to long-term lease contracts. In this way, net operating income is somewhat more predictable among the properties in the other traditional asset classes, though we believe that opportunities to increase revenue are, in many cases, limited because of the duration of the existing lease contracts. We believe lodging facilities have the benefit of capturing increased revenue opportunities on a daily or weekly basis but are also subject to immediate decreases in revenue as a result of declines in daily rental rates and/or daily occupancy when demand falls off quickly. Due to seasonality, we expect our revenues to be greater during the second and third quarters with lower revenues in the first and fourth quarters.

Two practices are common in the lodging industry: 1) association with national franchise organizations and 2) professional management by specialized third-party hotel managers. Our portfolio consists of assets aligned with what we believe are the top franchise enterprises in the lodging industry: Marriott, Hilton, Intercontinental, Hyatt, Wyndham, and Choice Hotels. By doing so, we believe our lodging operations benefit from enhanced advertising, marketing, and sales programs through a franchise arrangement while the franchisee (in this case us) pays only a fraction of the overall cost for these programs. We believe effective TV, radio, print, on-line, and other forms of advertisement are necessary to draw customers to our lodging facilities creating higher occupancy and rental rates, and increased revenue. Additionally, by using the franchise system we are also able to benefit from the frequent traveler rewards programs or “point awards” systems which we believe further bolsters occupancy and overall daily rental rates.

Lodging Properties	Number of Properties		Number of Rooms		Average Occupancy for the Year ended December 31, 2010			Average Revenue Per Available Room for the Year ended December 31, 2010 ($)		Average Daily Rate for the Year 2010 ($)
Marriot		53		7,933		68	%		77		113
Hilton		38		5,759		71	%		82		115
Other		8		1,688		67	%		72		108
		99		15,380		69	%		78		113

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Office Segment

Our investments in office properties largely represent assets leased and occupied to either a diverse group of tenants or to single tenants that fully occupy the space leased. Examples of our multi-tenant properties include the IDS Center located in the central business district of Minneapolis, and Dulles Executive Plaza and Worldgate Plaza, both located in metropolitan Washington D.C. catering to high-technology companies and federal government contractors. Examples of our single tenant properties include three buildings leased and occupied by AT&T and located in three distinct US office markets—Chicago, St. Louis, and Cleveland. In addition, our single tenant office portfolio includes bank branch properties leased on a net basis to SunTrust, with the leased locations located in the east and southeast regions of the country.

Office Properties	Number of Properties		Total Gross Leasable Area		% of Financial Occupancy as of December 31, 2010			Total # of Financially Active Leases as of December 31, 2010		Sum of Annualized Rent ($)		Average of Rent PSF ($)
Single-Tenant		34		7,732,456		97	%		34		103,536,391		13.86
Multi-Tenant		13		2,880,023		85	%		242		50,196,873		20.59
		47		10,612,479		93	%		276		153,733,264		15.52

Industrial Segment

Our industrial segment is comprised of four types of properties: Charter Schools, Correctional Facilities, Distribution Centers and Specialty Distribution Centers. Our distribution centers are warehouses or other specialized buildings which stock products to be distributed to retailers, wholesalers or directly to consumers. These properties are located in what we believe are active and sought-after industrial markets, including the Memphis, Tennessee Airport market and the O’Hare Airport market of Chicago, Illinois, commonly one of the largest industrial markets in the world. The specialty distribution centers consist of refrigeration or air

conditioned buildings in various locations across the country. The charter schools and correctional facilities consist of nine properties under long-term triple net leases.

Industrial Properties	Number of Properties		Total Gross Leasable Area		% of Financial Occupancy as of December 31, 2010			Total # of Financially Active Leases as of December 31, 2010		Sum of Annualized Rent ($)		Average of Rent PSF ($)
Distribution Center		52		13,304,881		94	%		59		55,120,140		4.42
Specialty Distribution Center		11		1,896,815		100	%		11		12,974,321		6.84
Charter Schools		7		300,301		100	%		7		6,423,512		21.39
Correctional Facility		2		457,345		100	%		2		12,131,102		26.53
		72		15,959,342		95	%		79		86,649,075		5.73

Multi-Family Segment

The multi-family portfolio consists of conventional apartments and student housing. Our conventional apartment properties are upscale with resident amenities such as business centers, fitness centers, swimming pools, landscaped grounds and clubhouse facilities. The apartment homes are typically three-story walk-up buildings offering one, two and three bedroom apartments and are leased on per unit basis. Our student-housing portfolio consists of residential and mixed-use communities close to university campuses and in urban infill locations. Student-housing facilities are leased on a per bed basis rather than per unit. These eight properties were constructed between mid-2007 and 2010.

Multi-family Properties	Number of Properties		Total Gross Leasable Area		% of Financial Occupancy as of December 31, 2010			Total # of Units/ Beds Occupied		Rent per Unit/ Bed ($)
Conventional		19		5,982,271		91	%		5,754		919.21
Student-Housing		8		1,650,643		87	%		3,055		775.88
		27		7,632,914		90	%		8,809		869.50

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Item 3. Legal Proceedings

Contemporaneous with the Company’s merger with Winston Hotels, Inc., its wholly-owned subsidiary, Inland American Winston Hotels, Inc., referred to herein as “Inland American Winston,” WINN Limited Partnership, or “WINN,” and Crockett Capital Corporation, or “Crockett,” memorialized in a development memorandum their intentions to subsequently negotiate and enter into a series of contracts to develop certain hotel properties, including without limitation a Westin Hotel in Durham, North Carolina, a Hampton Inn & Suites/Aloft Hotel in Raleigh, North Carolina, an Aloft Hotel in Chapel Hill, North Carolina and an Aloft Hotel in Cary, North Carolina (collectively referred to herein as the “development hotels”).

On March 6, 2008, Crockett filed an amended complaint in the General Court of Justice of the State of North Carolina against Inland American Winston and WINN. The amended complaint alleges that the development memorandum reflecting the parties’ intentions regarding the development hotels was instead an agreement that legally bound the parties. The amended complaint further claims that Inland American Winston and WINN breached the terms of the alleged agreement by failing to take certain actions to develop the Cary, North Carolina hotel and by refusing to convey their rights in the three other development hotels to Crockett. The amended complaint seeks, among other things, monetary damages in an amount not less than $4.8 million with respect to the Cary, North Carolina property. With respect to the remaining three development hotels, the amended complaint seeks specific performance in the form of an order directing Inland American Winston and WINN to transfer their rights in the hotels to Crockett or, alternatively, monetary damages in an amount not less than $20.1 million. Inland American Winston and WINN deny these claims and, on March 26, 2008, filed a motion to dismiss the amended complaint. On March 13, 2009, the court denied the motion to dismiss. Inland American Winston and WINN have filed answers and affirmative defenses to the amended complaint as well as counter claims against Crockett. Contemporaneously with the close of fact discovery, Crockett sought leave to amend its complaint to add another cause of action and to seek treble damages and attorneys’ fees, which was granted. Expert discovery has been completed. Based upon an expert report recently received from Crockett, it was originally believed that Crockett’s maximum claim, without the inclusion of treble damages or attorneys fees, was approximately $16.8 million. On February 28, 2011, the Court ruled on cross motions for summary judgment, which were filed by the parties. The result of the ruling on the cross motions is that certain claims against WINN by Crockett were dismissed, including the treble damages claim and claims relating to two of the hotel properties at issue. Most of the WINN’s counter-claims against Crockett were also dismissed as a result of the ruling. Based upon the expert report referenced above, it is now believed that the maximum claim against WINN is approximately $7.0 million exclusive of any claimed interest. WINN believes a trial on these remaining claims will likely take place by the end of 2011. The outcome of this lawsuit cannot be predicted with any certainty and management is currently unable to estimate an amount or range of potential loss that could result if an unfavorable outcome occurs.

While management does not believe that an adverse outcome in the above lawsuit would have a material adverse effect on our financial condition, there can be no assurance that an adverse outcome would not have a material effect on the results of operations for any particular period.

We have also filed a number of eviction actions against tenants and are involved in a number of tenant bankruptcies. The tenants in some of the eviction cases may file counterclaims against us in an attempt to gain leverage against us in connection with the eviction. In our opinion, none of these counterclaims is likely to result in any material losses.

Item 4. Reserved.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

While there is no public trading market for the common stock, we established an estimated value per share of our common stock equal to $8.03 as of September 21, 2010. We intend on estimating our value per share on an annual basis.

We estimated the per share value of our common stock to assist those broker-dealers that sold our common stock in our initial and follow-on “best efforts” offerings to comply with the rules published by the Financial Industry Regulatory Authority (“FINRA”) and to assist fiduciaries of retirement plans subject to annual reporting requirements of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), in the preparation of their reports. Specifically, FINRA requires registered broker-dealers to disclose in a customer’s account statement an estimated value for a REIT’s securities if the annual report of that REIT discloses a per share estimated value. The FINRA rules prohibit broker-dealers from using a per share estimated value developed from data that is more than eighteen months old, which in effect prohibits the broker-dealers from using a per share offering price from an issuer’s last “best efforts” offering for more than eighteen months after the termination of that offering. Our last “best efforts” offering was terminated on April 6, 2009.

The FINRA rules provide no guidance regarding the methodology a REIT must use to determine its estimated value per share. As with any valuation methodology, our methodology is based upon a number of estimates and assumptions that may prove later to be inaccurate or incomplete. Further, different parties using different assumptions and estimates could derive a different estimated value per share, which could be significantly different from our estimated value per share. The estimated per share value established by us represents neither the fair value according to U.S. generally accepted accounting principles (or “GAAP”) of our assets less liabilities, nor the amount our shares would trade at on a national securities exchange or the amount a stockholder would obtain if he or she tried to sell his or her shares or if we liquidated our assets.

Share Repurchase Program

We adopted a share repurchase program, effective August 31, 2005, to provide limited liquidity for stockholders. Our obligation to repurchase any shares under the program was conditioned upon our having sufficient funds available to complete the repurchase. Subject to funds being available, we limited the number of shares repurchased during any consecutive twelve month period to 5.0% of the number of outstanding shares of common stock at the beginning of that twelve month period. Effective March 30, 2009, our board of directors voted to suspend the share repurchase program until further notice. Therefore, no shares were repurchased during 2010. Written notice of the suspension was provided to each stockholder pursuant to the terms of the share repurchase program.

Stockholders

As of March 1, 2011, we had 187,356 stockholders of record.

Distributions

We have been paying monthly cash distributions since October 2005. During the years ended December 31, 2010 and 2009, we declared cash distributions, which are paid monthly to stockholders, totaling $417.9 million and $405.3 million, respectively, or $.50 and $.50 per share on an annualized basis. For federal income tax purposes for the years ended December 31, 2010 and 2009, 66% and 72% of the distributions paid constituted a return of capital in the applicable year.

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We intend to continue paying regular monthly cash distributions to our stockholders. However, there are many factors that can affect the availability and timing of cash distributions to stockholders. There is no assurance that we will be able to continue paying distributions at the current level or that the amount of distributions will increase, or not decrease further, over time. Even if we are able to continue paying distributions, the actual amount and timing of distributions is determined by our board of directors in its discretion and typically depends on the amount of funds available for distribution, which depends on items such as current and projected cash requirements and tax considerations. As a result, our distribution rate and payment frequency may vary from time to time.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information regarding our equity compensation plans as of December 31, 2010.

Equity Compensation Plan Information

Plan category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders:
Independent Director Stock Option Plan		32,000	$	9.05		43,000
Total:		32,000	$	9.05		43,000

We have adopted an Independent Director Stock Option Plan, as amended, which, subject to certain conditions, provides for the grant to each independent director of an option to purchase 3,000 shares following their becoming a director and for the grant of additional options to purchase 500 shares on the date of each annual stockholder’s meeting. The options for the initial 3,000 shares are exercisable as follows: 1,000 shares on the date of grant and 1,000 shares on each of the first and second anniversaries of the date of grant. All other options are exercisable on the second anniversary of the date of grant. The exercise price for all options is equal to the fair value of our shares, as defined in the plan, on the date of each grant.

Recent Sales of Unregistered Securities

None.

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Item 6. Selected Financial Data

The following table shows our consolidated selected financial data relating to our consolidated historical financial condition and results of operations. Such selected data should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and related notes appearing elsewhere in this report (dollar amounts are stated in thousands, except per share amounts.)

	2010			2009			2008			2007			2006
Total assets	$	11,391,502			11,328,211			11,136,866			8,114,714			3,040,037
Mortgages, notes and margins payable	$	5,532,057			5,085,899			4,437,997			3,028,647			1,107,113
Total income	$	1,231,735			1,096,777			1,006,751			469,334			123,202
Total interest and dividend income	$	33,040			55,173			81,274			84,271			22,164
Net income (loss) attributable to Company	$	(176,431	)		(397,960	)		(365,178	)		54,078			1,896
Net income (loss) per common share, basic and diluted (a)	$	(0.21	)		(0.49	)		(0.54	)		0.14			0.03
Distributions declared to common stockholders	$	417,885			405,337			418,694			242,606			41,178
Distributions per weighted average common share (a)	$	0.50			0.51			0.62			0.61			0.60
Funds from operations (a)(b)	$	252,592			35,820			6,350			234,215			48,088
Cash flows provided by operating activities	$	356,660			369,031			384,365			263,420			65,883
Cash flows used in investing activities	$	(380,685	)		(563,163	)		(2,484,825	)		(4,873,404	)		(1,552,014	)
Cash flows provided by (used in) financing activities	$	(208,759	)		(250,602	)		2,636,325			4,716,852			1,751,494
Weighted average number of common shares outstanding, basic and diluted		835,131,057			811,400,035			675,320,438			396,752,280			68,374,350

(a) The net income (loss) per share basic and diluted is based upon the weighted average number of common shares outstanding for the years ended December 31, 2010, 2009, and 2008, respectively. The distributions per common share are based upon the weighted average number of common shares outstanding for the years ended December 31, 2010, 2009 and 2008. See Footnote (b) below for information regarding our calculation of FFO. Our distributions of our current and accumulated earnings and profits for federal income tax purposes are taxable to stockholders as ordinary income; however in 2005 we had a tax loss which resulted in distributions paid during that period being treated as a return of capital for tax purposes. Distributions in excess of these earnings and profits generally are treated as a non-taxable reduction of the stockholder’s basis in the shares to the extent thereof, and thereafter as taxable gain for tax purposes. Distributions in excess of earnings and profits have the effect of deferring taxation of the amount of the distributions until the sale of the stockholder’s shares, only to the extent of a shareholder’s basis. For the years ended December 31, 2010, 2009 and 2008, $275,803, $296,491 and $194,239 (or approximately 66%, 72%, and 48% of the $416,935, $411,797 and $405,925 distributions paid in 2010, 2009 and 2008, respectively) represented a return of capital. In order to maintain our qualification as a REIT, we must make annual distributions to stockholders of at least 90% of our REIT taxable income, subject to certain adjustments, such as excluding net capital gains. Under certain circumstances, we may be required to make distributions in excess of cash available for distribution in order to meet the REIT distribution requirements.

(b) Cash generated from operations is not equivalent to our net income as determined under U.S. generally accepted accounting principles or GAAP. Due to certain unique operating characteristics of real estate companies, the National Association of Real Estate Investment Trusts, or NAREIT, an industry trade group, has promulgated a standard known as “Funds from Operations”, or “FFO”, which it believes more accurately reflects the operating performance of a REIT such as us. As defined by NAREIT, FFO means net income computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus

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depreciation and amortization on real property and after adjustments for unconsolidated partnerships and joint ventures in which the Company holds an interest. FFO is not intended to be an alternative to “Net Income” as an indicator of our performance nor to “Cash Flows from Operating Activities” as determined by GAAP as a measure of our capacity to pay distributions. We believe that FFO is a better measure of our operating performance because FFO excludes non-cash items from GAAP net income. This allows us to compare our property performance to our investment objectives. Management uses the calculation of FFO for several reasons. We use FFO to compare our performance to that of other REITs. Additionally, we use FFO in conjunction with our acquisition policy to determine investment capitalization strategy. FFO is calculated as follows (in thousands):

		Year ended December 31,
		2010			2009			2008
	Net loss attributable to common shares	$	(176,431	)		(397,960	)		(365,178	)
Add:	Depreciation and amortization:
	Related to investment properties		443,100			394,995			320,402
	Related to investment in unconsolidated entities, net of related gains on sale of real estate		43,845			41,300			53,761
Less:	Gain on sale of properties		55,412			—			—
	Noncontrolling interests’ share:
	Depreciation and amortization related to investment properties		2,510			2,515			2,635
	Funds from operations	$	252,592			35,820			6,350

Below is additional information related to certain items that significantly impact the comparability of our Funds from Operations and Net Loss from the periods presented:

	Year ended December 31,
	2010			2009			2008
Additions (deductions) that were included in net income and FFO
Provision for asset impairment	$	(46,584	)		(1,117	)		—
Provision for asset impairment included in discontinued operations	$	(945	)		(32,934	)		(33,809	)
Provision for goodwill impairment	$	—			(26,676	)		(11,199	)
Impairment of notes receivable	$	(111,896	)		(74,136	)		—
Gain (loss) on consolidated investment	$	433			(148,887	)		—
Equity in loss of unconsolidated entities	$	(18,684	)		(78,487	)		(46,108	)
Impairment of investment in unconsolidated entities	$	(11,239	)		(7,443	)		(61,993	)
Realized gain (loss) and impairment on securities, net	$	21,073			34,155			(262,105	)
Gain on extinguishment of debt (included in discontinued operations $19,227, $0, and $0)	$	19,227			—			7,760
Acquisition Costs	$	(1,805	)		(9,617	)		(9,171	)

Acquisition costs of $2,669 were capitalized in accordance with accounting guidance effective in 2008.

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

Certain statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Form 10-K constitute “forward-looking statements” within the meaning of the Federal Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical, including statements regarding management’s intentions, beliefs, expectations, representations, plans or predictions of the future and are typically identified by words such as “believe,” “expect,” “anticipate,” “intend,” “estimate,” “may,” “will,” “should” and “could.” Similarly, statements that describe or contain information related to matters such as management’s intent, belief or expectation with respect to the Company’s financial performance, investment strategy and portfolio, cash flows, growth prospects, legal proceedings, amount and timing of anticipated future cash distributions, and other matters are forward-looking statements. These forward-looking statements are not historical facts but are the intent, belief or current expectations of the Company’s management based on their knowledge and understanding of the business and industry, the economy and other future conditions. These statements are not guarantees of future performance, and stockholders should not place undue reliance on forward-looking statements. Actual results may differ materially from those expressed or forecasted in the forward-looking statements due to a variety of risks, uncertainties and other factors, including but not limited to the factors listed and described under “Risk Factors” in this Annual Report on Form 10-K . These factors include, but are not limited to: market and economic volatility experienced by the U.S. economy or real estate industry as a whole, and the local economic conditions in the markets in which the Company’s properties are located; the Company’s ability to refinance maturing debt or to obtain new financing on attractive terms; the availability of cash flow from operating activities to fund distributions; future increases in interest rates; and actions or failures by the Company’s joint venture partners, including development partners. The Company intends that such forward-looking statements be subject to the safe harbors created by Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. The Company undertakes no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results.

The following discussion and analysis relates to the years ended December 31, 2010, 2009 and 2008 and as of December 31, 2010 and 2009. You should read the following discussion and analysis along with our Consolidated Financial Statements and the related notes included in this report.

Overview

We seek to invest in real estate assets that we believe will produce attractive current yields and long-term risk-adjusted returns to our stockholders and to generate sustainable cash flow from our operations to fund distributions to our stockholders. To achieve these objectives, we selectively acquire and actively manage, through affiliates of our business manager, investments in commercial real estate. Our property managers for our non-lodging properties actively seek to lease space at favorable rates, control expenses, and maintain strong tenant relationships. We oversee the management of our lodging facilities through active engagement with our third party managers and franchisors to maximize occupancy and daily rates as well as control expenses.

On a consolidated basis, essentially all of our revenues and cash flows from operations for the year ended December 31, 2010 were generated by collecting rental payments from our tenants, room revenues from lodging properties, interest income on our notes receivable investments, distributions from unconsolidated entities and dividend income earned from investments in marketable securities. Our largest cash expense relates to the operation of our properties as well as the interest expense on our mortgages and notes payable. Our property operating expenses include, but are not limited to, real estate taxes, regular repair and maintenance, management fees, utilities and insurance (some of which are recoverable). Our lodging operating expenses include, but are not limited to, rooms, food and beverage, utility, administrative and marketing, payroll, franchise and management fees and repairs and maintenance expenses.

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In evaluating our financial condition and operating performance, management focuses on the following financial and non-financial indicators, discussed in further detail herein:

• Funds from Operations (“FFO”), a supplemental measure to net income determined in accordance with U.S. generally accepted accounting principles (“GAAP”).

• Economic and physical occupancy and rental rates.

• Leasing activity and lease rollover.

• Managing operating expenses

• Average daily room rate, revenue per available room, and average occupancy to measure our lodging properties.

• Debt maturities and leverage ratios.

• Liquidity levels.

Results of Operations

General

Consolidated Results of Operations

This section describes and compares our results of operations for the years ended December 31, 2010, 2009 and 2008. We generate most of our net operating income from property operations. In order to evaluate our overall portfolio, management analyzes the operating performance of all properties from period to period and properties we have owned and operated for the same period during each year. A total of 896 and 716 of our investment properties satisfied the criteria of being owned for the entire years ended December 31, 2010 and 2009 and December 31, 2009 and 2008, respectively, and are referred to herein as “same store” properties. This analysis allows management to monitor the operations of our existing properties for comparable periods. Additionally, we are able to determine the effects of our new acquisitions on net income. Unless otherwise noted, all dollar amounts are stated in thousands (except per share amounts, per square foot amounts, revenue per available room and average daily rate).

Comparison of the years ended December 31, 2010 and December 31, 2009

	Year ended December 31,  2010			Year ended December 31, 2009
Net loss attributable to the Company	$	(176,431	)	$	(397,960	)
Net loss per share		(.21	)		(.49	)

Net loss decreased from $(397,960) or $(.49) per share for the year ended December 31, 2009 to $(176,431) or $(.21) per share for the year ended December 31, 2010. The primary reason for the difference was the loss on consolidated investment of $148,887 in 2009 compared to a gain on consolidated investment of $433 in 2010 and equity in losses of unconsolidated entities of $78,487 in 2009 compared to losses of $18,684 in 2010, as well as gains on sale of properties of $55,412 in 2010. This decrease was offset by the asset related impairments of $159,425 in 2010 compared to $134,863 in 2009.

Rental Income, Tenant Recovery Income, Lodging Income and Other Property Income. Except for our lodging and multi-family properties, the majority of the revenue from the properties consists of rents received under long-term operating leases. Some leases provide for the payment of fixed base rent paid monthly in advance, and for the reimbursement by tenants of the tenant’s pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the landlord and recoverable under the terms of the lease. Under these leases, we pay all expenses and are reimbursed by the tenant for the tenant’s pro rata share of recoverable expenses. Certain other tenants are

subject to net leases which require the tenant to be responsible for fixed base rent as well as all costs and expenses associated with occupancy. Under net leases, where all expenses are paid directly by the tenant,

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expenses are not included in the consolidated statements of operations and other comprehensive income. Under leases where all expenses are paid by us, subject to reimbursement by the tenant, the expenses are included within property operating expenses, and reimbursements are included in tenant recovery income on the consolidated statements of operations and other comprehensive income.

Rental income consists of basic monthly rent, straight-line rent adjustments, amortization of acquired above and below market leases, fee income, and percentage rental income recorded pursuant to tenant leases. Tenant recovery income consists of reimbursements for real estate taxes, common area maintenance costs, management fees, and insurance costs. Lodging income consists of room revenues, food and beverage revenues, telephone revenues and miscellaneous revenues. Other property income consists of lease termination fees and other miscellaneous property income.

Our lodging properties generate revenue through sales of rooms and associated food and beverage services. We measure our financial performance by revenue generated per available room known as RevPAR, which is an operational measure commonly used in the hotel industry to evaluate hotel performance. RevPAR represents the product of the average daily room rate charged and the average daily occupancy achieved but excludes other revenue generated by a hotel property, such as food and beverage, parking, telephone and other guest service revenues.

Below is a summary of sources of revenue for years ended December 31, 2010 and 2009.

	Year ended December 31, 2010		Year ended December 31, 2009		2010 Increase (decrease) from 2009
Property rentals	$	606,761	$	515,988	$	90,773
Straight-line rents		17,705		16,965		740
Amortization of acquired above and below market leases, net		434		1,688		(1,254	)
Total rental income	$	624,900	$	534,641	$	90,259
Tenant recoveries		93,927		83,979		9,948
Other income		17,323		18,433		(1,110	)
Lodging operating income		495,585		459,724		35,861
Total property revenues	$	1,231,735	$	1,096,777	$	134,958

Total property revenues increased $134,958 for the year ended December 31, 2010 over the prior year. The increase in property revenues in 2010 was due primarily to a full year of operations reflected in 2010 for properties acquired during 2009 in addition to 2010 additions of 28 properties. The increase in lodging revenue in 2010 is the result of occupancy increases across the lodging segment.

Property Operating Expenses and Real Estate Taxes. Property operating expenses for properties other than lodging properties consist of property management fees paid to property managers including affiliates of our sponsor and operating expenses, including costs of owning and maintaining investment properties, real estate taxes, insurance, utilities, maintenance to the exterior of the buildings and the parking lots. Lodging operating expenses include the room, food and beverage, payroll, utilities, any fees paid to our third party operators, insurance, marketing, and other expenses required to maintain and operate our lodging facilities.

	Year ended December 31, 2010		Year ended December 31, 2009		2010 Increase from 2009
Property operating expenses	$	136,353	$	111,323	$	25,030
Lodging operating expenses		316,757		291,610		25,147
Real estate taxes		91,575		84,044		7,531
Total property expenses	$	544,685	$	486,977	$	57,708

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Total property operating expenses increased $57,708 for the year ended December 31, 2010 compared to the year ended December 31, 2009 due to the effect of operations of the additional 28 properties acquired after December 31, 2009 as well as the full year impact of 2009 acquisitions. Lodging operating expenses increased due to increases in occupancy across the lodging segment.

Other Income and Expenses

Interest and Dividend Income and Realized Gain (Loss) on Securities. Interest income consists of interest earned on short term investments and notes receivable. Dividends are earned from investments in our portfolio of marketable securities.

	Year ended December 31, 2010			Year ended December 31, 2009			2010 Increase (decrease) from 2009
Interest Income	$	14,654		$	37,196		$	(22,542	)
Dividend Income		18,386			17,977			409
Total	$	33,040		$	55,173		$	(22,133	)
Realized gain (loss) on investment securities	$	22,929		$	38,193		$	(15,264	)
Other than temporary impairments		(1,856	)		(4,038	)		2,182
Total	$	21,073		$	34,155		$	(13,082	)

Interest income was $14,654 and $37,196 for the years ended December 31, 2010 and 2009, respectively. Interest income is earned on our cash balances and notes receivable.

Our notes receivable balance of $54,047 as of December 31, 2010 consisted of installment notes from unrelated parties that mature on various dates through December 2013. The notes are secured by mortgages on land, shopping centers and lodging facilities. Interest only is due each month at rates ranging from 5.85% to 9.5% per annum. For the years ended December 31, 2010 and 2009, we recorded interest income from notes receivable of $13,690 and $26,355, respectively. In addition, we recognized discount amortization income on our note receivable of $0 and $8,107 in December 31, 2010 and 2009, respectively. See Notes Receivable section in Liquidity and Capital Resources for more discussion.

Other operating expenses are summarized as follows:

	Year ended December 31, 2010		Year ended December 31, 2009		2010 Increase (decrease) from 2009
Depreciation and amortization	$	432,081	$	384,764	$	47,317
Interest expense		293,507		248,267		45,240
General and administrative (1)		36,668		43,499		(6,831	)
Business manager fee		36,000		39,000		(3,000	)
	$	798,256	$	715,530	$	82,726

(1) Includes expenses paid to affiliates of our sponsor as described below.

Depreciation and amortization. The $47,317 increase in depreciation and amortization expense for the year ended December 31, 2010 relative to the year ended December 31, 2009 was due substantially to the impact of the properties acquired during 2009 and 2010.

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Interest expense. A summary of interest expense for the years ended December 31, 2010 and 2009 appears below:

	Year ended December 31, 2010		Year ended December 31, 2009		2010 Increase from 2009
Debt Type
Margin and other interest expense	$	20,382	$	15,525	$	4,857
Mortgages		273,125		232,742		40,383
Total	$	293,507	$	248,267	$	45,240

The $45,240 increase in interest expense for the year ended December 31, 2010 as compared to the year ended December 31, 2009 was primarily due to mortgage debt financings during 2010 which increased to $5,508,668 from $5,056,398. Our average interest rate on outstanding debt was 5.1% per annum and 4.9% per annum as of December 31, 2010 and 2009, respectively.

Variable debt comprises 29% of our overall outstanding debt, which has caused us to experience a lower overall weighted average interest rate in 2009 and 2010 due to the decline in London InterBank Offered Rate (“LIBOR”). If LIBOR increases, we will experience higher weighted average interest rates, which would impact our financial results.

General and Administrative Expenses. General and administrative expenses primarily consist of legal, audit and other professional fees, acquisition related expenses, insurance, board of director fees, state and local taxes as well as salary, information technology and other administrative cost reimbursements paid to our business manager and affiliates, and investment advisor fees. Our expenses were $36,668 for the year ended December 31, 2010 and $43,499 for the year ended December 31, 2009. The decrease is due primarily to the slowdown in acquisition activity during 2010, reflected in $1,805 and $9,617 of acquisition and transaction costs for the years ended December 31, 2010 and 2009, respectively.

Business Manager Fee. After our stockholders have received a non-cumulative, non-compounded return of 5% per annum on their “invested capital,” we pay our business manager an annual business management fee of up to 1% of the “average invested assets,” payable quarterly in an amount equal to 0.25% of the average invested assets as of the last day of the immediately preceding quarter. We incurred a business management fee equal to $36,000 for the year ended December 31, 2010 or .32% of average invested assets, and the business manager waived the remaining $78,120 for the year ended December 31, 2010. We incurred a business management fee equal to $39,000 for the year ended December 31, 2009 or .38% of average invested assets, and the business manager waived the remaining $64,584 for the year ended December 31, 2009. Once we have satisfied the minimum return on invested capital described above, the amount of the actual fee paid to the business manager is determined by the business manager up to the amount permitted by the agreement. There is no assurance that our business manager will continue to forego or defer all or a portion of its business management fee.

Noncontrolling Interest. The noncontrolling interest represents the interests of the third parties in Minto Builders (Florida), Inc. (“MB REIT”) and consolidated joint ventures managed by third parties.

Equity in Earnings of Unconsolidated Entities. In 2010, we have equity in losses of unconsolidated entities of $18,684. This is a decrease of $59,803 from last year’s equity in losses of unconsolidated entities of $78,487 as of December 31, 2009, which is mainly due to significant losses incurred and impairments recorded by our Concord Debt joint venture in 2009, of which our portion was $75,787, offset by impairment in the D.R. Stephens joint venture, of which our portion was $10,710 for the year ended December 31, 2010.

Provision for Asset Impairment. For the year ended December 31, 2010, we recorded a provision for asset impairment of $46,584 to reduce the book value of six of our investment properties to fair value; in addition, asset impairment of $945 related to two disposed properties is included in discontinued operations. For the year

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ended December 31, 2009, a provision of $1,117 was recorded for asset impairment related to six investment properties of which five were subsequently disposed and related impairment of $32,934 is included in discontinued operations.

Provision for Goodwill Impairment. For the year ended December 31, 2010, we have recorded no impairment to our goodwill. We recorded impairment of $26,676 to our goodwill for the year ended December 31, 2009. The 2009 impairment was primarily due to the effect of the slowdown in the economy and its impact on the property resulting in increases in capitalization and discount rates used in the fair value calculation.

Impairment of Notes Receivable. For the year ended December 31, 2010, we have recorded an impairment of notes receivable of $111,896. For the year ended December 31, 2009, we recorded an impairment of notes receivable of $74,136. Certain of our loans have had declines in the fair value of the underlying collateral, which result in impairments of our loan receivable balance to the extent the collateral is valued below the loan book value.

Impairment of Investment in Unconsolidated Entities. For the year ended December 31, 2010, we recorded an impairment of $11,239 on our investment in unconsolidated entities that included the write-down of a retail development center and two hotel ventures of which one was sold in 2010. For the year ended December 31, 2009, we recorded an impairment of $7,443 on our investment in unconsolidated entities related to a retail center and a lodging development venture.

Discontinued Operations. For the year ended December 31, 2010, we recorded income of $71,408 from discontinued operations, which includes gain on sale of properties of $55,412 a gain on extinguishment of debt of $19,227 and provision for asset impairment of $945. For the year ended December 31, 2009, we recorded loss of $35,825 from discontinued operations, which includes a provision for asset impairment of $32,934.

Segment Reporting

An analysis of results of operations by segment is below. The tables contained throughout summarize certain key operating performance measures for the years ended December 31, 2010 and 2009.

Retail Segment

	Total Retail Properties
	As of December 31,
	2010			2009
Retail Properties
Physical occupancy		92	%		92	%
Economic occupancy		93	%		93	%
Base rent per square foot	$	15.07		$	15.78
Gross investment in properties	$	4,152,846		$	3,465,817

The following table represents lease expirations for the retail segment:

Lease Expiration Year	Number of Expiring Leases		GLA of Expiring Leases (Sq. Ft.)		Annualized Base Rent of Expiring Leases ($)		Percent of Total GLA			Percent of Total Annualized Base Rent			Expiring Rent/Square Foot
2011		361		1,229,718		18,249		6.1	%		5.7	%	$	14.84
2012		453		2,068,766		36,877		10.3	%		11.5	%	$	17.83
2013		326		1,219,535		20,298		6.1	%		6.4	%	$	16.64
2014		265		1,785,935		25,539		8.9	%		8.0	%	$	14.30
2015		316		2,404,535		29,915		12.0	%		9.4	%	$	12.44
Thereafter		1,061		11,384,019		188,605		56.6	%		59.0	%	$	16.57
		2,782		20,092,508		319,483		100.0	%		100.0	%	$	15.90

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Our retail business is not highly dependent on specific retailers or specific retail industries, which we believe shields the portfolio from significant revenue variances over time. The occupancy rates above are as of December 31, 2010 and 2009 and they do not represent the average rate during that period.

Our retail business is centered on multi-tenant properties with fewer than 120,000 square feet of total space, located in stable communities, primarily in the southwest and southeast regions of the country. Adding to this core investment profile is a select number of traditional mall properties and single-tenant properties. Among the single-tenant properties, the largest holdings are comprised of investments in bank branches operated by SunTrust Bank and Citizens Bank, where the tenant-occupant pays rent with contractual increases over time, and bears virtually all expenses associated with operating the facility.

Our tenants largely consist of necessity-based retailers such as grocery, pharmacy, moderate-fashion shoes and clothing, and services. We have limited exposure to retail categories such as books/music/video, big-box electronics, fast-food restaurants, new-concept, and other goods-providers, which we believe are being negatively impacted the greatest by the internet and existing economic conditions.

We have not experienced bankruptcies or receivable write-offs in our retail portfolio that have materially impacted our result of operations in the economy or retail environment. However, we continue to actively monitor our retail tenants as a downturn in the economy could have negative impact on our tenants’ abilities to pay rent or our ability to fill space that is currently vacant, or space that becomes vacant in the near future.

Comparison of Years Ended December 31, 2010 and December 31, 2009

The table below represents operating information for the retail segment of 735 properties and for the same store retail segment consisting of 687 properties acquired prior to January 1, 2009. The properties in the same store portfolio were owned for the entire years ended December 31, 2010 and December 31, 2009, respectively.

	Total Retail Segment									Same Store Retail Segment
	2010			2009			Increase/ (Decrease)			2010			2009			Increase/ (Decrease)
Revenues:
Rental income	$	298,984		$	243,299		$	55,685		$	211,221		$	212,108		$	(887	)
Tenant recovery incomes		60,836			50,045			10,791			39,283			41,569			(2,286	)
Other property income		5,329			6,382			(1,053	)		3,702			6,174			(2,472	)
Total revenues	$	365,149		$	299,726		$	65,423		$	254,206		$	259,851		$	(5,645	)
Expenses:
Property operating expenses	$	60,372		$	47,984		$	12,388		$	39,056		$	40,190		$	(1,134	)
Real estate taxes		36,580			30,502			6,078			25,234			26,575			(1,341	)
Total operating expenses	$	96,952		$	78,486		$	18,466		$	64,290		$	66,765		$	(2,475	)
Net operating income	$	268,197		$	221,240		$	46,957		$	189,916		$	193,086		$	(3,170	)
Average occupancy for the period		93	%		93	%		—			93	%		93	%		—

Our retail segment’s rental revenues increased from $299,726 for the year ended December 31, 2009 to $365,149 for the year ended December 31, 2010 mainly due to the addition of 22 retail properties since January 1, 2010. Retail property operating expenses also increased from $78,486 in 2009 to $96,952 in 2010 as a result of these additions.

The primary reason for the decrease in revenue and net property operations for the retail same store comparison is lower renewal rates in 2010 and lease termination income of $1,000 for 2010 compared to $3,000 for 2009. In addition, we saw a reduction in recoverable expenses for 2010 compared to 2009, which affected both operating expenses and tenant recovery income.

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Lodging Segment

	For the year ended December 31, 2010			For the year ended December 31, 2009
Lodging Properties
Revenue per available room	$	78		$	76
Average daily rate	$	113		$	117
Occupancy		69	%		65	%
Gross investment in properties	$	2,856,899		$	2,632,208

Lodging facilities have characteristics different from those found in office, retail, industrial, and multi-family properties (also known as “traditional asset classes”). Revenue, operating expenses, and net income are directly tied to the daily hotel sales operation whereas other traditional asset classes generate revenue from medium to long-term lease contracts. In this way, net operating income is somewhat more predictable among the properties in the other traditional asset classes, though we believe that opportunities to increase revenue are, in many cases, limited because of the duration of the existing lease contracts. We believe lodging facilities have the benefit of capturing increased revenue opportunities on a daily or weekly basis but are also subject to immediate decreases in revenue as a result of declines in daily rental rates and/or daily occupancy when demand falls off quickly. Due to seasonality, we expect our revenues to be greater during the second and third quarters with lower revenues in the first and fourth quarters.

Two practices are common in the lodging industry: 1) association with national franchise organizations and 2) professional management by specialized third-party hotel managers. Our portfolio consists of assets aligned with what we believe are the top franchise enterprises in the lodging industry: Marriott, Hilton, Intercontinental, Hyatt, Wyndham, and Choice Hotels. By doing so, we believe our lodging operations benefit from enhanced advertising, marketing, and sales programs through a franchise arrangement while the franchisee (in this case us) pays only a fraction of the overall cost for these programs. We believe effective TV, radio, print, on-line, and other forms of advertisement are necessary to draw customers to our lodging facilities, creating higher occupancy and rental rates, and increased revenue. Additionally, by using the franchise system we are also able to benefit from the frequent traveler rewards programs or “point awards” systems which we believe further bolsters occupancy and overall daily rental rates.

Our lodging facilities are generally classified in the upscale or upper-upscale lodging categories. All of our lodging facilities are managed by third-party managers with extensive experience and skill in hospitality operations. These third-party managers report to a dedicated, specialized group within our business manager that has, in our view, extensive expertise in lodging ownership and operation within a REIT environment. This group has daily interaction with all third-party managers, and closely monitors all aspects of our lodging interests. Additionally, this group also maintains close relationships with the franchisors to assure that each property maintains high levels of customer satisfaction, franchise conformity, and revenue-management.

During 2009, the hotel industry experienced declines in both occupancy levels and rental rates (better known as “Average Daily Rate” or “ADR”). The downturn in performance affected all major segments of the travel industry (e.g. corporate travel, group travel, and leisure travel). During 2010, the hotel performance began bouncing back from the economic downturn increasing occupancy throughout the year and began increasing average daily rates in the late third quarter and fourth quarter. Overall, lodging demand

increases in 2010 exceeded industry forecasts and fueled demand for rooms. Primary segments that increased demand were from corporate business travel, association meeting attendance and ongoing healthy demand from leisure travel segment. For 2011, the industry is predicting Revenue per Available Room increases from 5%-8% compared to 2010. We believe revenues will continue to increase steadily as long as the Gross Domestic Product (“GDP”) continues its growth rates. For 2011, we believe that our revenue per available room should be consistent with the overall industry trends.

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Our third party managers and asset management are focusing on increasing average daily rates, maintaining and growing occupancy while controlling operating costs to improve cash flow to the owner.

Comparison of Years Ended December 31, 2010 and December 31, 2009

The table below represents operating information for the lodging segment of 99 properties and for the same store portfolio consisting of 92 properties acquired prior to January 1, 2009. The properties in the same store portfolio were owned for the entire years ended December 31, 2010 and December 31, 2009.

	Total Lodging Segment							Same Store Lodging Segment
	2010		2009		Increase/ (Decrease)			2010		2009		Increase/ (Decrease)
Revenues:
Lodging operating income	$	495,585	$	459,724	$	35,861		$	473,389	$	456,955	$	16,434
Total revenues	$	495,585	$	459,724	$	35,861		$	473,389	$	456,955	$	16,434
Expenses:
Lodging operating expenses	$	316,757	$	291,610	$	25,147		$	301,993	$	289,398	$	12,595
Real estate taxes		25,523		26,268		(745	)		24,567		26,048		(1,481	)
Total operating expenses	$	342,280	$	317,878	$	24,402		$	326,560	$	315,446	$	11,114
Net operating income	$	153,305	$	141,846	$	11,459		$	146,829	$	141,509	$	5,320

On a same store basis, the lodging segment’s net operating income increase is primarily attributable to an increase in occupancy from 65% to 69%, a reduction in the Average Daily Rate from $117 to $113, which together resulted in a slight increase in Rev/Par from $76 to $78. The increase is the result of an increase in business demand, while maintaining a strong demand in the leisure group. Both group project and association group attendance increased in 2010 as well.

Office Segment

	Total Office Properties
	As of December 31,
	2010			2009
Office Properties
Physical occupancy		93	%		96	%
Economic occupancy		93	%		96	%
Base rent per square foot	$	15.52		$	15.33
Gross investment in properties	$	2,024,202		$	1,980,823

The following table represents lease expirations for the office segment:

Lease Expiration Year	Number of Expiring Leases		GLA of Expiring Leases (Sq. Ft.)		Annualized Base Rent of Expiring Leases ($)		Percent of Total GLA			Percent of Total Annualized Base Rent			Expiring Rent/ Square Foot
2011		29		186,869		5,035		1.9	%		3.0	%	$	26.94
2012		31		401,067		7,200		4.0	%		4.2	%	$	17.95
2013		32		661,418		13,453		6.7	%		7.9	%	$	20.34
2014		50		348,999		6,710		3.5	%		3.9	%	$	19.23
2015		40		382,530		7,558		3.9	%		4.4	%	$	19.76
Thereafter		94		7,922,292		130,661		80.0	%		76.6	%	$	16.49
		276		9,903,175		170,617		100.00	%		100.0	%	$	17.23

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Our investments in office properties largely represent assets leased and occupied to either a diverse group of tenants or to single tenants that fully occupy the space leased. Examples of the former include the IDS Center located in the central business district of Minneapolis, and Dulles Executive Plaza and Worldgate Plaza, both located in metropolitan Washington D.C. and catering to medium to high-technology companies and federal government contractors. Examples of the latter include three buildings leased and occupied by AT&T and located in three distinct US office markets—Chicago, St. Louis, and Cleveland. In addition, our office portfolio includes properties leased on a net basis to SunTrust, with the leased locations located in the east and southeast regions of the country.

Our office properties continue to experience consistent occupancy rates and stable rental rates for more recent acquisitions. For example, in the Minneapolis, Minnesota and Dulles, Virginia office markets, where a majority of our multi-tenant office properties are located, our high occupancy rate is consistent with the strength of the market. The increase in our base rent per square foot from $15.33 to $15.52 was primarily a result of the consolidation of eleven properties during 2010. These rates are as of the end of the period and do not represent the average rate during the year ended December 31, 2010 and 2009.

Comparison of Years Ended December 31, 2010 and December 31, 2009

The table below represents operating information for the office segment of 47 properties and for the same store portfolio consisting of 36 properties acquired prior to January 1, 2009. The properties in the same store portfolio were owned for the years ended December 31, 2010 and December 31, 2009.

	Total Office Segment									Same Store Office Segment
	2010			2009			Increase/ (Decrease)			2010			2009			Increase/ (Decrease)
Revenues:
Rental income	$	154,894		$	152,759		$	2,135		$	119,822		$	125,043		$	(5,221	)
Tenant recovery incomes		30,219			29,533			686			25,837			27,142			(1,305	)
Other property income		4,245			6,087			(1,842	)		4,236			6,071			(1,835	)
Total revenues	$	189,358		$	188,379		$	979		$	149,895		$	158,256		$	(8,361	)
Expenses:
Property operating expenses	$	34,669		$	32,741		$	1,928		$	29,013		$	29,401		$	(388	)
Real estate taxes		14,800			14,904			(104	)		13,323			14,329			(1,006	)
Total operating expenses	$	49,469		$	47,645		$	1,824		$	42,336		$	43,730		$	(1,394	)
Net operating income	$	139,889		$	140,734		$	(845	)	$	107,559		$	114,526		$	(6,967	)
Average occupancy for the period		95	%		96	%		(1	%)		94	%		96	%		(2	%)

The office segment real estate rental revenues increased from $188,379 in 2009 to $189,358 in 2010 mainly due to the consolidation of the four Lauth properties since January 1, 2010. In addition, less lease termination income was received in 2010 than in 2009, which resulted in the $1,842 decrease in other property income. Office properties real estate and operating expenses also increased from $47,645 in 2009 to $49,469 in 2010 as a result of these additions. The decrease in rental income for the office same store comparison resulted primarily from a decrease in same store average occupancy of 2% and lower renewal rates. The decrease in tenant recovery income is due to lower operating expenses. The reduction in real estate taxes of $1,006 from 2009 to 2010 is a result of real estate tax reassessment.

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Industrial Segment

	Total Industrial Properties
	As of December 31,
	2010			2009
Industrial Properties
Physical occupancy		93	%		95	%
Economic occupancy		95	%		96	%
Base rent per square foot	$	5.73		$	5.45
Gross investment in properties	$	1,076,502		$	1,012,545

The following table represents lease expirations for the industrial segment:

Lease Expiration Year	Number of Expiring Leases		GLA of Expiring Leases (Sq. Ft.)		Annualized Base Rent of Expiring Leases ($)		Percent of Total GLA			Percent of Total Annualized Base Rent			Expiring Rent/Square Foot
2011		15		1,819,525		6,307		12.0	%		6.5	%	$	3.47
2012		9		855,538		3,514		5.7	%		3.6	%	$	4.11
2013		10		1,381,725		7,771		9.1	%		8.0	%	$	5.62
2014		1		23,218		433		.2	%		.4	%	$	18.65
2015		5		688,373		2,975		4.5	%		3.1	%	$	4.32
Thereafter		39		10,348,934		76,275		68.5	%		78.4	%	$	7.37
		79		15,117,313		97,275		100.0	%		100.00	%	$	6.43

During 2010, our industrial holdings continued to experience high economic occupancy rates. These properties are located in what we believe are active and sought-after industrial markets, including the Memphis, Tennessee airport market and the O’Hare Airport market of Chicago, Illinois, commonly one of the largest industrial markets in the world. The specialty distribution centers are comprised of refrigeration or air conditioned buildings in various locations across the country. The charter schools and correctional facilities consist of nine properties under long-term triple net leases.

Comparison of Years Ended December 31, 2010 and December 31, 2009

The table below represents operating information for the industrial segment of 72 properties and for the same store portfolio consisting of 64 properties acquired prior to January 1, 2009

	Total Industrial Segment									Same Store Industrial Segment
	2010			2009			Increase/ (Decrease)			2010			2009			Increase/ (Decrease)
Revenues:
Rental income	$	88,300		$	76,086		$	12,214		$	72,887		$	75,850		$	(2,963	)
Tenant recovery incomes		2,499			4,106			(1,607	)		2,499			4,105			(1,606	)
Other property income		1,104			1,083			21			63			83			(20	)
Total revenues	$	91,903		$	81,275		$	10,628		$	75,449		$	80,038		$	(4,589	)
Expenses:
Property operating expenses	$	5,237		$	4,959		$	278		$	4,951		$	5,059		$	(108	)
Real estate taxes		2,629			3,198			(569	)		2,629			3,198			(569	)
Total operating expenses	$	7,866		$	8,157		$	(291	)	$	7,580		$	8,257		$	(677	)
Net operating income	$	84,037		$	73,118		$	10,919		$	67,869		$	71,781		$	(3,912	)
Average occupancy for the period		95	%		97	%		(2	%)		95	%		97	%		(2	%)

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Industrial properties real estate revenues increased from $81,275 for the year ended December 31, 2009 to $91,903 for the year ended December 31, 2010 mainly due to the acquisition of the charter schools in February 2010. Industrial properties operating expenses decreased from $8,157 in 2009 to $7,866 in 2010, due to a reduction in real estate taxes.

A majority of the tenants have net leases and they are directly responsible for operating costs and reimburse us for real estate taxes and insurance. Therefore, industrial segment operating expenses are generally lower than expenses for the other segments.

Our overall decrease in net operating income for the industrial same store comparison reflects lower revenues from a decrease in occupancy as well as lower renewal rates. Our 2% decline in occupancy is primarily driven by an overall decline in demand for industrial space. We believe a future recovery in the overall economy will be needed to increase our occupancy.

Multi-family Segment

	Total Multi-family Properties
	As of December 31,
	2010			2009
Multi-Family Properties
Economic occupancy		90	%		84	%
End of month scheduled base rent per unit per month	$	870		$	880
Gross investment in properties	$	892,693		$	721,359

Our portfolio contains 27 multi-family properties, each reporting stable rental rate levels. These rates are as of the end of the period and do not represent the average rate during the year ended December 31, 2010 and 2009.

Comparison of Years Ended December 31, 2010 and December 31, 2009

The table below represents operating information for the multi-family segment of 27 properties and for the same store portfolio consisting of 17 properties acquired prior to January 1, 2009. The properties in the same store portfolio were owned for the years ended December 31, 2010 and December 31, 2009.

	Total Multi-Family Segment									Same Store Multi-Family Segment
	2010			2009			Increase/ (Decrease)			2010			2009			Increase/ (Decrease)
Revenues:
Rental income	$	82,722		$	62,497		$	20,225		$	56,181		$	54,828		$	1,353
Tenant property income		373			295			78			353			294			59
Other property income		6,645			4,881			1,764			4,432			4,009			423
Total revenues	$	89,740		$	67,673		$	22,067		$	60,966		$	59,131		$	1,835
Expenses:
Property operating expenses	$	36,075		$	25,639		$	10,436		$	24,312		$	22,762		$	1,550
Real estate taxes		12,043			9,172			2,871			6,349			6,925			(576	)
Total operating expenses	$	48,118		$	34,811		$	13,307		$	30,661		$	29,687		$	974
Net operating income	$	41,622		$	32,862		$	8,760		$	30,305		$	29,444		$	861
Average occupancy for the period		87	%		88	%		(1	%)		91	%		89	%		2	%

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Multi–family real estate rental revenues increased from $67,673 for the year ended December 31, 2009 to $89,740 for the year ended December 31, 2010. The increases are mainly due to two acquisitions made earlier in 2010 and two development properties placed-in-service in the second half of 2010. Multi-family properties real estate and operating expenses also increased from $34,811 in 2009 to $48,118 in 2010 as a result of these additions.

The primary reason for the increase in revenue and net property operations for the multi-family same store comparison is higher occupancy in 2010, offset by increased operating expenses related to utilities.

Comparison of the years ended December 31, 2009 and December 31, 2008

	Year ended December 31, 2009			Year ended December 31, 2008
Net loss attributable to the Company	$	(397,960	)	$	(365,178	)
Net loss per share		(.49	)		(.54	)

Net loss increased from $(365,178) or $(.54) per share for the year ended December 31, 2008 to $(397,960) or $(.49) per share for the year ended December 31, 2009. The primary reason for the decrease was the loss on consolidated investment of $148,887, impairment of notes receivable of $74,136 and equity in losses of unconsolidated entities of $78,487 for the year ended December 31, 2009, countered by the effect of impairments on investment securities of $262,105 and on investments in unconsolidated entities at $61,993 for the year ended December 31, 2008.

Rental Income, Tenant Recover Income, Lodging Income and Other Property Income

Below is a summary of sources of revenue for years ended December 31, 2009 and 2008.

	Year ended December 31, 2009		Year ended December 31, 2008		2009 Increase (decrease) from 2008
Property rentals	$	515,988	$	394,766	$	121,222
Straight-line rents		16,965		17,174		(209	)
Amortization of acquired above and below market leases, net		1,688		2,409		(721	)
Total rental income	$	534,641	$	414,349	$	120,292
Tenant recoveries		83,979		74,169		9,810
Other income		18,433		11,702		6,731
Lodging operating income		459,724		506,531		(46,807	)
Total property revenues	$	1,096,777	$	1,006,751	$	90,026

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Total property revenues increased $90,026 for the year ended December 31, 2009 over the prior year. The increase in property revenues in 2009 was due primarily to a full year of operations reflected in 2009 for properties acquired during 2008 in addition to 2009 acquisitions of 48 properties, offset by decreases in our lodging segment, as discussed below.

Property Operating Expenses and Real Estate Taxes. Property operating expenses for properties other than lodging properties consist of property management fees paid to property managers including affiliates of our sponsor and operating expenses, including costs of owning and maintaining investment properties, real estate taxes, insurance, utilities, maintenance to the exterior of the buildings and the parking lots. Lodging operating expenses include the room, food and beverage, payroll, utilities, any fees paid to our third party operators, insurance, marketing, and other expenses required to maintain and operate our lodging facilities.

	Year ended December 31, 2009		Year ended December 31, 2008		2009 Increase (decrease) from 2008
Property operating expenses	$	111,323	$	84,445	$	26,878
Lodging operating expenses		291,610		299,184		(7,574	)
Real estate taxes		84,044		70,233		13,811
Total property expenses	$	486,977	$	453,862	$	33,115

Total property operating expenses increased $33,115 for the year ended December 31, 2009 compared to the year ended December 31, 2008 due to the effect of operations of the additional 48 properties acquired after December 31, 2008 as well as the full year impact of 2008 acquisitions, offset by decreases in the lodging segment.

Other Operating Income and Expenses

Interest and Dividend Income and Realized Gain (Loss) on Securities. Interest income consists of interest earned on short term investments and notes receivable. Dividends are earned from investments in our portfolio of marketable securities.

	Year ended December 31, 2009			Year ended December 31, 2008			2009 Increase (decrease) from 2008
Interest Income	$	37,196		$	50,331		$	(13,135	)
Dividend Income		17,977			30,943			(12,966	)
Total	$	55,173		$	81,274			(26,101	)
Realized gain (loss) on investment securities	$	38,193		$	(15,941	)	$	54,134
Other than temporary impairments		(4,038	)		(246,164	)		242,126
Total	$	34,155		$	(262,105	)	$	296,260

Interest income was $37,196 and $50,331 for the years ended December 31, 2009 and 2008, respectively. Interest income is earned on our cash balances and notes receivable. Our average cash balance in 2009 was $685,725 and our average interest rate earned on cash investments was .4% for the year ended December 31, 2009.

Our notes receivable balance of $423,478 as of December 31, 2009 consisted of installment notes from unrelated parties that mature on various dates through May 2012. Interest only was due each month at rates ranging from 1.86% to 9.50% per annum. For the years ended December 31, 2009 and 2008, we recorded interest income from notes receivable of $26,355 and $27,614, respectively. See the Notes Receivable section in Liquidity and Capital Resources for more discussion.

Dividend income decreased by $12,966 for the year ended December 31, 2009 compared to the year ended December 31, 2008 as a result of reduced dividend payout rates.

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Other operating expenses are summarized as follows:

	Year ended December 31, 2009		Year ended December 31, 2008		2009 Increase (decrease) from 2008
Depreciation and amortization	$	384,764	$	313,765	$	70,999
Interest expense		248,267		225,476		22,791
General and administrative (1)		43,499		34,087		9,412
Business manager fee		39,000		18,500		20,500
	$	715,530	$	591,828	$	123,702

(1) Includes expenses paid to affiliates of our sponsor as described below.

Depreciation and amortization. The $70,999 increase in depreciation and amortization expense for the year ended December 31, 2009 relative to the year ended December 31, 2008 was due substantially to the impact of the properties acquired during 2008 and 2009.

Interest expense. The $22,791 increase in interest expense for the year ended December 31, 2009 as compared to the year ended December 31, 2008 was primarily due to mortgage debt financings during 2009 which increased to $5,056,398 from $4,405,558. Our average interest rate on outstanding debt was 4.9% and 5.1% as of December 31, 2009 and 2008, respectively.

A summary of interest expense for the years ended December 31, 2009 and 2008 appears below:

	Year ended December 31, 2009		Year ended December 31, 2008		2009 Increase (decrease) from 2008
Debt Type
Margin and other interest expense	$	15,525	$	19,077	$	(3,552	)
Mortgages		232,742		206,399		26,343
Total	$	248,267	$	225,476	$	22,791

General and Administrative Expenses. General and administrative expenses primarily consist of legal, audit and other professional fees, acquisition related expenses, insurance, board of director fees, state and local taxes as well as salary, information technology and other administrative cost reimbursements paid to our business manager and affiliates, and investment advisor fees. Our expenses were $43,499 for the year ended December 31, 2009 and $34,087 for the year ended December 31, 2008. The increase was due primarily to the growth of our asset and stockholder base during 2009 and 2008, as well as $9,617 and $6,502 of acquisition and dead deal costs for the years ended December 31, 2009 and 2008, respectively.

During 2009, we expensed acquisition costs of all transactions as incurred. Thus all costs related to finding, analyzing and negotiating a transaction were expensed as incurred as a general and administrative expense, whether or not the acquisition is completed. These expenses would include acquisition fees, if any, paid to an affiliate of our business manager. In the year ended December 31, 2009, we incurred $3,844 of acquisition costs that are included in the general and administrative expenses of $43,499. Separately, we expensed $5,773 of dead deal costs for the year ended December 31, 2009.

Business Manager Fee. After our stockholders have received a non-cumulative, non-compounded return of 5% per annum on their “invested capital,” we pay our business manager an annual business management fee of up to 1% of the “average invested assets,” payable quarterly in an amount equal to 0.25% of the average invested assets as of the last day of the immediately preceding quarter. We incurred a business management fee equal to $39,000 for the year ended December 31, 2009 or .38% of average invested assets, waiving the remaining $64,584 for the year ended December 31, 2009. We incurred a business manager management fee of $18,500 for

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the year ended 2008. Once we have satisfied the minimum return on invested capital described above, the amount of the actual fee paid to the business manager is determined by the business manager up to the amount permitted by the agreement. There is no assurance that our business manager will continue to forego or defer all or a portion of its business management fee.

Noncontrolling Interest. The noncontrolling interest represents the interests of the third parties in Minto Builders (Florida), Inc. (“MB REIT”) and consolidated joint ventures managed by third parties.

Equity in Earnings of Unconsolidated Entities. In 2009, we had equity in losses of unconsolidated entities of $78,487. This was an increase of $32,379 in loss of unconsolidated entities of $46,108 as of December 31, 2008 was mainly due to significant losses incurred and impairments recorded by our Concord Debt joint venture of which our portion was $75,787.

Provision for Asset Impairment.

For the year ended December 31, 2009, a provision of $1,117 was recorded for asset impairment related to six investment properties of which five were subsequently disposed and related impairment of $32,934 is included in discontinued operations. For the year ended December 31, 2008, a provision for asset impairment was recorded for two investment properties of which both were subsequently sold and the related asset impairment of $33,809 is included in discontinued operations.

Provision for Goodwill Impairment. For the year ended December 31, 2009, we recorded impairment of $26,676 to our goodwill. We recorded impairment of $11,199 to our goodwill for the year ended December 31, 2008. The impairments were primarily due to the effect of the slowdown in the economy and its impact on the property resulting in increases in capitalization and discount rates used in the fair value calculation. Increases in these rates reduced the fair value of goodwill. Each of the three properties with goodwill recorded an impairment. As a result, goodwill on each property was stated at fair value as of December 31, 2009.

Impairment of Notes Receivable. For the year ended December 31, 2009, we recorded an impairment of notes receivable of $74,136. No impairment was recorded for the year ended December 31, 2008. Certain of our loans, including loans in default, had declines in the fair value of the underlying collateral which resulted in impairments of our loan receivable balance to the extent the collateral is valued below the loan book value.

Impairment of Investment in Unconsolidated Entities. For the year ended December 31, 2009, we recorded an impairment of $7,443 on our investment in unconsolidated entities related to a retail center and a lodging development venture. For the year ended December 31, 2008, we recorded an impairment of $61,993 which was a $51,419 loss on our investment in Feldman Mall Properties, Inc., and a $10,574 loss on a retail center development.

Segment Reporting

An analysis of results of operations by segment is below. The tables contained throughout summarize certain key operating performance measures for the years ended December 31, 2009 and 2008.

Retail Segment

	Total Retail Properties
	As of December 31,
	2009			2008
Retail Properties
Physical occupancy		92	%		94	%
Economic occupancy		93	%		95	%
Base rent per square foot	$	15.78		$	16.41
Gross investment in properties	$	3,465,817		$	2,989,908

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Comparison of Years Ended December 31, 2009 and December 31, 2008

The table below represents operating information for the retail segment of 713 properties and for the same store retail segment consisting of 545 properties acquired prior to January 1, 2008. The properties in the same store portfolio were owned for the entire years ended December 31, 2009 and December 31, 2008, respectively.

	Total Retail Segment									Same Store Retail Segment
	2009			2008			Increase/ (Decrease)			2009			2008			Increase/ (Decrease)
Revenues:
Rental income	$	243,299		$	206,591		$	36,708		$	181,915		$	190,337		$	(8,422	)
Tenant recovery incomes		50,045			43,411			6,634			38,597			42,052			(3,455	)
Other property income		6,382			3,322			3,060			4,494			2,937			1,557
Total revenues	$	299,726		$	253,324		$	46,402		$	225,006		$	235,326		$	(10,320	)
Expenses:
Property operating expenses	$	47,984		$	39,268		$	8,716		$	35,978		$	37,532		$	(1,554	)
Real estate taxes		30,502			26,457			4,045			25,243			26,188			(945	)
Total operating expenses	$	78,486		$	65,725		$	12,761		$	61,221		$	63,720		$	(2,499	)
Net operating income	$	221,240		$	187,599		$	33,641		$	163,785		$	171,606		$	(7,821	)
Average occupancy for the period		93	%		96	%		(3	%)		93	%		96	%		(3	%)

Our retail segment’s rental revenues increased from $253,324 for the year ended December 31, 2008 to $299,726 for the year ended December 31, 2009 mainly due to the acquisition of 25 retail properties since December 31, 2008. Retail property operating expenses also increased from $65,725 in 2008 to $78,486 in 2009 as a result of these acquisitions.

The primary reason for the decrease in revenue and net property operations for the retail same store comparison was a decrease in economic occupancy of 3% between the year ended December 31, 2008 and the year ended December 31, 2009. The decrease in occupancy resulted from an overall decline in the economy and the impact on demand for retail space. The primary reason for the decrease in property operating expenses was contract renegotiations that took place in 2009 for all contracted services as well as a decline in real estate taxes, in addition to 2008 experiencing hurricane related repairs.

Lodging Segment

	For the year ended December 31, 2009			For the year ended December 31, 2008
Lodging Properties
Revenue per available room	$	76		$	91
Average daily rate	$	117		$	130
Occupancy		65	%		70	%
Gross investment in properties	$	2,632,208		$	2,597,660

We believe the decrease in lodging revenues per available room, average daily rate and occupancy were primarily a result of the current economic slowdown that has affected all industries and travel segments.

During 2008 and 2009, the hotel industry experienced declines in both occupancy levels and rental rates (better known as “Average Daily Rate” or “ADR”). The downturn in performance affected all major segments of the travel industry (e.g. corporate travel, group travel, and leisure travel).

Our third party managers and asset management were focusing on reducing variable costs and gaining market share from competitors as a result of the declines in revenues.

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Comparison of Years Ended December 31, 2009 and December 31, 2008

The table below represents operating information for the lodging segment of 99 properties and for the same store portfolio consisting of 70 properties acquired prior to January 1, 2008. The properties in the same store portfolio were owned for the entire years ended December 31, 2009 and December 31, 2008.

	Total Lodging Segment							Same Store Lodging Segment
	2009		2008		Increase/ (Decrease)			2009		2008		Increase/ (Decrease)
Revenues:
Lodging operating income	$	459,724	$	506,531	$	(46,807	)	$	278,232	$	334,560	$	(56,328	)
Total revenues	$	459,724	$	506,531	$	(46,807	)	$	278,232	$	334,560	$	(56,328	)
Expenses:
Lodging operating expenses	$	291,610	$	299,184	$	(7,574	)	$	170,496	$	196,037	$	(25,541	)
Real estate taxes		26,268		23,037		3,231			15,042		14,898		144
Total operating expenses	$	317,878	$	322,221	$	(4,343	)	$	185,538	$	210,935	$	(25,397	)
Net operating income	$	141,846	$	184,310	$	(42,464	)	$	92,694	$	123,625	$	(30,931	)

On a same store basis, the lodging segment’s net operating income decrease was primarily attributable to a decrease in same store occupancy from 69% to 64%, a reduction in the Average Daily Rate from $123 to $106, which together resulted in Rev/Par dropping from $85 to $68. The reduction was attributable to the current economic recession which reduced travel from all major segments of the lodging industry (business transient and group, and leisure group and transient travel). Through our active involvement with our managers, we reduced variable costs consistent with occupancy decreases.

Office Segment

	Total Office Properties
	As of December 31,
	2009			2008
Office Properties
Physical occupancy		96	%		97	%
Economic occupancy		96	%		97	%
Base rent per square foot	$	15.33		$	14.82
Gross investment in properties	$	1,980,823		$	1,554,700

Our office properties experienced consistent occupancy rates and stable rental rates for more recent acquisitions. For example, in the Minneapolis, Minnesota and Dulles, Virginia office markets, where a majority of our multi-tenant office properties are located, our high occupancy rate was consistent with the strength of the market. The increase in our base rent per square foot from $14.82 to $15.33 was primarily a result of acquisitions during 2008 and 2009. These rates are as of the end of the period and do not represent the average rate during the year ended December 31, 2009 and 2008.

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Comparison of Years Ended December 31, 2009 and December 31, 2008

The table below represents operating information for the office segment of 40 properties and for the same store portfolio consisting of 28 properties acquired prior to January 1, 2008. The properties in the same store portfolio were owned for the years ended December 31, 2009 and December 31, 2008.

	Total Office Segment								Same Store Office Segment
	2009			2008			Increase/ (Decrease)		2009			2008			Increase/ (Decrease)
Revenues:
Rental income	$	152,759		$	109,410		$	43,349	$	106,808		$	108,215		$	(1,407	)
Tenant recovery incomes		29,533			27,034			2,499		27,142			27,034			108
Other property income		6,087			5,733			354		6,068			5,706			362
Total revenues	$	188,379		$	142,177		$	46,202	$	140,018		$	140,955		$	(937	)
Expenses:
Property operating expenses	$	32,741		$	28,181		$	4,560	$	28,633		$	28,384		$	249
Real estate taxes		14,904			13,775			1,129		14,329			13,775			554
Total operating expenses	$	47,645		$	41,956		$	5,689	$	42,962		$	42,159		$	803
Net operating income	$	140,734		$	100,221		$	40,513	$	97,056		$	98,796		$	(1,740	)
Average occupancy for the period		97	%		97	%		—		96	%		97	%		(1	%)

Office properties real estate rental revenues increased from $142,177 in 2008 to $188,379 in 2009 mainly due to the acquisition of four properties since January 1, 2009. Office properties real estate and operating expenses also increased from $41,956 in 2008 to $47,645 in 2009 as a result of these acquisitions and due to higher real estate taxes and common area maintenance costs.

The decrease in net operating income for the office same store comparison resulted primarily from a decrease in same store occupancy and an increase in real estate taxes.

Industrial Segment

	Total Industrial Properties
	As of December 31,
	2009			2008
Industrial Properties
Physical occupancy		95	%		97	%
Economic occupancy		96	%		99	%
Base rent per square foot	$	5.45		$	4.75
Gross investment in properties	$	1,012,545		$	919,818

During 2009, our industrial holdings continued to experience high economic occupancy rates. The majority of the properties are located in what we believe are active and sought-after industrial markets, including the Memphis Airport market of Memphis, Tennessee and the O’Hare Airport market of Chicago, Illinois, commonly one of the largest industrial markets in the world.

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Comparison of Years Ended December 31, 2009 and December 31, 2008

The table below represents operating information for the industrial segment of 65 properties and for the same store portfolio consisting of 60 properties acquired prior to January 1, 2008.

	Total Industrial Segment									Same Store Industrial Segment
	2009			2008			Increase/ (Decrease)			2009			2008			Increase/ (Decrease)
Revenues:
Rental income	$	76,086		$	67,581		$	8,505		$	63,520		$	64,700		$	(1,180	)
Tenant recovery incomes		4,106			3,759			347			4,099			3,759			340
Other property income		1,083			132			951			83			133			(50	)
Total revenues	$	81,275		$	71,472		$	9,803		$	67,702		$	68,592		$	(890	)
Expenses:
Property operating expenses	$	4,959		$	4,670		$	289		$	4,570		$	4,650		$	(80	)
Real estate taxes		3,198			2,259			939			3,197			2,259			938
Total operating expenses	$	8,157		$	6,929		$	1,228		$	7,767		$	6,909		$	858
Net operating income	$	73,118		$	64,543		$	8,575		$	59,935		$	61,683		$	(1,748	)
Average occupancy for the period		97	%		99	%		(2	%)		96	%		98	%		(2	%)

Industrial properties real estate revenues increased from $71,472 for the year ended December 31, 2008 to $81,275 for the year ended December 31, 2009 mainly due to the effect of discontinued operations in 2008. Industrial properties real estate and operating expenses increased from $6,929 in 2008 to $8,157 in 2009.

A majority of the tenants have net leases and they are directly responsible for operating costs and reimburse us for real estate taxes and insurance. Therefore, industrial segment operating expenses are generally lower than expenses for the other segments.

Our overall decrease in net operating income for the industrial same store comparison reflected lower revenues from a decrease in occupancy and higher real estate taxes. Our 2% decline in occupancy was primarily driven by an overall decline in demand for industrial space.

Multi-family Segment

	Total Multi-family Properties
	As of December 31,
	2009			2008
Multi-Family Properties
Physical occupancy		84	%		92	%
Economic occupancy		84	%		92	%
End of month scheduled base rent per unit per month	$	880		$	832
Gross investment in properties	$	721,359		$	548,278

Our portfolio contains 27 multi-family properties, each reporting stable rental rate levels. These rates are as of the end of the period and do not represent the average rate during the year ended December 31, 2009 and 2008.

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Comparison of Years Ended December 31, 2009 and December 31, 2008

The table below represents operating information for the multi-family segment of 27 properties and for the same store portfolio consisting of seven properties acquired prior to January 1, 2008. The properties in the same store portfolio were owned for the years ended December 31, 2009 and December 31, 2008.

	Total Multi-Family Segment									Same Store Multi-Family Segment
	2009			2008			Increase/ (Decrease)			2009			2008			Increase/ (Decrease)
Revenues:
Rental income	$	62,497		$	30,767		$	31,730		$	19,425		$	19,875		$	(450	)
Tenant property income		295			(35	)		330			30			(40	)		70
Other property income		4,881			2,515			2,366			1,533			1,601			(68	)
Total revenues	$	67,673		$	33,247		$	34,426		$	20,988		$	21,436		$	(448	)
Expenses:
Property operating expenses	$	25,639		$	12,326		$	13,313		$	8,322		$	8,917		$	(595	)
Real estate taxes		9,172			4,705			4,467			3,351			4,041			(690	)
Total operating expenses	$	34,811		$	17,031		$	17,780		$	11,673		$	12,958		$	(1,285	)
Net operating income	$	32,862		$	16,216		$	16,646		$	9,315		$	8,478		$	837
Average occupancy for the period		88	%		89	%		(1	%)		87	%		90	%		(3	%)

Multi–family real estate rental revenues increased from $33,247 for the year ended December 31, 2008 to $67,673 for the year ended December 31, 2009. The increases were mainly due to the acquisition of 10 properties since January 1, 2009. Multi-family properties real estate and operating expenses also increased from $17,031 in 2008 to $34,811 in 2009 as a result of these acquisitions.

The increase in net operating income was primarily caused by a decrease in overall operating expenses in 2009 related to decreases in real estate taxes, lower insurance expenses in 2009 and hurricane related expenses in 2008.

Critical Accounting Policies and Estimates

General

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions in certain circumstances that affect amounts reported in the accompanying consolidated financial statements and related notes. This section discusses those critical accounting policies and estimates. These judgments often result from the need to make estimates about the effect of matters that are inherently uncertain. GAAP requires information in financial statements about accounting principles, methods used and disclosures pertaining to significant estimates. This discussion addresses our judgment pertaining to trends, events or uncertainties known which were taken into consideration upon the application of those policies.

Acquisitions

We allocate the purchase price of each acquired business between tangible and intangible assets at full fair value at the date of the transaction. Such tangible and intangible assets include land, building and improvements, acquired above market and below market leases, in-place lease value, customer relationships (if any), and any assumed financing that is determined to be above or below market terms. Any additional amounts are allocated to goodwill as required, based on the remaining purchase price in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed. The allocation of the purchase price is an area that requires judgment and significant estimates.

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We expense acquisition costs of all transactions as incurred. All costs related to finding, analyzing and negotiating a transaction are expensed as incurred as a general and administrative expense, whether or not the acquisition is completed. These expenses would include acquisition fees, if any, paid to an affiliate of our business manager.

Goodwill

We evaluate goodwill for impairment at least annually. The goodwill impairment test is a two-step test. Under the first step, the fair value of the reporting unit is compared with its carrying value (including goodwill). If the fair value of the reporting unit is less than its carrying value, an indication of goodwill impairment exists for the reporting unit and the enterprise must perform step two of the impairment test (measurement). Under step two, an impairment loss is recognized for any excess of the carrying amount of the reporting unit’s goodwill over the implied fair value of that goodwill.

Impairment

We assess the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed carrying value, we are required to record an impairment loss to the extent that the carrying value exceeds fair value. The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on our continuous process of analyzing each property and reviewing assumptions about uncertain inherent factors, as well as the economic condition of the property at a particular point in time.

We also evaluate our equity method investments for impairment indicators. The valuation analysis considers the investment positions in relation to the underlying business and activities of our investment and identities potential declines in fair value. An impairment loss should be recognized if a decline in value of the investment has occurred that is considered to be other than temporary, without ability to recover or sustain operations that would support the value of the investment.

We evaluate the collectability of both interest and principal of each of our notes receivable to determine whether it is impaired. A note receivable is considered to be impaired when management determines that it is probable that we will not be able to collect all amounts due under the contractual terms of the note receivable. When a note receivable is considered impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the note’s effective interest rate or to the fair value of the underlying collateral if the note receivable is collateral dependent.

Cost Capitalization and Depreciation Policies

Our policy is to review all expenses paid and capitalize any items exceeding $5 thousand which are deemed to be an upgrade or a tenant improvement. These costs are capitalized and included in the investment properties classification as an addition to buildings and improvements.

Buildings and improvements are depreciated on a straight-line basis based upon estimated useful lives of 30 years for buildings and improvements, and five to 15 years for site improvements. Furniture, fixtures and equipment are depreciated on a straight-line basis over five to ten years. Tenant improvements are depreciated on a straight-line basis over the life of the related lease as a component of depreciation and amortization expense. The portion of the purchase price allocated to acquired above market costs and acquired below market costs is amortized on a straight-line basis over the life of the related lease as an adjustment to net rental income. Acquired in-place lease costs, customer relationship value and other leasing costs are amortized on a straight-line basis over the life of the related lease as a component of amortization expense.

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Cost capitalization and the estimate of useful lives requires our judgment and includes significant estimates that can and do change based on our process which periodically analyzes each property and on our assumptions about uncertain inherent factors.

Investment in Marketable Securities

We classify our investment in securities in one of three categories: trading, available-for-sale, or held-to-maturity. Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities are those securities in which we have the ability and intent to hold the security until maturity. All securities not included in trading or held-to-maturity are classified as available-for-sale. Investment in securities at December 31, 2010 and 2009 consists of common stock investments and investments in commercial mortgage backed securities that are all classified as available-for-sale securities and are recorded at fair value. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is deemed to be other than temporary, results in a reduction in the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. When a security is impaired, management considers whether we have the ability and intent to hold the investment for a time sufficient to allow for any anticipated recovery in market value and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to period end and forecasted performance of the investee.

Revenue Recognition

We commence revenue recognition on our leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, this occurs on the lease commencement date. The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins. If we are the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If we conclude we are not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded under the lease are treated as lease incentives which reduces revenue recognized over the term of the lease. In these circumstances, we begin revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements. We consider a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes. These factors include:

• whether the lease stipulates how and on what a tenant improvement allowance may be spent;

• whether the tenant or landlord retains legal title to the improvements;

• the uniqueness of the improvements;

• the expected economic life of the tenant improvements relative to the length of the lease; and

• who constructs or directs the construction of the improvements.

The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment. In making that determination, we consider all of the above factors. No one factor, however, necessarily establishes its determination.

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We recognize rental income on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rents receivable in the accompanying consolidated balance sheets. Due to the impact of the straight-line basis, rental income generally is greater than the cash collected in the early years and decreases in the later years of a lease. We periodically review the collectability of outstanding receivables. Allowances are taken for those balances that we deem to be uncollectible, including any amounts relating to straight-line rent receivables.

Reimbursements from tenants for recoverable real estate tax and operating expenses are accrued as revenue in the period the applicable expenses are incurred. We make certain assumptions and judgments in estimating the reimbursements at the end of each reporting period. We do not expect the actual results to significantly differ from the estimated reimbursement.

In conjunction with certain acquisitions, we may receive payments under master lease agreements pertaining to certain non-revenue producing spaces either at the time of, or subsequent to the purchase of some of our properties. These master leases may be established at the time of purchase in order to mitigate the potential negative effects of loss of rent and expense reimbursements. Master lease payments are received through a draw of funds escrowed at the time of purchase and may cover a period from six months to three years. These funds may be released to either us or the seller when certain leasing conditions are met. Funds received by third party escrow agents, from sellers, pertaining to master lease agreements are included in restricted cash. We record such escrows as both an asset and a corresponding liability, until certain leasing conditions are met. As of December 31, 2010, there were no material adjustments for master lease agreements.

We will recognize lease termination income if there is a signed termination letter agreement, all of the conditions of the agreement have been met, collectability is reasonably assured and the tenant is no longer occupying the property. Upon early lease termination, we will provide for losses related to unrecovered intangibles and other assets.

We recognize lodging operating revenue on an accrual basis consistent with operations.

Partially-Owned Entities

We evaluate our investments in limited liability companies and partnerships to determine whether such entities may be a variable interest entity (“VIE”). If the entity is a VIE, the determination of whether we are the primary beneficiary must be made. We will consolidate a VIE if we are deemed to be the primary beneficiary, as defined in Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic on Consolidation. The equity method of accounting is applied to entities in which we are not the primary beneficiary as defined in the Consolidation Topic of the FASB ASC, or the entity is not a VIE and we do not have effective control, but can exercise influence over the entity with respect to its operations and major decisions.

Income Taxes

We and MB REIT operate in a manner intended to enable each entity to qualify as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended. Under those sections, a REIT that distributes at least 90% of its “REIT taxable income” determined without regard to the deduction for dividends paid and by excluding any net capital gain to its stockholders each year and that meets certain other conditions will not be taxed on that portion of its taxable income which is distributed to its stockholders. If we or MB REIT fail to distribute the required amount of income to our stockholders, or fail to meet the various REIT requirements, without the benefit of certain relief provisions, we or MB REIT may fail to qualify as a REIT and substantial adverse tax consequences may result. Even if we and MB REIT qualify for taxation as a REIT, we and MB REIT may be subject to certain state and local taxes on our income, property, or net worth, and to federal income and

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excise taxes on our undistributed taxable income. In addition, taxable income from non-REIT activities managed through taxable REIT subsidiaries is subject to federal, state and local income taxes.

In 2007, we formed the following wholly-owned taxable REIT subsidiaries in connection with the acquisition of the lodging portfolios and student housing: Barclay Holdings, Inc., Inland American Holding TRS, Inc., and Inland American Communities Third Party, Inc. In 2008, we formed Inland American Lodging Garden Grove Harbor TRS, LLC in connection with an addition to the lodging portfolio. Taxable income from non-REIT activities managed through these taxable REIT subsidiaries is subject to federal, state, and local income taxes. As such, our taxable REIT subsidiaries are required to pay income taxes at the applicable rates.

Liquidity and Capital Resources

We continually evaluate the economic and credit environment and its impact on our business. Maintaining significant capital reserves has become a priority for all companies. At this juncture we believe we are appropriately positioned to have significant cash to utilize in executing our strategy. Our objectives are to invest in real estate assets that produce attractive current yield and long-term risk-adjusted returns to our stockholders and to generate sustainable and predictable cash flow from our operations to distribute to our stockholders.

For 2011, we believe that our acquisitions will be fewer than prior years as our primary capital raise was completed in April 2009.

Our principal demands for funds will be:

• to pay our expenses and the operating expenses of our properties;

• to make distributions to our stockholders;

• to service or pay-down our debt;

• to fund capital expenditures;

• to invest in properties; and

• to fund joint ventures and development investments.

Generally, our cash needs will be funded from:

• income earned on our investment properties;

• interest income on investments and dividend and gain on sale income earned on our investment in marketable securities;

• distributions from our joint venture investments;

• proceeds from sales of properties;

• proceeds from borrowings on properties; and

• issuance of shares under our distribution reinvestment plan.

Acquisitions and Investments

We completed approximately $897.4 million of real estate acquisitions in 2010 and $1.1 billion in 2009. These acquisitions were consummated through our subsidiaries and were funded with available cash, mortgage indebtedness, and the proceeds from the primary offering of our shares of common stock through 2009, and DRP proceeds through 2010.

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Investments in Joint Ventures

We have entered into a number of joint ventures that invest in operating properties, developments and real estate loans. Generally, the joint ventures that are focused on operating properties continue to generate positive cash flows. The joint ventures have mortgage financing that will mature and could require paydowns or result in increased interest rates. These lenders might not be willing to extend their loans or extend on terms acceptable to us or our partners. Although we have no additional obligation to fund these ventures, other than noted below, our investment could be at risk without the funding of additional capital. It is anticipated that the entities will be able to repay or refinance all of their debt on a timely basis, however, the debt maturities of the entities are not recourse to us.

Joint Venture	Description	Investment at December 31, 2010 (000s) (a)		Remaining Commitment (000s)
D.R. Stephens Institutional Fund, LLC	Industrial and R&D Assets	$	57,389	$	—
Cobalt Industrial REIT II	Industrial Portfolio		124,750		—
Net Lease Strategic Asset Fund L.P.	Net Lease Assets		160,487		—
NRF Healthcare, LLC	Senior Housing Portfolio		87,878		—
Centro/IA JV, LLC	Retail Assets		121,534		—
Other operating joint ventures	Various		21,236		137
Total		$	573,274	$	137

(a) Represents our investment balance as reported for GAAP purposes on our balance sheet at December 31, 2010.

Centro/IA JV LLC

On December 6, 2010, we entered into a Joint Venture with Centro NP Residual Holding LLC (“Centro”), resulting in the creation of Centro/IA JV, LLC (“Centro/IA”). The joint venture structure provides us with an equity stake of $121.5 million, a preferred capital position and preferred return of 11%. The joint venture has interest in 25 retail shopping centers, with a total value of approximately $471 million. Concurrent with our entry into the venture, Centro/IA obtained 10-year CMBS financing of approximately $310.0 million secured by 24 properties. We have converted the note receivable balance of $140.8 million for the partnership interest of $121.5 million and received $19.4 million in cash.

Investments in Consolidated Developments

We have development projects that are in various stages of pre-development and development. We fund cash needs for these development activities from our working capital and by borrowings secured by the properties. Specifically identifiable direct development and construction costs are capitalized, including, where applicable, salaries and related costs, real estate taxes and interest incurred in developing the property. These developments encompass the retail and multi-family segments. In addition, we have purchased land and incurred pre-development costs of $80.1 million for an additional three multi-family projects.

Although the economy, in general, has started to recover, our retail developments could experience longer lease-up timelines and future leasing could be at leasing rates less than originally underwritten.

On October 22, 2010, we entered into a restructure agreement with the borrower on three loans, being Stan Thomas Properties. As part of the restructure, we received title and all rights to one land parcel, located in California, that secured two of the outstanding three notes receivable, and in return, we released our collateral rights to another land parcel as well as the personal guarantees of Stan Thomas.

The land parcel in California is under development and is funded by multiple municipal and state sources. The book value is $102.1 million and included in construction in progress on the consolidated balance sheets as of December 31, 2010.

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The properties under development and all amounts set forth below are as of December 31, 2010. (Dollar amounts stated in thousands)

Name	Location (City, State)	Property Type	Square Feet		Total Costs Incurred to Date ($)		Total Estimated Costs ($) (a)		Remaining Costs to be Funded by Inland American ($)		Note Payable as of December 31, 2010 ($)		Estimated Placed in Service Date (b)
Woodbridge	Wylie, TX	Retail		519,745		35,673		71,638		—		14,243	(d)
Stone Creek	San Marcos, TX	Retail		469,741		47,454		68,836		—		10,135	(d)
UCF Housing	Orlando, FL	Multi-family		385,052		20,847		67,158		—		2,487	Q2 – Q3 2012 (c)
				1,374,538		103,974		207,632		—		26,865

(a) The Total Estimated Costs represent 100% of the development’s estimated costs, including the acquisition cost of the land and building, if any. The Total Estimated Costs are subject to change upon, or prior to, the completion of the development and include amounts required to lease the property.

(b) The Estimated Placed in Service Date represents the date the certificate of occupancy is currently anticipated to be obtained. Subsequent to obtaining the certificate of occupancy, each property will go through a lease-up period.

(c) Leasing activities related to multi-family properties do not begin until six to nine months prior to the placed in service date.

(d) Stone Creek and Woodbridge are retail shopping centers and development is planned to be completed in phases. As the construction and lease-up of individual phases are completed, the respective phase will be placed in service resulting in a range of estimated placed in service dates through 2016. The Stone Creek and Woodbridge developments are pre-leased at 63% and 45%, respectively, as of December 31, 2010. The Percentage Pre-Leased represents the percentage of square feet leased of the total projected square footage of the entire development.

As part of our restructure and foreclosure of the Stan Thomas note, we began overseeing the infrastructure activities to further the development of the Sacramento Railyards. The Railyards project is a collaborative planning effort of various federal, state and local municipalities to develop an approximate 240 acre site north of Sacramento’s central business district. Our current book value is $102.1 million as of December 31, 2010. The project is scheduled to be completed in phases, beginning in 2012-2030.

Notes Receivable

Our notes receivable balance was $54.0 million and $423.4 million as of December 31, 2010 and December 31, 2009, respectively, and consisted of installment notes from unrelated parties that mature on various dates through December 2013 and installment notes assumed in the Winston acquisition. The remaining notes represent loans to various third parties secured by operating retail and lodging properties as well as land held for development. Interest only is due each month at rates ranging from 5.85% to 9.50% per annum. For the years ended December 31, 2010 and 2009, we recorded interest income from notes receivable of $13.7 million and $26.4 million, respectively, which is included in the interest and dividend income on the consolidated statements of operations and other comprehensive income.

On October 22, 2010, we entered into a restructure agreement on three loans with a borrower, being Stan Thomas Properties. As part of the restructure, we received title and all rights to two land parcels, located in Florida and California, that secured the note receivables, and in return, we released our collateral rights to a third land parcel as well as the personal guarantees of Stan Thomas.

Prior to foreclosure, we recorded our note receivable at the estimated fair values for the two land sites that were received as part of the restructure. The changes reduced the estimated fair value of the collateral to $120 million, resulting in impairment of $94.6 million for the year ended December 31, 2010. The California collateral subject to

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the restructure and foreclosure was recorded in investment properties, effective October 22, 2010, at its estimated fair value of $100 million. As of December 31, 2010, the note secured by the Florida property remains a note receivable of $20 million. On March 8, 2011, we received title to the Florida property.

On December 6, 2010, we converted a note receivable balance of $140.8 million for a partnership interest in a joint venture. As part of the exchange, we received $19.5 million in cash. The joint venture was entered into with Centro NP Residual Holding LLC (“Centro”), resulting in the creation of Centro/IA JV, LLC. The joint venture has interest in 25 retail shopping centers, with a total value of approximately $471.0 million. The properties comprise 4.5 million square feet and are located in 13 states. The venture has 10 year CMBS financing of approximately $310.0 million secured by 24 properties. Prior to the close of the joint venture, the Company had an existing participation on a portion of the prior first mortgage loan encumbering the 25 retail shopping centers.

Distributions

We declared cash distributions to our stockholders per weighted average number of shares outstanding during the period from January 1, 2010 to December 31, 2010 totaling $417.9 million or $.50 per share. These cash distributions were paid with $356.7 million from our cash flow from operations, $31.7 million provided by distributions from unconsolidated entities as well as gain on sale of properties. Our average dividend reinvestment program participation was 50% for the year ended December 31, 2010 compared to 57% for the year ended December 31, 2009.

The following chart presents a historical view of our distribution coverage.

	2010			2009			2008			2007			2006
Cash flow provided by operations	$	356,660			369,031			384,365			263,420			65,883
Distributions from unconsolidated entities	$	31,737			32,081			41,704			—			—
Gain on sales of properties	$	55,412			—			—			—			—
Distributions declared	$	(417,885	)		(405,337	)		(418,694	)		(242,606	)		(41,178	)
Excess (deficiency)	$	25,924			(4,225	)		7,375			20,814			24,705

Effective as of September 21, 2010, we adopted a Second Amended and Restated Distribution Reinvestment Plan (the “Plan”). Under the Plan, beginning with reinvestments made after September 21, 2010, and until a new estimated value per share has been established, distributions may be reinvested in shares of our common stock at a price equal to $8.03 per share.

Financing Activities and Contractual Obligations

Stock Offering

Our initial offering of shares of common stock terminated as of the close of business on July 31, 2007. We had sold a total of 469,598,762 shares in the primary offering and 9,720,991 shares pursuant to the offering of shares through the distribution reinvestment plan. A follow-on registration statement for an offering of up to 500,000,000 shares of common stock at $10.00 each and up to 40,000,000 shares at $9.50 each pursuant to our distribution reinvestment plan was declared effective by the SEC on August 1, 2007 and terminated on April 6, 2009. On March 31, 2009, we filed a registration statement to register 50,000,000 shares to be issued under the distribution reinvestment plan. As of December 31, 2010, we had sold a total of 320,636,231 shares in the follow-on offering and 78,977,920 shares pursuant to the offering of shares through the dividend reinvestment plan. Our total offering costs for both our initial and follow on-offering as of December 31, 2010 were approximately $828 million.

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Share Repurchase Program

As of December 31, 2009, we had repurchased 32,527,130 shares for $304 million under the share repurchase program. Our board of directors voted to suspend the share repurchase program until further notice, effective March 30, 2009. We did not repurchase any shares in 2010.

Borrowings

Mortgage loans outstanding as of December 31, 2010 and 2009 were $5.5 billion and $5.1 billion and had a weighted average interest rate of 5.1% and 4.9%, respectively. During 2010, we borrowed $33.8 million against our portfolio of marketable securities. During 2009, we repaid $10 million of amounts borrowed against our portfolio of marketable securities. We borrowed approximately $432.9 million secured by mortgages on our properties and assumed $457.9 million of debt at acquisition for the year ended December 31, 2010. We borrowed approximately $371 million secured by mortgages on our properties and assumed $626.2 million of debt at acquisition for the year ended December 31, 2009.

Our interest rate risk is monitored using a variety of techniques, including periodically evaluating fixed interest rate quotes on all variable rate debt and the costs associated with converting the debt to fixed rate debt. Also, existing fixed and variable rate loans that are scheduled to mature in the next year or two are evaluated for possible early refinancing and or extension due to consideration given to current interest rates. The table below presents, on a consolidated basis, the principal amount, weighted average interest rates and maturity date (by year) on our mortgage debt as of December 31, 2010 (dollar amounts are stated in thousands).

	2011			2012			2013			2014			2015			Thereafter			Total
Maturing debt :
Fixed rate debt (mortgage loans)	$	114,491			138,559			556,496			234,863			385,098			2,478,848			3,908,355
Variable rate debt (mortgage loans)	$	426,771			540,553			454,327			43,857			75,877			58,928			1,600,313
Weighted average interest rate on debt:
Fixed rate debt (mortgage loans)		5.11	%		5.63	%		5.71	%		5.61	%		5.61	%		5.71	%		5.68	%
Variable rate debt (mortgage loans)		3.43	%		3.56	%		3.76	%		5.66	%		5.62	%		4.87	%		3.78	%

The debt maturity excludes mortgage discounts associated with debt assumed at acquisition of which a discount of $38.7 million, net of accumulated amortization, is outstanding as of December 31, 2010.

We have entered into nine interest rate swap agreements that have converted $355.5 million or 22.2% of our variable rate mortgage loans from variable to fixed rates. The pay rates range from .63% to 4.75% with maturity dates from April 2011 to April 2013.

As of December 31, 2010, we have approximately $541.3 million and $679.1 million in mortgage debt maturing in 2011 and 2012, respectively. We are currently negotiating refinancing the remaining debt with the existing lenders at terms that will most likely be at higher credit spreads and lower loan to value. We currently anticipate that we will be able to repay or refinance all of our debt on a timely basis, and believe we have adequate sources of funds to meet our short term cash needs. However, there can be no assurance that we can obtain such refinancing on satisfactory terms. Continued volatility in the capital markets could expose us to the risk of not being able to borrow on terms and conditions acceptable to us for future acquisitions or refinancings.

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Summary of Cash Flows

	Year ended December 31,
	2010			2009			2008
	(In thousands)
Cash provided by operating activities	$	356,660		$	369,031		$	384,365
Cash used in investing activities		(380,685	)		(563,163	)		(2,484,825	)
Cash provided by (used in) financing activities		(208,759	)		(250,602	)		2,636,325
Increase (decrease) in cash and cash equivalents		(232,784	)		(444,734	)		535,865
Cash and cash equivalents, at beginning of year		500,491			945,225			409,360
Cash and cash equivalents, at end of year	$	267,707		$	500,491		$	945,225

Cash provided by operating activities was $357 million, $369 million and $384 million for the years ended December 31, 2010, 2009 and 2008, respectively, and was generated primarily from operating income from property operations, and interest and dividends. The decrease in cash flows from the year ended December 31, 2010 to December 31, 2009 of $12 million was primarily due to decrease in interest and dividend income and an increase in interest expenses.

Cash used in investing activities was $381 million, $563 million and $2.5 billion for years ended December 31, 2010, 2009 and 2008, respectively. During the year ended December 31, 2010, cash was used primarily for purchases of 35 investment properties and capital expenditures offset by cash received from the sale of 14 investment properties. We used more cash in our investing activities during the year ended December 31, 2009 and 2008 primarily due to the acquisitions of 48 and 187 properties, respectively.

Cash provided by (used in) financing activities was $(209) million, $(251) million and $2.6 billion for the years ended December 31, 2010, 2009 and 2008, respectively. In 2009 and 2008, we generated proceeds from the sale of shares in our public offerings, net of offering costs paid of $224 million and $2.3 billion. Effective April 6, 2009, we terminated our primary offering and therefore, we did not receive share proceeds or incur offering costs in 2010. During the years ended December 31, 2010, 2009 and 2008, we generated proceeds from the distribution reinvestment plan of approximately $207, $231, and $242 million, respectively. We generated approximately $433 million from borrowings secured by mortgages on our properties for the year ended December 31, 2010. During the years ended December 31, 2009 and 2008, we generated approximately $370 million and $1.0 billion, respectively, from borrowings secured by mortgages on our properties. During the years ended December 31, 2010, 2009 and 2008, we paid approximately $417, $412 and $406 million, respectively, in distributions to our stockholders. We also paid off mortgage debt in the amount of $430, $436 and $139 million for the years ended December 31, 2010, 2009 and 2008.

We consider all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements with a maturity of six months or less, at the date of purchase, to be cash equivalents. We maintain our cash and cash equivalents at financial institutions. The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance

Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage.

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Contractual Obligations

The table below presents, on a consolidated basis, obligations and commitments to make future payments under debt obligations (including interest), and lease agreements as of December 31, 2010 (dollar amounts are stated in thousands).

	Payments due by period
	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Long-Term Debt Obligations	$	7,446,616		1,073,876		2,381,521		2,333,937		1,657,282
Ground Lease Payments	$	22,862		395		1,197		1,206		20,064

As part of our consolidated MB REIT joint venture with Minto Delaware, we could be required to redeem Minto Delaware’s interest in MB REIT beginning on October 11, 2011 subject to the terms and conditions below:

• On or after October 11, 2011 until October 11, 2012, Minto Holdings, an affiliate of Minto Delaware, has the option to require us to purchase, in whole, but not in part, 100% of the Minto Delaware’s investment in the MB REIT (consisting of the series A preferred stock and common stock) for a price equal to (A) if our shares of common stock are not listed, on the earlier of (x) the date we purchase Minto Delaware’s investment or (y) 150 days after the date written notice of the exercise of the initial purchase right is given, the sum of (1) the series A liquidation preference, payable in cash and (2) $29.3 million or (B) if the shares of our stock are listed, on the earlier of (x) the date we purchase Minto Delaware’s investment or (y) 150 days after the date written notice of the exercise of the initial purchase right is given, the sum of (1) the series A liquidation preference, payable in cash and (2) 2,934,800 shares of our common stock. The series A liquidation preference is equal to $1,276 per share for 207,000 shares of series A preferred stock plus accrued and unpaid dividends.

• On or after October 11, 2012, Minto Holdings has an option to require us to purchase, in whole, but not in part, 100% of the Minto Delaware investment for a price equal to (A) if the shares of our common stock are not listed, on the earlier of (x) the date we purchase the Minto Delaware investment or (y) 150 days after written notice of a subsequent purchase right is given, the sum of (1) the series A liquidation preference, payable in cash and (2) the fair market value (pursuant to a specified formula) of the common stock held by Minto Delaware on the date written notice of the subsequent purchase right is given, payable in cash, or (B) if the shares of our common stock are listed, on the earlier of (x) the date we purchase the Minto Delaware equity or (y) 150 days after written notice of the subsequent purchase right is given, the sum of (1) the series A liquidation preference, payable in cash and (2) 2,934,800 shares of our common stock.

• On or after October 11, 2015, so long as the MB REIT qualifies as a “domestically controlled REIT,” MB REIT has the right to purchase, in whole, but not in part, 100% of Minto Delaware’s investment for a price equal to (A) if the shares of our common stock are not listed, the sum of (1) the series A liquidation preference, payable in cash and (2) the fair market value (pursuant to a specified formula) of the common stock of MB REIT held by Minto Delaware or (B) if the shares of our common stock are listed, the sum of (1) the series A liquidation preference, payable in cash and (2) 2,934,800 shares of our common stock.

We have acquired several properties subject to the obligation to pay the seller additional monies depending on the future leasing and occupancy of the property. These earnout payments are based on a predetermined formula. Each earnout agreement has a time limit regarding the obligation to pay any additional monies. If at the end of the time period, certain space has not been leased and occupied, we will not have any further obligation. Assuming all the conditions are satisfied, as of December 31, 2010, we would be obligated to pay as much as $31.8 million in the future as vacant space covered by these earnout agreements is occupied and becomes rent producing. The information in the above table does not reflect these contractual obligations.

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Off Balance Sheet Arrangements

Unconsolidated Real Estate Joint Ventures

Unconsolidated joint ventures are those where we have substantial influence over but do not control the entity. We account for our interest in these ventures using the equity method of accounting. For additional discussion of our investments in joint ventures, please refer to the liquidity section of Management’s Discussion and Analysis of Financial Condition and Results of Operations and our Notes to Consolidated Financial Statements. Our ownership percentage and related investment in each joint venture is summarized in the following table. (Dollar amounts stated in thousands).

Joint Venture	Ownership %			Investment at December 31, 2010
Net Lease Strategic Asset Fund L.P.		85	%	$	160,487
Cobalt Industrial REIT II		36	%		124,750
D.R. Stephens Institutional Fund, LLC		90	%		57,389
NRF Healthcare, LLC		(a	)		87,878
Centro/IA JV, LLC		(b	)		121,534
Other Unconsolidated Joint Ventures		Various			21,236
				$	573,274

(a) We invested $100,000 in NRF Healthcare, LLC in exchange for a Series A Convertible Preferred Membership interest and are entitled to a 10.5% preferred dividend. This entity was previously known as Wakefield Capital, LLC.

(b) On December 6, 2010, we entered into a Joint Venture with Centro NP Residual Holding LLC (“Centro”), resulting in the creation of Centro/IA JV, LLC. The joint venture structure provides Inland American with an equity stake of $121,534, a preferred capital position and preferred return of 11%.

Subsequent Events

Subsequent to year end, we purchased one property for $25.5 million.

We entered into two interest rate swap transactions at a rate of 0.912% over a notional amount of $49.7 million.

We have adopted an Amended and Restated Share Repurchase Program (“SRP”), effective April 11, 2011, to repurchase shares, on a quarterly basis, due to death of the beneficial owner. Beginning April 11, 2011, we will begin accepting share repurchase requests due to the death of any beneficial owner of shares, with checks distributed by the end of the calendar quarter. There will be $5 million available each quarter to repurchase shares at a price per share of $7.23, which is equal to 90% of the most recently disclosed estimated per share value of $8.03. Additionally in accordance with the SRP, the aggregate number of shares repurchased will be limited to 5.0% of the total number of issued and outstanding shares during any consecutive 12 calendar month period.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

We are subject to market risk associated with changes in interest rates both in terms of variable-rate debt and the price of new fixed-rate debt upon maturity of existing debt and for acquisitions. We are also subject to market risk associated with our marketable securities investments.

Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. If market rates of interest on all of the floating rate debt as of December 31, 2010 permanently increased by 1%, the increase in interest expense on the floating rate debt would decrease future earnings and cash flows by approximately $16 million. If market rates of interest on all of the floating rate debt as of December 31, 2010 permanently decreased by 1%, the decrease in interest expense on the floating rate debt would increase future earnings and cash flows by approximately $16 million.

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With regard to variable rate financing, we assess interest rate cash flow risk by continually identifying and monitoring changes in interest rate exposures that may adversely impact expected future cash flows and by evaluating hedging opportunities. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both of our outstanding or forecasted debt obligations as well as our potential offsetting hedge positions. The risk management control systems involve the use of analytical techniques, including cash flow sensitivity analysis, to estimate the expected impact of changes in interest rates on our future cash flows.

We monitor interest rate risk using a variety of techniques, including periodically evaluating fixed interest rate quotes on all variable rate debt and the costs associated with converting the debt to fixed rate debt. Also, existing fixed and variable rate loans that are scheduled to mature in the next year or two are evaluated for possible early refinancing and or extension due to consideration given to current interest rates. The table below presents mortgage debt principal amounts and weighted average interest rates by year and expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes (dollar amounts are stated in thousands).

	2011			2012			2013			2014			2015			Thereafter			Total
Maturing debt :
Fixed rate debt (mortgage loans)	$	114,491			138,559			556,496			234,863			385,098			2,478,848			3,908,355
Variable rate debt (mortgage loans)	$	426,771			540,553			454,327			43,857			75,877			58,928			1,600,313
Weighted average interest rate on debt:
Fixed rate debt (mortgage loans)		5.11	%		5.63	%		5.71	%		5.61	%		5.61	%		5.71	%		5.68	%
Variable rate debt (mortgage loans)		3.43	%		3.56	%		3.76	%		5.66	%		5.62	%		4.87	%		3.78	%

The debt maturity excludes mortgage discounts associated with debt assumed at acquisition of which a discount of $38.7 million, net of accumulated amortization, is outstanding as of December 31, 2010.

We may use derivative financial instruments to hedge exposures to changes in interest rates on loans secured by our properties. To the extent we do, we are exposed to credit risk and market risk. Credit risk is the failure of the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes us, which creates credit risk for us. When the fair value of a derivative contract is negative, we owe the counterparty and, therefore, it does not possess credit risk. It is our policy to enter into these transactions with the same party providing the financing. In the alternative, we will seek to minimize the credit risk in derivative instruments by entering into transactions with what we believe are high-quality counterparties. Market risk is the adverse effect on the value of a financial instrument that results from a change in interest rates. The market risk associated with interest-rate contracts is managed by establishing and monitoring parameters that limit the types and degree of market risk that may be undertaken.

We have, and may in the future enter into, derivative positions that do not qualify for hedge accounting treatment. If these derivatives do not qualify for hedge accounting treatment, the gains or losses resulting from their mark-to-market at the end of each reporting period are recognized as an increase or decrease in “interest expense” on our consolidated statements of income. In addition, we are, and may in the future be, subject to additional expense based on the notional amount of the derivative positions and a specified spread over LIBOR.

Equity Price Risk

We are exposed to equity price risk as a result of our investments in marketable equity securities. Equity price risk changes as the volatility of equity prices changes or the values of corresponding equity indices change.

Other than temporary impairments were $1.9 million and $4.0 million for the year ended December 31, 2010 and 2009, respectively. The overall stock market and REIT stocks, including our REIT stock investments, have declined since mid-2007, which have resulted in our recognizing impairments. We believe that our investments will continue to generate dividend income and, if the REIT market recovers, we could continue to recognize gains on sale. However, due to general economic and credit market uncertainties it is difficult to project where the REIT market and our portfolio value will be in 2011.

-64-

While it is difficult to project what factors may affect the prices of equity sectors and how much the effect might be, the table below illustrates the impact of a 10% increase and a 10% decrease in the price of the equities held by us would have on the value of the total assets and the book value of the Company as of December 31, 2010 (dollar amounts stated in thousands).

	Cost		Fair Value		Hypothetical 10% Decrease in Market Value		Hypothetical 10% Increase in Market Value
Marketable securities (1)	$	300,867	$	253,838	$	228,484	$	279,221

(1) Excludes CMBS investments of $14,888.

Derivatives

The following table summarizes our interest rate swap contracts outstanding as of December 31, 2010 (dollar amounts stated in thousands):

Date Entered	Effective Date		End Date	Pay Fixed Rate		Receive Floating Rate Index	Notional Amount ($)		Fair Value of December 31, 2010 (1) ($)
November 16, 2007		November 20, 2007	April 1, 2011		4.45%	1 month LIBOR		24,425		(253	)
March 28, 2008		March 28, 2008	March 27, 2013		3.32%	1 month LIBOR		33,062		(1,819	)
March 28, 2008		March 28, 2008	March 31, 2011		2.81%	1 month LIBOR		50,000		(312	)
December 12, 2008		January 1, 2009	December 12, 2011		(2)	(2)		20,245		—
December 23, 2008		January 5, 2009	December 22, 2011		1.86%	1 month LIBOR		16,637		(242	)
January 16, 2009		January 13, 2009	January 13, 2012		1.62%	1 month LIBOR		22,000		(282	)
August 19, 2010		August 31, 2010	March 27,2012		.63%	1 month LIBOR		34,373		(84	)
October 15, 2010		November 1, 2010	December 19, 2011		.77%	1 month LIBOR		125,000		(487	)
October 15, 2010		November 1, 2010	April 23, 2013		.94%	1 month LIBOR		29,727		(54	)
								355,469		(3,533	)

(1) The fair value was determined by a discounted cash flow model based on changes in interest rates.

(2) Interest rate cap at 4.75%.

We and MB REIT entered into a put/call agreement as a part of the MB REIT transaction. This agreement is considered a derivative instrument and is accounted for pursuant to ASC 815. Derivatives are required to be recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. The fair value of the put/call agreement is estimated using the Black-Scholes model.

-65-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Index

Item 8. Consolidated Financial Statements and Supplementary Data

	Page
Report of Independent Registered Public Accounting Firm		67
Financial Statements:
Consolidated Balance Sheets at December 31, 2010 and 2009		68
Consolidated Statements of Operations and Other Comprehensive Income for the years ended December  31, 2010, 2009 and 2008		69
Consolidated Statements of Changes in Equity for the years ended December 31, 2010, 2009 and 2008		71
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008		74
Notes to Consolidated Financial Statements		77
Real Estate and Accumulated Depreciation (Schedule III)		116

Schedules not filed:

All schedules other than the one listed in the Index have been omitted as the required information is inapplicable or the information is presented in the financial statements or related notes.

-66-

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Inland American Real Estate Trust, Inc.:

We have audited the accompanying consolidated balance sheets of Inland American Real Estate Trust, Inc. (the Company) as of December 31, 2010 and 2009, and the related consolidated statements of operations and other comprehensive income, changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2010. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule III. These consolidated financial statements and financial statement schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Inland American Real Estate Trust, Inc. as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/S/ KPMG LLP

Chicago, Illinois

March 11, 2011

-67-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Balance Sheets

(Dollar amounts in thousands, except share amounts)

	December 31, 2010			December 31, 2009
Assets
Assets:
Investment properties:
Land	$	1,883,486		$	1,684,793
Building and other improvements		8,411,621			7,866,633
Construction in progress		306,673			278,096
Total		10,601,780			9,829,522
Less accumulated depreciation		(1,038,829	)		(717,547	)
Net investment properties		9,562,951			9,111,975
Cash and cash equivalents		267,707			500,491
Restricted cash and escrows		96,089			71,187
Investment in marketable securities		268,726			217,061
Investment in unconsolidated entities		573,274			453,782
Accounts and rents receivable (net of allowance of $7,905 and $7,853)		101,465			80,145
Notes receivable		54,047			423,478
Intangible assets, net		386,916			389,136
Deferred costs and other assets		80,327			80,956
Total assets	$	11,391,502		$	11,328,211
Liabilities and Equity
Liabilities:
Mortgages, notes and margins payable, net	$	5,532,057		$	5,085,899
Accounts payable and accrued expenses		33,672			45,854
Distributions payable		35,267			34,317
Accrued real estate taxes		52,479			46,805
Advance rent and other liabilities		81,043			94,881
Intangible liabilities, net		81,698			76,379
Other financings		47,762			47,762
Total liabilities		5,863,978			5,431,897
Noncontrolling redeemable interests		264,132			264,132
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $.001 par value, 40,000,000 shares authorized, none outstanding		—			—
Common stock, $.001 par value, 1,460,000,000 shares authorized, 846,406,774 and 823,619,190 shares issued and outstanding		846			824
Additional paid in capital (net of offering costs of $828,434, of which $788,272 was paid or accrued to affiliates)		7,605,105			7,397,831
Accumulated distributions in excess of net loss		(2,409,370	)		(1,815,054	)
Accumulated other comprehensive income		49,430			29,712
Total Company stockholders’ equity		5,246,011			5,613,313
Noncontrolling interests		17,381			18,869
Total equity		5,263,392			5,632,182
Total liabilities and equity	$	11,391,502		$	11,328,211

See accompanying notes to the consolidated financial statements.

-68-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Statements of Operations and Other Comprehensive Income

(Dollar amounts in thousands, except per share amounts)

	Year ended December 31, 2010			Year ended December 31, 2009			Year ended December 31, 2008
Income:
Rental income	$	624,900		$	534,641		$	414,349
Tenant recovery income		93,927			83,979			74,169
Other property income		17,323			18,433			11,702
Lodging income		495,585			459,724			506,531
Total income		1,231,735			1,096,777			1,006,751
Expenses:
General and administrative expenses		36,668			43,499			34,087
Property operating expenses		136,353			111,323			84,445
Lodging operating expenses		316,757			291,610			299,184
Real estate taxes		91,575			84,044			70,233
Depreciation and amortization		432,081			384,764			313,765
Business manager management fee		36,000			39,000			18,500
Provision for asset impairment		46,584			1,117			—
Provision for goodwill impairment		—			26,676			11,199
Impairment of notes receivable		111,896			74,136			—
Total expenses		1,207,914			1,056,169			831,413
Operating income	$	23,821		$	40,608		$	175,338
Interest and dividend income		33,040			55,173			81,274
Other income		1,845			591			70
Interest expense		(293,507	)		(248,267	)		(225,476	)
Gain on extinguishment of debt		—			—			7,760
Equity in loss of unconsolidated entities		(18,684	)		(78,487	)		(46,108	)
Impairment of investment in unconsolidated entities		(11,239	)		(7,443	)		(61,993	)
Gain (loss) on consolidated investment		433			(148,887	)		—
Realized gain (loss) and impairment on securities, net		21,073			34,155			(262,105	)
Loss before income taxes	$	(243,218	)	$	(352,557	)	$	(331,240	)
Income tax benefit (expense)		4,518			(627	)		(6,124	)
Net loss from continuing operations	$	(238,700	)	$	(353,184	)	$	(337,364	)
Income (loss) from discontinued operations, net	$	71,408		$	(35,825	)	$	(18,887	)
Net loss	$	(167,292	)	$	(389,009	)	$	(356,251	)
Less: Net income attributable to noncontrolling interests		(9,139	)		(8,951	)		(8,927	)
Net loss attributable to Company	$	(176,431	)	$	(397,960	)	$	(365,178	)

See accompanying notes to the consolidated financial statements.

-69-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Statements of Operations and Other Comprehensive Income

(Dollar amounts in thousands, except per share amounts)

	Year ended December 31, 2010			Year ended December 31, 2009			Year ended December 31, 2008
Other comprehensive income (loss):
Unrealized gain (loss) on investment securities		40,491			65,068			(195,194	)
Reversal of unrealized (gain) loss to realized gain (loss) on investment securities		(21,073	)		(34,155	)		262,105
Unrealized gain (loss) on derivatives		300			5,220			(9,054	)
Comprehensive loss	$	(156,713	)	$	(361,827	)	$	(307,321	)
Net loss, per common share, from continuing operations	$	(0.30	)	$	(0.45	)	$	(0.51	)
Net income (loss), per common share, from discontinued operations	$	0.09		$	(0.04	)	$	(0.03	)
Net loss, per common share, basic and diluted	$	(0.21	)	$	(0.49	)	$	(0.54	)
Weighted average number of common shares outstanding, basic and diluted		835,131,057			811,400,035			675,320,438

See accompanying notes to the consolidated financial statements.

-70-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Statements of Changes in Equity

(continued)

(Dollar amounts in thousands)

For the years ended December 31, 2010, 2009 and 2008

	Number of Shares			Common Stock			Additional Paid-in Capital			Accumulated Distributions in excess of Net Income (Loss)			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total			Noncontrolling Redeemable Interests
Balance at January 1, 2008		548,168,989		$	548		$	4,905,710		$	(227,885	)	$	(64,278	)	$	23,783		$	4,637,878		$	264,132
Net loss		—			—			—			(365,178	)		—			(318	)		(365,496	)		9,245
Unrealized loss on investment securities		—			—			—			—			(195,194	)		—			(195,194	)		—
Reversal of unrealized loss to realized loss on investment securities		—			—			—			—			262,105			—			262,105			—
Unrealized loss on derivatives		—			—			—			—			(9,054	)		—			(9,054	)		—
Distributions declared		—			—			—			(418,694	)		—			(2,872	)		(421,566	)		(9,245	)
Proceeds from offering		231,961,443			232			2,327,910			—			—			—			2,328,142			—
Offering costs		—			—			(242,897	)		—			—			—			(242,897	)		—
Proceeds from distribution reinvestment program		25,485,006			26			242,087			—			—			—			242,113			—
Shares repurchased		(11,041,431	)		(11	)		(102,993	)		—			—			—			(103,004	)		—
Issuance of stock options and discounts on shares issued to affiliates		—			—			128			—			—			—			128			—
Balance at December 31, 2008		794,574,007		$	795		$	7,129,945		$	(1,011,757	)	$	(6,421	)	$	20,593		$	6,133,155		$	264,132

See accompanying notes to the consolidated financial statements.

-71-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Statements of Changes in Equity

(continued)

(Dollar amounts in thousands)

For the years ended December 31, 2010, 2009 and 2008

	Number of Shares			Common Stock			Additional Paid-in Capital			Accumulated Distributions in excess of Net Income (Loss)			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total			Noncontrolling Redeemable Interests
Balance at January 1, 2009		794,574,007		$	795		$	7,129,945		$	(1,011,757	)	$	(6,421	)	$	20,593		$	6,133,155		$	264,132
Net loss		—			—			—			(397,960	)		—			(294	)		(398,254	)		9,245
Unrealized gain on investment securities		—			—			—			—			65,068			—			65,068			—
Reversal of unrealized gain to realized gain on investment securities		—			—			—			—			(34,155	)		—			(34,155	)		—
Unrealized gain on derivatives		—			—			—			—			5,220			—			5,220			—
Distributions declared		—			—			—			(405,337	)		—			(2,732	)		(408,069	)		(9,245	)
Contributions from noncontrolling interests		—			—			—			—			—			1,302			1,302			—
Proceeds from offering		24,869,350			25			253,961			—			—			—			253,986			—
Offering costs		—			—			(28,415	)		—			—			—			(28,415	)		—
Proceeds from distribution reinvestment program		24,347,096			24			231,282			—			—			—			231,306			—
Shares repurchased		(20,171,263	)		(20	)		(188,956	)		—			—			—			(188,976	)		—
Issuance of stock options and discounts on shares issued to affiliates		—			—			14			—			—			—			14			—
Balance at December 31, 2009		823,619,190		$	824		$	7,397,831		$	(1,815,054	)	$	29,712		$	18,869		$	5,632,182		$	264,132

See accompanying notes to the consolidated financial statements.

-72-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Statements of Changes in Equity

(continued)

(Dollar amounts in thousands)

For the years ended December 31, 2010, 2009 and 2008

	Number of Shares		Common Stock		Additional Paid-in Capital		Accumulated Distributions  in excess of Net Loss			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total			Noncontrolling Redeemable Interests
Balance at January 1, 2010		823,619,190	$	824	$	7,397,831	$	(1,815,054	)	$	29,712		$	18,869		$	5,632,182		$	264,132
Net income (loss)		—		—		—		(176,431	)		—			(106	)		(176,537	)		9,245
Unrealized gain on investment securities		—		—		—		—			40,491			—			40,491			—
Reversal of unrealized gain to realized gain on investment securities		—		—		—		—			(21,073	)		—			(21,073	)		—
Unrealized gain on derivatives		—		—		—		—			300			—			300			—
Distributions declared		—		—		—		(417,885	)		—			(2,237	)		(420,122	)		(9,245	)
Contributions from noncontrolling interests		—		—		—		—			—			855			855			—
Proceeds from distribution reinvestment program		22,787,584		22		207,274		—			—			—			207,296			—
Balance at December 31, 2010		846,406,774	$	846	$	7,605,105	$	(2,409,370	)	$	49,430		$	17,381		$	5,263,392		$	264,132

See accompanying notes to the consolidated financial statements.

-73-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Statements of Cash Flows

(Dollar amounts in thousands)

	Year ended December 31, 2010			Year ended December 31, 2009			Year ended December 31, 2008
Cash flows from operating activities:
Net loss	$	(167,292	)	$	(389,009	)	$	(356,251	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		443,787			395,501			320,792
Amortization of above and below market leases, net		(433	)		(1,688	)		(2,408	)
Amortization of debt premiums, discounts, and financing costs		18,424			10,032			11,419
Amortization of note receivable discount		—			(8,107	)		(3,208	)
Straight-line rental income		(17,705	)		(16,329	)		(17,457	)
Gain on extinguishment of debt		(19,227	)		—			(7,760	)
Gain on sale of property, net		(55,412	)		—			—
(Gain) loss on consolidated investment		(433	)		148,887			—
Provision for asset impairment		47,529			34,051			33,809
Provision for goodwill impairment		—			26,676			11,199
Impairment of notes receivable		111,896			74,136			—
Equity in loss of unconsolidated of entities		18,684			78,487			46,108
Distributions from unconsolidated entities		3,887			9,040			2,522
Impairment of investment in unconsolidated entities		11,239			7,443			61,993
Realized (gain) loss on investments in securities		(22,929	)		(38,193	)		15,941
Impairment of investments in securities		1,856			4,038			246,164
Other non-cash adjustments		(278	)		319			228
Changes in assets and liabilities:
Accounts and rents receivable		(3,612	)		6,769			542
Prepaid rental and recovery income		2,993			8,389			8,954
Other assets		580			3,521			2,987
Accounts payable and other liabilities		(13,093	)		(8,906	)		4,549
Accrued real estate taxes		(1,883	)		12,560			3,334
Due to related parties		(1,918	)		11,414			908
Net cash flows provided by operating activities		356,660			369,031			384,365
Cash flows from investing activities:
Purchase of RLJ Hotels		—			—			(503,065	)
Consolidation of Lauth		392			1,757			—
Purchase of investment properties		(365,427	)		(376,387	)		(981,183	)
Acquired in-place and market-lease intangibles, net		(74,841	)		(63,777	)		(53,095	)
Capital expenditures and tenant improvements		(109,827	)		(72,076	)		(83,618	)
Investment in development projects		(56,894	)		(134,453	)		(137,187	)
Sale of investment properties		301,189			—			27,659
Acquisition of joint venture interest		—			—			(10,823	)
Purchase of investment securities		(86,986	)		(53,861	)		(228,411	)
Sale of investment securities		75,812			131,017			47,464
Investment in unconsolidated entities, net		(60,043	)		(27,909	)		(411,961	)
Distributions from unconsolidated entities		31,737			32,081			41,704
Payment of leasing fees and franchise fees		(8,211	)		(4,137	)		(3,693	)
Purchase of note receivable		(34,253	)		—			—
Payments from (funding of) notes receivable, net		26,141			417			(196,345	)
Restricted escrows		(23,179	)		2,983			(41,446	)
Other assets		3,705			1,182			49,175
Net cash flows used in investing activities		(380,685	)		(563,163	)		(2,484,825	)

See accompanying notes to the consolidated financial statements.

-74-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Statements of Cash Flows

(continued)

(Dollar amounts in thousands)

	Year ended December 31, 2010			Year ended December 31, 2009			Year ended December 31, 2008
Cash flows from financing activities:
Proceeds from offering		—			253,986			2,328,142
Proceeds from the dividend reinvestment program		207,296			231,306			242,113
Shares repurchased		—			(192,548	)		(103,004	)
Payment of offering costs		—			(29,616	)		(246,777	)
Distributions paid		(416,935	)		(411,797	)		(405,925	)
Proceeds from mortgage debt and notes payable		432,873			370,555			1,021,844
Payoffs of mortgage debt		(429,737	)		(435,540	)		(138,707	)
Principal payments of mortgage debt		(16,812	)		(6,708	)		(3,375	)
Proceeds from (paydown of) margin securities debt, net		33,800			(10,044	)		(35,113	)
Payment of loan fees and deposits		(8,617	)		(9,353	)		(11,032	)
Distributions paid to noncontrolling interests		(2,237	)		(2,732	)		(2,872	)
Distributions paid to noncontrolling redeemable interests		(9,245	)		(9,245	)		(9,245	)
Contributions from noncontrolling interests		855			1,302			—
Due from related parties, net		—			(168	)		276
Net cash flows provided by (used in) financing activities		(208,759	)		(250,602	)		2,636,325
Net increase (decrease) in cash and cash equivalents		(232,784	)		(444,734	)		535,865
Cash and cash equivalents, at beginning of year		500,491			945,225			409,360
Cash and cash equivalents, at end of year	$	267,707		$	500,491		$	945,225
Supplemental disclosure of cash flow information:
Purchase of investment properties	$	(779,986	)	$	(1,021,008	)		(1,131,748	)
Tenant and real estate tax liabilities assumed at acquisition		4,753			13,440			1,972
Assumption of mortgage debt at acquisition		457,685			626,174			147,423
Non-cash (discount) premium		(47,879	)		5,007			205
Other financings		—			—			965
		(365,427	)		(376,387	)		(981,183	)

See accompanying notes to the consolidated financial statements.

-75-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Consolidated Statements of Cash Flows

(continued)

(Dollar amounts in thousands)

	Year ended December 31,  2010			Year ended December 31, 2009			Year ended December 31, 2008
Purchase of RLJ Hotels		—			—			(932,200	)
Assumption of mortgage debt at acquisition		—			—			426,654
Liabilities assumed at acquisition		—			—			2,481
		—			—			(503,065	)
Cash paid for interest, net capitalized interest of $4,302, $9,648 and $7,032 for 2010, 2009 and 2008	$	293,301		$	245,912		$	219,419
Supplemental schedule of non-cash investing and financing activities:
Consolidation of Lauth assets	$	38,365		$	135,686		$	—
Assumption of mortgage debt at consolidation of Lauth	$	(37,890	)	$	(96,763	)	$	—
Liabilities assumed at consolidation of Lauth	$	(1,345	)		(3,584	)		—
Property surrendered in exchange for extinguishment of debt	$	10,492		$	—		$	—
Property acquired through exchange of notes receivable	$	142,827		$	—		$	—
Conversion of note receivable to unconsolidated joint venture	$	121,320		$	—		$	—

See accompanying notes to the consolidated financial statements.

-76-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

(1) Organization

Inland American Real Estate Trust, Inc. (the “Company”) was formed on October 4, 2004 (inception) to acquire and manage a diversified portfolio of commercial real estate, primarily retail properties and multi-family (both conventional and student housing), office, industrial and lodging properties, located in the United States and Canada. The Business Management Agreement (the “Agreement”) provides for Inland American Business Manager & Advisor, Inc. (the “Business Manager”), an affiliate of the Company’s sponsor, to be the business manager to the Company. On August 31, 2005, the Company commenced an initial public offering (the “Initial Offering”) of up to 500,000,000 shares of common stock (“Shares”) at $10.00 each and the issuance of 40,000,000 shares at $9.50 per share available to be distributed pursuant to the Company’s distribution reinvestment plan. On August 1, 2007, the Company commenced a second public offering (the “Second Offering”) of up to 500,000,000 shares of common stock at $10.00 per share and up to 40,000,000 shares at $9.50 per share available to be distributed through the Company’s distribution reinvestment plan. On March 31, 2009, the Company filed a registration statement to register 50,000,000 shares to be issued under the distribution reinvestment plan or “DRP.” Under the DRP, as amended, the purchase price per share is equal to 100% of the “market price” of a share of the Company’s common stock until the shares become listed for trading. Beginning with reinvestments made after September 21, 2010, and until a new estimated value per share has been established, the DRP purchase price is equal to $8.03 per share. Effective April 6, 2009, the Company elected to terminate the Second Offering.

The Company is qualified and has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ended December 31, 2005. Since the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its REIT taxable income (subject to certain adjustments) to its stockholders. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property, or net worth and federal income and excise taxes on its undistributed income.

The Company has elected to treat certain of its consolidated subsidiaries, and may in the future elect to treat newly formed subsidiaries, as taxable REIT subsidiaries pursuant to the Internal Revenue Code. Taxable REIT subsidiaries may participate in non-real estate related activities and/or perform non-customary services for tenants and are subject to federal and state income tax at regular corporate tax rates. The Company’s hotels are leased to certain of the Company’s taxable REIT subsidiaries. Lease revenue from these taxable REIT subsidiaries and its wholly-owned subsidiaries is eliminated in consolidation.

The accompanying consolidated financial statements include the accounts of the Company, as well as all wholly owned subsidiaries and consolidated joint venture investments. Wholly owned subsidiaries generally consist of limited liability companies (LLCs) and limited partnerships (LPs). The effects of all significant intercompany transactions have been eliminated.

-77-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

At December 31, 2010, the Company owned a portfolio of 980 commercial real estate properties compared to 952 properties at December 31, 2009. The breakdown by segment is as follows:

Segment	Property Count	Square Ft/Rooms/Units
Retail	735	21,649,521 square feet
Lodging	99	15,380 rooms
Office	47	10,612,479 square feet
Industrial	72	15,959,342 square feet
Multi-Family	27	9,790 units

(2) Summary of Significant Accounting Policies

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and require 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

Revenue Recognition

The Company commences revenue recognition on its leases based on a number of factors. In most cases, revenue recognition under a lease begins when the lessee takes possession of or controls the physical use of the leased asset. Generally, this occurs on the lease commencement date. The determination of who is the owner, for accounting purposes, of the tenant improvements determines the nature of the leased asset and when revenue recognition under a lease begins. If the Company is the owner, for accounting purposes, of the tenant improvements, then the leased asset is the finished space and revenue recognition begins when the lessee takes possession of the finished space, typically when the improvements are substantially complete. If the Company concludes it is not the owner, for accounting purposes, of the tenant improvements (the lessee is the owner), then the leased asset is the unimproved space and any tenant improvement allowances funded under the lease are treated as lease incentives which reduces revenue recognized over the term of the lease. In these circumstances, the Company begins revenue recognition when the lessee takes possession of the unimproved space for the lessee to construct their own improvements. The Company considers a number of different factors to evaluate whether it or the lessee is the owner of the tenant improvements for accounting purposes. These factors include:

• whether the lease stipulates how and on what a tenant improvement allowance may be spent;

• whether the tenant or landlord retains legal title to the improvements;

• the uniqueness of the improvements;

• the expected economic life of the tenant improvements relative to the length of the lease; and

• who constructs or directs the construction of the improvements.

The determination of who owns the tenant improvements, for accounting purposes, is subject to significant judgment. In making that determination, the Company considers all of the above factors. No one factor, however, necessarily establishes its determination.

-78-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Rental income is recognized on a straight-line basis over the term of each lease. The difference between rental income earned on a straight-line basis and the cash rent due under the provisions of the lease agreements is recorded as deferred rent receivable and is included as a component of accounts and rents receivable in the accompanying consolidated balance sheets.

Revenue for lodging facilities is recognized when the services are provided. Additionally, the Company collects sales, use, occupancy and similar taxes at its lodging facilities which it presents on a net basis (excluded from revenues) on the consolidated statements of operations and other comprehensive income.

The Company records lease termination income if there is a signed termination agreement, all of the conditions of the agreement have been met, the tenant is no longer occupying the property and amounts due are considered collectible.

The Company defers recognition of contingent rental income (i.e. percentage/excess rent) until the specified target that triggers the contingent rental income is achieved.

Consolidation

The Company evaluates its investments in limited liability companies and partnerships to determine whether such entities may be a variable interest entity (“VIE”). If the entity is a VIE, the determination of whether the Company is the primary beneficiary must be made. The primary beneficiary determination is based on a qualitative assessment as to whether the entity has (i) power to direct significant activities of the VIE and (ii) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE. The Company will consolidate a VIE if it is deemed to be the primary beneficiary, as defined in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic on Consolidation. The equity method of accounting is applied to entities in which the Company is not the primary beneficiary as defined in the Consolidation Topic of the FASB ASC, or the entity is not a VIE and the Company does not have effective control, but can exercise influence over the entity with respect to its operations and major decisions.

Reclassifications

Certain reclassifications have been made to the 2009 and 2008 consolidated financial statements to conform to the 2010 presentations.

Capitalization and Depreciation

Real estate acquisitions are recorded at cost less accumulated depreciation. Ordinary repairs and maintenance are expensed as incurred.

Depreciation expense is computed using the straight line method. Building and other improvements are depreciated based upon estimated useful lives of 30 years for building and improvements and 5-15 years for furniture, fixtures and equipment and site improvements.

Tenant improvements are amortized on a straight line basis over the life of the related lease as a component of depreciation and amortization expense.

-79-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Leasing fees are amortized on a straight-line basis over the life of the related lease as a component of depreciation and amortization.

Loan fees are amortized on a straight-line basis, which approximates the effective interest method, over the life of the related loans as a component of interest expense.

Direct and indirect costs that are clearly related to the construction and improvements of investment properties are capitalized. Costs incurred for property taxes and insurance are capitalized during periods in which activities necessary to get the property ready for its intended use are in progress. Interest costs are also capitalized during such periods. Additionally, the Company treats investments accounted for by the equity method as assets qualifying for interest capitalization provided (1) the investee has activities in progress necessary to commence its planned principal operations and (2) the investee’s activities include the use of such funds to acquire qualifying assets.

Investment Properties Held for Sale

In determining whether to classify an investment property as held for sale, the Company considers whether: (i) management has committed to a plan to sell the investment property; (ii) the investment property is available for immediate sale, in its present condition; (iii) the Company has initiated a program to locate a buyer; (iv) the Company believes that the sale of the investment property is probable; (v) the Company has received a significant non-refundable deposit for the purchase of the property; (vi) the Company is actively marketing the investment property for sale at a price that is reasonable in relation to its fair value; and (vii) actions required for the Company to complete the plan indicate that it is unlikely that any significant changes will be made to the plan.

If all of the above criteria are met, the Company classifies the investment property as held for sale. On the day that these criteria are met, the Company suspends depreciation on the investment properties held for sale, including depreciation for tenant improvements and additions, as well as on the amortization of acquired in-place leases. The investment properties and liabilities associated with those investment properties that are held for sale are classified separately on the consolidated balance sheets for the most recent reporting period. Additionally, the operations for the periods presented are classified on the consolidated statements of operations and other comprehensive income as discontinued operations for all periods presented. As of December 31, 2010 and 2009, no investment properties were classified as held for sale.

Impairment

The Company assesses the carrying values of the respective long-lived assets, whenever events or changes in circumstances indicate that the carrying amounts of these assets may not be fully recoverable. If it is determined that the carrying value is not recoverable because the undiscounted cash flows do not exceed carrying value, the Company is required to record an impairment loss to the extent that the carrying value exceeds fair value. The valuation and possible subsequent impairment of investment properties is a significant estimate that can and does change based on our continuous process of analyzing each property and reviewing assumptions about uncertain inherent factors, as well as the economic condition of the property at a particular point in time.

The use of projected future cash flows and related holding period is based on assumptions that are consistent with the estimates of future expectations and the strategic plan the Company uses to manage its underlying business. However assumptions and estimates about future cash flows and capitalization rates are complex and subjective.

-80-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Changes in economic and operating conditions and the Company’s ultimate investment intent that occur subsequent to the impairment analyses could impact these assumptions and result in future impairment charges of the real estate properties. As of December 31, 2010, triggering events primarily related to a change in estimated holding period have occurred on certain properties and impairments of $46,584, $1,117, and $0 have been recognized for the years ended December 31, 2010, 2009 and 2008, respectively. In addition $945, $32,934, and $33,809 is included in discontinued operations.

On a periodic basis, management assesses whether there are any indicators that the carrying value of the Company’s investments in unconsolidated entities may be other than temporarily impaired. To the extent impairment has occurred, the loss is measured as the excess of the carrying value of the investment over the fair value of the investment. For the year ended December 31, 2010, management determined that three of its unconsolidated entities were impaired. The Company recorded impairment of $11,239 for the year ended December 31, 2010. The Company recorded its investment in these three unconsolidated entities based on an evaluation of fair value of the underlying investment which includes a review of expected cash flows to be received from the investee. Impairment of $7,443 and $61,993 was recorded for the years ended December 31, 2009 and 2008.

Derivative Instruments

In the normal course of business, the Company is exposed to the effect of interest rate changes. The Company limits these risks by following established risk management policies and procedures including the use of derivatives to hedge interest rate risk on debt instruments.

The Company has a policy of only entering into contracts with established financial institutions based upon their credit ratings and other factors. When viewed in conjunction with the underlying and offsetting exposure that the derivatives are designed to hedge, the Company has not sustained a material loss from those instruments nor does it anticipate any material adverse effect on its net income or financial position in the future from the use of derivatives.

The Company recognizes all derivatives in the balance sheet at fair value. Additionally, the fair value adjustments will affect either equity or net income depending on whether the derivative instruments qualify as a hedge for accounting purposes and, if so, the nature of the hedging activity. When the terms of an underlying transaction are modified, or when the underlying transaction is terminated or completed, all changes in the fair value of the instrument are marked-to-market with changes in value included in net income each period until the instrument matures. Any derivative instrument used for risk management that does not meet the criteria for hedge accounting is marked-to-market each period. The Company does not use derivatives for trading or speculative purposes.

Marketable Securities

The Company classifies its investment in securities in one of three categories: trading, available-for-sale, or held-to-maturity. Trading securities are bought and held principally for the purpose of selling them in the near term. Held-to-maturity securities are those securities in which the Company has the ability and intent to hold the security until maturity. All securities not included in trading or held-to-maturity are classified as available-for-sale. Investment in securities at December 31, 2010 and 2009 consists of common stock investments and investments in commercial mortgage backed securities that are all classified as available-for-sale

-81-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

securities and are recorded at fair value. Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported as a separate component of other comprehensive income until realized. Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis. A decline in the market value of any available-for-sale security below cost that is deemed to be other than temporary, results in a reduction in the carrying amount to fair value. The impairment is charged to earnings and a new cost basis for the security is established. When a security is impaired, the Company considers whether it has the ability and intent to hold the investment for a time sufficient to allow for any anticipated recovery in market value and considers whether evidence indicating the cost of the investment is recoverable outweighs evidence to the contrary. Evidence considered in this assessment includes the reasons for the impairment, the severity and duration of the impairment, changes in value subsequent to period end and forecasted performance of the investee. For the years ended December 31, 2010, 2009 and 2008, the Company recorded $1,856, $4,038 and $246,164, respectively, in other than temporary impairments.

Notes Receivable

The Company evaluates the collectability of both interest and principal of each of its notes receivable to determine whether it is impaired. A note receivable is considered to be impaired when the Company determines that it is probable that it will not be able to collect all amounts due under the contractual terms of the note receivable. When a note receivable is considered impaired, the amount of loss is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the note receivable’s effective interest rate or to the fair value of the underlying collateral if the note is collateral dependent. Provision of $111,896 for impairment was recorded for the year ended December 31, 2010. Provision of $74,136 for impairment was recorded for the year ended December 31, 2009. No provision was recorded for the year ended December 31, 2008.

If the Company considers a note receivable to be non-performing or the collectability is uncertain based on the underlying collateral, it will place the note receivable on non-accrual status. The Company will recognize interest income on a cash basis, as received. If the fair value of the note receivable collateral decreases to less than the amortized cost basis of the note receivable, any interest received will be recorded as a reduction of the note receivable basis. If the fair value of the collateral subsequently recovers to greater than the cost basis of the note receivable, and if the note receivable is not otherwise in default, any interest payments will be recognized as interest income.

Acquisition of Real Estate

The Company allocates the purchase price of each acquired business (as defined in the accounting guidance related to business combinations) between tangible and intangible assets at full fair value at the date of the transaction. Such tangible and intangible assets include land, building and improvements, acquired above market and below market leases, in-place lease value, customer relationships (if any), and any assumed financing that is determined to be above or below market terms. Any additional amounts are allocated to goodwill as required, based on the remaining purchase price in excess of the fair value of the tangible and intangible assets acquired and liabilities assumed. The allocation of the purchase price is an area that requires judgment and significant estimates.

The Company uses the information contained in the independent appraisal obtained at acquisition as the primary basis for the allocation to land and building and improvements. The Company determines whether any financing assumed is above or below market based upon comparison to similar financing terms for similar investment

-82-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

properties. The Company allocates a portion of the purchase price to the estimated acquired in-place lease costs based on estimated lease execution costs for similar leases as well as lost rent payments during assumed lease up period when calculating as if vacant fair values. The Company also evaluates each acquired lease based upon current market rates at the acquisition date and considers various factors including geographical location, size and location of leased space within the investment property, tenant profile, and the credit risk of the tenant in determining whether the acquired lease is above or below market lease costs. After an acquired lease is determined to be above or below market, the Company allocates a portion of the purchase price to such above or below acquired lease costs based upon the present value of the difference between the contractual lease rate and the estimated market rate. For below market leases with fixed rate renewals, renewal periods are included in the calculation of below market in-place lease values. The determination of the discount rate used in the present value calculation is based upon the “risk free rate” and current interest rates. This discount rate is a significant factor in determining the market valuation which requires judgment of subjective factors such as market knowledge, economics, demographics, location, visibility, age and physical condition of the property.

The Company expenses acquisition costs of all transactions as incurred. All costs related to finding, analyzing and negotiating a transaction are expensed as incurred as a general and administrative expense, whether or not the acquisition is completed. These expenses would include acquisition fees, if any, paid to an affiliate of the business manager.

Cash and Cash Equivalents

The Company considers all demand deposits, money market accounts and investments in certificates of deposit and repurchase agreements purchased with a maturity of three months or less, at the date of purchase, to be cash equivalents. The Company maintains its cash and cash equivalents at financial institutions. The combined account balances at one or more institutions periodically exceed the Federal Depository Insurance Corporation (“FDIC”) insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes that the risk is not significant, as the Company does not anticipate the financial institutions’ non-performance.

Restricted Cash and Escrows

Restricted escrows primarily consist of cash held in escrow comprised of lenders’ restricted escrows of $28,376 and $22,790, post acquisition escrows of $17,650 and $11,397, and lodging furniture, fixtures and equipment reserves of $35,055 and $28,825 as of December 31, 2010 and 2009, respectively. Restricted cash consists of funds contributed by sellers held by third party escrow agents pertaining to master leases, tenant improvements and other closing items as well as lender required escrows. As of December 31, 2010 and 2009, the restricted cash balance was $15,008 and $8,175, respectively.

Income Taxes

Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributed to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.

-83-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Goodwill

The excess of the cost of an acquired entity over the net of the amounts assigned to assets acquired (including identified intangible assets) and liabilities assumed was recorded as goodwill. Goodwill has been recognized and allocated to specific properties in our lodging segment since each individual hotel property is an operating segment and considered a reporting unit. The Company tests goodwill for impairment annually or more frequently if events or changes in circumstances indicate impairment.

The Company tested goodwill for impairment by first comparing the estimated fair value of each property with goodwill to the carrying value of the property’s assets, including goodwill. The fair value is based on estimated future cash flow projections that utilize discount and capitalization rates, which are generally unobservable in the market place (Level 3 inputs), but approximate the inputs the Company believes would be utilized by market participants in assessing fair value. The estimates of future cash flows are based on a number of factors including the historical operating results, known trends, and market/economic conditions. If the carrying amount of the property’s assets, including goodwill, exceeds its estimated fair value, the second step of the goodwill impairment test is performed to measure the amount of impairment loss, if any.

In this second step, if the implied fair value of goodwill is less than the carrying amount of goodwill, an impairment charge is recorded in an amount equal to that excess. For the years ended December 31, 2010, 2009, and 2008, the Company recorded $0, $26,676 and $11,199.

(3) Investment Properties

Acquisitions

The Company records identifiable assets, liabilities, noncontrolling interests and goodwill acquired in a business combination at full fair value. During the year ended December 31, 2010 and 2009, the Company incurred $1,805 and $9,617, respectively, of acquisition and transaction costs that were recorded in general and administrative expenses on the consolidated statements of operations and other comprehensive income.

The table below reflects acquisition activity for the year ended December 31, 2010.

Segment	Property	Date		Gross Acquisition Price		Sq Ft/Units/Rooms
Retail	Retail Portfolio – 16 properties		03/04/2010	$	424,300	3,557,846 square feet
	Heritage Crossing		03/23/2010	$	29,500	310,922 square feet
	Prestonwood Shopping Center		04/21/2010	$	48,300	238,926 square feet
	Tulsa Hills Shopping Center		04/23/2010	$	54,100	317,106 square feet
	University Oaks		04/30/2010	$	38,100	235,906 square feet
	Sherman Town Center II		12/30/2010	$	19,300	83,678 square feet
Lodging	Lodging Portfolio – 4 hotels		05/11/2010	$	80,000	598 rooms
	Marriott – Dallas City		09/30/2010	$	50,000	407 rooms
Industrial	Imagine Charter Schools – 7 schools		02/11/2010	$	61,200	292,211 square feet
Multi-family	Fannin Street Station Apartments		01/15/2010	$	57,600	678 units
	Nantucket Apartments		08/05/2010	$	35,000	394 units
Total				$	897,400

-84-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

For properties acquired as of December 31, 2010, the Company recorded revenue of $84,789 and property net income of $51,497, not including related expensed acquisition costs.

(4) Discontinued Operations

The table below reflects divestiture activity for the year ended December 31, 2010.

Segment	Property	Date		Gross Sales Price		Sq Ft/Units/Rooms
Lodging	Comfort Inn – Riverview		03/03/2010	$	6,000	129 rooms
	Comfort Inn – University		03/22/2010		5,700	136 rooms
	Hampton Inn – Crabtree Valley		06/01/2010		4,300	141 rooms
	Comfort Inn – Medical Park		06/22/2010		5,100	136 rooms
	Comfort Inn – Orlando		06/25/2010		3,200	214 rooms
	Hilton Garden Inn – Chelsea		09/08/2010		68,400	169 rooms
Office	Select Medical Portfolio – 4 properties		12/17/2010		102,000	217,710 square feet
Multi-family	Malibu Lakes Apartments		12/20/2010		42,600	356 units
	Woodlands Apartments – 3 properties		12/22/2010		71,300	883 units
Total				$	308,600

For the year ended December 31, 2010, the Company had proceeds from the sale of investment properties of $301,189 and gains of $55,412 that were realized from the fourteen sales. In addition, the Company has transferred assets previously held by a consolidated joint venture to the lender in satisfaction of the outstanding debt balance.

The Company has presented separately as discontinued operations in all periods the results of operations for all disposed assets in both consolidated operations and consolidated joint ventures.

The components of the Company’s discontinued operations are presented below and include the results of operations for the respective periods that the Company owned such assets or was involved with the operations of such ventures during the years ended December 31, 2010, 2009 and 2008

	Year ended December 31, 2010			Year ended December 31, 2009			Year ended December 31, 2008
Revenues	$	32,770		$	33,369		$	43,988
Expenses (including interest expense and impairments of $945, $32,934 and $33,809)		36,001			69,194			62,875
Operating loss from discontinued operations	$	(3,231	)	$	(35,825	)	$	(18,887	)
Gain on extinguishment of debt	$	19,227		$	—		$	—
Gain on sale of properties	$	55,412		$	—		$	—
Income (loss) from discontinued operations, net	$	71,408		$	(35,825	)	$	(18,887	)

-85-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

(5) Consolidated Entities

Minto Builders (Florida), Inc.

On October 11, 2005, the Company entered into a joint venture with Minto (Delaware), LLC, or Minto Delaware who owned all of the outstanding equity of Minto Builders (Florida), Inc. (“MB REIT”) prior to October 11, 2005. Pursuant to the terms of the purchase agreement, the Company purchased 920,000 shares of common stock of MB REIT at a price of $1,276 per share for a total investment of approximately $1,172,000 in MB REIT. MB REIT is not considered a VIE as defined in FASB ASC 810, Consolidation, however the Company has a controlling financial interest in MB REIT, has the direct ability to make major decisions for MB REIT through its voting interests, and holds key management positions in MB REIT. Therefore this entity is consolidated by the Company and the outside ownership interests are reflected as noncontrolling interests in the accompanying consolidated financial statements.

A put/call agreement that was entered into by the Company and MB REIT as a part of the MB REIT transaction on October 11, 2005 grants Minto (Delaware), LLC, referred to herein as MD, certain rights to sell its shares of MB REIT stock back to MB REIT. The agreement is considered a free standing financial instrument and is accounted for pursuant to ASC 480, Distinguishing Liabilities from Equity, (previously Statement of Financial Accounting Standard (“SFAS”) 150) and ASC 815, Derivatives and Hedging. Derivatives, whether designated in hedging relationships or not, are recorded on the balance sheet at fair value. If the derivative is designated as a fair value hedge, the changes in the fair value of the derivative and of the hedged item attributable to the hedged risk are recognized in earnings. This derivative was not designated as a hedge and the change in fair value is recorded in other income (loss) in the accompanying consolidated statements of operations and other comprehensive income.

ASC 810, Consolidation, requires a noncontrolling interest in a subsidiary to be reported as equity and the amount of consolidated net income specifically attributable to the noncontrolling interest to be identified in the consolidated financial statements. As of December 31, 2010 and 2009, noncontrolling interests in the Company are comprised of the ownership interests of (1) noncontrolling redeemable interests (Series A Preferred Interest) and other interests in Minto Builders (Florida), Inc. (MB REIT).

The Series A Preferred Interest in MB REIT is subject to redemption features outside of the Company’s control that results in presentation outside of permanent equity, reported at greater of carrying value or redemption value. The noncontrolling interest is reported at its redemption value as noncontrolling redeemable interests in the Company’s consolidated financial statements with a balance of $264,132 as of December 31, 2010 and December 31, 2009.

Lauth Consolidation

On June 8, 2007, the Company, through a 100% owned subsidiary, entered into the LIP Holdings, LLC (LIP-H) operating agreement for the purpose of funding the development and ownership of real estate projects in the office, distribution, retail, healthcare and mixed-use markets. As of January 6, 2009, control over LIP-H rests with the Company’s subsidiary, resulting in the consolidation of LIP-H. The assets of LIP-H consist of eight operating office and retail projects and a mezzanine loan to LIP Development (LIP-D), an entity related to Lauth Investment Properties, LLC (Lauth). The mezzanine loan with LIP-D is secured primarily by development projects at various stages of completion, including vacant land. The consolidation resulted in a loss of $148,887 being recognized for the year ended December 31, 2009.

-86-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Entities under control of Lauth went into bankruptcy in May of 2009. On July 21, 2009, the Company filed an action against Lauth for their actions with regard to the Company’s losses with its investment in LIP-H (“the lawsuit”). On September 14, 2010, the Company approved a settlement agreement relative to the Lauth bankruptcy, which resolved all remaining issues. The agreement provided for the transfer of five additional properties and consideration of $1,000 in settlement of the mezzanine note. The closing of the settlement agreement and transfer of assets occurred on October 1, 2010 and has been recorded by the Company in the fourth quarter of 2010 at fair value. The consolidation and retirement of the outstanding mezzanine loan resulted in a gain of $433 being recognized for the year ended December 31, 2010 representing the excess of the fair value of the collateral received over the carrying value of note receivable.

Other Consolidated Entities

The Company has ownership interests in two consolidated development joint ventures. Stone Creek Crossing, L.P. is a retail shopping center development in San Marcos, Texas, which the Company contributed $26,790 and is entitled to receive an 11% preferred return. Woodbridge Crossing, L.P. is a retail shopping center development in Wylie, Texas. As of December 31, 2010, the Company has contributed approximately $19,500 to the venture and is entitled to receive an 11% preferred return.

Stone Creek Crossing, L.P. is considered a VIE as defined in ASC 810, and the Company is considered the primary beneficiary for the joint venture. Therefore, it is consolidated by the Company and the outside interests are reflected as noncontrolling interests in the accompanying consolidated financial statements.

The Company has ownership interests of 67% in various limited liability companies which own nine shopping centers. These entities are considered VIEs as defined in ASC 810, and the Company is considered the primary beneficiary of each of these entities. Therefore, these entities are consolidated by the Company. The entities agreements contain put/call provisions which grant the right to the outside owners and the Company to require these entities to redeem the ownership interests of the outside owners during future periods. Because the outside ownership interests are subject to a put/call arrangement requiring settlement for a fixed amount, the these entities are treated as 100% owned subsidiaries by the Company with the amount due the outside owners reflected as a financing and included within other financings in the accompanying consolidated financial statements. Interest expense is recorded on these liabilities in an amount generally equal to the preferred return due to the outside owners as provided in the entities agreements.

For those VIEs where the Company is the primary beneficiary, the Company shall present the liabilities of the consolidated VIE, which are not recourse to the Company, and the assets that can be used only to settle those obligations. The applicable amounts for Stone Creek Crossing, L.P. and the various limited liability companies are included in the consolidated balance sheets as presented in the table below.

Net investment properties	$	156,464
Other assets		10,457
Total assets	$	166,921
Mortgages, notes and margins payable	$	(95,188	)
Other liabilities		(50,538	)
Total liabilities	$	(145,726	)
Net assets	$	21,195

-87-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

(6) Investment in Unconsolidated Entities

The entities listed below are owned by the Company and other unaffiliated parties in joint ventures. Net income, distributions and capital transactions for these properties are allocated to the Company and its joint venture partners in accordance with the respective partnership agreements. The Company’s partners manage the day-to-day operations of the properties and hold key management positions. These entities are not consolidated by the Company and the equity method of accounting is used to account for these investments. Under the equity method of accounting, the net equity investment of the Company and the Company’s share of net income or loss from the unconsolidated entity are reflected in the consolidated balance sheets and the consolidated statements of operations and other comprehensive income.

Entity	Description	Ownership %		Investment at December 31, 2010		Investment at December 31, 2009
Net Lease Strategic Asset Fund L.P.	Diversified portfolio of net lease assets		85% (a)	$	160,487	$	180,304
Cobalt Industrial REIT II	Industrial portfolio		36% (b)		124,750		79,511
D.R. Stephens Institutional Fund, LLC	Industrial and R&D assets		90% (c)		57,389		70,752
NRF Heathcare, LLC	Senior housing portfolio		(d)		87,878		94,872
Centro/IA JV, LLC	Retail Shopping Centers		(e)		121,534		—
Other Unconsolidated Entities	Various Real Estate Investments		Various		21,236		28,343
				$	573,274	$	453,782

(a) On August 10, 2007, the Company entered a joint venture with The Lexington Master Limited Partnership (“LMLP”) and LMLP GP LLC (“LMLP GP”), for the purpose of directly or indirectly acquiring, financing, holding for investment, operating, and leasing real estate assets as acquired by the joint venture. The Company’s initial capital contribution was approximately $127,500 and LMLP’s initial contribution was approximately $22,500. LMLP GP is the general partner who manages investments and day-to-day affairs of the venture. The Company analyzed the venture and determined that it was not a VIE. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also require the agreement of LMLP, which equates to shared decision making ability, and therefore do not give the Company control over the venture. As such, the Company has significant influence but does not control Net Lease Strategic Asset Fund L.P. Therefore, the Company does not consolidate this entity, rather the Company accounts for its investment in the entity under the equity method of accounting.

(b) On June 29, 2007, we entered into a venture (Cobalt) to invest $149,000 in shares of common beneficial interest. Our investment gives us the right to a preferred dividend equal to 9% per annum. The Company analyzed the venture and determined that it was not a VIE. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also require the agreement of Cobalt, which equates to shared decision making ability, and therefore do not give the Company control over the venture. As such, the Company has significant influence but does not control Cobalt Industrial REIT II. Therefore, the Company does not consolidate this entity, rather the Company accounts for its investment in the entity under the equity method of accounting.

-88-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

(c) On April 23, 2007, the Company entered into a joint venture, D.R. Stephens Institutional Fund, LLC, between the Company and Stephens Ventures III, LLC (“Stephens Member”) for the purpose of acquiring entities engaged in the acquisition, ownership, and development of real property. The Company’s initial capital contribution was limited to approximately $90,000 and the Stephens Member’s initial contribution was limited to approximately $10,000. Stephens & Stephens LLC (“Stephens”), an affiliate of the Stephens Member, is the managing member of D.R. Stephens Institutional Fund, LLC. The Company analyzed the venture and determined that it was not a VIE. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also require the agreement of Stephens Member, which equates to shared decision making ability, and therefore do not give the Company control over the venture. As such, the Company has significant influence but does not control D.R. Stephens Institutional Fund, LLC. Therefore, the Company does not consolidate this entity, rather the Company accounts for its investment in the entity under the equity method of accounting.

(d) On July 9, 2008, the Company invested $100,000 in NRF Healthcare, LLC (“NRF”) in exchange for a Series A Convertible Preferred Membership interest and is entitled to a 10.5% preferred dividend. NRF Healthcare owns 96 senior living properties containing 5,971 operating units/beds, one medical office building and a research campus totaling 313,204 square feet. This entity was previously known as Wakefield Capital, LLC. The Company analyzed the venture and determined that it was not a VIE. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also require the agreement of NRF, which equates to shared decision making ability, and therefore do not give the Company control over the venture. As such, the Company has significant influence but does not control NRF Healthcare, LLC. Therefore, the Company does not consolidate this entity, rather the Company accounts for its investment in the entity under the equity method of accounting.

(e) On December 6, 2010, the Company entered into a Joint Venture with Centro NP Residual Holding LLC (“Centro”), resulting in the creation of Centro/IA JV, LLC. The joint venture structure provides the Company with an equity stake of $121,534, a preferred capital position and preferred return of 11%. The joint venture has interest in 25 retail shopping centers, with a total value of approximately $471,000. The properties comprise 4.5 million square feet and are located in 13 states. The venture has 10 year CMBS financing of approximately $310,000 secured by 24 properties. Prior to the close of the joint venture, the Company had an existing participation on a portion of the prior first mortgage loan encumbering the 25 retail shopping centers. The Company converted the note receivable balance of $140,800 for the partnership interest of $121,320 and received $19,480 in cash as described above. The Company analyzed the venture and determined that it was not a VIE. The Company also considered its participating rights under the joint venture agreement and determined that such participating rights also require the agreement of Centro, which equates to shared decision making ability, and therefore do not give the Company control over the venture. As such, the Company has significant influence but does not control Centro. Therefore, the Company does not consolidate this entity, rather the Company accounts for its investment in the entity under the equity method of accounting.

For the year ended December 31, 2010, management determined that three of its other unconsolidated entities were impaired. The Company recorded impairment of $11,239 for the year ended December 31, 2010. Impairment of $7,443 and $61,993 was recorded for the years ended December 31, 2009 and 2008.

-89-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Combined Financial Information

The Company’s carrying value of its investment in unconsolidated entities differs from its share of the partnership or members equity reported in the combined balance sheet of the unconsolidated entities because the Company’s cost of its investment exceeds the historical net book values of the unconsolidated entities. The Company’s additional basis allocated to depreciable assets is recognized on a straight-line basis over 30 years.

	December 31,
	2010		2009
Balance Sheets:
Assets:
Real estate, net of accumulated depreciation	$	2,913,570	$	2,208,528
Real estate debt and securities investments		86,346		599,617
Other assets		335,640		313,381
Total Assets	$	3,335,556	$	3,121,526
Liabilities and Equity:
Mortgage debt	$	2,063,151	$	2,014,152
Other liabilities		109,265		113,637
Equity		1,163,140		993,737
Total Liabilities and Equity	$	3,335,556	$	3,121,526
Company’s share of equity	$	563,141	$	437,671
Net excess of cost of investments over the net book value of underlying net assets (net of accumulated depreciation of $1,446 and $1,362, respectively)		10,133		16,111
Carrying value of investments in unconsolidated entities	$	573,274	$	453,782

	December 31,
	2010			2009			2008
Statements of Operations:
Revenues	$	287,694		$	282,708		$	248,406
Expenses:
Interest expense and loan cost amortization	$	90,857		$	104,854		$	82,381
Depreciation and amortization		99,254			111,389			85,279
Operating expenses, ground rent and general and administrative expenses		100,954			125,247			89,283
Impairments		14,019			197,949			67,614
Total expenses	$	305,084		$	539,439		$	324,557
Net loss before gain on sale of real estate	$	(17,390	)	$	(256,731	)	$	(76,151	)
Gain on sale of real estate		553			13,799			—
Net loss	$	(16,837	)	$	(242,932	)	$	(76,151	)
Company’s share of:
Net loss, net of excess basis depreciation of $84, $587 and $381	$	(18,684	)	$	(78,487	)	$	(46,108	)
Depreciation and amortization (real estate related)	$	43,845		$	41,300		$	53,761

-90-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

In the table above, the balances as of December 31, 2008 and for the year ended December 31, 2008 include amounts for LIP-H, which has been consolidated as of January 6, 2009.

The unconsolidated entities had total third party debt of $2,063,151 at December 31, 2010 that matures as follows:

2011	$	200,671
2012		275,998
2013		306,493
2014		144,787
2015		194,587
Thereafter		940,615
	$	2,063,151

The debt maturities of the unconsolidated entities are not recourse to the Company and the Company has no obligation to fund, except for remaining commitments (Note 18), however, it is anticipated that the ventures will be able to repay or refinance all of their debt on a timely basis.

(7) Transactions with Related Parties

The following table summarizes the Company’s related party transactions for the years ended December 31, 2010, 2009 and 2008.

		For the years ended						Unpaid amount as of
		December 31, 2010		December 31, 2009		December 31, 2008		December 31, 2010		December 31, 2009
General and administrative:
General and administrative reimbursement	(a)	$	8,205	$	8,975	$	7,020	$	1,862	$	1,876
Loan servicing	(b)		586		480		343		—		—
Affiliate share purchase discounts	(c)		—		14		126		—		—
Investment advisor fee	(d)		1,447		1,319		2,162		127		118
Total general and administrative to related parties		$	10,238	$	10,788	$	9,651	$	1,989	$	1,994
Property management fees	(e)	$	30,828	$	26,413	$	20,553	$	100	$	18
Business manager fee	(f)	$	36,000	$	39,000	$	18,500	$	10,000	$	12,000
Acquisition reimbursements capitalized		$	—	$	—	$	1,370	$	—	$	—
Acquisition fees	(g)	$	—	$	—	$	22,326	$	—	$	—
Loan placement fees	(h)	$	845	$	2,483	$	1,798	$	—	$	—
Offering costs	(i)	$	—	$	25,660	$	232,090	$	—	$	—

(a) The Business Manager and its related parties are entitled to reimbursement for general and administrative expenses of the Business Manager and its related parties relating to the Company’s administration. Unpaid amounts as of December 31, 2010 and 2009 are included in accounts payable and accrued expenses on the consolidated balance sheets.

-91-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

(b) A related party of the Business Manager provides loan servicing to the Company for an annual fee. Effective May 1, 2009, the loan servicing fees were reduced to 200 dollars per month, per loan for the Company’s non-lodging properties. The Company’s lodging properties will continue to be billed at 225 dollars per month, per loan and MB REIT properties at 200 dollars per month, per loan.

(c) The Company established a discount stock purchase policy for related parties and related parties of the Business Manager that enables the related parties to purchase shares of common stock at either $8.95 or $9.50 a share depending on when the shares are purchased. The Company sold 0, 18,067 and 142,396 shares to related parties and recognized an expense related to these discounts of $0, $14 and $126 for the years ended December 31, 2010, 2009 and 2008, respectively.

(d) The Company pays a related party of the Business Manager to purchase and monitor its investment in marketable securities.

(e) The property manager, an entity owned principally by individuals who are related parties of the Business Manager, is entitled to receive property management fees up to 4.5% of gross operating income (as defined), for management and leasing services. In addition, the property manager is entitled to receive an oversight fee of 1% of gross operating income (as defined) in operating companies purchased by the Company. Unpaid amounts as of December 31, 2010 and 2009 are included in advanced rent and other liabilities on the consolidated balance sheets. In addition to the fee, the property manager receives reimbursements of payroll costs for property level employees. The Company reimbursed the property manager $4,384, $3,370 and $2,431 for the years ended December 31, 2010, 2009 and 2008.

(f) After the Company’s stockholders have received a non-cumulative, non-compounded return of 5% per annum on their “invested capital,” the Company pays its Business Manager an annual business management fee of up to 1% of the “average invested assets,” payable quarterly in an amount equal to 0.25% of the average invested assets as of the last day of the immediately preceding quarter. For the years ended December 31, 2010, 2009 and 2008, average invested assets were $11,411,953, $10,358,444 and $8,445,009 and operating expenses, as defined, were $69,091, $72,882 and $45,860 or 0.61%, 0.70% and 0.54%, respectively, of average invested assets. The Business Manager has agreed to waive all fees allowed but not taken, except for the $36,000, $39,000 and $18,500 for the years ended December 31, 2010, 2009 and 2008.

(g) The Company pays the Business Manager a fee for services performed in connection with acquiring a controlling interest in a REIT or other real estate operating company. Acquisition fees, however, are not paid for acquisitions solely of a fee interest in a property. The amount of the acquisition fee is equal to 2.5% of the aggregate purchase price paid to acquire the controlling interest and, prior to 2009, was capitalized as part of the purchase price of the company.

(h) The Company pays a related party of the Business Manager 0.2% of the principal amount of each loan placed for the Company. Such costs are capitalized as loan fees and amortized over the respective loan term.

(i) The Business Manager and its related parties are entitled to reimbursement for salaries and expenses of employees of the Business Manager and its related parties relating to the offerings. In addition, a related party of the Business Manager is entitled to receive selling commissions, and the marketing contribution and due diligence expense allowance from the Company in connection with the offerings. Such costs are offset against the stockholders’ equity accounts.

As of December 31, 2010, the Company had deposited $370 in Inland Bank and Trust, a subsidiary of Inland Bancorp, Inc., an affiliate of The Inland Real Estate Group, Inc.

-92-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

The Company is party to an agreement with an LLC formed as an insurance association captive (the “Captive”), which is wholly-owned by the Company and three related parties, Inland Real Estate Corporation (IRC), Inland Western Real Estate Trust, Inc., and Inland Diversified Real Estate Trust, Inc. The Company paid insurance premiums of $9,892, $7,726 and $6,130 for the years ended December 31, 2010, 2009 and 2008, respectively.

On February 24, 2009, the Company purchased 35,000 IRC convertible bonds for $24,959 with a face value of $35,000 from an unaffiliated third party. The Company sold these bonds in the third quarter of 2009 for a total gain of $6,000. In addition, the Company held 843,200 shares of IRC valued $7,426 as of December 31, 2010.

On April 30, 2009, the Company purchased two properties from Inland Western Retail Real Estate Trust, Inc. (“Inland Western”), another REIT previously sponsored by Inland Real Estate Investment Corporation, for approximately $99,000. The Company assumed debt of $63,100, with a rate of 4.3% per annum in the transaction. On June 24, 2009, the Company purchased a property from Inland Western for approximately $62,600. The Company assumed debt of $44,500, with a rate of 5.34% per annum in the transaction.

(8) Notes Receivable

The Company’s notes receivable balance was $54,047 and $423,478 as of December 31, 2010 and December 31, 2009, respectively, and consisted of installment notes from unrelated parties that mature on various dates through December 2013. The notes are secured by mortgages on vacant land and hotel properties. Interest is due each month at rates ranging from 5.85% to 9.5% per annum. For the years ended December 31, 2010, 2009 and 2008, the Company recorded interest income from notes receivable of $13,690, $34,462 and $30,822, including amortized discount of $0, $8,107 and $3,208, which is included in the interest and dividend income on the consolidated statements of operations and other comprehensive income.

The table below represents a summary of the Company’s notes receivable balance for the year ended December 31, 2010.

	Centro (a)			Stan Thomas (b)			Other				Total
Beginning balance 1/1/2010	$	140,800		$	214,627		$	68,051			$	423,478
Additions		—			—			34,000		c		34,000
Conversion to Joint Venture		(121,320	)		—			—				(121,320	)
Conversion to Real Estate		—			(100,000	)		(45,438	)	c		(145,438	)
Impairment		—			(94,627	)		(17,269	)	d		(111,896	)
Paydown		(19,480	)		—			(5,297	)			(24,777	)
Ending balance 12/31/2010	$	—		$	20,000		$	34,047			$	54,047

(a) In the fourth quarter of 2010, the Company converted its notes receivable into a joint venture interest with Centro. See Note 6 for further details on this joint venture.

(b) On October 22, 2010, the Company entered into a restructure agreement with a borrower, being Stan Thomas Properties on three loans. As part of the restructure, the Company received title and all rights to two land parcels, located in Florida and California, that secured the notes receivable, and in return, the Company released its collateral rights to a third land parcel as well as the personal guarantees of Stan Thomas.

-93-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Prior to foreclosure, the Company recorded its note receivable at the estimated fair values for the two land sites that were to be received as part of the restructure. The changes reduced the estimated fair value of the collateral to $120,000, resulting in impairment of $94,627 for the year ended December 31, 2010. The California collateral subject to the restructure and foreclosure was recorded in investment properties, effective October 22, 2010, at its estimated fair value of $100,000. As of December 31, 2010, the note secured by the Florida property remains a note receivable of $20,000. On March 8, 2011, the Company received title to the Florida property.

(c) In the first quarter of 2010, the Company purchased a note receivable in the amount of $34,000, which is collateralized by a shopping center. In the second quarter, the Company foreclosed on the note and assumed ownership of the underlying collateral for $2,000 in cash plus the amount of the note receivable. In addition, the Company also settled on other notes receivable of $11,400 and recorded these assets in investment properties.

(d) During the fourth quarter, the Company recognized an impairment on a note receivable with a carrying value of $35,821. The note is secured by improved and unimproved land located in Florida. The Company considered in part a third party appraisal to assess the underlying collateral’s fair value, which was estimated at $16,400. As of December 31, 2010, an impairment loss of $19,421 was recorded.

For the year ended December 31, 2010, the Company recorded $111,896 of impairment losses. The impaired loans generated $3,781 of interest income for the year ended December 31, 2010.

(9) Investment in Marketable Securities

Investment in marketable securities of $268,726 and $217,061 at December 31, 2010 and December 31, 2009, respectively, consists of primarily preferred and common stock investments in other REITs, certain real estate related bonds, and commercial mortgage backed securities which are classified as available-for-sale securities and recorded at fair value.

Unrealized holding gains and losses on available-for-sale securities are excluded from earnings and reported as a separate component of comprehensive income until realized. Of the investment securities held as of December 31, 2010, the Company has net accumulated other comprehensive income of $52,965, which includes gross unrealized losses of $5,433. All such gross unrealized losses on investments have been in an unrealized loss position for less than twelve months and such investments have a related fair value of $43,775 as of December 31, 2010.

Realized gains and losses from the sale of available-for-sale securities are determined on a specific identification basis. The Company’s policy for assessing recoverability of its available-for-sale securities is to record a charge against net earnings when the Company determines that a decline in the fair value of a security drops below the cost basis and believes that decline to be other-than-temporary, which includes determining whether (1) the Company intends to sell the debt security, and (2) it is more likely than not that the Company will be required to sell the debt security before its anticipated recovery. During the year ended December 31, 2010, the Company recorded impairment of $1,856 compared to an impairment of $4,038 and $246,164 for the years ended December 31, 2009 and 2008 for other-than-temporary declines on certain available-for-sale securities, which is included as a component of realized gain (loss) and impairment on securities, net on the consolidated statements of operations and other comprehensive income.

-94-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Dividend income is recognized when earned. During the years ended December 31, 2010, 2009 and 2008, dividend income of $18,386, $17,977 and $30,943 was recognized and is included in interest and dividend income on the consolidated statements of operations and other comprehensive income.

(10) Leases

Operating Leases

Minimum lease payments to be received under operating leases, excluding multi-family and lodging properties and rental income under master lease agreements and assuming no expiring leases are renewed, are as follows:

	Minimum Lease Payments
2011	$	534,479
2012		502,377
2013		463,518
2014		429,635
2015		399,701
Thereafter		1,830,624
Total	$	4,160,334

The remaining lease terms range from one year to 29 years. The majority of the revenue from the Company’s properties consists of rents received under long-term operating leases. Some leases provide for the payment of fixed base rent paid monthly in advance, and for the reimbursement by tenants to the Company for the tenant’s pro rata share of certain operating expenses including real estate taxes, special assessments, insurance, utilities, common area maintenance, management fees, and certain building repairs paid by the landlord and recoverable under the terms of the lease. Under these leases, the landlord pays all expenses and is reimbursed by the tenant for the tenant’s pro rata share of recoverable expenses paid. Certain other tenants are subject to net leases which provide that the tenant is responsible for fixed based rent as well as all costs and expenses associated with occupancy. Under net leases where all expenses are paid directly by the tenant rather than the landlord, such expenses are not included in the consolidated statements of operations and other comprehensive income. Under leases where all expenses are paid by the landlord, subject to reimbursement by the tenant, the expenses are included within property operating expenses and reimbursements are included in tenant recovery income on the consolidated statements of operations and other comprehensive income.

-95-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Ground Leases

The Company leases land under noncancelable operating leases at certain of the properties which expire in various years from 2020 to 2084. Ground lease rent is recorded on a straight-line basis over the term of each lease. For the years ended December 31, 2010, 2009 and 2008, ground lease rent was $2,067, $1,872 and $1,729, respectively. Minimum future rental payments to be paid under the ground leases are as follows:

	Minimum Lease Payments
2011	$	1,126
2012		1,142
2013		1,164
2014		1,192
2015		1,196
Thereafter		58,335
Total	$	64,155

(11) Intangible Assets and Goodwill

The portion of the purchase price allocated to acquired above market lease costs and acquired below market lease costs are amortized on a straight line basis over the life of the related lease, including the respective renewal period for below market lease costs with fixed rate renewals, as an adjustment to rental income. Amortization pertaining to the above market lease costs of $6,511, $3,052 and $2,777 was applied as a reduction to rental income for the years ended December 31, 2010, 2009 and 2008, respectively. Amortization pertaining to the below market lease costs of $6,945, $4,740 and $5,185 was applied as an increase to rental income for the years ended December 31, 2010, 2009 and 2008, respectively.

The portion of the purchase price allocated to acquired in-place lease intangibles is amortized on a straight line basis over the life of the related lease. The Company incurred amortization expense pertaining to acquired in-place lease intangibles of $78,632, $74,126 and $66,110 for the years ended December 31, 2010, 2009 and 2008, respectively. The portion of the purchase price allocated to customer relationship value is amortized on a straight line basis over the life of the related lease.

-96-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

The following table summarizes the Company’s identified intangible assets, intangible liabilities and goodwill as of December 31, 2010 and December 31, 2009.

	Balance as of December 31, 2010			Balance as of December 31, 2009
Intangible assets:
Acquired in-place lease	$	600,726		$	541,259
Acquired above market lease		43,495			30,422
Acquired below market ground lease		8,825			8,825
Advance bookings		5,924			5,782
Accumulated amortization		(279,815	)		(204,913	)
Net intangible assets		379,155			381,375
Goodwill, net		7,761			7,761
Total intangible assets, net	$	386,916		$	389,136
Intangible liabilities:
Acquired below market lease	$	92,341		$	81,425
Acquired above market ground lease		5,840			5,840
Accumulated amortization		(16,483	)		(10,886	)
Net intangible liabilities	$	81,698		$	76,379

The following table presents the amortization during the next five years related to intangible assets and liabilities at December 31, 2010.

	2011			2012			2013			2014			2015			Thereafter			Total
Amortization of:
Acquired above market lease costs	$	(5,273	)		(4,492	)		(3,855	)		(3,538	)		(3,107	)		(10,571	)	$	(30,836	)
Acquired below market lease costs	$	5,932			5,548			5,210			4,801			4,586			50,347		$	76,424
Net rental income increase	$	659			1,056			1,355			1,263			1,479			39,776		$	45,588
Acquired in-place lease intangibles	$	64,029			57,548			48,675			37,350			31,352			101,040		$	339,994
Advance bookings	$	98			47			36			—			—			—		$	181
Acquired below market ground lease	$	(228	)		(228	)		(228	)		(228	)		(228	)		(7,006	)	$	(8,146	)
Acquired above market ground lease	$	191			187			140			140			140			4,475		$	5,273

For the year ended December 31, 2010 and 2009, the Company recorded an impairment charge of $0 and $26,676 of its goodwill as a result of the effect of the slowdown in the economy and its impact on three properties, resulting in increases in the capitalization and discount rates used for these properties. The changes in the carrying amount of goodwill for the years ended December 31, 2010 and 2009 are in the table below.

	2010			2009
Goodwill	$	45,636		$	45,636
Accumulated impairment losses		(37,875	)		(11,199	)
		7,761			34,437
Impairment losses		—			(26,676	)
Balance at end of year	$	7,761		$	7,761

-97-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

(12) Mortgages, Notes and Margins Payable

During the year ended December 31, 2010, the following debt transactions occurred:

Balance at December 31, 2008	$	4,437,997
New financings		370,555
Assumed financings, net of discount		722,531
Paydown of debt		(452,292	)
Amortization of discount/premium		7,108
Balance at December 31, 2009	$	5,085,899
New financings		466,673
Assumed financings, net of discount		449,461
Paydown of debt		(446,549	)
Extinguishment of debt		(29,630	)
Amortization of discount/premium		6,203
Balance at December 31, 2010	$	5,532,057

Mortgage loans outstanding as of December 31, 2010 and 2009 were $5,508,668 and $5,056,398 and had a weighted average interest rate of 5.1% and 4.9%, respectively. Mortgage premium and discount, net was a discount of $38,712 and a premium of $1,199 as of December 31, 2010 and 2009. As of December 31, 2010, scheduled maturities for the Company’s outstanding mortgage indebtedness had various due dates through December 2047.

	As of December 31, 2010		Weighted average interest rate
2011	$	541,262		3.79	%
2012	$	679,112		3.98	%
2013	$	1,010,823		4.83	%
2014	$	278,720		5.61	%
2015	$	460,975		5.61	%
Thereafter	$	2,537,776		5.69	%

The Company is negotiating refinancing certain debt maturing in 2011 with the existing lenders at terms that will most likely be at higher credit spreads and lower loan to value. It is anticipated that the Company will be able to repay, refinance or extend the maturities of all of the debt on a timely basis, and the Company believes it has adequate sources of funds to meet short term cash needs related to these refinancings. Of the outstanding debt, approximately $635,866 is recourse to the Company.

Some of the mortgage loans require compliance with certain covenants, such as debt service ratios, investment restrictions and distribution limitations. As of December 31, 2010, the Company was in compliance with all mortgage loan requirements except two loans with a carrying value of $16,580 and one loan for a consolidated joint venture with a carrying value of $10,135; neither of which are cross collateralized with any other mortgage loans.

The Company has purchased a portion of its securities through margin accounts. As of December 31, 2010 and December 31, 2009, the Company has recorded a payable of $62,101 and $28,302, respectively, for securities

-98-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

purchased on margin. This debt bears a variable interest rate of the LIBOR plus 35 basis points. At December 31, 2010 and December 31, 2009, this rate was .609% and .585%. Interest expense in the amount of $419, $168 and $3,776 was recognized in interest expense on the consolidated statements of operations and other comprehensive income for the years ended December 31, 2010, 2009 and 2008, respectively.

(13) Derivatives

As of December 31, 2010, in connection with nine mortgages payable that have variable interest rates, the Company has entered into interest rate swap and cap agreements, with a notional value of $355,469. The Company’s interest rate swaps involve the receipt of fixed-rate amounts from a counterparty in exchange for the Company making variable payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up front premium. The interest rate swaps and cap were considered highly effective as of December 31, 2010. The fair value of the Company’s swaps increased $300 during the year ended December 31, 2010 and is reflected in other comprehensive income (loss) on the consolidated statements of operations and other comprehensive income.

The following table summarizes interest rate swap contracts outstanding as of December 31, 2010:

Date Entered	Effective Date		End Date		Pay Fixed Rate			Receive Floating Rate Index		Notional Amount		Fair Value as of December 31, 2010
November 16, 2007		November 20, 2007		April 1, 2011		4.45	%		1 month LIBOR	$	24,425	$	(253	)
March 28, 2008		March 28, 2008		March 27, 2013		3.32	%		1 month LIBOR		33,062		(1,819	)
March 28, 2008		March 28, 2008		March 31, 2011		2.81	%		1 month LIBOR		50,000		(312	)
December 12, 2008		January 1, 2009		December 12, 2011		(1	)		(1)		20,245		—
December 23, 2008		January 5, 2009		December 22, 2011		1.86	%		1 month LIBOR		16,637		(242	)
January 16, 2009		January 13, 2009		January 13, 2012		1.62	%		1 month LIBOR		22,000		(282	)
August 19, 2010		August 31, 2010		March 27, 2012		0.63	%		1 month LIBOR		34,373		(84	)
October 15, 2010		November 1, 2010		December 19, 2011		0.77	%		1 month LIBOR		125,000		(487	)
October 15, 2010		November 1, 2010		April 23, 2013		0.94	%		1 month LIBOR		29,727		(54	)
										$	355,469	$	(3,533	)

(1) Interest rate cap at 4.75%.

Derivative Instruments and Hedging Activities

The Company records all derivatives on the balance sheet at fair value. The accounting for changes in the fair value of derivatives depends on the intended use of the derivative, whether the Company has elected to designate a derivative in a hedging relationship and apply hedge accounting and whether the hedging relationship has satisfied the criteria necessary to apply hedge accounting. Derivatives designated and qualifying as a hedge of the exposure to changes in the fair value of an asset, liability, or firm commitment attributable to a particular risk, are considered fair value hedges. Derivatives designated and qualifying as a hedge of the exposure to variability in expected future cash flows, or other types of forecasted transactions, are considered cash flow hedges. Hedge accounting generally provides for the matching of the timing of gain or loss recognition on the hedging instrument with the recognition of the changes in the fair value of the hedged asset or liability that are attributable to the hedged risk in a fair value hedge or the earnings effect of the hedged forecasted transactions in a cash flow hedge. The Company may enter into derivative contracts that are intended to economically hedge certain of its risk, even though hedge accounting does not apply or the Company elects not to apply hedge accounting.

-99-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Risk Management Objective of Using Derivatives

The Company is exposed to certain risk arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its debt funding and through the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the payment of future uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash payments principally related to the Company’s borrowings.

Cash Flow Hedges of Interest Rate Risk

The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The Company has elected to designate the interest rate swaps as cash flow hedging relationships.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the years ended December 31, 2010 and 2009, such derivatives were used to hedge the variable cash flows associated with existing variable-rate debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. During the year ended December 31, 2010, the Company recorded $473 of ineffectiveness income as a result of the hypo and actual swap adjusting to market value, which is included in interest expense on the consolidated statements of operations and other comprehensive income. The Company recorded $262 and $242 of ineffectiveness expense during the years ended December 31, 2009 and 2008, which is included in interest expense on the consolidated statements of operations and other comprehensive income.

Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. During the next twelve months, the Company estimates that an additional $2,839 will be reclassified to interest expense.

-100-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheet as of December 31, 2010 and December 31, 2009.

	Liability Derivatives
	As of December 31, 2010				As of December 31, 2009
	Balance Sheet Location		Fair Value		Balance Sheet Location		Fair Value
Derivatives designated as hedging instruments under ASC 815:
Interest Rate Products		Advance rent and other liabilities		$3,533		Advance rent and other liabilities		$4,533

The derivative instruments were reported at their fair value of $3,533 and $4,533 in advance rent and other liabilities at December 31, 2010 and December 31, 2009, respectively, with a corresponding adjustment to other comprehensive income for the unrealized gains and losses. Over time, the unrealized gains and losses held in accumulated other comprehensive income will be reclassified to earnings. This reclassification will correlate with the recognition of the hedged interest payments in earnings.

The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations and other comprehensive income for the years ended December 31, 2010, 2009 and 2008:

Derivatives in ASC 815 Cash Flow Hedging Relationships	Amount of Gain or (Loss) Recognized in OCI on Derivative (Effective Portion) December 31,							Location of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)		Amount of Gain or (Loss) Reclassified from Accumulated OCI into Income (Effective Portion) December 31,									Location of Gain or (Loss) Recognized in Income on Derivative (Ineffective Portion and Amount Excluded from Effectiveness Testing)		Amount of Gain or (Loss) Recognized in Income on Derivative  (Ineffective Portion and Amount Excluded from Effectiveness Testing) December 31,
	2010		2009		2008					2010			2009			2008					2010		2009			2008
Interest Rate Products	$	300	$	5,220	$	(9,054	)		Interest expense	$	(4,508	)	$	(8,766	)	$	(3,254	)		Interest expense	$	473	$	(262	)	$	(242	)

During the year ended December 31, 2010, the Company recognized additional other comprehensive gain of $300 to adjust the carrying amount of the interest rate swaps to fair values at December 31, 2010. During the year ended December 31, 2009, the Company recognized additional other comprehensive gain of $5,220 to adjust the carrying amount of the interest rate swaps to fair values at December 31, 2009. The interest rate swap settlements were offset by a corresponding adjustment in interest expense related to the interest payments being hedged.

Non-designated Hedges

The Company has entered into a put/call agreement as a part of the MB REIT transaction. This agreement is considered a derivative instrument and is accounted for as such. The fair value of the put/call agreement is estimated using the Black-Scholes model. The fair value of the option was $1,274 and $1,950 and is included as a liability in advance rent and other liabilities on the consolidated balance sheets as of December 31, 2010 and

-101-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

December 31, 2009, respectively, with $676 included in other income on the consolidated statements of operations and other comprehensive income at December 31, 2010. For the years ended December 31, 2009 and 2008, $1,050 of income and $651 of expense was included in other income on the consolidated statements of operations and other comprehensive income.

The Company does not use derivatives for trading or speculative purposes.

(14) Fair Value Measurements

Fair Value Measurements

In accordance with ASC 820, Fair Value Measurement and Disclosures, the Company defines fair value based on the price that would be received upon sale of an asset or the exit price that would be paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value. The fair value hierarchy consists of three broad levels, which are described below:

• Level 1 - Quoted prices in active markets for identical assets or liabilities that the entity has the ability to access.

• Level 2 - Observable inputs, other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

• Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets and liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The Company has estimated the fair value of its financial and non-financial instruments using available market information and valuation methodologies the Company believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that would be realized upon disposition.

For assets and liabilities measured at fair value on a recurring basis, quantitative disclosure of the fair value for each major category of assets and liabilities is presented below:

	Fair Value Measurements at December 31, 2010
Description	Using Quoted Prices in Active Markets for Identical Assets (Level 1)		Using Significant Other Observable Inputs (Level 2)			Using Significant Other Unobservable Inputs (Level 3)
Available-for-sale real estate equity securities	$	253,838	$	—			—
Commercial mortgage backed securities		—		—		$	14,888
Total assets	$	253,838		—		$	14,888
Put/call agreement in MB REIT	$	—		—		$	(1,274	)
Derivative interest rate instruments		—	$	(3,533	)		—
Total liabilities	$	—	$	(3,533	)	$	(1,274	)

-102-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

	Fair Value Measurements at December 31, 2009
Description	Using Quoted Prices in Active Markets for Identical Assets (Level 1)		Using Significant Other Observable Inputs (Level 2)			Using Significant Other Unobservable Inputs (Level 3)
Available-for-sale real estate equity securities	$	207,510	$	—			—
Commercial mortgage backed securities		—		—		$	9,551
Total assets	$	207,510	$	—		$	9,551
Put/call agreement in MB REIT	$	—		—		$	(1,950	)
Derivative interest rate instruments		—	$	(4,533	)		—
Total liabilities	$	—	$	(4,533	)	$	(1,950	)

Level 1

At December 31, 2010 and 2009, the fair value of the available for sale real estate equity securities have been estimated based upon quoted market prices for the same or similar issues when current quoted market prices are available. Unrealized gains on investment are reflected in unrealized gain (loss) on investment securities in other comprehensive income on the consolidated statements of operations and other comprehensive income.

Level 2

To calculate the fair value of the derivative contracts, the Company primarily uses quoted prices for similar contracts . The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements.

Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by itself and its counterparties. However, as of December 31, 2010, the Company has assessed the significance of the effect of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

-103-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Level 3

The following table summarizes activity for the Company’s assets and liabilities measured at fair value on a recurring basis using Level 3 inputs as of December 31, 2010:

	Level 3 Assets			Level 3 Liabilities
Balance, December 31, 2008	$	22,615		$	(3,000	)
Purchases		2,447			—
Sales		(16,934	)		—
Realized gains		3,447			1,050
Unrealized losses		(2,024	)		—
Balance, December 31, 2009	$	9,551		$	(1,950	)
Purchases		—			—
Sales		—			—
Realized gains		—			676
Unrealized gains		5,337			—
Balance, December 31, 2010	$	14,888		$	(1,274	)

The fair value of the commercial mortgage backed securities (“CMBS”) that do not have current quoted market prices available has been estimated by discounting the estimated future cash flows. The lack of activity in the CMBS market has resulted in a lack of observable market inputs to use in determining fair value. The Company incorporated its own assumptions about future cash flows and the appropriate discount rate adjusted for credit and liquidity factors. In developing these assumptions, the Company incorporated the contractual terms of the securities, the type of collateral, any credit enhancements available, and relevant market data, where available. Subsequently, in the first quarter of 2011, CMBS was sold at $15,426. The Company’s valuation of its put/call agreement in MB REIT is determined using present value estimates of the put liability based on probable dividend yields.

The following table summarizes activity for the Company’s assets measured at fair value on a non-recurring basis The Company recognized certain non-cash impairment charges to write the investments to their fair values in the year ended December 31, 2010. The asset groups that were impaired to fair value through this evaluation are:

	As of December 31, 2010					As of December 31, 2009
	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)		Total Impairment Gain (Losses)			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)		Total Impairment Gain (Losses)
Investment properties	$	40,509	$	(46,584	)	$	35,616	$	(34,051	)
Notes receivable		36,400		(111,896	)		11,500		(74,136	)
Investment in unconsolidated entities		121,320		(11,239	)		—		(7,443	)
Consolidated investment		37,496		433			137,443		(148,887	)
Goodwill		—		—			7,761		(26,676	)
Total	$	235,725	$	(169,286	)	$	192,320	$	(291,193	)

-104-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Investment Properties

The Company’s estimated fair value relating to the investment properties’ impairment analysis is based on a comparison of letters of intent, broker opinion of value and discounted cash flow models, which includes contractual inflows and outflows over a specific holding period. The cash flows consist of unobservable inputs such as contractual revenues and forecasted revenues and expenses. These unobservable inputs are based on market conditions and the Company’s expected growth rates. Capitalization rates and discount rates are utilized in the model and are based upon observable rates that the Company believes to be within a reasonable range of current market rates. As of December 31, 2010 and 2009, the impairment of the investment properties was $46,584 and $0, respectively. Certain properties were impaired prior to disposition and the related impairment charge of $945 and $34,051 is included in discontinued operations for the year ended December 31, 2010 and 2009.

Notes Receivable

When the Company assesses the potential impairment of the notes, an evaluation of the fair value of the collateral is performed through a review of third party appraisals and discounted cash flow models. The Company’s discounted cash flow model includes contractual inflows and outflows over a specific holding period and utilizes unobservable inputs based on market conditions and the Company’s expected growth rates. The Company believes the capitalization rates and discount rates utilized in the models are based upon observable rates that are within a reasonable range of current market rates.

The unobservable inputs used in the Stan Thomas note receivable evaluation include significant judgments of future long-term real estate, governmental and economic conditions to develop cash-flowing investments from these land parcels. These primary inputs are conditioned on a long-term recovery of these real estate markets so that development of certain infrastructure relating to the parcels will deliver positive risk-adjusted returns.

For the year ended December 31, 2010 and 2009, the Company recorded $111,896 of impairment losses and $74,136, respectively.

Investment in Unconsolidated Entities

The Company periodically reviews its investment in unconsolidated entities for impairment. The estimated fair value is based on reviews of the expected cash flows to be received from the respective investee. In some instances, the Company may perform a discounted cash flow analysis on an unconsolidated entity’s underlying assets. The cash flows comprise of unobservable inputs including expected and forecasted inflows and outflows over a specific holding period. The Company believes the capitalization rates and discount rates used are based on observable rates present in the market place. The unconsolidated entities’ impairment loss recorded for year ended December 31, 2010 and 2009 was $11,239 and $7,443, respectively.

The conversion of the note receivable to an investment in unconsolidated entities was recorded at fair value; the fair value of $121,320 was based on the Company’s evaluation of the underlying investee’s assets, which included cash flows analyzes and a review of relevant capitalization rates.

-105-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Consolidated Investment

The Company valued the consolidating properties using a discounted cash flow model, including discount rates and capitalization rates on the expected future cash flows of the properties. The Company estimated fair value of the debt by discounting the future cash flows of each instrument at rates currently offered for similar debt instruments. These factors resulted in a loss on a consolidated investment of $148,887 for the year ended December 31, 2009 and a gain of $433 for year ended December 31, 2010.

Goodwill

The goodwill fair values were determined based on discounted future cash flows, as applicable, using unobservable inputs, such as management’s estimates of cash flows, and the eventual disposition. The discount and capitalization rates were based on observable rates present in the current market. For the year ended December 31, 2009, fair value of the goodwill was $7,761 and an impairment of $26,676 was recognized. As of December 31, 2010, there was no impairment of goodwill.

Financial Instruments not Measured at Fair Value

The table below represents the fair value of financial instruments presented at carrying values in our consolidated financial statements as of December 31, 2010 and 2009.

	December 31, 2010				December 31, 2009
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Mortgage and notes payable	$	5,508,668	$	5,408,898	$	5,056,398	$	4,872,189
Margins payable	$	62,101	$	62,101	$	28,302	$	28,302
Notes receivable	$	54,047	$	52,193	$	423,478	$	416,520

The Company estimates the fair value of its mortgages and margins payable by discounting the future cash flows of each instrument at rates currently offered to the Company for similar debt instruments of comparable maturities by the Company’s lenders. The Company estimates the fair value of its notes receivable by discounting the future cash flows of each instrument at rates currently available to the Company for similar instruments or in the case of certain impaired loans, by determining the fair value of the collateral supporting the loan.

(15) Income Taxes

The Company is qualified and has elected to be taxed as a real estate investment trust (“REIT”) under the Internal Revenue Code of 1986, as amended, for federal income tax purposes commencing with the tax year ending December 31, 2005. Since the Company qualifies for taxation as a REIT, the Company generally will not be subject to federal income tax on taxable income that is distributed to stockholders. A REIT is subject to a number of organizational and operational requirements, including a requirement that it currently distributes at least 90% of its REIT taxable income (subject to certain adjustments) to its stockholders. If the Company fails to qualify as a REIT in any taxable year, without the benefit of certain relief provisions, the Company will be subject to federal and state income tax on its taxable income at regular corporate tax rates. Even if the Company qualifies for taxation as a REIT, the Company may be subject to certain state and local taxes on its income, property or net worth and federal income and excise taxes on its undistributed income.

-106-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

In 2007, the Company formed the following wholly-owned taxable REIT subsidiaries in connection with the acquisition of the lodging portfolios and student housing: Barclay Holdings, Inc., Inland American Holding TRS, Inc., and Inland American Communities Third Party, Inc. In 2008, the Company formed Inland American Lodging Garden Grove Harbor TRS, LLC in connection with an addition to the lodging portfolio. Taxable income from non-REIT activities managed through these taxable REIT subsidiaries is subject to federal, state, and local income taxes. As such, the Company’s taxable REIT subsidiaries are required to pay income taxes at the applicable rates. In addition, the Company is also subject to certain state and local taxes.

The components of income tax expense for the years ended December 31:

	2010									2009								2008
	Federal			State			Total			Federal			State		Total			Federal		State			Total
Current	$	1,502		$	1,466		$	2,968		$	(2,043	)	$	1,728	$	(315	)	$	3,216	$	2,370		$	5,586
Deferred		(6,698	)		(788	)		(7,486	)		859			83		942			601		(63	)		538
Total income expense (benefit)	$	(5,196	)	$	678		$	(4,518	)	$	(1,184	)	$	1,811	$	627		$	3,817	$	2,307		$	6,124

The components of the deferred tax assets and liabilities at December 31, 2010 and 2009 were as follows:

	2010			2009
Net operating loss – Barclay Holding, Inc.	$	7,146		$	4,168
Net operating loss - Inland American Holding TRS, Inc.		5,260			2,736
Basis difference IA-Holding		108			—
Lease acquisition costs - Barclay Holding, Inc.		941			1,883
Depreciation expense – Barclay Holding, Inc.		849			459
Total deferred tax assets		14,304			9,246
Less: Valuation allowance		(5,969	)		(7,011	)
Net deferred tax assets	$	8,335		$	2,235
Gain on sales of real estate, net of depreciation effect	$	—		$	1,408
Straight-line rents		—			7
Others		—			(30	)
Deferred tax liabilities	$	—		$	1,385

Federal net operating loss carryforwards amounting to $31,981 begin to expire in 2023, if not utilized by then.

Deferred tax assets are recognized only to the extent that it is more likely than not that they will be realized based on consideration of available evidence, including future reversal of existing taxable temporary difference, future projected taxable income, and tax planning strategies. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. The Company has considered various factors, including future reversals of existing taxable temporary differences, projected future taxable income and tax-planning strategies in making this assessment.

-107-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is more likely than not that the Company will realize the benefits of these deductible differences, net of the existing valuation allowance of $5,969 at December 31, 2010. The amount of the deferred tax assets considered realizable, however, could be reduced in the near term if estimates of future taxable income during the carryforward period are reduced.

Uncertain Tax Positions

The Company had no unrecognized tax benefits as of or during the three year period ended December 31, 2010. The Company expects no significant increases or decreases in unrecognized tax benefits due to changes in tax positions within one year of December 31, 2010. The Company has no material interest or penalties relating to income taxes recognized in the consolidated statements of operations and other comprehensive income for the years ended December 31, 2010, 2009, and 2008 or in the consolidated balance sheets as of December 31, 2010 and 2009. As of December 31, 2010, all of the Company’s tax years remain subject to examination by U.S. and various state tax jurisdictions.

Distributions

For federal income tax purposes, distributions may consist of ordinary income, qualifying dividends, return of capital, capital gains or a combination thereof. Distributions to the extent of the Company’s current and accumulated earnings and profits for federal income tax purposes are taxable to the recipient as ordinary income. Distributions in excess of these earnings and profits will constitute a non-taxable return of capital rather than a dividend and will reduce the recipient’s basis in the shares.

A summary of the average taxable nature of the Company’s common distributions paid for each of the years in the three year period ended December 31, 2010 is as follows:

	2010		2009		2008
Ordinary income	$	0.17	$	0.14	$	0.32
Return of capital		0.33		0.37		0.30
Total distributions per share	$	0.50	$	0.51	$	0.62

(16) Segment Reporting

The Company has five business segments: Office, Retail, Industrial, Lodging and Multi-family. The Company evaluates segment performance primarily based on net property operations. Net property operations of the segments do not include interest expense, depreciation and amortization, general and administrative expenses, noncontrolling interest expense or interest and other investment income from corporate investments. The non-segmented assets primarily include the Company’s cash and cash equivalents, investment in marketable securities, construction in progress, investment in unconsolidated entities and notes receivable.

Prior to October 1, 2010, the Company considered the net property operations of the LIP-H assets, which consisted of eight operating office and retail properties, a segment. Due to the settlement and consolidation of the remaining Lauth assets and the disposition of four of eight LIP-H assets, the Company no longer evaluates the net property operations of these assets as a segment. As of December 31, 2010, the assets of the LIP-H segment were classified into the appropriate segment as identified above. The Company has restated the prior years’ comparatives to conform with current year presentation.

-108-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

For the year ended December 31, 2010, approximately 9% of the Company’s rental revenue was generated by over 400 retail banking properties leased to SunTrust Banks, Inc Also, as of December 31, 2010, approximately 7% of the Company’s rental revenue was generated by three properties leased to AT&T, Inc. As a result of the concentration of revenue generated from these properties, if SunTrust or AT&T were to cease paying rent or fulfilling its other monetary obligations, the Company could have significantly reduced rental revenues or higher expenses until the defaults were cured or the properties were leased to a new tenant or tenants.

-109-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

The following table summarizes net property operations income by segment for the year ended December 31, 2010.

	Total			Office			Retail			Industrial			Lodging			Multi- Family
Property rentals	$	606,761		$	149,846		$	289,324		$	85,307		$	—		$	82,284
Straight-line rents		17,705			5,809			6,954			4,504			—			438
Amortization of acquired above and below market leases, net		434			(761	)		2,706			(1,511	)		—			—
Total rental income	$	624,900		$	154,894		$	298,984		$	88,300		$	—		$	82,722
Tenant recovery income		93,927			30,219			60,836			2,499			—			373
Other property income		17,323			4,245			5,329			1,104			—			6,645
Lodging income		495,585			—			—			—			495,585			—
Total income	$	1,231,735		$	189,358		$	365,149		$	91,903		$	495,585		$	89,740
Operating expenses		(544,685	)		(49,469	)		(96,952	)		(7,866	)		(342,280	)		(48,118	)
Net property operations	$	687,050		$	139,889		$	268,197		$	84,037		$	153,305		$	41,622
Depreciation and amortization	$	(432,081	)
Business manager management fee	$	(36,000	)
General and administrative expenses	$	(36,668	)
Interest and dividend income	$	33,040
Interest expense	$	(293,507	)
Income tax benefit	$	4,518
Other income	$	1,845
Realized gain and impairment on securities, net	$	21,073
Equity in loss of unconsolidated entities	$	(18,684	)
Impairment of investment in unconsolidated entities	$	(11,239	)
Provision for asset impairment	$	(46,584	)
Impairment of notes receivable	$	(111,896	)
Gain on consolidated investment	$	433
Net loss from continuing operations	$	(238,700	)
Income from discontinued operations, net	$	71,408
Net income attributable to noncontrolling interests	$	(9,139	)
Net loss attributable to Company	$	(176,431	)
Balance Sheet Data:
Real estate assets, net	$	9,643,194		$	1,730,995		$	3,745,959		$	944,181		$	2,424,363		$	797,696
Non-segmented assets		1,748,308
Total Assets	$	11,391,502
Capital expenditures	$	101,723		$	7,114		$	17,674		$	903		$	73,757		$	2,275

-110-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

The following table summarizes net property operations income by segment for the year ended December 31, 2009.

	Total			Office			Retail			Industrial			Lodging			Multi- Family
Property rentals	$	515,988		$	147,298		$	234,861		$	71,743		$	—		$	62,086
Straight-line rents		16,965			6,081			5,743			4,730			—			411
Amortization of acquired above and below market leases, net		1,688			(620	)		2,695			(387	)		—			—
Total rental income	$	534,641		$	152,759		$	243,299		$	76,086		$	—		$	62,497
Tenant recovery income		83,979			29,533			50,045			4,106			—			295
Other property income		18,433			6,087			6,382			1,083			—			4,881
Lodging income		459,724			—			—			—			459,724			—
Total income	$	1,096,777		$	188,379		$	299,726		$	81,275		$	459,724		$	67,673
Operating expenses		(486,977	)		(47,645	)		(78,486	)		(8,157	)		(317,878	)		(34,811	)
Net property operations	$	609,800		$	140,734		$	221,240		$	73,118		$	141,846		$	32,862
Depreciation and amortization	$	(384,764	)
Business manager management fee	$	(39,000	)
General and administrative expenses	$	(43,499	)
Interest and dividend income	$	55,173
Interest expense	$	(248,267	)
Loss on consolidated investment	$	(148,887	)
Income tax expense	$	(627	)
Other income	$	591
Realized gain and impairment on securities, net	$	34,155
Impairment of notes receivable	$	(74,136	)
Equity in loss of unconsolidated entities	$	(78,487	)
Impairment of investment in unconsolidated entities	$	(7,443	)
Provision for asset impairment	$	(1,117	)
Provision for goodwill impairment	$	(26,676	)
Net loss from continuing operations	$	(353,184	)
Loss from discontinued operations, net	$	(35,825	)
Net income attributable to noncontrolling interests	$	(8,951	)
Net loss attributable to Company	$	(397,960	)
Balance Sheet Data:
Real estate assets, net	$	9,223,015		$	1,861,529		$	3,236,729		$	921,209		$	2,456,454		$	747,094
Non-segmented assets		2,105,196
Total Assets	$	11,328,211
Capital expenditures	$	48,995		$	9,096		$	4,090		$	85		$	34,929		$	795

-111-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

The following table summarizes net property operations income by segment for the year ended December 31, 2008.

	Total			Office			Retail			Industrial			Lodging			Multi- Family
Property rentals	$	394,766		$	104,900		$	196,060		$	63,236		$	—		$	30,570
Straight-line rents		17,174			5,259			6,986			4,732			—			197
Amortization of acquired above and below market leases, net		2,409			(749	)		3,545			(387	)		—			—
Total rentals	$	414,349		$	109,410		$	206,591		$	67,581		$	—		$	30,767
Tenant recoveries		74,169			27,034			43,411			3,759			—			(35	)
Other income		11,702			5,733			3,322			132			—			2,515
Lodging operating income		506,531			—			—			—			506,531			—
Total revenues	$	1,006,751		$	142,177		$	253,324		$	71,472		$	506,531		$	33,247
Total operating expenses		(453,862	)		(41,956	)		(65,725	)		(6,929	)		(322,221	)		(17,031	)
Net property operations	$	552,889		$	100,221		$	187,599		$	64,543		$	184,310		$	16,216
Depreciation and amortization	$	(313,765	)
General and administrative expenses	$	(34,087	)
Business manager management fee	$	(18,500	)
Interest and dividend income	$	81,274
Interest expense	$	(225,476	)
Income tax expense	$	(6,124	)
Other income	$	70
Realized loss and impairment on securities, net	$	(262,105	)
Equity in loss of unconsolidated entities	$	(46,108	)
Impairment of investment in unconsolidated entities	$	(61,993	)
Provision for goodwill impairment	$	(11,199	)
Gain on extinguishment of debt	$	7,760
Net loss from continuing operations	$	(337,364	)
Income from discontinued operations, net	$	(18,887	)
Net income attributable to noncontrolling interests	$	(8,927	)
Net loss attributable to Company	$	(365,178	)

-112-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

(17) Earnings (loss) per Share

Basic earnings (loss) per share (“EPS”) are computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period (the “common shares”). Diluted EPS is computed by dividing net income (loss) by the common shares plus potential common shares issuable upon exercising options or other contracts. There are an immaterial amount of potentially dilutive common shares.

The basic and diluted weighted average number of common shares outstanding was 835,131,057, 811,400,035 and 675,320,438 for the years ended December 31, 2010, 2009 and 2008.

(18) Commitments and Contingencies

The Company has closed on several properties which have earnout components, meaning the Company did not pay for portions of these properties that were not rent producing. The Company is obligated, under certain agreements, to pay for those portions when the tenant moves into its space and begins to pay rent. The earnout payments are based on a predetermined formula. Each earnout agreement has a limited obligation period to pay any additional monies. If at the end of the time period allowed certain space has not been leased and occupied, the Company will own that space without any further obligation. Based on pro forma leasing rates, the Company may pay as much as $31,839 in the future as vacant space covered by earnout agreements is occupied and becomes rent producing.

As part of the Company’s consolidated MB REIT joint venture with Minto Delaware, the Company could be required to redeem Minto Delaware’s interest in MB REIT beginning on October 11, 2011 subject to the terms and conditions below:

• On or after October 11, 2011 until October 11, 2012, Minto Holdings, an affiliate of Minto Delaware, has the option to require the Company to purchase, in whole, but not in part, 100% of the Minto Delaware’s investment in the MB REIT (consisting of the series A preferred stock and common stock) for a price equal to (A) if the shares of the Company’s common stock are not listed, on the earlier of (x) the date the Company purchases Minto Delaware’s investment or (y) 150 days after the date written notice of the exercise of the initial purchase right is given, the sum of (1) the series A liquidation preference, payable in cash and (2) $29,300 or (B) if the shares of the Company’s stock are listed, on the earlier of (x) the date the Company purchases Minto Delaware’s investment or (y) 150 days after the date written notice of the exercise of the initial purchase right is given, the sum of (1) the series A liquidation preference, payable in cash and (2) 2,934,800 shares of common stock. The series A liquidation preference is equal to $1,276 per share for 207,000 shares of series A preferred stock plus accrued and unpaid dividends.

• On or after October 11, 2012, Minto Holdings has an option to require the Company to purchase, in whole, but not in part, 100% of the Minto Delaware investment for a price equal to (A) if the shares of the Company’s common stock are not listed, on the earlier of (x) the date the Company purchases the Minto Delaware investment or (y) 150 days after written notice of a subsequent purchase right is given, the sum of (1) the series A liquidation preference, payable in cash and (2) the fair market value (pursuant to a specified formula) of the common stock held by Minto Delaware on the date written notice of the subsequent purchase right is given, payable in cash, or (B) if the shares of the Company’s common stock are listed, on the earlier of (x) the date the Company purchases the Minto Delaware equity or (y) 150 days after written notice of the subsequent purchase right is given, the sum of (1) the series A liquidation preference, payable in cash and (2) 2,934,800 shares of common stock.

-113-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

• On or after October 11, 2015, so long as the MB REIT qualifies as a “domestically controlled REIT,” MB REIT has the right to purchase, in whole, but not in part, 100% of Minto Delaware’s investment for a price equal to (A) if the shares of the Company’s common stock are not listed, the sum of (1) the series A liquidation preference, payable in cash and (2) the fair market value (pursuant to a specified formula) of the common stock of MB REIT held by Minto Delaware or (B) if the shares of the Company’s common stock are listed, the sum of (1) the series A liquidation preference, payable in cash and (2) 2,934,800 shares of common stock.

Certain leases and operating agreements within the lodging segment require the Company to reserve funds relating to replacements and renewals of the hotels’ furniture, fixtures and equipment. As of December 31, 2010, the Company has funded $50,098 in reserves for future improvements. This amount is included in restricted cash and escrows on the consolidated balance sheet as of December 31, 2010.

Contemporaneous with the Company’s merger with Winston Hotels, Inc., its wholly-owned subsidiary, Inland American Winston Hotels, Inc., referred to herein as “Inland American Winston,” WINN Limited Partnership, or “WINN,” and Crockett Capital Corporation, or “Crockett,” memorialized in a development memorandum their intentions to subsequently negotiate and enter into a series of contracts to develop certain hotel properties, including without limitation a Westin Hotel in Durham, North Carolina, a Hampton Inn & Suites/Aloft Hotel in Raleigh, North Carolina, an Aloft Hotel in Chapel Hill, North Carolina and an Aloft Hotel in Cary, North Carolina (collectively referred to herein as the “development hotels”).

On March 6, 2008, Crockett filed an amended complaint in the General Court of Justice of the State of North Carolina against Inland American Winston and WINN. The amended complaint alleges that the development memorandum reflecting the parties’ intentions regarding the development hotels was instead an agreement that legally bound the parties. The amended complaint further claims that Inland American Winston and WINN breached the terms of the alleged agreement by failing to take certain actions to develop the Cary, North Carolina hotel and by refusing to convey their rights in the three other development hotels to Crockett. The amended complaint seeks, among other things, monetary damages in an amount not less than $4,800 with respect to the Cary, North Carolina property. With respect to the remaining three development hotels, the amended complaint seeks specific performance in the form of an order directing Inland American Winston and WINN to transfer their rights in the hotels to Crockett or, alternatively, monetary damages in an amount not less than $20,100. Inland American Winston and WINN deny these claims and, on March 26, 2008, filed a motion to dismiss the amended complaint. On March 13, 2009, the court denied the motion to dismiss. Inland American Winston and WINN have filed answers and affirmative defenses to the amended complaint as well as counter claims against Crockett. Contemporaneously with the close of fact discovery, Crockett sought leave to amend its complaint to add another cause of action and to seek treble damages and attorneys’ fees, which was granted. Expert discovery has been completed. Based upon an expert report recently received from Crockett, it was originally believed that Crockett’s maximum claim, without the inclusion of treble damages or attorneys fees, was approximately $16,800. On February 28, 2011, the Court ruled on cross motions for summary judgment, which were filed by the parties. The result of the ruling on the cross motions is that certain claims against WINN by Crockett were dismissed, including the treble damages claim and claims relating to two of the hotel properties at issue. Most of the WINN’s counter-claims against Crockett were also dismissed as a result of the ruling. Based upon the expert report referenced above, it is now believed that the maximum claim against WINN is approximately $7,000 exclusive of any claimed interest. WINN believes a trial on these remaining claims will likely take place by the end of 2011. The outcome of this lawsuit cannot be predicted with any certainty and management is currently unable to estimate an amount or range of potential loss that could result if an unfavorable outcome occurs.

-114-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Notes To Consolidated Financial Statements

(Dollar amounts in thousands, except per share amounts)

December 31, 2010, 2009 and 2008

While management does not believe that an adverse outcome in the above lawsuit would have a material adverse effect on the Company’s financial condition, there can be no assurance that an adverse outcome would not have a material effect on the Company’s results of operations for any particular period.

The Company has also filed a number of eviction actions against tenants and is involved in a number of tenant bankruptcies. The tenants in some of the eviction cases may file counterclaims against the Company in an attempt to gain leverage against the Company in connection with the eviction. In the opinion of the Company, none of these counterclaims is likely to result in any material losses to the Company.

(19) Subsequent Events

Subsequent to year end, the Company purchased one property for $25,500.

The Company entered into two interest rate swap transactions at a rate of 0.912% over a notional amount of $49,671.

We have adopted an Amended and Restated Share Repurchase Program (“SRP”), effective April 11, 2011, to repurchase shares, on a quarterly basis, due to death of the beneficial owner. Beginning April 11, 2011, we will begin accepting share repurchase requests due to the death of any beneficial owner of shares, with checks distributed by the end of the calendar quarter. There will be $5 million available each quarter to repurchase shares at a price per share of $7.23, which is equal to 90% of the most recently disclosed estimated per share value of $8.03. Additionally in accordance with the SRP, the aggregate number of shares repurchased will be limited to 5.0% of the total number of issued and outstanding shares during any consecutive 12 calendar month period.

(20) Quarterly Supplemental Financial Information (unaudited)

The following represents the results of operations, for each quarterly period, during 2010 and 2009.

	2010
	Dec. 31			Sept. 30			June 30			March 31
Total income	$	295,149		$	321,174		$	322,415		$	292,997
Net loss		(18,338	)		(119,894	)		(1,963	)		(27,097	)
Net loss attributable to Company		(20,483	)		(122,480	)		(4,129	)		(29,339	)
Net loss, per common share, basic and diluted (1)		(.01	)		(.15	)		(.01	)		(.04	)
Weighted average number of common shares outstanding, basic and diluted (1)		843,554,275			837,717,745			832,322,161			826,716,592

	2009
	Dec. 31			Sept. 30			June 30			March 31
Total income	$	271,025		$	277,255		$	280,701		$	267,796
Net loss		(157,594	)		(27,049	)		(37,333	)		(167,033	)
Net loss attributable to Company		(159,755	)		(29,458	)		(39,505	)		(169,242	)
Net loss, per common share, basic and diluted (1)		(.19	)		(.04	)		(.05	)		(.21	)
Weighted average number of common shares outstanding, basic and diluted (1)		821,020,633			815,129,571			808,952,703			800,227,755

(1) Quarterly income per common share amounts may not total to the annual amounts due to rounding and the changes in the number of weighted common shares outstanding

-115-

INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Schedule III

Real Estate and Accumulated Depreciation

December 31, 2010

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
Retail
14th STREET MARKET		7,712		3,500		9,241		8			3,500		9,249		12,749		1,214		2007
Plano, TX
24 HOUR FITNESS - 249 & JONES		—		2,650		7,079		190			2,650		7,269		9,919		1,363		2005
Houston, TX
24 HOUR FITNESS - THE WOODLANDS		—		1,540		11,287		—			1,540		11,287		12,827		2,074		2005
Woodlands, TX
6101 RICHMOND AVENUE		—		1,700		1,264		—			1,700		1,264		2,964		243		2005
Houston, TX
825 RAND		5,767		1,700		7,931		(4,627	)		1,700		3,304		5,004		66		2005
Lake Zurich, IL
95th and CICERO		8,949		4,500		9,910		(24	)		4,500		9,886		14,386		817		2008
Oak Lawn, IL
ALCOA EXCHANGE		12,810		4,900		15,577		20			4,900		15,598		20,498		1,467		2008
Bryant, AR
ALCOA EXCHANGE II		—		1,300		5,511		—			1,300		5,511		6,811		390		2009
Benton, AR
ANDERSON CENTRAL		13,653		2,800		9,961		—			2,800		9,961		12,761		294		2010
Anderson, SC
ANTOINE TOWN CENTER		—		1,645		7,343		66			1,645		7,409		9,054		1,345		2005
Houston, TX
ASHFORD PLAZA		—		900		2,440		231			900		2,671		3,571		529		2005
Houston, TX
ATASCOCITA SHOPPING CENTER		—		1,550		7,994		41			1,550		8,036		9,586		1,514		2005
Humble, TX
BARTOW MARKETPLACE		23,298		5,600		20,154		—			5,600		20,154		25,754		600		2010
Atlanta, GA

-116-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
BAY COLONY		—		3,190		30,828		5,661			3,190		36,489		39,679		5,976		2005
League City, TX
BEAR CREEK VILLAGE CENTER		15,065		3,523		12,384		(188	)		3,523		12,196		15,719		763		2009
Wildomar, CA
BELLERIVE PLAZA		6,092		2,400		7,749		62			2,400		7,811		10,211		1,036		2007
Nicholasville, KY
BENT TREE PLAZA		5,453		1,983		7,093		(52	)		1,983		7,040		9,023		524		2009
Raleigh, NC
BI-LO - GREENVILLE		4,286		1,400		5,503		—			1,400		5,503		6,903		883		2006
Greenville, SC
BLACKHAWK TOWN CENTER		—		1,645		19,982		—			1,645		19,982		21,627		3,611		2005
Houston, TX
BOYNTON COMMONS		27,854		11,400		17,315		—			11,400		17,315		28,715		522		2010
Miami, FL
BRANDON CENTRE SOUTH		16,133		5,720		19,500		639			5,720		20,140		25,860		2,587		2007
Brandon, FL
BROOKS CORNER		14,276		10,600		13,648		2,564			10,600		16,212		26,812		2,596		2006
San Antonio, TX
BUCKHEAD CROSSING		33,215		7,565		27,104		(1,468	)		7,565		25,637		33,202		1,646		2009
Atlanta, GA
BUCKHORN PLAZA		9,025		1,651		11,770		769			1,651		12,539		14,189		1,949		2006
Bloomsburg, PA
CAMPUS MARKETPLACE		19,619		6,723		27,462		(289	)		6,723		27,174		33,896		1,669		2009
San Marcos, CA
CANFIELD PLAZA		7,575		2,250		10,339		538			2,250		10,877		13,127		1,904		2006
Canfield, OH
CARVER CREEK		—		650		560		825			650		1,384		2,034		241		2005
Dallas, TX
CENTERPLACE OF GREELEY		17,175		3,904		14,715		(113	)		3,904		14,602		18,506		949		2009
Greeley, CO
CHESAPEAKE COMMONS		8,950		2,669		10,839		—			2,669		10,839		13,508		1,490		2007
Chesapeake, VA

-117-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CHEYENNE MEADOWS		4,890		2,023		6,991		(319	)		2,023		6,672		8,695		449		2009
Colorado Springs, CO
CHILI’S - HUNTING BAYOU		—		400		—		—			400		—		400		—		2005
Jacinto City, TX
CINEMARK - JACINTO CITY		—		1,160		10,540		—			1,160		10,540		11,700		1,987		2005
Jacinto City, TX
CINEMARK - WEBSTER		—		1,830		12,094		—			1,830		12,094		13,924		2,251		2005
Webster, TX
CINEMARK 12 - SILVERLAKE		—		1,310		7,496		—			1,310		7,496		8,806		1,374		2005
Pearland, TX
CITIZENS (CFG) CONNECTICUT		678		525		737		(2	)		525		735		1,260		97		2007
Hamden, CT
CITIZENS (CFG) CONNECTICUT		1,095		450		1,191		(4	)		450		1,187		1,637		156		2007
Colchester, CT
CITIZENS (CFG) CONNECTICUT		2,018		480		2,194		(7	)		480		2,187		2,667		287		2007
Deep River, CT
CITIZENS (CFG) CONNECTICUT		1,142		430		1,242		(4	)		430		1,238		1,668		163		2007
East Lyme, CT
CITIZENS (CFG) CONNECTICUT		2,435		111		2,648		(9	)		111		2,640		2,751		347		2007
Montville, CT
CITIZENS (CFG) CONNECTICUT		1,123		450		1,221		(4	)		450		1,217		1,667		160		2007
Stonington, CT
CITIZENS (CFG) CONNECTICUT		1,150		420		1,251		(4	)		420		1,247		1,667		164		2007
Stonington, CT
CITIZENS (CFG) CONNECTICUT		808		490		879		(3	)		490		876		1,366		115		2007
East Hampton, CT
CITIZENS (CFG) DELAWARE		653		525		353		(4	)		525		349		874		46		2007
Lewes, DE
CITIZENS (CFG) DELAWARE		467		275		252		(3	)		275		250		525		33		2007
Wilmington, DE
CITIZENS (CFG) DELAWARE		393		485		212		(2	)		485		210		695		28		2007
Wilmington, DE

-118-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) ILLINOIS		3,260		1,870		2,414		(6	)		1,870		2,408		4,278		316		2007
Orland Hills, IL
CITIZENS (CFG) ILLINOIS		361		450		267		(1	)		450		267		717		35		2007
Calumet City, IL
CITIZENS (CFG) ILLINOIS		179		815		133		—			815		132		947		17		2007
Chicago, IL
CITIZENS (CFG) ILLINOIS		512		575		379		(1	)		575		378		953		50		2007
Villa Park, IL
CITIZENS (CFG) ILLINOIS		786		725		582		(1	)		725		580		1,305		76		2007
Westchester, IL
CITIZENS (CFG) ILLINOIS		1,443		375		1,069		(2	)		375		1,066		1,441		140		2007
Olympia Fields, IL
CITIZENS (CFG) ILLINOIS		1,221		290		904		(2	)		290		902		1,192		118		2007
Chicago Heights, IL
CITIZENS (CFG) MELLON BANK BLD		2,205		725		2,255		284			725		2,540		3,265		304		2007
Georgetown, DE
CITIZENS (CFG) MICHIGAN		640		500		174		—			500		174		674		23		2007
Farmington, MI
CITIZENS (CFG) MICHIGAN		803		1,100		219		—			1,100		219		1,319		29		2007
Troy, MI
CITIZENS (CFG) NEW HAMPSHIRE		2,407		1,050		2,121		—			1,050		2,121		3,171		278		2007
Keene, NH
CITIZENS (CFG) NEW HAMPSHIRE		1,270		554		1,119		—			554		1,119		1,673		147		2007
Manchester, NH
CITIZENS (CFG) NEW HAMPSHIRE		1,420		618		1,251		—			618		1,251		1,869		164		2007
Manchester, NH
CITIZENS (CFG) NEW HAMPSHIRE		1,472		641		1,297		—			641		1,297		1,938		170		2007
Salem, NH
CITIZENS (CFG) NEW HAMPSHIRE		17,744		9,620		15,633		—			9,620		15,633		25,253		2,052		2007
Manchester, NH
CITIZENS (CFG) NEW HAMPSHIRE		319		172		281		—			172		281		453		37		2007
Hinsdale, NH

-119-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) NEW HAMPSHIRE		284		111		250		—		111		250		361		33		2007
Ossipee, NH
CITIZENS (CFG) NEW HAMPSHIRE		294		176		259		—		176		259		435		34		2007
Pelham, NH
CITIZENS (CFG) NEW JERSEY		821		500		466		—		500		466		966		61		2007
Haddon Heights, NJ
CITIZENS (CFG) NEW JERSEY		824		850		468		—		850		468		1,318		61		2007
Marlton, NJ
CITIZENS (CFG) NEW YORK		1,156		70		1,342		—		70		1,342		1,412		176		2007
Plattsburgh, NY
CITIZENS (CFG) OHIO		2,333		400		1,736		—		400		1,736		2,136		228		2007
Fairlawn, OH
CITIZENS (CFG) OHIO		565		450		420		—		450		420		870		55		2007
Bedford, OH
CITIZENS (CFG) OHIO		641		625		477		—		625		477		1,102		63		2007
Parma, OH
CITIZENS (CFG) OHIO		678		900		505		—		900		505		1,405		66		2007
Parma, OH
CITIZENS (CFG) OHIO		683		750		508		—		750		508		1,258		67		2007
Parma Heights, OH
CITIZENS (CFG) OHIO		1,178		850		876		—		850		876		1,726		115		2007
South Russell, OH
CITIZENS (CFG) PENNSYLVANIA		689		50		771		—		50		771		821		101		2007
Altoona, PA
CITIZENS (CFG) PENNSYLVANIA		1,013		85		1,134		—		85		1,133		1,218		149		2007
Ashley, PA
CITIZENS (CFG) PENNSYLVANIA		1,022		675		1,144		—		675		1,144		1,819		150		2007
Brodheadsville, PA
CITIZENS (CFG) PENNSYLVANIA		1,282		75		1,434		—		75		1,434		1,509		188		2007
Butler, PA
CITIZENS (CFG) PENNSYLVANIA		1,269		1,150		1,420		—		1,150		1,419		2,569		186		2007
Camp Hill, PA

-120-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) PENNSYLVANIA		1,199		500		1,342		—		500		1,342		1,842		176		2007
Camp Hill, PA
CITIZENS (CFG) PENNSYLVANIA		1,636		125		1,830		—		125		1,830		1,955		240		2007
Carnegie, PA
CITIZENS (CFG) PENNSYLVANIA		1,390		40		1,555		—		40		1,555		1,595		204		2007
Charlerol, PA
CITIZENS (CFG) PENNSYLVANIA		1,275		325		1,427		—		325		1,427		1,752		187		2007
Dallas, PA
CITIZENS (CFG) PENNSYLVANIA		860		150		962		—		150		962		1,112		126		2007
Dallastown, PA
CITIZENS (CFG) PENNSYLVANIA		1,303		260		1,458		—		260		1,458		1,718		191		2007
Dillsburg, PA
CITIZENS (CFG) PENNSYLVANIA		1,479		485		1,655		—		485		1,655		2,140		217		2007
Drexel Hill, PA
CITIZENS (CFG) PENNSYLVANIA		988		50		1,106		—		50		1,106		1,156		145		2007
Ford City, PA
CITIZENS (CFG) PENNSYLVANIA		1,544		385		1,727		—		385		1,727		2,112		227		2007
Glenside, PA
CITIZENS (CFG) PENNSYLVANIA		813		125		909		—		125		909		1,034		119		2007
Greensburg, PA
CITIZENS (CFG) PENNSYLVANIA		975		300		1,092		—		300		1,091		1,391		143		2007
Highspire, PA
CITIZENS (CFG) PENNSYLVANIA		902		100		1,009		—		100		1,009		1,109		132		2007
Homestead, PA
CITIZENS (CFG) PENNSYLVANIA		1,516		300		1,697		—		300		1,696		1,996		223		2007
Kingston, PA
CITIZENS (CFG) PENNSYLVANIA		1,240		50		1,388		—		50		1,388		1,438		182		2007
Kittanning, PA
CITIZENS (CFG) PENNSYLVANIA		1,625		330		1,819		—		330		1,819		2,149		239		2007
Matamoras, PA
CITIZENS (CFG) PENNSYLVANIA		1,034		100		1,157		—		100		1,157		1,257		152		2007
McKees Rocks, PA

-121-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) PENNSYLVANIA		2,619		250		2,931		—			250		2,931		3,181		385		2007
Mechanicsburg, PA
CITIZENS (CFG) PENNSYLVANIA		465		40		521		—			40		520		560		68		2007
Mercer, PA
CITIZENS (CFG) PENNSYLVANIA		1,450		275		1,623		—			275		1,623		1,898		213		2007
Milford, PA
CITIZENS (CFG) PENNSYLVANIA		1,105		600		1,237		—			600		1,237		1,837		162		2007
Philadelphia, PA
CITIZENS (CFG) PENNSYLVANIA		942		245		1,054		—			245		1,054		1,299		138		2007
Philadelphia, PA
CITIZENS (CFG) PENNSYLVANIA		1,200		700		1,342		—			700		1,342		2,042		176		2007
Philadelphia, PA
CITIZENS (CFG) PENNSYLVANIA		1,011		75		1,131		—			75		1,131		1,206		148		2007
Pitcairn, PA
CITIZENS (CFG) PENNSYLVANIA		3,278		75		3,668		(1	)		75		3,668		3,743		482		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		1,849		100		2,069		—			100		2,069		2,169		272		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		2,811		900		3,146		(1	)		900		3,145		4,045		413		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		922		150		1,032		—			150		1,032		1,182		136		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		2,969		75		3,322		(1	)		75		3,322		3,397		436		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		1,414		75		1,583		—			75		1,582		1,657		208		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		1,364		50		1,527		—			50		1,527		1,577		200		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		2,024		165		2,265		—			165		2,265		2,430		297		2007
Reading, PA
CITIZENS (CFG) PENNSYLVANIA		1,194		120		1,336		—			120		1,336		1,456		175		2007
Reading, PA

-122-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) PENNSYLVANIA		1,116		650		1,249		—		650		1,249		1,899		164		2007
Souderton, PA
CITIZENS (CFG) PENNSYLVANIA		1,494		400		1,672		—		400		1,671		2,071		219		2007
State College, PA
CITIZENS (CFG) PENNSYLVANIA		1,094		730		1,225		—		730		1,224		1,954		161		2007
Tannersville, PA
CITIZENS (CFG) PENNSYLVANIA		1,123		150		1,257		—		150		1,257		1,407		165		2007
Turtle Creek, PA
CITIZENS (CFG) PENNSYLVANIA		821		50		919		—		50		919		969		121		2007
Tyrone, PA
CITIZENS (CFG) PENNSYLVANIA		1,152		530		1,289		—		530		1,289		1,819		169		2007
Upper Darby, PA
CITIZENS (CFG) PENNSYLVANIA		861		115		964		—		115		964		1,079		127		2007
West Chester, PA
CITIZENS (CFG) PENNSYLVANIA		2,481		125		2,776		—		125		2,776		2,901		364		2007
West Hazelson, PA
CITIZENS (CFG) PENNSYLVANIA		2,695		400		3,016		—		400		3,015		3,415		396		2007
York, PA
CITIZENS (CFG) PENNSYLVANIA		597		150		668		—		150		668		818		88		2007
Aliquippa, PA
CITIZENS (CFG) PENNSYLVANIA		680		750		761		—		750		761		1,511		100		2007
Allison Park, PA
CITIZENS (CFG) PENNSYLVANIA		512		100		573		—		100		573		673		75		2007
Altoona, PA
CITIZENS (CFG) PENNSYLVANIA		451		350		504		—		350		504		854		66		2007
Beaver Falls, PA
CITIZENS (CFG) PENNSYLVANIA		506		350		567		—		350		567		917		74		2007
Carlisle, PA
CITIZENS (CFG) PENNSYLVANIA		431		100		483		—		100		483		583		63		2007
Cranberry, PA
CITIZENS (CFG) PENNSYLVANIA		545		275		610		—		275		610		885		80		2007
Erie, PA

-123-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) PENNSYLVANIA		343		90		383		—		90		383		473		50		2007
Grove City, PA
CITIZENS (CFG) PENNSYLVANIA		547		40		612		—		40		612		652		80		2007
Grove City, PA
CITIZENS (CFG) PENNSYLVANIA		604		625		676		—		625		676		1,301		89		2007
Harrisburg, PA
CITIZENS (CFG) PENNSYLVANIA		699		690		782		—		690		782		1,472		103		2007
Haertown, PA
CITIZENS (CFG) PENNSYLVANIA		655		50		733		—		50		733		783		96		2007
Hollidaysburg, PA
CITIZENS (CFG) PENNSYLVANIA		526		420		589		—		420		589		1,009		77		2007
Kutztown, PA
CITIZENS (CFG) PENNSYLVANIA		548		650		614		—		650		614		1,264		81		2007
Lancaster, PA
CITIZENS (CFG) PENNSYLVANIA		599		500		671		—		500		671		1,171		88		2007
Lancaster, PA
CITIZENS (CFG) PENNSYLVANIA		481		200		538		—		200		538		738		71		2007
Latrobe, PA
CITIZENS (CFG) PENNSYLVANIA		493		175		552		—		175		552		727		72		2007
Lititz, PA
CITIZENS (CFG) PENNSYLVANIA		575		225		644		—		225		644		869		85		2007
Lower Burrell, PA
CITIZENS (CFG) PENNSYLVANIA		484		210		542		—		210		542		752		71		2007
Mountain Top, PA
CITIZENS (CFG) PENNSYLVANIA		246		125		275		—		125		275		400		36		2007
Munhall, PA
CITIZENS (CFG) PENNSYLVANIA		615		500		688		—		500		688		1,188		90		2007
New Stanton, PA
CITIZENS (CFG) PENNSYLVANIA		863		225		966		—		225		966		1,191		127		2007
Oakmont, PA
CITIZENS (CFG) PENNSYLVANIA		479		50		536		—		50		536		586		70		2007
Oil City, PA

-124-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) PENNSYLVANIA		609		225		682		—		225		682		907		90		2007
Philadelphia, PA
CITIZENS (CFG) PENNSYLVANIA		1,540		500		1,723		—		500		1,723		2,223		226		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		1,292		300		1,446		—		300		1,446		1,746		190		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		1,002		275		1,121		—		275		1,121		1,396		147		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		836		250		936		—		250		936		1,186		123		2007
Pittsburgh, PA
CITIZENS (CFG) PENNSYLVANIA		714		75		799		—		75		799		874		105		2007
Saxonburg, PA
CITIZENS (CFG) PENNSYLVANIA		373		225		417		—		225		417		642		55		2007
Shippensburg, PA
CITIZENS (CFG) PENNSYLVANIA		215		200		241		—		200		241		441		32		2007
Slovan, PA
CITIZENS (CFG) PENNSYLVANIA		478		325		535		—		325		535		860		70		2007
State College, PA
CITIZENS (CFG) PENNSYLVANIA		581		245		650		—		245		650		895		85		2007
Temple, PA
CITIZENS (CFG) PENNSYLVANIA		578		300		647		—		300		647		947		85		2007
Verona, PA
CITIZENS (CFG) PENNSYLVANIA		971		1,250		1,086		—		1,250		1,086		2,336		143		2007
Warrendale, PA
CITIZENS (CFG) PENNSYLVANIA		589		390		659		—		390		659		1,049		87		2007
West Grove, PA
CITIZENS (CFG) PENNSYLVANIA		578		600		647		—		600		646		1,246		85		2007
Wexford, PA
CITIZENS (CFG) PENNSYLVANIA		865		225		968		—		225		968		1,193		127		2007
Wilkes-Barre, PA
CITIZENS (CFG) PENNSYLVANIA		628		700		703		—		700		703		1,403		92		2007
York, PA

-125-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) PENNSYLVANIA		1,950		250		2,182		—			250		2,181		2,431		286		2007
Mount Lebanon, PA
CITIZENS (CFG) RHODE ISLAND		1,006		438		1,095		(2	)		438		1,093		1,531		144		2007
Coventry, RI
CITIZENS (CFG) RHODE ISLAND		1,476		643		1,607		(3	)		643		1,604		2,247		211		2007
Cranston, RI
CITIZENS (CFG) RHODE ISLAND		1,236		538		1,346		(3	)		538		1,343		1,881		176		2007
Johnston, RI
CITIZENS (CFG) RHODE ISLAND		1,818		821		1,980		(4	)		821		1,976		2,797		260		2007
North Providence,RI
CITIZENS (CFG) RHODE ISLAND		1,072		600		1,168		(2	)		600		1,166		1,766		153		2007
Providence, RI
CITIZENS (CFG) RHODE ISLAND		1,338		666		1,457		(3	)		666		1,455		2,120		191		2007
Wakefield, RI
CITIZENS (CFG) RHODE ISLAND		3,506		1,278		3,817		(7	)		1,278		3,810		5,088		500		2007
Providence, RI
CITIZENS (CFG) RHODE ISLAND		14,561		2,254		15,856		(30	)		2,254		15,826		18,080		2,078		2007
Warwick, RI
CITIZENS (CFG) RHODE ISLAND		586		375		639		(1	)		375		637		1,012		84		2007
East Greenwich, RI
CITIZENS (CFG) RHODE ISLAND		719		472		783		(1	)		472		781		1,253		103		2007
North Providence, RI
CITIZENS (CFG) RHODE ISLAND		647		366		705		(1	)		366		703		1,069		92		2007
Rumford, RI
CITIZENS (CFG) RHODE ISLAND		603		353		657		(1	)		353		655		1,009		86		2007
Warren, RI
CITIZENS (CFG) VERMONT		1,013		1,270		153		—			1,270		153		1,423		20		2007
Middlebury, VT
CITIZENS (CFG) MASSACHUSETTS		1,210		400		1,002		(1	)		400		1,001		1,401		131		2007
Ludlow, MA
CITIZENS (CFG) MASSACHUSETTS		2,175		1,263		1,802		(2	)		1,263		1,800		3,062		236		2007
Malden, MA

-126-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) MASSACHUSETTS		976		607		809		(1	)		607		808		1,415		106		2007
Malden, MA
CITIZENS (CFG) MASSACHUSETTS		1,518		952		1,258		(2	)		952		1,256		2,208		165		2007
Medford, MA
CITIZENS (CFG) MASSACHUSETTS		2,760		1,431		2,287		(3	)		1,431		2,284		3,714		300		2007
Milton, MA
CITIZENS (CFG) MASSACHUSETTS		1,719		998		1,424		(2	)		998		1,422		2,419		187		2007
Randolph, MA
CITIZENS (CFG) MASSACHUSETTS		1,421		743		1,177		(1	)		743		1,176		1,918		154		2007
South Dennis, MA
CITIZENS (CFG) MASSACHUSETTS		1,034		310		856		(1	)		310		855		1,165		112		2007
Springfield, MA
CITIZENS (CFG) MASSACHUSETTS		1,309		1,050		1,085		(1	)		1,050		1,083		2,133		142		2007
Woburn, MA
CITIZENS (CFG) MASSACHUSETTS		512		300		424		(1	)		300		424		724		56		2007
Dorchester, MA
CITIZENS (CFG) MASSACHUSETTS		668		440		553		(1	)		440		553		993		73		2007
Needham, MA
CITIZENS (CFG) MASSACHUSETTS		640		450		530		(1	)		450		530		980		69		2007
New Bedford, MA
CITIZENS (CFG) MASSACHUSETTS		725		595		601		(1	)		595		600		1,194		79		2007
Somerville, MA
CITIZENS (CFG) MASSACHUSETTS		293		300		243		—			300		242		542		32		2007
Springfield, MA
CITIZENS (CFG) MASSACHUSETTS		859		621		712		(1	)		621		711		1,332		93		2007
Tewksbury, MA
CITIZENS (CFG) MASSACHUSETTS		636		552		527		(1	)		552		526		1,078		69		2007
Watertown, MA
CITIZENS (CFG) MASSACHUSETTS		482		350		399		—			350		399		749		52		2007
Wilbraham, MA
CITIZENS (CFG) MASSACHUSETTS		994		541		824		(1	)		541		823		1,364		108		2007
Winthrop, MA

-127-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
CITIZENS (CFG) MASSACHUSETTS		995		379		824		(1	)		379		823		1,202		108		2007
Dedham, MA
CITIZENS (CFG) MASSACHUSETTS		1,246		542		1,032		(1	)		542		1,031		1,573		135		2007
Hanover, MA
CITY CROSSING		17,418		4,200		5,679		—			4,200		5,679		9,879		205		2010
Warner Robins, GA
COWETA CROSSING		3,143		1,143		4,590		57			1,143		4,647		5,790		297		2009
Newnan, GA
CROSS TIMBERS COURT		8,193		3,300		9,939		55			3,300		9,995		13,295		1,316		2007
Flower Mound, TX
CROSSROADS AT CHESAPEAKE SQUAR		11,210		3,970		13,732		412			3,970		14,144		18,114		1,937		2007
Chesapeake, VA
CUSTER CREEK VILLAGE		10,149		4,750		12,245		32			4,750		12,276		17,026		1,608		2007
Richardson, TX
CYFAIR TOWN CENTER		—		1,800		13,093		7			1,800		13,100		14,900		2,020		2006
Cypress, TX
CYPRESS TOWN CENTER		—		1,850		11,630		378			1,850		12,008		13,858		2,137		2005
Houston, TX
DONELSON PLAZA		2,315		1,000		3,147		—			1,000		3,147		4,147		432		2007
Nashville, TN
DOTHAN PAVILLION		37,165		8,200		38,759		402			8,200		39,161		47,361		2,585		2009
Dothan, AL
EAST GATE		6,800		2,000		10,305		—			2,000		10,305		12,305		1,408		2007
Aiken, SC
ELDRIDGE LAKES TOWN CENTER		—		1,400		14,048		28			1,400		14,076		15,476		2,180		2006
Houston, TX
ELDRIDGE TOWN CENTER		—		3,200		16,663		255			3,200		16,918		20,118		3,169		2005
Houston, TX
FABYAN RANDALL PLAZA		13,405		2,400		22,198		(68	)		2,400		22,130		24,530		3,480		2006
Batavia, IL
FAIRVIEW MARKET		2,625		1,140		5,241		(272	)		1,140		4,968		6,108		313		2009
Simpsonville, SC

-128-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
FLOWER MOUND CROSSING		8,342		4,500		9,049		149			4,500		9,198		13,698		1,246		2007
Flower Mound, TX
FOREST PLAZA		2,085		3,400		14,550		277			3,400		14,827		18,227		1,756		2007
Fond du Lac, WI
FRIENDSWOOD SHOPPING CENTER		—		1,550		10,887		1,243			1,550		12,130		13,680		2,242		2005
Friendswood, TX
FURY’S FERRY		6,381		1,600		9,783		49			1,600		9,832		11,432		1,357		2007
Augusta, GA
GARDEN VILLAGE		7,970		3,188		16,522		(129	)		3,188		16,393		19,581		1,035		2009
San Pedro, CA
GATEWAY MARKET CENTER		23,173		13,600		4,992		—			13,600		4,992		18,592		171		2010
Tampa, FL
GATEWAY PLAZA		10,098		4,700		6,769		—			4,700		6,769		11,469		210		2010
Jacksonville, NC
GLENDALE HEIGHTS I, II, III		4,705		2,220		6,399		94			2,220		6,493		8,713		1,020		2006
Glendale Heights, IL
GRAFTON COMMONS SHOPPING CENTER		18,516		7,200		26,984		62			7,200		27,045		34,245		999		2009
Grafton, WI
GRAVOIS DILLON PLAZA		12,630		7,300		—		15,809			7,300		15,809		23,109		2,074		2007
High Ridge, MO
HERITAGE CROSSING		16,120		4,400		22,921		—			4,400		22,921		27,321		628		2010
Wilson, NC
HERITAGE HEIGHTS		10,719		4,600		13,502		—			4,600		13,502		18,102		1,769		2007
Grapevine, TX
HERITAGE PLAZA - CHICAGO		15,243		5,297		8,831		(403	)		5,297		8,428		13,725		550		2009
Carol Stream, IL
HIGHLAND PLAZA		—		2,450		15,642		—			2,450		15,642		18,092		2,782		2005
Katy, TX
HIRAM PAVILION		37,609		4,600		16,832		—			4,600		16,832		21,432		540		2010
Hiram, GA
HUNTER’S GLEN CROSSING		9,790		4,800		11,719		55			4,800		11,775		16,575		1,537		2007
Plano, TX

-129-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
HUNTING BAYOU		—		2,400		16,265		1,253			2,400		17,518		19,918		3,078		2006
Jacinto City, TX
INTECH RETAIL		2,755		819		2,038		—			819		2,038		2,858		155		2009
Indianapolis, IN
JAMES CENTER		12,368		4,497		16,219		(62	)		4,497		16,157		20,654		1,200		2009
Tacoma, WA
JOSEY OAKS CROSSING		9,346		2,620		13,989		72			2,620		14,061		16,681		1,834		2007
Carrollton, TX
LAKEPORT COMMONS		—		7,800		39,984		2,215			7,800		42,199		49,999		4,680		2007
Sioux City, IA
LAKEWOOD SHOPPING CENTER		11,715		4,115		20,646		362			4,115		21,008		25,123		3,736		2006
Margate, FL
LAKEWOOD SHOPPING CTR PHASE II		—		6,340		6,996		(23	)		6,340		6,973		13,313		914		2007
Margate, FL
LEGACY CROSSING		10,890		4,280		13,896		33			4,280		13,929		18,209		1,871		2007
Marion, OH
LEXINGTON ROAD		5,454		1,980		7,105		—			1,980		7,105		9,085		1,085		2006
Athens, GA
LINCOLN MALL		33,835		11,000		50,395		3,099			11,000		53,494		64,494		8,167		2006
Lincoln, RI
LINCOLN VILLAGE		22,035		13,600		25,053		508			13,600		25,561		39,161		3,842		2006
Chicago, IL
LORD SALISBURY CENTER		12,600		11,000		9,567		—			11,000		9,567		20,567		1,225		2007
Salisbury, MD
MARKET AT MORSE / HAMILTON		7,893		4,490		8,734		9			4,490		8,742		13,232		1,268		2007
Columbus, OH
MARKET AT WESTLAKE		4,803		1,200		6,274		79			1,200		6,353		7,553		845		2007
Westlake Hills, TX
MCKINNEY TOWN CENTER		21,945		16,297		22,562		—			16,297		22,562		38,859		490		2007
McKinney, TX
MERCHANTS CROSSING		11,593		3,404		11,281		(196	)		3,404		11,085		14,489		710		2009
Englewood, FL

-130-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
MIDDLEBURG CROSSING		6,432		2,760		7,145		91			2,760		7,236		9,996		883		2007
Middleburg, FL
MONADNOCK MARKETPLACE		26,785		7,000		39,008		248			7,000		39,255		46,255		6,837		2006
Keene, NH
NEW FOREST CROSSING II		3,438		1,490		3,922		421			1,490		4,342		5,832		620		2006
Houston, TX
NEWTOWN ROAD		968		574		877		(877	)		574		—		574		—		2006
Virginia Beach, VA
NORTHWEST MARKETPLACE		19,965		2,910		30,340		31			2,910		30,371		33,281		3,818		2007
Houston, TX
NTB ELDRIDGE		—		960		—		—			960		—		960		—		2005
Houston, TX
PALAZZO DEL LAGO		—		8,938		—		—			8,938		—		8,938		—		2010
Orlando, FL
PALM HARBOR SHOPPING CENTER		12,100		2,836		10,927		(545	)		2,836		10,382		13,218		664		2009
Palm Coast, FL
PARADISE PLACE		10,149		3,975		5,912		—			3,975		5,912		9,887		178		2010
West Palm Beach, FL
PARADISE SHOPS OF LARGO		7,325		4,640		7,483		(27	)		4,640		7,456		12,096		1,421		2005
Largo, FL
PARK WEST PLAZA		7,532		4,250		8,186		—			4,250		8,186		12,436		1,121		2007
Grapevine, TX
PARKWAY CENTRE NORTH		13,892		4,680		16,046		1,816			4,680		17,862		22,542		2,461		2007
Grove City, OH
PARKWAY CENTRE NORTH OUTLOT B		2,198		900		2,590		—			900		2,590		3,490		358		2007
Grove City, OH
PAVILION AT LAQUINTA		23,976		15,200		20,947		—			15,200		20,947		36,147		1,354		2009
LaQuinta, CA
PAVILLIONS AT HARTMAN HERITAGE		23,450		9,700		28,849		1,839			9,700		30,688		40,388		3,829		2007
Independence, MO
PEACHLAND PROMENADE		4,791		1,742		6,502		(62	)		1,742		6,440		8,182		478		2009
Port Charlotte, FL

-131-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
PENN PARK		31,000		6,260		29,424		(73	)		6,260		29,351		35,611		3,517		2007
Oklahoma City, OK
PINEHURST SHOPPING CENTER		—		625		2,157		252			625		2,409		3,034		459		2005
Humble, TX
PIONEER PLAZA		2,250		373		3,099		—			373		3,099		3,472		426		2007
Mesquite, TX
PLAZA AT EAGLE’S LANDING		5,310		1,580		7,002		1			1,580		7,003		8,583		1,021		2006
Stockbridge, GA
PLEASANT HILL SQUARE		30,459		7,950		22,651		—			7,950		22,651		30,601		675		2010
Duluth, GA
POPLIN PLACE		23,945		6,100		27,790		318			6,100		28,108		34,208		2,281		2008
Monroe, NC
PRESTONWOOD SHOPPING CENTER		26,703		25,400		17,193		—			25,400		17,193		42,593		410		2010
Dallas, TX
PROMENADE FULTONDALE		16,870		5,540		22,414		38			5,540		22,452		27,992		1,509		2009
Fultondale, AL
RALEIGH HILLSBOROUGH		—		2,605		—		—			2,605		—		2,605		—		2007
Raleigh, NC
RIVERSTONE SHOPPING CENTER		21,000		12,000		26,395		(26	)		12,000		26,368		38,368		3,384		2007
Missouri City, TX
RIVERVIEW VILLAGE		10,121		6,000		9,649		23			6,000		9,673		15,673		1,268		2007
Arlington, TX
ROSE CREEK		3,968		1,443		5,630		(62	)		1,443		5,567		7,010		412		2009
Woodstock, GA
ROSEWOOD SHOPPING CENTER		3,131		1,138		3,946		(62	)		1,138		3,884		5,022		292		2009
Columbia, SC
SALTGRASS RESTAURANT-HUNTING BAYOU		—		540		—		—			540		—		540		—		2005
Jacinto City, TX
SAND LAKE CORNERS		20,709		5,500		7,464		—			5,500		7,464		12,964		241		2010
Orlando, FL
SARASOTA PAVILION		40,425		12,000		25,823		—			12,000		25,823		37,823		771		2010
Sarasota, FL

-132-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SARATOGA TOWN CENTER		—		1,500		12,971		30			1,500		13,000		14,500		2,328		2005
Corpus Christi, TX
SCOFIELD CROSSING		8,435		8,100		4,992		—			8,100		4,992		13,092		686		2007
Austin, TX
SHAKOPEE SHOPPING CENTER		8,800		6,900		8,583		—			6,900		8,583		15,483		1,494		2006
Shakopee, MN
SHALLOTTE COMMONS		6,078		1,650		9,028		67			1,650		9,095		10,745		1,140		2007
Shallotte, NC
SHERMAN PLAZA		30,275		9,655		30,982		8,404			9,655		39,385		49,040		5,263		2006
Evanston, IL
SHERMAN TOWN CENTER		35,450		4,850		49,273		—			4,850		49,273		54,123		7,476		2006
Sherman, TX
SHERMAN TOWN CENTER II		—		3,000		14,805		—			3,000		14,805		17,805		—		2010
Sherman, TX
SHILOH SQUARE		3,238		1,025		3,946		—			1,025		3,946		4,971		518		2007
Garland, TX
SIEGEN PLAZA		16,638		9,340		20,251		234			9,340		20,485		29,825		1,715		2008
East Baton Rouge, LA
SILVERLAKE		4,750		2,031		6,975		(87	)		2,031		6,888		8,918		446		2009
Erlanger, KY
SOUTHGATE VILLAGE		4,921		1,789		6,266		(62	)		1,789		6,204		7,993		368		2009
Pelham, AL
SPRING TOWN CENTER		—		3,150		12,433		121			3,150		12,554		15,704		2,033		2006
Spring, TX
SPRING TOWN CENTER III		—		1,320		3,070		2,001			1,320		5,071		6,391		521		2007
Spring, TX
STABLES TOWN CENTER I and II		—		4,650		19,006		2,310			4,650		21,316		25,966		3,566		2005
Spring, TX
STATE STREET MARKET		10,450		3,950		14,184		654			3,950		14,838		18,788		2,203		2006
Rockford, IL
STONE CREEK		—		—		—		13,533			—		13,533		13,533		763
San Marcos, TX

-133-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
STONECREST MARKETPLACE		34,516		6,150		23,321		—			6,150		23,321		29,471		700		2010
Lithonia, GA
STOP & SHOP - SICKLERVILLE		8,535		2,200		11,559		—			2,200		11,559		13,759		1,854		2006
Sicklerville, NJ
STOP N SHOP - BRISTOL		8,368		1,700		11,830		—			1,700		11,830		13,530		1,898		2006
Bristol, RI
STOP N SHOP - CUMBERLAND		11,531		2,400		16,196		—			2,400		16,196		18,596		2,598		2006
Cumberland, RI
STOP N SHOP - FRAMINGHAM		9,269		6,500		8,517		—			6,500		8,517		15,017		1,366		2006
Framingham, MA
STOP N SHOP - HYDE PARK		8,100		2,000		12,274		—			2,000		12,274		14,274		2,131		2006
Hyde Park, NY
STOP N SHOP - MALDEN		12,753		6,700		13,828		—			6,700		13,828		20,528		2,218		2006
Malden, MA
STOP N SHOP - SOUTHINGTON		11,145		4,000		13,938		—			4,000		13,938		17,938		2,236		2006
Southington, CT
STOP N SHOP - SWAMPSCOTT		11,066		4,200		13,613		—			4,200		13,613		17,813		2,183		2006
Swampscott, MA
STREETS OF CRANBERRY		24,425		4,300		20,215		8,154			4,300		28,369		32,669		2,995		2007
Cranberry Township,PA
STREETS OF INDIAN LAKES		40,800		8,825		48,679		6,089			8,825		54,768		63,593		3,911		2008
Hendersonville, TN
SUNCREEK VILLAGE		2,683		900		3,155		26			900		3,181		4,081		436		2007
Plano, TX
SUNTRUST BANK I AL		323		675		1,018		(1	)		675		1,017		1,692		115		2007
Muscle Shoals, AL
SUNTRUST BANK I AL		143		633		449		—			633		449		1,082		51		2007
Killen, AL
SUNTRUST BANK I DC		699		500		2,082		(1	)		500		2,081		2,581		235		2007
Brightwood, DC
SUNTRUST BANK I FL		452		1,200		603		—			1,200		603		1,803		68		2007
Panama City, FL

-134-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I FL		589		1,400		786		—		1,400		786		2,186		89		2007
Orlando, FL
SUNTRUST BANK I FL		464		1,276		620		—		1,276		620		1,896		70		2007
Apopka, FL
SUNTRUST BANK I FL		438		1,285		584		—		1,285		584		1,869		66		2007
Bayonet Point, FL
SUNTRUST BANK I FL		659		800		879		—		800		879		1,679		99		2007
West Palm Beach, FL
SUNTRUST BANK I FL		510		600		681		—		600		681		1,281		77		2007
Daytona Beach, FL
SUNTRUST BANK I FL		400		900		534		—		900		534		1,434		60		2007
Sarasota, FL
SUNTRUST BANK I FL		318		759		425		—		759		425		1,184		48		2007
Dade City, FL
SUNTRUST BANK I FL		269		725		359		—		725		359		1,084		41		2007
Pensacola, FL
SUNTRUST BANK I FL		856		1,100		1,142		—		1,100		1,142		2,242		129		2007
New Smyrna Beach, FL
SUNTRUST BANK I FL		699		1,700		933		—		1,700		933		2,633		105		2007
Clearwater, FL
SUNTRUST BANK I FL		450		1,218		601		—		1,218		601		1,819		68		2007
Daytona Beach, FL
SUNTRUST BANK I FL		434		950		579		—		950		579		1,529		65		2007
Deltona, FL
SUNTRUST BANK I FL		636		1,900		849		—		1,900		849		2,749		96		2007
Boca Raton, FL
SUNTRUST BANK I FL		600		900		802		—		900		801		1,701		91		2007
Clearwater, FL
SUNTRUST BANK I FL		430		1,476		574		—		1,476		574		2,049		65		2007
Ocala, FL
SUNTRUST BANK I FL		400		1,100		534		—		1,100		534		1,634		60		2007
Palm Coast, FL

-135-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I FL		261		650		348		—		650		348		998		39		2007
Tampa, FL
SUNTRUST BANK I FL		533		1,400		712		—		1,400		712		2,112		80		2007
Fort Meade, FL
SUNTRUST BANK I FL		241		575		321		—		575		321		896		36		2007
Fruitland Park, FL
SUNTRUST BANK I FL		381		953		509		—		953		509		1,462		58		2007
Ocala, FL
SUNTRUST BANK I FL		577		950		771		—		950		771		1,721		87		2007
Ormond Beach, FL
SUNTRUST BANK I FL		402		1,100		537		—		1,100		537		1,637		61		2007
Gainesville, FL
SUNTRUST BANK I FL		274		625		366		—		625		366		991		41		2007
Lakeland, FL
SUNTRUST BANK I FL		480		950		641		—		950		641		1,591		72		2007
Hobe Sound, FL
SUNTRUST BANK I FL		235		600		314		—		600		314		914		35		2007
Mulberry, FL
SUNTRUST BANK I FL		415		1,060		553		—		1,060		553		1,613		63		2007
Indian Harbour Beach, FL
SUNTRUST BANK I FL		536		500		715		—		500		715		1,215		81		2007
Inverness, FL
SUNTRUST BANK I FL		1,065		2,100		1,422		—		2,100		1,422		3,522		161		2007
Lake Mary, FL
SUNTRUST BANK I FL		492		910		656		—		910		656		1,566		74		2007
Melbourne, FL
SUNTRUST BANK I FL		393		1,000		525		—		1,000		524		1,524		59		2007
St. Petersburg, FL
SUNTRUST BANK I FL		355		1,100		474		—		1,100		473		1,573		54		2007
Lutz, FL
SUNTRUST BANK I FL		630		275		841		—		275		841		1,116		95		2007
Marianna, FL

-136-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I FL		255		730		340		—		730		340		1,070		38		2007
Gainesville, FL
SUNTRUST BANK I FL		734		900		979		—		900		979		1,879		111		2007
Vero Beach, FL
SUNTRUST BANK I FL		578		500		772		—		500		772		1,272		87		2007
Mount Dora, FL
SUNTRUST BANK I FL		637		1,800		850		—		1,800		850		2,650		96		2007
Sarasota, FL
SUNTRUST BANK I FL		302		300		403		—		300		403		703		46		2007
New Smyrna Beach, FL
SUNTRUST BANK I FL		528		1,700		705		—		1,700		705		2,405		80		2007
Lakeland, FL
SUNTRUST BANK I FL		439		1,300		585		—		1,300		585		1,885		66		2007
North Palm Beach, FL
SUNTRUST BANK I FL		413		900		552		—		900		551		1,451		62		2007
Port St. Lucie, FL
SUNTRUST BANK I FL		307		1,100		410		—		1,100		410		1,510		46		2007
Clearwater, FL
SUNTRUST BANK I FL		464		1,200		620		—		1,200		620		1,820		70		2007
Okeechobee, FL
SUNTRUST BANK I FL		644		650		859		—		650		859		1,509		97		2007
Ormond Beach, FL
SUNTRUST BANK I FL		539		1,100		719		—		1,100		719		1,819		81		2007
Osprey, FL
SUNTRUST BANK I FL		227		601		303		—		601		303		903		34		2007
Panama City Beach, FL
SUNTRUST BANK I FL		344		975		459		—		975		459		1,434		52		2007
New Port Richey, FL
SUNTRUST BANK I FL		531		1,750		708		—		1,750		708		2,458		80		2007
Pembroke Pines, FL
SUNTRUST BANK I FL		539		1,023		719		—		1,023		719		1,742		81		2007
Orlando, FL

-137-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I FL		672		1,800		896		—		1,800		896		2,696		101		2007
Pompano Beach, FL
SUNTRUST BANK I FL		352		1,030		469		—		1,030		469		1,499		53		2007
Jacksonville, FL
SUNTRUST BANK I FL		116		298		155		—		298		155		453		18		2007
Brooksville, FL
SUNTRUST BANK I FL		1,045		2,803		1,394		—		2,803		1,394		4,197		158		2007
Miami, FL
SUNTRUST BANK I FL		432		490		577		—		490		577		1,067		65		2007
Rockledge, FL
SUNTRUST BANK I FL		304		812		406		—		812		406		1,218		46		2007
Tampa, FL
SUNTRUST BANK I FL		855		1,565		1,141		—		1,565		1,141		2,706		129		2007
Seminole, FL
SUNTRUST BANK I FL		535		1,430		714		—		1,430		713		2,143		81		2007
Orlando, FL
SUNTRUST BANK I FL		323		861		431		—		861		430		1,291		49		2007
Jacksonville, FL
SUNTRUST BANK I FL		572		1,500		764		—		1,500		764		2,264		86		2007
Ocala, FL
SUNTRUST BANK I FL		855		2,200		1,142		—		2,200		1,142		3,342		129		2007
Orlando,FL
SUNTRUST BANK I FL		251		600		335		—		600		335		935		38		2007
Brooksville, FL
SUNTRUST BANK I FL		570		600		761		—		600		761		1,361		86		2007
Spring Hill, FL
SUNTRUST BANK I FL		568		1,000		758		—		1,000		758		1,758		86		2007
St. Augustine, FL
SUNTRUST BANK I FL		517		1,050		689		—		1,050		689		1,739		78		2007
Port St. Lucie, FL
SUNTRUST BANK I FL		331		850		441		—		850		441		1,291		50		2007
Vero Beach, FL

-138-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I FL		432		1,150		576		—		1,150		576		1,726		65		2007
Gulf Breeze, FL
SUNTRUST BANK I FL		684		2,400		913		—		2,400		912		3,312		103		2007
Casselberry, FL
SUNTRUST BANK I FL		805		2,700		1,075		—		2,700		1,074		3,774		121		2007
Winter Park, FL
SUNTRUST BANK I FL		517		1,500		690		—		1,500		690		2,190		78		2007
Fort Pierce, FL
SUNTRUST BANK I FL		341		600		456		—		600		456		1,056		51		2007
Plant City, FL
SUNTRUST BANK I FL		496		1,540		662		—		1,540		662		2,202		75		2007
St. Petersburg, FL
SUNTRUST BANK I FL		495		580		661		—		580		660		1,240		75		2007
Ormond Beach, FL
SUNTRUST BANK I FL		589		1,840		786		—		1,840		786		2,626		89		2007
West St. Cloud, FL
SUNTRUST BANK I FL		488		1,450		652		—		1,450		652		2,102		74		2007
Tamarac, FL
SUNTRUST BANK I GA		368		1,050		584		—		1,050		584		1,634		66		2007
Brunswick, GA
SUNTRUST BANK I GA		602		2,100		955		—		2,100		955		3,055		108		2007
Kennesaw, GA
SUNTRUST BANK I GA		537		675		852		—		675		852		1,527		96		2007
Columbus, GA
SUNTRUST BANK I GA		452		925		716		—		925		716		1,641		81		2007
Austell, GA
SUNTRUST BANK I GA		2,100		7,184		3,329		—		7,184		3,330		10,514		376		2007
Atlanta, GA
SUNTRUST BANK I GA		477		1,375		756		—		1,375		756		2,131		85		2007
Chambleee, GA
SUNTRUST BANK I GA		496		525		787		—		525		787		1,312		89		2007
Conyers, GA

-139-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I GA		764		1,750		1,211		—		1,750		1,212		2,962		137		2007
Atlanta, GA
SUNTRUST BANK I GA		305		300		483		—		300		483		783		55		2007
Savannah, GA
SUNTRUST BANK I GA		750		1,325		1,190		—		1,325		1,190		2,515		135		2007
Dunwoody, GA
SUNTRUST BANK I GA		389		800		617		—		800		617		1,417		70		2007
Douglasville, GA
SUNTRUST BANK I GA		159		325		253		—		325		253		578		29		2007
Albany, GA
SUNTRUST BANK I GA		294		865		466		—		865		466		1,330		53		2007
Athens, GA
SUNTRUST BANK I GA		257		250		408		—		250		408		658		46		2007
Macon, GA
SUNTRUST BANK I GA		412		500		652		—		500		653		1,153		74		2007
Atlanta, GA
SUNTRUST BANK I GA		738		1,275		1,171		—		1,275		1,171		2,446		132		2007
Duluth, GA
SUNTRUST BANK I GA		356		360		565		—		360		565		925		64		2007
Thomson, GA
SUNTRUST BANK I GA		387		90		614		—		90		614		704		69		2007
Madison, GA
SUNTRUST BANK I GA		425		325		674		—		325		674		999		76		2007
Savannah, GA
SUNTRUST BANK I GA		707		2,025		1,120		—		2,025		1,120		3,145		127		2007
Marietta, GA
SUNTRUST BANK I GA		625		1,200		992		—		1,200		992		2,192		112		2007
Marietta, GA
SUNTRUST BANK I GA		720		1,000		1,141		—		1,000		1,141		2,141		129		2007
Cartersville, GA
SUNTRUST BANK I GA		1,425		4,539		2,259		—		4,539		2,259		6,798		255		2007
Atlanta, GA

-140-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I GA		293		300		465		—			300		465		765		53		2007
Lithonia, GA
SUNTRUST BANK I GA		652		1,500		1,034		—			1,500		1,034		2,534		117		2007
Peachtree City, GA
SUNTRUST BANK I GA		434		575		688		—			575		688		1,263		78		2007
Stone Mountain, GA
SUNTRUST BANK I GA		997		1,600		1,581		—			1,600		1,582		3,182		179		2007
Atlanta, Ga
SUNTRUST BANK I GA		415		175		658		—			175		658		833		74		2007
Waycross, GA
SUNTRUST BANK I GA		219		475		347		—			475		347		822		39		2007
Union City, GA
SUNTRUST BANK I GA		291		650		462		—			650		462		1,112		52		2007
Savannah, GA
SUNTRUST BANK I GA		554		525		878		—			525		878		1,403		99		2007
Morrow, GA
SUNTRUST BANK I GA		250		575		396		—			575		396		971		45		2007
Norcross, GA
SUNTRUST BANK I GA		380		869		603		—			869		603		1,472		68		2007
Stockbridge, GA
SUNTRUST BANK I GA		283		250		449		—			250		449		699		51		2007
Stone Mountain, GA
SUNTRUST BANK I GA		245		575		388		—			575		388		963		44		2007
Sylvester, GA
SUNTRUST BANK I GA		672		1,100		1,065		—			1,100		1,065		2,165		120		2007
Evans, GA
SUNTRUST BANK I GA		185		200		294		—			200		294		494		33		2007
Thomson, GA
SUNTRUST BANK I MD		752		1,000		1,925		(1	)		1,000		1,924		2,924		218		2007
Annapolis, MD
SUNTRUST BANK I MD		458		800		1,174		—			800		1,173		1,973		133		2007
Landover, MD

-141-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I MD		552		600		1,414		(1	)		600		1,413		2,013		160		2007
Avondale, MD
SUNTRUST BANK I MD		571		800		1,462		(1	)		800		1,461		2,261		165		2007
Cambridge, MD
SUNTRUST BANK I MD		615		800		1,575		(1	)		800		1,574		2,374		178		2007
Cockeysville, MD
SUNTRUST BANK I MD		870		700		2,229		(1	)		700		2,228		2,928		252		2007
Glen Burnie, MD
SUNTRUST BANK I MD		966		100		2,473		(1	)		100		2,473		2,573		279		2007
Annapolis, MD
SUNTRUST BANK I MD		679		1,100		1,737		(1	)		1,100		1,737		2,837		196		2007
Prince Frederick, MD
SUNTRUST BANK I NC		342		600		844		—			600		844		1,444		95		2007
Greensboro, NC
SUNTRUST BANK I NC		291		550		719		—			550		719		1,269		81		2007
Greensboro, NC
SUNTRUST BANK I NC		363		190		896		—			190		896		1,086		101		2007
Apex, NC
SUNTRUST BANK I NC		193		450		477		—			450		477		927		54		2007
Arden, NC
SUNTRUST BANK I NC		279		400		690		—			400		690		1,090		78		2007
Asheboro, NC
SUNTRUST BANK I NC		245		75		604		—			75		604		679		68		2007
Bessemer City, NC
SUNTRUST BANK I NC		180		500		444		—			500		444		944		50		2007
Durham, NC
SUNTRUST BANK I NC		284		550		701		—			550		702		1,252		79		2007
Charlotte, NC
SUNTRUST BANK I NC		361		200		891		—			200		891		1,091		101		2007
Charlotte, NC
SUNTRUST BANK I NC		370		425		915		—			425		915		1,340		103		2007
Greensboro, NC

-142-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I NC		207		320		512		—		320		512		832		58		2007
Creedmoor, NC
SUNTRUST BANK I NC		323		280		796		—		280		797		1,077		90		2007
Durham, NC
SUNTRUST BANK I NC		333		400		821		—		400		822		1,222		93		2007
Dunn, NC
SUNTRUST BANK I NC		158		550		389		—		550		389		939		44		2007
Harrisburg, NC
SUNTRUST BANK I NC		376		450		929		—		450		929		1,379		105		2007
Hendersonville, NC
SUNTRUST BANK I NC		287		230		708		—		230		709		939		80		2007
Cary, NC
SUNTRUST BANK I NC		419		300		1,034		—		300		1,035		1,335		117		2007
Mebane, NC
SUNTRUST BANK I NC		964		175		2,380		1		175		2,381		2,556		269		2007
Lenoir, NC
SUNTRUST BANK I NC		303		130		747		—		130		748		878		85		2007
Roxboro, NC
SUNTRUST BANK I NC		250		300		617		—		300		617		917		70		2007
Winston-Salem, NC
SUNTRUST BANK I NC		472		280		1,164		—		280		1,165		1,445		132		2007
Oxford, NC
SUNTRUST BANK I NC		165		25		408		—		25		408		433		46		2007
Pittsboro, NC
SUNTRUST BANK I NC		430		500		1,061		—		500		1,061		1,561		120		2007
Charlotte, NC
SUNTRUST BANK I NC		227		500		561		—		500		561		1,061		63		2007
Greensboro, NC
SUNTRUST BANK I NC		166		350		410		—		350		410		760		46		2007
Stanley, NC
SUNTRUST BANK I NC		155		275		382		—		275		382		657		43		2007
Salisbury, NC

-143-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I NC		193		250		477		—			250		477		727		54		2007
Stokesdale, NC
SUNTRUST BANK I NC		181		600		446		—			600		446		1,046		50		2007
Sylva, NC
SUNTRUST BANK I NC		96		150		237		—			150		237		387		27		2007
Lexington, NC
SUNTRUST BANK I NC		273		140		674		—			140		674		814		76		2007
Walnut Cove, NC
SUNTRUST BANK I NC		256		200		632		—			200		632		832		71		2007
Waynesville, NC
SUNTRUST BANK I NC		307		550		757		—			550		757		1,307		86		2007
Concord, NC
SUNTRUST BANK I NC		381		250		941		—			250		941		1,191		106		2007
Yadkinville, NC
SUNTRUST BANK I NC		144		275		356		—			275		356		631		40		2007
Rural Hall, NC
SUNTRUST BANK I NC		194		450		479		—			450		479		929		54		2007
Summerfield, NC
SUNTRUST BANK I SC		455		260		1,255		(1	)		260		1,254		1,514		142		2007
Greenville, SC
SUNTRUST BANK I SC		328		36		904		(1	)		36		903		939		102		2007
Fountain Inn, SC
SUNTRUST BANK I SC		275		80		758		—			80		758		838		86		2007
Liberty, SC
SUNTRUST BANK I SC		318		350		878		(1	)		350		878		1,228		99		2007
Mauldin, SC
SUNTRUST BANK I SC		296		160		816		—			160		815		975		92		2007
Greenville, SC
SUNTRUST BANK I SC		224		360		618		—			360		617		977		70		2007
Greenville, SC
SUNTRUST BANK I SC		432		800		1,192		(1	)		800		1,192		1,992		135		2007
Greenville, SC

-144-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I TN		186		240		319		—			240		319		559		36		2007
Kingsport, TN
SUNTRUST BANK I TN		136		370		234		—			370		233		603		26		2007
Morristown, TN
SUNTRUST BANK I TN		605		1,110		1,036		(1	)		1,110		1,035		2,145		117		2007
Brentwood, TN
SUNTRUST BANK I TN		544		1,100		932		(1	)		1,100		931		2,031		105		2007
Brentwood, TN
SUNTRUST BANK I TN		600		1,450		1,028		(1	)		1,450		1,027		2,477		116		2007
Nashville, TN
SUNTRUST BANK I TN		204		675		350		—			675		350		1,025		40		2007
Nashville, TN
SUNTRUST BANK I TN		234		250		400		—			250		400		650		45		2007
East Ridge, TN
SUNTRUST BANK I TN		509		735		872		(1	)		735		872		1,607		99		2007
Nashville, TN
SUNTRUST BANK I TN		239		370		409		—			370		408		778		46		2007
Chattanooga, TN
SUNTRUST BANK I TN		495		675		848		(1	)		675		847		1,522		96		2007
Lebanon, TN
SUNTRUST BANK I TN		368		425		630		(1	)		425		630		1,055		71		2007
Chattanooga, TN
SUNTRUST BANK I TN		287		185		491		—			185		491		676		55		2007
Chattanooga, TN
SUNTRUST BANK I TN		224		410		383		—			410		383		793		43		2007
Loudon, TN
SUNTRUST BANK I TN		392		1,400		671		(1	)		1,400		671		2,071		76		2007
Nashville, TN
SUNTRUST BANK I TN		230		150		394		—			150		393		543		44		2007
Soddy Daisy, TN
SUNTRUST BANK I TN		424		660		725		(1	)		660		725		1,385		82		2007
Oak Ridge, TN

-145-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I TN		376		335		645		(1	)		335		644		979		73		2007
Savannah, TN
SUNTRUST BANK I TN		219		550		375		—			550		375		925		42		2007
Signal Mountain, TN
SUNTRUST BANK I TN		346		870		593		(1	)		870		592		1,462		67		2007
Smyrna, TN
SUNTRUST BANK I TN		310		1,000		530		(1	)		1,000		530		1,530		60		2007
Murfreesboro, TN
SUNTRUST BANK I TN		155		391		265		—			391		265		657		30		2007
Murfreesboro, TN
SUNTRUST BANK I TN		98		180		168		—			180		168		348		19		2007
Johnson City, TN
SUNTRUST BANK I TN		162		453		278		—			453		278		730		31		2007
Chattanooga, TN
SUNTRUST BANK I TN		265		620		454		—			620		454		1,074		51		2007
Nashville, TN
SUNTRUST BANK I VA		126		30		260		—			30		260		290		29		2007
Accomac, VA
SUNTRUST BANK I VA		148		300		306		—			300		306		606		35		2007
Richmond, VA
SUNTRUST BANK I VA		799		1,000		1,647		—			1,000		1,647		2,647		186		2007
Fairfax, VA
SUNTRUST BANK I VA		491		1,000		1,012		—			1,000		1,012		2,012		114		2007
Fredericksburg, VA
SUNTRUST BANK I VA		142		500		292		—			500		292		792		33		2007
Richmond, VA
SUNTRUST BANK I VA		186		140		384		—			140		384		524		43		2007
Collinsville, VA
SUNTRUST BANK I VA		168		150		346		—			150		346		496		39		2007
Doswell, VA
SUNTRUST BANK I VA		479		380		988		—			380		987		1,367		112		2007
Lynchburg, VA

-146-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST BANK I VA		719		2,200		1,482		—		2,200		1,482		3,682		167		2007
Stafford, VA
SUNTRUST BANK I VA		554		760		1,142		—		760		1,142		1,902		129		2007
Gloucester, VA
SUNTRUST BANK I VA		352		450		726		—		450		725		1,175		82		2007
Chesapeake, VA
SUNTRUST BANK I VA		111		310		228		—		310		228		538		26		2007
Lexington, VA
SUNTRUST BANK I VA		90		90		185		—		90		185		275		21		2007
Radford, VA
SUNTRUST BANK I VA		265		530		547		—		530		547		1,077		62		2007
Williamsburg, VA
SUNTRUST BANK I VA		232		860		479		—		860		479		1,339		54		2007
Salem, VA
SUNTRUST BANK I VA		658		1,170		1,357		—		1,170		1,357		2,527		153		2007
Roanoke, VA
SUNTRUST BANK I VA		307		150		634		—		150		634		784		72		2007
New Market, VA
SUNTRUST BANK I VA		485		200		999		—		200		999		1,199		113		2007
Onancock, VA
SUNTRUST BANK I VA		85		120		176		—		120		176		296		20		2007
Painter, VA
SUNTRUST BANK I VA		449		260		926		—		260		926		1,186		105		2007
Stuart, VA
SUNTRUST BANK I VA		242		450		498		—		450		498		948		56		2007
Roanoke, VA
SUNTRUST BANK I VA		118		399		243		—		399		243		642		27		2007
Vinton, VA
SUNTRUST II FLORIDA		1,528		1,533		893		3		1,533		896		2,429		98		2007
Miami, FL
SUNTRUST II FLORIDA		1,388		1,392		811		2		1,392		813		2,206		89		2007
Destin, FL

-147-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST II FLORIDA		1,458		1,463		852		2		1,463		855		2,318		94		2007
Dunedin, FL
SUNTRUST II FLORIDA		1,079		1,082		630		2		1,082		632		1,715		70		2007
Palm Harbor FL
SUNTRUST II FLORIDA		1,669		1,675		976		3		1,675		979		2,654		108		2007
Tallahassee, FL
SUNTRUST II FLORIDA		1,217		1,221		711		2		1,221		713		1,935		78		2007
Orlando, FL
SUNTRUST II FLORIDA		1,424		1,429		832		2		1,429		835		2,264		92		2007
Orlando, FL
SUNTRUST II FLORIDA		1,123		1,127		656		2		1,127		658		1,785		72		2007
Melbourne, FL
SUNTRUST II FLORIDA		1,314		1,319		768		2		1,319		770		2,089		85		2007
Coral Springs, FL
SUNTRUST II FLORIDA		1,034		1,038		604		2		1,038		606		1,644		67		2007
Lakeland, FL
SUNTRUST II FLORIDA		1,217		1,221		711		2		1,221		713		1,935		78		2007
Palm Coast, FL
SUNTRUST II FLORIDA		1,522		1,527		890		3		1,527		892		2,420		98		2007
Plant City, FL
SUNTRUST II FLORIDA		1,383		1,388		808		2		1,388		811		2,198		89		2007
Orlando, FL
SUNTRUST II FLORIDA		1,022		1,026		598		2		1,026		599		1,625		66		2007
South Daytona, FL
SUNTRUST II FLORIDA		1,192		1,196		697		2		1,196		699		1,895		77		2007
Fort Lauderdale, FL
SUNTRUST II FLORIDA		979		982		572		2		982		574		1,556		63		2007
Pensacola, FL
SUNTRUST II FLORIDA		1,236		1,240		722		2		1,240		724		1,965		80		2007
West Palm Beach, FL
SUNTRUST II FLORIDA		813		815		475		1		815		476		1,292		52		2007
Lake Wells, FL

-148-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST II FLORIDA		338		339		198		1			339		198		537		22		2007
Dunnellon, FL
SUNTRUST II FLORIDA		1,176		1,180		687		2			1,180		689		1,869		76		2007
Kissimmee, FL
SUNTRUST II FLORIDA		1,127		1,131		659		2			1,131		660		1,791		73		2007
Port Orange, FL
SUNTRUST II FLORIDA		1,115		1,119		652		2			1,119		654		1,772		72		2007
North Port, FL
SUNTRUST II FLORIDA		1,091		1,095		638		2			1,095		640		1,735		70		2007
Hudson, FL
SUNTRUST II FLORIDA		1,026		1,030		600		2			1,030		602		1,632		66		2007
Port Orange, FL
SUNTRUST II GEORGIA		1,515		1,399		1,057		(37	)		1,399		1,021		2,420		112		2007
Atlanta, GA
SUNTRUST II GEORGIA		975		900		680		(24	)		900		657		1,557		72		2007
Bowden, GA
SUNTRUST II GEORGIA		477		440		333		(12	)		440		321		761		35		2007
Cedartown, GA
SUNTRUST II GEORGIA		1,217		1,124		849		(29	)		1,124		820		1,944		90		2007
St. Simons Island, GA
SUNTRUST II GEORGIA		1,878		1,734		1,310		(45	)		1,734		1,264		2,998		139		2007
Dunwoody, GA
SUNTRUST II GEORGIA		1,107		1,022		772		(27	)		1,022		745		1,767		82		2007
Atlanta, GA
SUNTRUST II GEORGIA		1,094		1,010		763		(26	)		1,010		737		1,747		81		2007
Jessup, GA
SUNTRUST II GEORGIA		172		159		120		(4	)		159		116		274		13		2007
Brunswick, GA
SUNTRUST II GEORGIA		1,373		1,268		958		(33	)		1,268		924		2,192		102		2007
Roswell, GA
SUNTRUST II GEORGIA		1,506		1,391		1,051		(36	)		1,391		1,014		2,406		112		2007
Norcross, GA

-149-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST II GEORGIA		657		607		459		(16	)		607		443		1,050		49		2007
Augusta, GA
SUNTRUST II MARYLAND		2,909		1,747		2,890		2			1,747		2,892		4,639		318		2007
Annapolis, MD
SUNTRUST II MARYLAND		1,201		721		1,193		1			721		1,194		1,915		131		2007
Frederick, MD
SUNTRUST II MARYLAND		2,113		1,269		2,099		1			1,269		2,100		3,369		231		2007
Waldorf, MD
SUNTRUST II MARYLAND		1,602		962		1,591		1			962		1,592		2,554		175		2007
Ellicott City, MD
SUNTRUST II NORTH CAROLINA		936		453		1,038		1			453		1,039		1,492		114		2007
Belmont, NC
SUNTRUST II NORTH CAROLINA		622		301		690		1			301		691		992		76		2007
Carrboro, NC
SUNTRUST II NORTH CAROLINA		1,240		601		1,375		2			601		1,377		1,978		151		2007
Monroe, NC
SUNTRUST II NORTH CAROLINA		776		376		861		1			376		862		1,238		95		2007
Lexington, NC
SUNTRUST II NORTH CAROLINA		602		292		668		1			292		669		961		74		2007
Burlington, NC
SUNTRUST II NORTH CAROLINA		2,384		1,155		2,645		3			1,155		2,648		3,803		291		2007
Mocksville, NC
SUNTRUST II NORTH CAROLINA		1,293		627		1,434		2			627		1,436		2,063		158		2007
Durham, NC
SUNTRUST II NORTH CAROLINA		547		265		607		1			265		608		873		67		2007
Oakboro, NC
SUNTRUST II NORTH CAROLINA		858		416		951		1			416		953		1,368		105		2007
Concord, NC
SUNTRUST II NORTH CAROLINA		796		386		883		1			386		884		1,270		97		2007
Raleigh, NC
SUNTRUST II NORTH CAROLINA		697		338		773		1			338		774		1,111		85		2007
Greensboro, NC

-150-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST II NORTH CAROLINA		219		106		243		0			106		243		349		27		2007
Pittsboro, NC
SUNTRUST II NORTH CAROLINA		347		168		385		—			168		385		553		42		2007
Yadkinville, NC
SUNTRUST II NORTH CAROLINA		466		226		517		1			226		517		743		57		2007
Matthews, NC
SUNTRUST II NORTH CAROLINA		378		183		419		1			183		420		603		46		2007
Burlington, NC
SUNTRUST II NORTH CAROLINA		697		338		773		1			338		774		1,111		85		2007
Zebulon, NC
SUNTRUST II SOUTH CAROLINA		639		220		798		—			220		798		1,018		88		2007
Belton, SC
SUNTRUST II SOUTH CAROLINA		996		343		1,243		1			343		1,244		1,587		137		2007
Anderson, SC
SUNTRUST II SOUTH CAROLINA		906		312		1,132		1			312		1,132		1,444		125		2007
Travelers Rest, SC
SUNTRUST II TENNESSEE		1,757		1,190		1,619		3			1,190		1,623		2,812		178		2007
Nashville, TN
SUNTRUST II TENNESSEE		231		156		213		—			156		213		369		23		2007
Lavergne, TN
SUNTRUST II TENNESSEE		747		506		689		1			506		690		1,196		76		2007
Nashville, TN
SUNTRUST II TENNESSEE		531		360		489		1			360		490		850		54		2007
Nashville, TN
SUNTRUST II TENNESSEE		919		622		847		2			622		848		1,470		93		2007
Chatanooga, TN
SUNTRUST II TENNESSEE		866		587		798		2			587		800		1,387		88		2007
Madison, TN
SUNTRUST II VIRGINIA		1,367		759		1,423		(1	)		759		1,422		2,181		156		2007
Richmond, VA
SUNTRUST II VIRGINIA		423		235		441		—			235		441		676		48		2007
Richmond, VA

-151-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST II VIRGINIA		665		369		692		—			369		692		1,061		76		2007
Norfolk, VA
SUNTRUST II VIRGINIA		436		242		454		—			242		453		695		50		2007
Lynchburg, VA
SUNTRUST II VIRGINIA		366		203		382		—			203		381		585		42		2007
Cheriton, VA
SUNTRUST II VIRGINIA		1,104		613		1,149		(1	)		613		1,149		1,761		126		2007
Rocky Mount, VA
SUNTRUST II VIRGINIA		250		139		260		—			139		260		399		29		2007
Petersburg, VA
SUNTRUST III DISTRICT OF COLUMBIA		1,730		800		1,986		—			800		1,986		2,786		200		2008
Washington, DC
SUNTRUST III FLORIDA		1,208		1,199		729		—			1,199		729		1,928		73		2008
Avon Park, FL
SUNTRUST III FLORIDA		626		622		378		—			622		378		1,000		38		2008
Bartow, FL
SUNTRUST III FLORIDA		621		616		374		—			616		374		991		38		2008
Belleview, FL
SUNTRUST III FLORIDA		1,027		1,020		620		—			1,020		620		1,640		62		2008
Beverly Hills, FL
SUNTRUST III FLORIDA		1,485		1,474		896		—			1,474		896		2,370		90		2008
Boca Raton, FL
SUNTRUST III FLORIDA		997		990		602		—			990		602		1,592		61		2008
Bradenton, FL
SUNTRUST III FLORIDA		1,200		1,192		724		—			1,192		724		1,916		73		2008
Cape Coral, FL
SUNTRUST III FLORIDA		563		559		340		—			559		340		898		34		2008
Clearwater, FL
SUNTRUST III FLORIDA		1,657		1,646		1,000		—			1,646		1,000		2,645		101		2008
Crystal River, FL
SUNTRUST III FLORIDA		666		661		402		—			661		402		1,063		40		2008
Daytona Beach Shores, FL

-152-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST III FLORIDA		981		975		592		—		975		592		1,567		60		2008
Deland, FL
SUNTRUST III FLORIDA		981		975		592		—		975		592		1,567		60		2008
Deland, FL
SUNTRUST III FLORIDA		1,050		1,043		634		—		1,043		634		1,677		64		2008
Edgewater, FL
SUNTRUST III FLORIDA		931		924		562		—		924		562		1,486		57		2008
Flager Beach, FL
SUNTRUST III FLORIDA		683		678		412		—		678		412		1,090		42		2008
Fort Myers, FL
SUNTRUST III FLORIDA		1,089		1,081		657		—		1,081		657		1,738		66		2008
Fort Myers, FL
SUNTRUST III FLORIDA		1,436		1,426		867		—		1,426		867		2,293		87		2008
Greenacres City, FL
SUNTRUST III FLORIDA		1,790		1,778		1,080		—		1,778		1,080		2,859		109		2008
Gulf Breeze, FL
SUNTRUST III FLORIDA		1,114		1,106		672		—		1,106		672		1,778		68		2008
Haines City, FL
SUNTRUST III FLORIDA		2,193		2,178		1,323		—		2,178		1,323		3,501		133		2008
Hallandale, FL
SUNTRUST III FLORIDA		685		680		413		—		680		413		1,093		42		2008
Hamosassa, FL
SUNTRUST III FLORIDA		2,130		2,115		1,285		—		2,115		1,285		3,401		130		2008
Hilaleah, FL
SUNTRUST III FLORIDA		581		577		350		—		577		350		927		35		2008
Inverness, FL
SUNTRUST III FLORIDA		868		862		524		—		862		524		1,385		53		2008
Jacksonville, FL
SUNTRUST III FLORIDA		1,088		1,080		656		—		1,080		656		1,736		66		2008
Jacksonville, FL
SUNTRUST III FLORIDA		1,303		1,294		786		—		1,294		786		2,080		79		2008
Jupiter, FL

-153-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST III FLORIDA		1,132		1,124		683		—		1,124		683		1,806		69		2008
Lady Lake, FL
SUNTRUST III FLORIDA		1,292		1,283		779		—		1,283		779		2,062		79		2008
Lady Lake, FL
SUNTRUST III FLORIDA		1,060		1,052		639		—		1,052		639		1,692		64		2008
Lake Placid, FL
SUNTRUST III FLORIDA		800		795		483		—		795		483		1,278		49		2008
Lakeland, FL
SUNTRUST III FLORIDA		711		706		429		—		706		429		1,135		43		2008
Largo, FL
SUNTRUST III FLORIDA		869		863		525		—		863		525		1,388		53		2008
Lynn Haven, FL
SUNTRUST III FLORIDA		880		874		531		—		874		531		1,405		54		2008
Melbourne, FL
SUNTRUST III FLORIDA		1,644		1,633		992		—		1,633		992		2,624		100		2008
Miami, FL
SUNTRUST III FLORIDA		963		956		581		—		956		581		1,538		59		2008
Miami Beach, FL
SUNTRUST III FLORIDA		942		935		568		—		935		568		1,503		57		2008
New Port Richey, FL
SUNTRUST III FLORIDA		1,509		1,498		910		—		1,498		910		2,408		92		2008
Orlando, FL
SUNTRUST III FLORIDA		1,415		1,405		854		—		1,405		854		2,259		86		2008
Orlando, FL
SUNTRUST III FLORIDA		576		572		348		—		572		348		920		35		2008
Palm Harbor, FL
SUNTRUST III FLORIDA		1,361		1,352		821		—		1,352		821		2,173		83		2008
Palm Harbor, FL
SUNTRUST III FLORIDA		935		928		564		—		928		564		1,492		57		2008
Port St. Lucie, FL
SUNTRUST III FLORIDA		1,706		1,695		1,030		—		1,695		1,030		2,724		104		2008
Punta Gorda, FL

-154-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST III FLORIDA		981		974		592		—		974		592		1,567		60		2008
Roseland, FL
SUNTRUST III FLORIDA		793		787		478		—		787		478		1,265		48		2008
Sebring, FL
SUNTRUST III FLORIDA		748		743		452		—		743		452		1,195		46		2008
Seminole, FL
SUNTRUST III FLORIDA		826		820		498		—		820		498		1,319		50		2008
Spring Hill, FL
SUNTRUST III FLORIDA		1,370		1,360		827		—		1,360		827		2,187		83		2008
Spring Hill, FL
SUNTRUST III FLORIDA		1,339		1,330		808		—		1,330		808		2,138		81		2008
Spring Hill, FL
SUNTRUST III FLORIDA		943		936		569		—		936		569		1,505		57		2008
St. Petersburg, FL
SUNTRUST III FLORIDA		1,919		1,906		1,158		—		1,906		1,158		3,063		117		2008
Stuart, FL
SUNTRUST III FLORIDA		2,027		2,013		1,223		—		2,013		1,223		3,236		123		2008
Sun City Center, FL
SUNTRUST III FLORIDA		1,528		1,518		922		—		1,518		922		2,440		93		2008
Tamarac, FL
SUNTRUST III FLORIDA		609		605		367		—		605		367		972		37		2008
Valrico, FL
SUNTRUST III FLORIDA		765		760		462		—		760		462		1,221		47		2008
Wildwood, FL
SUNTRUST III FLORIDA		808		802		488		—		802		488		1,290		49		2008
Zephyhills, FL
SUNTRUST III FLORIDA		1,929		1,916		1,164		—		1,916		1,164		3,080		117		2008
Zephyhills, FL
SUNTRUST III GEORGIA		653		564		482		—		564		482		1,046		49		2008
Albany, GA
SUNTRUST III GEORGIA		1,901		1,642		1,404		—		1,642		1,404		3,046		141		2008
Alpharetta, GA

-155-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST III GEORGIA		1,427		1,233		1,054		—		1,233		1,054		2,287		106		2008
Alpharetta, GA
SUNTRUST III GEORGIA		1,228		1,061		907		—		1,061		907		1,968		91		2008
Athens, GA
SUNTRUST III GEORGIA		2,321		2,005		1,714		—		2,005		1,714		3,719		173		2008
Atlanta, GA
SUNTRUST III GEORGIA		494		427		365		—		427		365		791		37		2008
Atlanta, GA
SUNTRUST III GEORGIA		1,028		888		759		—		888		759		1,647		76		2008
Augusta, GA
SUNTRUST III GEORGIA		501		432		370		—		432		370		802		37		2008
Augusta, GA
SUNTRUST III GEORGIA		674		582		498		—		582		498		1,080		50		2008
Augusta, GA
SUNTRUST III GEORGIA		1,046		904		772		—		904		772		1,676		78		2008
Baxley, GA
SUNTRUST III GEORGIA		605		523		447		—		523		447		970		45		2008
Columbus, GA
SUNTRUST III GEORGIA		526		454		389		—		454		389		843		39		2008
Conyers, GA
SUNTRUST III GEORGIA		712		615		526		—		615		526		1,141		53		2008
Douglas, GA
SUNTRUST III GEORGIA		1,299		1,122		959		—		1,122		959		2,081		97		2008
Duluth, GA
SUNTRUST III GEORGIA		928		802		686		—		802		686		1,488		69		2008
Jonesboro, GA
SUNTRUST III GEORGIA		1,844		1,593		1,362		—		1,593		1,362		2,955		137		2008
Lawrenceville, GA
SUNTRUST III GEORGIA		843		728		622		—		728		622		1,351		63		2008
Marietta, GA
SUNTRUST III GEORGIA		742		641		548		—		641		548		1,189		55		2008
Norcross, GA

-156-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST III GEORGIA		899		777		664		—		777		664		1,441		67		2008
Tucker, GA
SUNTRUST III GEORGIA		1,448		1,251		1,069		—		1,251		1,069		2,320		108		2008
Warner Robins, GA
SUNTRUST III GEORGIA		1,215		1,050		897		—		1,050		897		1,947		90		2008
Woodstock, GA
SUNTRUST III GEORGIA		384		332		284		—		332		284		615		29		2008
Macon, GA
SUNTRUST III MARYLAND		1,240		563		1,427		—		563		1,427		1,989		144		2008
Bladensburg, MD
SUNTRUST III MARYLAND		811		368		933		—		368		933		1,301		94		2008
Chestertown, MD
SUNTRUST III MARYLAND		1,696		770		1,952		—		770		1,952		2,721		197		2008
Upper Marlboro, MD
SUNTRUST III NORTH CAROLINA		973		617		953		—		617		953		1,570		96		2008
Black Mountain, NC
SUNTRUST III NORTH CAROLINA		431		273		422		—		273		422		695		43		2008
Butner, NC
SUNTRUST III NORTH CAROLINA		861		546		843		—		546		843		1,389		85		2008
Cary, NC
SUNTRUST III NORTH CAROLINA		545		346		534		—		346		534		880		54		2008
Chapel Hill, NC
SUNTRUST III NORTH CAROLINA		947		600		928		—		600		928		1,528		94		2008
Denton, NC
SUNTRUST III NORTH CAROLINA		505		320		495		—		320		495		815		50		2008
Erwin, NC
SUNTRUST III NORTH CAROLINA		606		384		594		—		384		594		978		60		2008
Greensboro, NC
SUNTRUST III NORTH CAROLINA		492		312		482		—		312		482		794		49		2008
Hudson, NC
SUNTRUST III NORTH CAROLINA		525		333		514		—		333		514		847		52		2008
Huntersville, NC

-157-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST III NORTH CAROLINA		1,249		792		1,224		—		792		1,224		2,016		123		2008
Kannapolis, NC
SUNTRUST III NORTH CAROLINA		641		407		628		—		407		628		1,035		63		2008
Kernersville, NC
SUNTRUST III NORTH CAROLINA		352		224		345		—		224		345		569		35		2008
Marshville, NC
SUNTRUST III NORTH CAROLINA		692		439		678		—		439		678		1,118		68		2008
Mocksville, NC
SUNTRUST III NORTH CAROLINA		528		335		517		—		335		517		852		52		2008
Monroe, NC
SUNTRUST III NORTH CAROLINA		622		395		610		—		395		610		1,004		61		2008
Monroe, NC
SUNTRUST III NORTH CAROLINA		557		354		546		—		354		546		900		55		2008
Norwood, NC
SUNTRUST III NORTH CAROLINA		1,445		916		1,415		—		916		1,415		2,332		143		2008
Raleigh, NC
SUNTRUST III NORTH CAROLINA		959		608		940		—		608		940		1,548		95		2008
Roxboro, NC
SUNTRUST III NORTH CAROLINA		539		342		528		—		342		528		869		53		2008
Spencer, NC
SUNTRUST III NORTH CAROLINA		1,325		841		1,299		—		841		1,299		2,139		131		2008
Wake Forest, NC
SUNTRUST III NORTH CAROLINA		264		167		259		—		167		259		426		26		2008
Youngsville, NC
SUNTRUST III SOUTH CAROLINA		787		422		836		—		422		836		1,258		84		2008
Anderson, SC
SUNTRUST III SOUTH CAROLINA		518		278		550		—		278		550		828		55		2008
Spartanburg, SC
SUNTRUST III TENNESSEE		578		597		343		—		597		343		940		35		2008
Chattanooga, TN
SUNTRUST III TENNESSEE		757		783		449		—		783		449		1,232		45		2008
Chattanooga, TN

-158-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST III TENNESSEE		516		533		306		—		533		306		839		31		2008
Chattanooga, TN
SUNTRUST III TENNESSEE		692		716		411		—		716		411		1,127		41		2008
Chattanooga, TN
SUNTRUST III TENNESSEE		341		353		203		—		353		203		556		20		2008
Cleveland, TN
SUNTRUST III TENNESSEE		111		115		66		—		115		66		180		7		2008
Johnson City, TN
SUNTRUST III TENNESSEE		229		237		136		—		237		136		373		14		2008
Jonesborough, TN
SUNTRUST III TENNESSEE		557		576		330		—		576		330		907		33		2008
Lake City, TN
SUNTRUST III TENNESSEE		300		310		178		—		310		178		488		18		2008
Lawrenceburg, TN
SUNTRUST III TENNESSEE		574		593		340		—		593		340		934		34		2008
Murfreesboro, TN
SUNTRUST III TENNESSEE		941		973		558		—		973		558		1,531		56		2008
Nashville, TN
SUNTRUST III TENNESSEE		743		768		441		—		768		441		1,209		44		2008
Nashville, TN
SUNTRUST III TENNESSEE		705		730		419		—		730		419		1,148		42		2008
Nashville, TN
SUNTRUST III VIRGINIA		1,792		1,518		1,370		—		1,518		1,370		2,888		138		2008
Alexandria, VA
SUNTRUST III VIRGINIA		1,557		1,319		1,190		—		1,319		1,190		2,508		120		2008
Arlington, VA
SUNTRUST III VIRGINIA		323		273		246		—		273		246		520		25		2008
Beaverdam, VA
SUNTRUST III VIRGINIA		541		458		413		—		458		413		871		42		2008
Franklin, VA
SUNTRUST III VIRGINIA		725		614		554		—		614		554		1,169		56		2008
Gloucester, VA

-159-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST III VIRGINIA		435		368		332		—		368		332		701		34		2008
Harrisonburg, VA
SUNTRUST III VIRGINIA		395		335		302		—		335		302		637		30		2008
Lightfoot, VA
SUNTRUST III VIRGINIA		366		310		280		—		310		280		590		28		2008
Madison Heights, VA
SUNTRUST III VIRGINIA		2,039		1,727		1,558		—		1,727		1,558		3,285		157		2008
Manassas, VA
SUNTRUST III VIRGINIA		566		479		433		—		479		433		912		44		2008
Mechanicsville, VA
SUNTRUST III VIRGINIA		300		254		229		—		254		229		484		23		2008
Nassawadox, VA
SUNTRUST III VIRGINIA		365		309		279		—		309		279		589		28		2008
Radford, VA
SUNTRUST III VIRGINIA		1,401		1,186		1,070		—		1,186		1,070		2,257		108		2008
Richmond, VA
SUNTRUST III VIRGINIA		306		259		234		—		259		234		493		24		2008
Richmond, VA
SUNTRUST III VIRGINIA		892		755		681		—		755		681		1,437		69		2008
Richmond, VA
SUNTRUST III VIRGINIA		591		501		452		—		501		452		952		46		2008
Richmond, VA
SUNTRUST III VIRGINIA		401		339		306		—		339		306		646		31		2008
Roanoke, VA
SUNTRUST III VIRGINIA		176		149		135		—		149		135		284		14		2008
Roanoke, VA
SUNTRUST III VIRGINIA		846		716		646		—		716		646		1,362		65		2008
South Boston, VA
SUNTRUST III VIRGINIA		1,341		1,136		1,025		—		1,136		1,025		2,160		103		2008
Spotsylvania, VA
SUNTRUST III VIRGINIA		659		558		504		—		558		504		1,062		51		2008
Virginia Beach, VA

-160-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SYCAMORE COMMONS		48,382		12,500		31,265		—			12,500		31,265		43,765		982		2010
Matthews, NC
THE CENTER AT HUGH HOWELL		7,722		2,250		11,091		458			2,250		11,549		13,799		1,566		2007
Tucker, GA
THE HIGHLANDS		9,745		5,500		9,589		103			5,500		9,692		15,192		1,267		2006
Flower Mound, TX
THE MARKET AT HILLIARD		11,205		4,432		13,308		3,056			4,432		16,364		20,796		2,427		2005
Hilliard, OH
THOMAS CROSSROADS		4,460		1,622		8,322		16			1,622		8,338		9,960		602		2009
Newnan, GA
TOMBALL TOWN CENTER		—		1,938		14,233		3,464			1,938		17,697		19,634		2,832		2005
Tomball, TX
TRIANGLE CENTER		23,600		12,770		24,556		1,447			12,770		26,003		38,773		4,398		2005
Longview, WA
TULSA HILLS SHOPPING CENTER		29,727		8,000		42,272		—			8,000		42,272		50,272		1,042		2010
Tulsa, OK
UNIVERSAL PLAZA		9,887		2,900		4,950		—			2,900		4,950		7,850		150		2010
Lauderhill, FL
UNIVERSITY OAKS SHOPPING CENTER		18,794		7,250		25,326		—			7,250		25,326		32,576		631		2010
Round Rock, TX
VENTURE POINT		25,818		10,400		12,887		—			10,400		12,887		23,287		337		2010
Duluth, GA
WALGREENS - SPRINGFIELD		—		855		2,530		—			855		2,530		3,385		464		2007
Springfield, MO
WARDS CROSSING		12,904		2,400		11,417		—			2,400		11,417		13,817		359		2010
Lynchburg, VA
WASHINGTON PARK PLAZA		30,600		6,500		33,912		(301	)		6,500		33,612		40,112		4,098		2005
Homewood, IL
WEST END SQUARE		—		675		2,784		146			675		2,930		3,605		500		2007
Houston, TX
WILLIS TOWN CENTER		—		1,550		1,820		652			1,550		2,472		4,022		377		2005
Willis, TX

-161-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
WINCHESTER TOWN CENTER		—		495		3,966		45		495		4,011		4,506		737		2005
Houston, TX
WINDERMERE VILLAGE		—		1,220		6,331		796		1,220		7,127		8,347		1,274		2005
Houston, TX
WOODBRIDGE		—		—		—		3,740		—		3,740		3,740		132		1905
Wylie, TX
WOODFOREST SQUARE		—		300		2,136		679		300		2,815		3,115		500		2005
Houston, TX
WOODLAKE CROSSING		15,244		3,420		14,153		700		3,420		14,853		18,273		534		2009
San Antonio, TX
Office
11500 MARKET STREET		—		140		346		—		140		346		486		65		2005
Jacinto City, TX
6234 RICHMOND AVENUE		—		500		970		992		500		1,962		2,462		316		2006
Houston, TX
AMERICAN EXPRESS - GREENSBORO		26,565		8,850		39,527		—		8,850		39,527		48,377		2,334		2009
Greensboro, NC
AMERICAN EXPRESS - SALT LAKE CITY		23,106		9,000		45,415		—		9,000		45,415		54,415		2,642		2009
Salt Lake City, UT
AT&T - ST LOUIS		112,695		8,000		170,169		39		8,000		170,208		178,208		23,825		2007
St Louis, MO
AT&T CLEVELAND		29,242		870		40,033		30		870		40,063		40,933		5,340		2005
Cleveland, OH
BRIDGESIDE POINT OFFICE BLDG		17,325		1,525		28,609		—		1,525		28,609		30,134		5,090		2006
Pittsburg, PA
COMMONS DRIVE		3,663		1,600		5,746		1,663		1,600		7,410		9,010		878		2007
Aurora, IL
COMPUTERSHARE/EQUISERVE		44,500		6,481		51,701		—		6,481		51,701		58,182		2,730		2009
Canton, MA
CRYSTAL LAKE MEDICAL		10,813		2,343		5,972		—		2,343		5,972		8,315		65		2010
Crystal Lake, IL

-162-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
DAKOTA RIDGE MEDICAL		—		1,873		5,406		—		1,873		5,406		7,280		79		2010
Littleton, CO
DENVER HIGHLANDS		10,500		1,700		11,839		—		1,700		11,839		13,539		1,700		2006
Highlands Ranch, CO
DULLES EXECUTIVE PLAZA		68,750		15,500		96,083		3,065		15,500		99,148		114,648		16,245		2006
Herndon, VA
HOUSTON LAKES		8,988		3,000		12,950		642		3,000		13,592		16,592		1,913		2006
Houston, TX
IDS CENTER		125,000		24,900		202,016		17,502		24,900		219,518		244,418		33,514		2007
Minneapolis, MN
KINROSS LAKES		10,065		825		14,639		50		825		14,689		15,514		2,053		2005
Richfield, OH
LAKE VIEW TECHNOLOGY CENTER		14,470		884		22,072		32		884		22,104		22,988		3,926		2006
Suffolk, VA
MCP ONE		5,832		451		2,861		—		451		2,861		3,311		254		2009
Indianapolis, IN
MCP TWO		12,750		1,990		9,820		—		1,990		9,820		11,810		1,055		2009
Indianapolis, IN
MCP THREE		12,000		2,251		7,178		—		2,251		7,178		9,428		101		2010
Indianapolis, IN
MIDLOTHIAN MEDICAL		8,807		—		9,041		113		—		9,153		9,153		719		2009
Midlothian, VA
NORTH BAY MEDICAL		4,097		—		3,957		—		—		3,957		3,957		43		2010
New Port Richey, FL
REGIONAL ROAD		8,679		950		10,501		122		950		10,623		11,573		1,611		2006
Greensboro, NC
SANOFI AVENTIS		190,000		16,900		192,987		2,621		16,900		195,608		212,508		13,063		2009
Bridgewater, NJ
SANTEE - CIVIC CENTER		12,023		—		17,838		18		—		17,856		17,856		2,552		2005
Santee, CA
SBC CENTER		200,472		35,800		287,424		443		35,800		287,867		323,667		51,998		2007
Hoffman Estates, IL

-163-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
SUNTRUST OFFICE I FL		2,079		5,700		2,417		(3	)		5,700		2,414		8,114		41		2007
Bal Harbour, FL
SUNTRUST OFFICE I FL		313		315		363		(1	)		315		363		678		273		2007
Bushnell, FL
SUNTRUST OFFICE I FL		570		1,260		662		(1	)		1,260		661		1,921		75		2007
Melbourne, FL
SUNTRUST OFFICE I GA		261		275		675		(0	)		275		675		950		76		2007
Douglas, GA
SUNTRUST OFFICE I MD		1,449		650		4,617		(2	)		650		4,614		5,264		522		2007
Bethesda, MD
SUNTRUST OFFICE I NC		519		400		1,471		(1	)		400		1,470		1,870		166		2007
Winston-Salem, NC
SUNTRUST OFFICE I NC		600		500		1,700		(1	)		500		1,699		2,199		192		2007
Raleigh, NC
SUNTRUST OFFICE I VA		2,092		1,360		6,272		(3	)		1,360		6,269		7,629		709		2007
Richmond, VA
SUNTRUST II OFFICE GEORGIA		4,357		2,625		4,355		(3	)		2,625		4,352		6,977		479		2008
Atlanta, GA
SUNTRUST III OFFICE FLORIDA		1,333		1,667		457		—			1,667		457		2,124		46		2008
Gainesville, FL
SUNTRUST III OFFICE FLORIDA		846		1,058		290		—			1,058		290		1,348		29		2008
Holy Hill, FL
SUNTRUST III OFFICE GEORGIA		1,483		676		1,703		—			676		1,703		2,379		172		2008
Brunswick, GA
SUNTRUST III OFFICE GEORGIA		1,755		799		2,016		—			799		2,016		2,815		203		2008
Gainesville, GA
UNITED HEALTH - CYPRESS		22,000		10,000		30,547		2			10,000		30,549		40,549		2,240		2008
Cypress, CA
UNITED HEALTH - FREDERICK		17,888		5,100		26,303		2			5,100		26,305		31,405		1,841		2008
Frederick, MD
UNTIED HEALTH - GREEN BAY		28,958		4,250		45,725		23			4,250		45,748		49,998		3,202		2008
Green Bay, WI

-164-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
UNITED HEALTH - INDIANAPOLIS		16,545		3,500		24,248		2		3,500		24,250		27,750		1,697		2008
Indianapolis, IN
UNITED HEALTH - ONALASKA		4,149		4,090		2,794		2		4,090		2,796		6,886		205		2008
Onalaska, WI
UNITED HEALTH - WAUWATOSA		10,050		1,800		14,930		2		1,800		14,932		16,732		1,045		2006
Wauwatosa, WI
WASHINGTON MUTUAL - ARLINGTON		20,115		4,870		30,915		3		4,870		30,918		35,788		4,723		2007
Arlington, TX
WORLDGATE PLAZA		59,950		14,000		79,048		2,356		14,000		81,403		95,403		10,735		2007
Herndon, VA
Multi-family
14th STREET - UAB		11,770		4,250		27,458		—		4,250		27,458		31,708		3,444		2007
Birmingham, AL
BLOCK 121		15,350		3,360		32,087		—		3,360		32,087		35,447		353		2010
Birmingham, AL
BRAZOS RANCH APARTMENTS		15,246		4,000		22,246		—		4,000		22,246		26,246		1,686		2009
Rosenberg, TX
ENCINO CANYON APARTMENTS		12,000		1,700		16,443		—		1,700		16,443		18,143		2,123		2007
San Antonio,TX
FANNIN STREET STATION APARTMENTS		31,820		24,000		30,200		—		24,000		30,200		54,200		1,166		2010
Houston, TX
FIELDS APARTMENT HOMES		18,700		1,850		29,783		—		1,850		29,783		31,633		4,266		2007
Bloomington, IN
GROGANS LANDING APARTMENTS		9,705		4,380		10,533		1,894		4,380		12,427		16,807		720		2009
The Woodlands, TX
KATY TRAIL		24,257		6,500		33,174		—		6,500		33,174		39,674		322		2010
Dallas, TX
LANDINGS AT CLEARLAKE		18,590		3,770		27,843		—		3,770		27,843		31,613		3,973		2007
Webster,TX
LEGACY AT ART QUARTER		29,426		1,290		35,031		123		1,290		35,153		36,443		2,865		2008
Oklahoma City, OK

-165-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
LEGACY CORNER		14,630		1,600		23,765		—			1,600		23,765		25,365		1,944		2008
Midwest City, OK
LEGACY CROSSING		23,488		1,110		29,297		75			1,110		29,372		30,482		2,374		2008
Oklahoma City, OK
LEGACY WOODS		21,190		2,500		31,505		8			2,500		31,514		34,014		2,580		2007
Edmond, OK
NANTUCKET APARTMENTS		27,398		2,170		30,388		—			2,170		30,388		32,558		477		2010
Loveland, OH
OAK PARK		30,801		9,738		39,958		69			9,738		40,027		49,765		1,754		2009
Dallas, TX
PARKSIDE APARTMENTS		18,000		5,500		15,623		—			5,500		15,623		21,123		765		2009
The Woodlands, TX
SEVEN PALMS APARTMENTS		18,750		3,550		24,348		5			3,550		24,353		27,903		3,117		2006
Webster,TX
SOUTHGATE APARTMENTS		10,725		1,730		16,356		—			1,730		16,356		18,086		2,971		2007
Louisville,KY
STERLING RIDGE ESTATES		14,324		4,140		20,550		(46	)		4,140		20,504		24,644		1,161		2009
The Woodlands, TX
THE RADIAN (PENN)		58,500		—		79,997		11,893			—		91,890		91,890		7,552		2007
Radian, PA
UNIV HOUSE AT GAINESVILLE		15,945		6,561		36,879		1,015			6,561		37,893		44,454		3,607		2007
Gainesville, FL
UNIV HOUSE AT HUNTSVILLE		13,325		1,351		26,308		1,230			1,351		27,538		28,888		2,926		2007
Huntsville, TX
UNIV HOUSE AT LAFAYETTE		9,306		—		16,357		1,665			—		18,022		18,022		1,881		2007
Lafayette, AL
VILLAGES AT KITTY HAWK		11,550		2,070		17,397		11			2,070		17,408		19,478		2,422		2007
Universal City,TX
VILLAS AT SHADOW CREEK		16,117		3,690		24,142		—			3,690		24,142		27,832		1,986		2007
Pearland, TX
WATERFORD PLACE AT SHADOW CREEK		16,500		2,980		24,573		—			2,980		24,573		27,553		3,512		2007
Pearland,TX

-166-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
WOODRIDGE APARTMENTS		13,173		3,680		11,235		—		3,680		11,235		14,915		540		2009
The Woodlands, TX
Industrial
11500 MELROSE AVE -294 TOLLWAY		4,561		2,500		5,071		—		2,500		5,071		7,571		635		2006
Franklin Park, IL
1800 BRUNING		10,156		10,000		7,971		83		10,000		8,053		18,053		1,198		2006
Itasca, IL
500 HARTLAND		5,860		1,200		7,459		—		1,200		7,459		8,659		1,139		2006
Hartland, WI
55th STREET		7,351		1,600		11,115		—		1,600		11,115		12,715		1,698		2007
Kenosha, WI
AIRPORT DISTRIB CENTER #10		2,042		600		2,861		35		600		2,896		3,496		380		2007
Memphis, TN
AIRPORT DISTRIB CENTER #11		1,539		400		2,120		—		400		2,120		2,520		278		2007
Memphis, TN
AIRPORT DISTRIB CENTER #15		1,203		200		1,651		4		200		1,654		1,854		227		2007
Memphis, TN
AIRPORT DISTRIB CENTER #16		2,714		600		3,750		—		600		3,750		4,350		493		2007
Memphis, TN
AIRPORT DISTRIB CENTER #18		1,007		200		1,317		65		200		1,382		1,582		194		2007
Memphis, TN
AIRPORT DISTRIB CENTER #19		2,546		600		3,866		—		600		3,866		4,466		507		2007
Memphis, TN
AIRPORT DISTRIB CENTER #2		1,734		400		2,282		—		400		2,282		2,682		299		2007
Memphis, TN
AIRPORT DISTRIB CENTER #4		1,287		300		1,662		—		300		1,662		1,962		218		2007
Memphis, TN
AIRPORT DISTRIB CENTER #7		699		200		832		—		200		832		1,032		114		2007
Memphis, TN
AIRPORT DISTRIB CENTER #8		448		100		630		—		100		630		730		87		2007
Memphis, TN
AIRPORT DISTRIB CENTER #9		811		200		948		40		200		988		1,188		136		2007
Memphis, TN

-167-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
ANHEUSER BUSCH		7,548		2,200		13,598		—			2,200		13,598		15,798		1,586		2007
Devens, MA
ATLAS - BELVIDERE		11,329		1,600		15,521		—			1,600		15,521		17,121		1,769		2007
Belvidere, IL
ATLAS - CARTERSVILLE		8,273		900		13,112		(39	)		900		13,073		13,973		1,488		2007
Cartersville, GA
ATLAS - DOUGLAS		3,432		75		6,681		—			75		6,681		6,756		760		2007
Douglas, GA
ATLAS - GAFFNEY		3,350		950		5,114		—			950		5,114		6,064		582		2007
Gaffney, SC
ATLAS - GAINESVILLE		7,731		550		12,783		—			550		12,783		13,333		1,454		2007
Gainesville, GA
ATLAS - PENDERGRASS		14,919		1,250		24,259		—			1,250		24,259		25,509		2,759		2007
Pendergrass, GA
ATLAS - PIEDMONT		13,563		400		23,113		7			400		23,120		23,520		2,629		2007
Piedmont, SC
ATLAS - ST PAUL		8,226		3,890		10,093		—			3,890		10,093		13,983		1,148		2007
St. Paul, MN
ATLAS-BROOKLYN PARK		7,407		2,640		8,934		—			2,640		8,934		11,574		1,016		2007
Brooklyn Park, MN
ATLAS-NEW ULM		6,015		900		9,359		—			900		9,359		10,259		1,066		2007
New Ulm, MN
ATLAS-ZUMBROA		10,242		1,300		16,437		—			1,300		16,437		17,737		1,870		2006
Zumbrota, MN
BAYMEADOW - GLEN BURNIE		13,824		1,225		23,407		24			1,225		23,431		24,656		3,348		2006
Glen Burnie, MD
C&S - ABERDEEN		22,720		4,650		33,276		13			4,650		33,289		37,939		4,660		2006
Aberdeen, MD
C&S - BIRMINGHAM		25,964		3,400		40,373		—			3,400		40,373		43,773		3,532		2008
Birmingham, AL
C&S - NORTH HATFIELD		20,280		4,800		30,103		14			4,800		30,117		34,917		4,216		2006
Hatfield, MA

-168-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
C&S - SOUTH HATFIELD		10,000		2,500		15,251		11		2,500		15,262		17,762		2,137		2006
Hatfield, MA
C&S - WESTFIELD		29,500		3,850		45,906		13		3,850		45,919		49,769		6,428		2006
Westfield, MA
CLARION		3,172		87		4,790		90		87		4,880		4,967		692		2007
Clarion, IA
COLOMA		10,017		410		17,110		777		410		17,887		18,297		2,017		2006
Coloma, MI
DEER PARK SEACO		2,965		240		5,271		—		240		5,271		5,511		805		2007
Deer Park, TX
DELP DISTRIBUTION CENTER #2		1,623		280		2,282		—		280		2,282		2,562		330		2007
Memphis, TN
DELP DISTRIBUTION CENTER #5		1,623		390		2,050		2		390		2,051		2,441		269		2007
Memphis, TN
DELP DISTRIBUTION CENTER #8		1,399		760		1,388		—		760		1,388		2,148		190		2006
Memphis, TN
DORAL - WAUKESHA		1,364		240		2,013		—		240		2,013		2,253		308		2006
Waukesha, WI
HASKELL-ROLLING PLAINS FACILITY		—		45		19,733		—		45		19,733		19,778		1,906		2008
Haskell, TX
HOME DEPOT - LAKE PARK		15,469		1,350		24,770		4		1,350		24,774		26,124		1,734		2008
Valdosta, GA
HOME DEPOT - MACALLA		17,094		2,800		26,067		4		2,800		26,071		28,871		1,828		2008
MaCalla, AL
HUDSON CORRECTIONAL FACILITY		—		1,382		—		93,137		1,382		93,137		94,520		4,217		2009
Hudson, CO
IMAGINE AVONDALE		—		1,195		5,731		—		1,195		5,731		6,926		195		2010
Avondale, AZ
IMAGINE COOLIDGE		—		2,260		3,895		—		2,260		3,895		6,155		133		2010
Coolidge, AZ
IMAGINE DISCOVERY		—		590		7,117		—		590		7,117		7,707		242		2010
Baltimore, MD

-169-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
IMAGINE FIRESTONE		—		680		6,439		—		680		6,439		7,119		219		2010
Firestone, CO
IMAGINE HOPE LAMOND		—		775		9,706		—		775		9,706		10,481		329		2010
Washington, DC
IMAGINE INDIGO RANCH		—		1,150		7,304		—		1,150		7,304		8,454		248		2010
Colorado Springs, CO
IMAGINE TOWN CENTER		—		1,175		7,309		—		1,175		7,309		8,484		248		2010
Palm Coast, FL
INDUSTRIAL DRIVE		3,709		200		6,812		—		200		6,812		7,012		993		2007
Horican, WI
KINSTON		8,930		460		14,837		—		460		14,837		15,297		1,859		2006
Kinston, NC
KIRK ROAD		7,863		2,200		11,413		42		2,200		11,455		13,655		1,748		2007
St. Charles, IL
LIBERTYVILLE ASSOCIATES		14,807		3,600		20,563		—		3,600		20,563		24,163		2,818		2005
Libertyville, IL
McKESSON DISTRIBUTION CENTER		5,760		345		8,952		—		345		8,952		9,297		1,695		2007
Conroe, TX
MOUNT ZION ROAD		24,632		2,570		41,667		—		2,570		41,667		44,237		5,711		2007
Lebanon, IN
OTTAWA		1,768		200		2,905		—		200		2,905		3,105		426		2007
Ottawa, IL
SCHNEIDER ELECTRIC		11,000		2,150		14,720		—		2,150		14,720		16,870		1,975		2007
Loves Park, IL
SOUTHWIDE INDUSTRIAL CENTER #5		392		122		425		—		122		425		547		58		2007
Memphis, TN
SOUTHWIDE INDUSTRIAL CENTER #6		1,007		248		1,361		—		248		1,361		1,609		187		2007
Memphis, TN
SOUTHWIDE INDUSTRIAL CENTER #7		2,014		483		2,792		6		483		2,798		3,281		385		2007
Memphis, TN
SOUTHWIDE INDUSTRIAL CENTER #8		196		42		286		—		42		286		328		39		2007
Memphis, TN

-170-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
STONE FORT DISTRIB CENTER #1		6,770		1,910		9,264		(52	)		1,910		9,212		11,122		1,268		2007
Chattanooga, TN
STONE FORT DISTRIB CENTER #4		1,399		490		1,782		—			490		1,782		2,272		245		2006
Chattanooga, TN
THERMO PROCESS SYSTEMS		8,201		1,202		11,995		—			1,202		11,995		13,197		2,162		2007
Sugar Land, TX
TRI-STATE HOLDINGS I		4,665		4,700		3,973		—			4,700		3,973		8,673		570		2007
Wood Dale, IL
TRI-STATE HOLDINGS II		6,372		1,630		11,252		—			1,630		11,252		12,882		1,542		2007
Houston, TX
TRI-STATE HOLDINGS III		4,334		650		8,083		—			650		8,083		8,733		1,108		2007
Mosinee, WI
UNION VENTURE		35,451		4,600		54,292		—			4,600		54,292		58,892		6,021		2007
West Chester, OH
UPS E-LOGISTICS		9,248		950		18,453		—			950		18,453		19,403		2,152		2006
Elizabethtown, KY
WESTPORT - MECHANICSBURG		4,029		1,300		6,185		486			1,300		6,671		7,971		967		2006
Mechanicsburg, PA
Lodging
ALOFT CHAPEL HILL		—		6,484		16,478		—			6,484		16,478		22,962		545		2010
Chapel Hill, NC
COMFORT INN - CROSS CREEK		—		571		8,789		3,887			571		12,676		13,248		2,196		2007
Fayetteville, NC
COURTYARD BY MARRIOTT QUORUM		18,860		4,000		26,141		1,931			4,000		28,073		32,073		4,131		2007
Addison, TX
COURTYARD BY MARRIOTT		12,146		4,989		18,988		2,996			4,989		21,984		26,973		3,584		2007
Ann Arbor, MI
COURTYARD BY MARRIOTT DUNN LORING-FAIRFAX		30,810		12,100		40,242		823			12,100		41,065		53,165		7,301		2007
Vienna, VA
COURTYARD - DOWNTOWN AT UAB		6,378		—		20,810		828			—		21,638		21,638		3,927		2008
Birmingham, AL

-171-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
COURTYARD - FORT MEADE AT NBP		14,400		1,611		22,622		832		1,611		23,454		25,065		3,868		2008
Annapolis Junction, MD
COURTYARD BY MARRIOTT - WEST LANDS END		7,550		1,500		13,416		913		1,500		14,328		15,828		2,346		2007
Fort Worth, TX
COURTYARD - FT WORTH		14,613		774		45,820		696		774		46,516		47,290		7,861		2008
Fort Worth, TX
COURTYARD BY MARRIOTT		6,790		1,600		13,247		2,865		1,600		16,112		17,712		2,779		2007
Harlingen, TX
COURTYARD BY MARRIOTT - NORTHWEST		7,216		1,428		15,085		1,331		1,428		16,415		17,843		2,888		2007
Houston, TX
COURTYARD BY MARRIOTT - WESTCHASE		16,680		4,400		22,626		1,616		4,400		24,242		28,642		3,691		2007
Houston, TX
COURTYARD BY MARRIOTT WEST UNIVERSITY		10,980		2,200		16,408		1,027		2,200		17,435		19,635		2,730		2007
Houston, TX
COURTYARD BY MARRIOTT - COUNTRY CLUB PLAZA		9,089		3,426		16,349		437		3,426		16,786		20,211		3,571		2007
Kansas City, MO
COURTYARD BY MARRIOTT		10,320		3,200		19,009		2,236		3,200		21,245		24,445		3,404		2007
Lebanon, NJ
COURTYARD BY MARRIOTT		—		5,272		12,778		1,905		5,272		14,683		19,955		2,810		2007
Houston, TX
COURTYARD - NEWARK ELIZABETH		9,737		—		35,177		2,346		—		37,524		37,524		6,403		2008
Elizabeth, NJ
COURTYARD - PITTSBURGH DOWNTOWN		17,316		2,700		33,086		—		2,700		33,086		35,786		688		2010
Pittsburgh, PA
COURTYARD - PITTSBURGH WEST HOME		8,405		1,500		14,364		—		1,500		14,364		15,864		311		2010
Pittsburgh, PA

-172-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
COURTYARD - RICHMOND		11,800		2,173		—		19,476			2,173		19,476		21,649		3,067		2007
Richmond, VA
COURTYARD BY MARRIOTT - ROANOKE AIRPORT		14,556		3,311		22,242		2,262			3,311		24,504		27,815		3,707		2007
Roanoke, VA
COURTYARD BY MARRIOTT SEATTLE - FEDERAL WAY		22,830		7,700		27,167		1,392			7,700		28,558		36,258		4,145		2007
Federal Way, WA
COURTYARD BY MARRIOTT CHICAGO- ST.CHARLES		—		1,685		9,355		1,602			1,685		10,956		12,642		1,669		2007
St. Charles, IL
COURTYARD BY MARRIOTT - WILLIAM CENTER		16,030		4,000		20,942		3,150			4,000		24,092		28,092		3,913		2007
Tucson, AZ
COURTYARD BY MARRIOTT		—		2,397		18,560		2,802			2,397		21,362		23,760		3,225		2007
Wilmington, NC
COURTYARD - WEST PALM AIRPORT		6,094		1,900		8,703		—			1,900		8,703		10,603		197		2010
Palm Coast, FL
DOUBLETREE - ATLANTA GALLERIA		6,116		1,082		20,397		1,584			1,082		21,981		23,063		3,884		2008
Alpharetta, GA
DOUBLETREE - WASHINGTON DC		26,398		25,857		56,964		2,820			25,857		59,783		85,640		8,847		2008
Washington, DC
EMBASSY SUITES - BEACHWOOD		14,448		1,732		42,672		(30,440	)		1,732		12,232		13,964		—		2008
Beachwood, OH
EMBASSY SUITES - BALTIMORE		12,661		2,429		38,927		4,079			2,429		43,006		45,436		7,473		2008
Hunt Valley, MD
FAIRFIELD INN		—		1,981		6,353		445			1,981		6,799		8,780		1,466		2007
Ann Arbor, MI
HAMPTON INN SUITES - DENVER		7,216		6,144		26,472		332			6,144		26,803		32,947		4,591		2008
Colorado Springs, CO
HAMPTON INN ATLANTA - PERIMETER CENTER		8,395		2,768		14,072		2,037			2,768		16,109		18,877		2,425		2007
Atlanta, GA

-173-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
HAMPTON INN BALTIMORE-INNER HARBOR		13,700		1,700		21,067		939			1,700		22,006		23,706		3,245		2007
Baltimore, MD
HAMPTON INN RALEIGH-CARY		7,024		2,268		10,503		2,004			2,268		12,507		14,775		2,050		2007
Cary, NC
HAMPTON INN UNIVERSITY PLACE		7,714		3,509		11,335		1,688			3,509		13,023		16,532		2,152		2007
Charlotte, NC
HAMPTON INN SUITES DULUTH-GWINNETT		9,523		488		12,991		2,010			488		15,001		15,488		2,426		2007
Duluth, GA
HAMPTON INN WHITE PLAINS-TARRYTOWN		15,541		3,200		26,160		4,570			3,200		30,730		33,930		4,406		2007
Elmsford, NY
HAMPTON INN		—		2,753		3,782		1,897			2,753		5,680		8,432		949		2007
Jacksonville, NC
HGI - BOSTON BURLINGTON		5,871		4,095		25,556		738			4,095		26,293		30,388		4,401		2008
Burlington, MA
HGI - COLORADO SPRINGS		8,402		1,400		17,522		2,223			1,400		19,745		21,145		2,928		2008
Colorado Springs, CO
HGI - SAN ANTONIO AIRPORT		6,085		1,498		19,484		220			1,498		19,703		21,201		3,411		2008
San Antonio, TX
HGI - WASHINGTON DC		60,730		18,800		64,359		845			18,800		65,204		84,004		10,911		2008
Washington, DC
HILTON GARDEN INN TAMPA YBOR		9,460		2,400		16,159		715			2,400		16,874		19,274		2,646		2007
Tampa, FL
HILTON GARDEN INN - AKRON		6,774		900		11,556		(415	)		900		11,141		12,041		2,060		2007
Akron, OH
HILTON GARDEN INN ALBANY AIRPORT		12,050		1,645		20,263		3,923			1,645		24,186		25,831		3,668		2007
Albany, NY
HILTON GARDEN INN ATLANTA WINWARD		10,435		1,030		18,206		1,231			1,030		19,436		20,467		2,884		2007
Alpharetta, GA

-174-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
HILTON GARDEN INN		19,799		2,920		27,995		1,731			2,920		29,726		32,646		4,463		2007
Evanston, IL
HILTON GARDEN INN RALEIGH - DURHAM		7,846		2,754		26,050		4,298			2,754		30,348		33,102		4,248		2007
Raleigh, NC
HILTON GARDEN INN		21,680		8,900		25,156		2,376			8,900		27,532		36,432		4,179		2007
Westbury, NY
HILTON GARDEN INN		7,646		6,354		10,328		114			6,354		10,443		16,796		2,448		2007
Wilmington, NC
HILTON GARDEN INN HARTFORD NORTH		10,317		5,606		13,892		1,695			5,606		15,588		21,193		2,421		2007
Windsor, CT
HILTON GARDEN INN PHOENIX		—		5,114		57,105		535			5,114		57,640		62,754		8,723		2008
Phoenix, AZ
HILTON - UNIVERSITY OF FLORIDA		27,775		—		50,407		5,380			—		55,787		55,787		9,521		2007
Gainesville, FL
HOLIDAY INN EXPRESS - CLEARWATER GATEWAY		—		2,283		6,202		(2,791	)		2,283		3,410		5,693		—		2007
Clearwater, FL
HOLIDAY INN HARMON MEADOW SECAUCUS		—		—		23,291		8,758			—		32,049		32,049		4,675		2007
Secaucus, NJ
HOMEWOOD - HOUSTON GALLERIA		9,415		1,655		30,587		185			1,655		30,772		32,426		5,972		2008
Houston, TX
HOMEWOOD SUITES		10,160		2,400		18,071		2,701			2,400		20,772		23,172		3,822		2007
Albuquerque, NM
HOMEWOOD SUITES		12,930		4,300		15,629		2,508			4,300		18,138		22,438		3,273		2007
Baton Rouge, LA
HOMEWOOD SUITES		12,664		1,478		19,404		4,820			1,478		24,224		25,702		4,282		2007
Cary, NC
HOMEWOOD SUITES HOUSTON - CLEARLAKE		7,175		1,235		12,655		2,597			1,235		15,253		16,488		2,386		2007
Houston, TX

-175-

			Initial Costs (A)						Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)		Land and Improvements		Buildings and Improvements (D)		Total (D,E)
HOMEWOOD SUITES		7,898		2,403		10,441		2,759		2,403		13,200		15,603		2,390		2007
Durham, NC
HOMEWOOD SUITES		9,836		721		9,592		2,657		721		12,250		12,971		2,373		2007
Lake Mary, FL
HOMEWOOD SUITES METRO CENTER		6,289		2,684		9,740		3,144		2,684		12,884		15,568		2,422		2007
Phoenix, AZ
HOMEWOOD SUITES		11,800		3,203		21,300		343		3,203		21,643		24,845		4,186		2007
Princeton, NJ
HOMEWOOD SUITES CRABTREE VALLEY		12,785		2,194		21,292		2,662		2,194		23,954		26,148		3,874		2007
Raleigh, NC
HOMEWOOD SUITES CLEVELAND SOLON		5,490		1,900		10,757		1,671		1,900		12,428		14,328		2,273		2007
Solon, OH
HOMEWOOD SUITES COLORADO SPRINGS NORTH		7,830		2,900		14,011		2,526		2,900		16,536		19,436		3,322		2007
Colorado Springs, CO
HYATT REGENCY - OC		—		18,688		93,384		24,351		18,688		117,735		136,423		12,164		2008
Orange County, CA
HYATT - BOSTON/MEDFORD		8,142		2,766		29,141		197		2,766		29,338		32,105		5,582		2008
Medford, MA
MARRIOTT - ATL CENTURY CENTER		9,628		—		36,571		2,211		—		38,782		38,782		8,173		2008
Atlanta, GA
MARRIOTT - CHICAGO - MED DIST UIC		7,896		8,831		17,911		4,921		8,831		22,832		31,664		3,997		2008
Chicago, IL
MARRIOTT - DALLAS		26,127		6,300		45,158		—		6,300		45,158		51,458		585		2010
Dallas, TX
Marriott - WOODLANDS WATERWAY		70,000		5,500		98,886		20,996		5,500		119,882		125,382		16,780		2007
Woodlands, TX
MARRIOTT - WEST DES MOINES		11,306		3,410		15,416		—		3,410		15,416		18,826		327		2010
Des Moines, IA
QUALITY SUITES		10,283		1,331		13,709		11,853		1,331		25,562		26,893		1,722		2007
Charleston, SC

-176-

			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
RESIDENCE INN - BALTIMORE		40,040		—		55,410		2,941			—		58,352		58,352		9,278		2008
Baltimore, MD
RESIDENCE INN		6,900		1,700		12,629		906			1,700		13,535		15,235		2,189		2007
Brownsville, TX
RESIDENCE INN - CAMBRIDGE		26,726		10,346		72,735		631			10,346		73,366		83,712		11,341		2008
Cambridge, MA
RESIDENCE INN SOUTH BRUNSWICK-CRANBURY		10,000		5,100		15,368		2,187			5,100		17,555		22,655		3,014		2007
Cranbury, NJ
RESIDENCE INN CYPRESS - LOS ALAMITS		20,650		9,200		25,079		3,152			9,200		28,231		37,431		4,831		2007
Cypress, CA
RESIDENCE INN DFW AIRPORT NORTH		9,560		2,800		14,782		635			2,800		15,417		18,217		2,445		2007
Dallas-Fort Worth, TX
RESIDENCE INN PARK CENTRAL		8,970		2,600		17,322		2,625			2,600		19,947		22,547		3,542		2007
Dallas , TX
RESIDENCE INN SOMERSET-FRANKLIN		9,890		3,100		14,322		1,945			3,100		16,267		19,367		2,770		2007
Franklin , NJ
RESIDENCE INN		10,810		5,300		14,632		2,176			5,300		16,809		22,109		2,833		2007
Hauppauge, NY
RESIDENCE INN WESTCHASE		12,550		4,300		16,969		710			4,300		17,679		21,979		2,809		2007
Westchase, TX
RESIDENCE INN WEST UNIVERSITY		13,100		3,800		18,834		467			3,800		19,300		23,100		3,151		2007
Houston, TX
RESIDENCE INN NASHVILLE AIRPORT		12,120		3,500		14,147		1,474			3,500		15,621		19,121		2,480		2007
Nashville, TN
RESIDENCE INN		7,500		1,688		10,812		(7,485	)		1,688		3,327		5,015		—		2007
Phoenix, AZ
RESIDENCE INN - POUGHKEEPSIE		8,109		1,003		24,590		305			1,003		24,895		25,898		4,343		2008
Poughkeepsie, NY
RESIDENCE INN ROANOKE AIRPORT		4,483		500		9,499		126			500		9,624		10,124		1,813		2007
Roanoke, VA

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			Initial Costs (A)							Gross amount at which carried at end of period						Accumulated Depreciation (D,F)		Date of Completion of Construction or Acquisition
	Encumbrance		Land		Buildings and Improvements		Adjustments to Basis (C)			Land and Improvements		Buildings and Improvements (D)		Total (D,E)
RESIDENCE INN WILLIAMS CENTRE		12,770		3,700		17,601		464			3,700		18,065		21,765		3,009		2007
Tucson, AZ
RESIDENCE INN - NEWARK ELIZABETH		10,297		—		41,096		1,959			—		43,055		43,055		7,562		2008
Elizabeth, NJ
SPRINGHILL SUITES		9,130		3,200		14,833		173			3,200		15,006		18,206		2,332		2007
Danbury, CT
TOWNEPLACE SUITES NORTHWEST		7,082		5,332		8,301		1,441			5,332		9,743		15,075		2,159		2007
Austin, TX
TOWNEPLACE SUITES BIRMINGHAM-HOMEWOOD		—		2,220		7,307		(3,574	)		2,220		3,733		5,952		—		2007
Birmingham, AL
TOWNEPLACE SUITES NORTHWEST		4,170		2,065		5,223		1,031			2,065		6,254		8,318		1,515		2007
College Station, TX
TOWNEPLACE SUITES NORTHWEST - CLEARLAKES		1,257		2,267		9,037		(6,358	)		2,267		2,679		4,946		—		2007
Houston, TX
TOWNEPLACE SUITES NORTHWEST		—		1,607		11,644		1,368			1,607		13,012		14,619		2,450		2007
Houston, TX
TOTAL:		5,462,124		1,883,486		7,993,827		417,794			1,883,486		8,411,621		10,295,107		1,038,829

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INLAND AMERICAN REAL ESTATE TRUST, INC.

(A Maryland Corporation)

Schedule III (continued)

Real Estate and Accumulated Depreciation

December 31, 2010

Notes:

(A) The initial cost to the Company represents the original purchase price of the property, including amounts incurred subsequent to acquisition which were contemplated at the time the property was acquired.

(B) The aggregate cost of real estate owned at December 31, 2010 for Federal income tax purposes was approximately $10,216,739 (unaudited).

(C) Cost capitalized subsequent to acquisition includes payments under master lease agreements as well as additional tangible costs associated with investment properties, including any earnout of tenant space.

(D) Reconciliation of real estate owned:

	2010			2009			2008
Balance at January 1,	$	9,551,426		$	8,216,942		$	6,167,090
Acquisitions and capital improvements		1,058,837			1,378,465			2,184,330
Intangible assets		(73,901	)		(81,052	)		(93,870	)
Intangible liabilities		10,916			37,071			5,968
Sales		(252,171	)		—			(46,576	)
Balance at December 31,	$	10,295,107		$	9,551,426		$	8,216,942

(E) Reconciliation of accumulated depreciation:

Balance at January 1,	$	717,547	$	406,235	$	160,046
Depreciation expense		321,282		311,312		246,189
Balance at December 31,	$	1,038,829	$	717,547	$	406,235

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

Buildings and improvements	5-30 years
Tenant improvements	Life of the lease
Furniture, fixtures & equipment	5-10 years

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

Not applicable.

Item 9A. Controls and Procedures

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our principal executive officer and our principal financial officer evaluated as of December 31, 2010, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures, as of December 31, 2010, were effective for the purpose of ensuring that information required to be disclosed by us in this report is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including the principal executive officer and our principal financial officer as appropriate to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Our management, including our principal executive officer and principal financial officer, evaluated as of December 31, 2010, the effectiveness of our internal control over financial reporting based on the framework in “Internal Control-Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its evaluation, our management has concluded that we maintained effective internal control over financial reporting as of December 31, 2010.

This annual report does not include an attestation report of the company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the company’s independent registered public accounting firm pursuant to permanent deferral of the Securities and Exchange Commission that permit the company to provide only management’s report in this annual report.

Changes in Internal Control over Financial Reporting

There has been no change in our internal control over financial reporting during the fourth quarter of 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

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Part III

Item 10. Directors, Executive Officers and Corporate Governance.

Directors

The biographies of our directors are set forth below. All ages are stated as of January 1, 2011.

Robert D. Parks, 67. Chairman of the board and director since October 2004. Mr. Parks has been a principal of the Inland real estate organization since May 1968 and is currently chairman of IREIC, a position he has held since November 1984. Mr. Parks has been a director of Inland Investment Advisors, Inc. since June 1995, and also served as a director of Inland Securities Corporation from August 1984 until June 2009. Mr. Parks served as a director of Inland Real Estate Corporation from 1994 to June 2008, and served as chairman of the board from May 1994 to May 2004 and president and chief executive officer from 1994 to April 2008. He also served as a director and chairman of the board of Inland Retail Real Estate Trust, Inc. from its inception in September 1998 to March 2006, and as chief executive officer until December 2004, and as the chairman of the board and a director of Inland Western Retail Real Estate Trust from its inception in March 2003 to October 2010. Mr. Parks also has served as the chairman of the board and a director of Inland Diversified Real Estate Trust, Inc. since its inception in June 2008. Mr. Parks is responsible for the ongoing administration of existing investment programs, corporate budgeting and administration for IREIC. He oversees and coordinates the marketing of all investments and investor relations.

He received his bachelor degree from Northeastern Illinois University, Chicago, Illinois, and his master’s degree from the University of Chicago and later taught in Chicago’s public schools. He is a member of the Real Estate Investment Association, the Foundation for Financial Planning and the National Association of Real Estate Investment Trusts, or “NAREIT.”

With over forty years of experience in the commercial real estate industry, our board believes that Mr. Parks has the depth of experience to implement our business strategy. As the current or past chairman of the board of each of the other real estate investment trusts, or “REITs,” sponsored by IREIC, including as the past chairman of a New York Stock Exchange-listed REIT, our board believes Mr. Parks has an understanding of the requirements of serving on a public company board and the leadership experience necessary to serve as our chairman.

J. Michael Borden, 74. Independent director since October 2004. Mr. Borden is president and chief executive officer of Rock Valley Trucking Co., Inc., Total Quality Plastics, Inc., Rock Valley Leasing, Inc., Hufcor Inc. and Airwall, Inc. Mr. Borden also served as the president and chief executive officer of Freedom Plastics, Inc. through February 2009, at which time it filed a voluntary petition for a court-supervised liquidation of all of its assets in the Circuit Court of Rock County, Wisconsin. Mr. Borden also is the chief executive officer of Hufcor Asia Pacific in China and Hong Kong, Marashumi Corp. in Malaysia, Hufcor Australia Group, and F. P. Investments a Real Estate Investment Company. He currently serves on the board of directors of Dowco, Inc., M&I Bank, Competitive Wisconsin, St. Anthony of Padua Charitable Trust and Great Lakes Packaging, is a trustee of The Nature Conservancy and is a regent of the Milwaukee School of Engineering. Mr. Borden previously served as chairman of the board of the Wisconsin Workforce Development Board and as a member of the SBA Advisory Council and the Federal Reserve Bank Advisory Council. He was named Wisconsin entrepreneur of the year in 1998. Mr. Borden received a bachelor degree in accounting and finance from Marquette University, Milwaukee, Wisconsin. He also attended a master of business administration program in finance at Marquette University.

Over the past twenty-five years, Mr. Borden’s various businesses have routinely entered into real estate transactions in the ordinary course of business, allowing him to develop experience in acquiring, leasing, developing and redeveloping real estate assets. Our board believes that this experience qualifies him to serve as a director on our board.

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Thomas F. Glavin, 50. Independent director since October 2007. Mr. Glavin is the owner of Thomas F. Glavin & Associates, Inc., a certified public accounting firm that he started in 1988. In that capacity, Mr. Glavin specializes in providing accounting and tax services to closely held companies. Mr. Glavin began his career at Vavrus & Associates, a real estate firm, located in Joliet, Illinois, that owned and managed apartment buildings and health clubs. At Vavrus & Associates, Mr. Glavin was an internal auditor responsible for reviewing and implementing internal controls. In 1984, Mr. Glavin began working in the tax department of Touche Ross & Co., where he specialized in international taxation. In addition to his accounting experience, Mr. Glavin also has been involved in the real estate business for the past seventeen years. Since 1997, Mr. Glavin has been a partner in Gateway Homes, which has zoned, developed and manages a 440 unit manufactured home park in Frankfort, Illinois. Mr. Glavin received his bachelor degree in accounting from Michigan State University in East Lansing, Michigan and a master of science in taxation from DePaul University in Chicago, Illinois. Mr. Glavin is a member of the Illinois CPA Society and the American Institute of Certified Public Accountants.

As a result of his financial experience, including over twenty-seven years in the accounting profession, our board believes that Mr. Glavin is able to provide valuable insight and advice with respect to our financial risk exposures, our financial reporting process and our system of internal controls. Mr. Glavin, who currently serves as the chairman of the audit committee of our board, qualifies as an “audit committee financial expert” as defined by the SEC.

Brenda G. Gujral, 68. President and director since October 2004. Ms. Gujral also serves as chief executive officer and a director of IREIC. She served as president and a director of IREIC from July 1987 through June 1992. She was again named president and a director of IREIC upon her return to IREIC in January 1998, and served as president until December 2010. Ms. Gujral was appointed chief executive officer of IREIC in January 2008. She has been a director of Inland Securities Corporation since January 1997, and served as its president and chief operating officer from January 1997 to June 2009. Additionally, Ms. Gujral has served as a director of Inland Investment Advisors, Inc. since January 2001 and has been a director of Inland Western Retail Real Estate Trust, Inc. since its inception in March 2003, serving as its chief executive officer from June 2005 until November 2007. Ms. Gujral also has served a director of Inland Diversified Real Estate Trust, Inc. since its inception in June 2008, and served as its president from June 2008 to May 2009. She has been the chairman of the board of Inland Private Capital Corporation (f/k/a Inland Real Estate Exchange Corporation), or “IPCC,” since May 2001 and a director of Inland Opportunity Business Manager & Advisor, Inc. since April 2009, and was a director of Inland Retail Real Estate Trust, Inc. from its inception in September 1998 until it was acquired in February 2007.

Ms. Gujral has overall responsibility for the operations of IREIC, including investor relations, regulatory compliance and filings, review of asset management activities and broker-dealer marketing and communication. Ms. Gujral works with internal and outside legal counsel in structuring IREIC’s investment programs and in connection with preparing offering documents and registering the related securities with the SEC and state securities commissions. Ms. Gujral was able to draw on this these experiences during our capital raising stage, and continues to do so. Our board believes that this experience, coupled with her leadership of IREIC, uniquely qualify Ms. Gujral to serve as a member of our board.

Ms. Gujral has been with the Inland organization for thirty years, becoming an officer in 1982. Prior to joining the Inland organization, she worked for the Land Use Planning Commission, establishing an office in Portland, Oregon, to implement land use legislation for that state. Ms. Gujral graduated from California State University. She holds Series 7, 22, 39 and 63 certifications from the Financial Industry Regulatory Authority (“FINRA”), and is a member of NAREIT, the Investment Program Association and the Real Estate Investment Securities Association.

Thomas F. Meagher, 80. Independent director since October 2004. Mr. Meagher currently serves on the board of directors of DuPage Airport Authority and the TWA Plan Oversight Committee. He also is a former member of the board of trustees of Edward Lowe Foundation, The Private Bank Corp. and the Chicago Chamber of

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Commerce. Mr. Meagher has previously served on the board of directors of UNR Industries, Rohn Towers, Greyhound Lines Inc., Festival Airlines, Lakeside Bank and Trans World Airlines, where he served as chairman of the board for two years and participated in the sale of the company to American Airlines.

Mr. Meagher began his business career in 1958 when he was selected by American Airlines for its management training program. He subsequently joined Continental Air Transport of Chicago as Executive Vice-President in 1964. In 1970, Mr. Meagher was appointed the first president and chief executive officer of the Chicago Convention and Tourism Bureau, returning to Continental Air Transport as president and chief executive officer in 1972. In 1980, Mr. Meagher purchased Howell Tractor and Equipment Company, a large heavy construction equipment dealership, and sold the company in April 2005.

Mr. Meagher received his bachelor degree from St. Mary’s University of Minnesota. Upon graduation, he entered the U.S. Marine Corps Officer Candidate Program, serving with the 2nd Marine Air Wing and achieving the rank of Captain. Mr. Meagher also attended graduate business school at the University of Chicago.

As his biography demonstrates, Mr. Meagher has served on the boards of directors of numerous public and private entities. Our board believes that this experience positions him well to serve on our board.

Paula Saban, 57. Independent director since October 2004. Ms. Saban has worked in the financial services and banking industry for over twenty-five years. She began her career in 1978 with Continental Bank, which later merged into Bank of America. From 1978 to 1990, Ms. Saban held various consultative sales roles in treasury management and in traditional lending areas. She also managed client service teams and developed numerous client satisfaction programs. In 1990, Ms. Saban began designing and implementing various financial solutions for clients with Bank of America’s Private Bank and Banc of America Investment Services, Inc. Her clients included top management of publicly-held companies and entrepreneurs. In addition to managing a diverse client portfolio, she was responsible for client management and overall client satisfaction. She retired from Bank of America in 2006 as a senior vice president/private client manager. In 1994, Ms. Saban and her husband started a construction products company, Newport Distribution, Inc., of which she is president and a principal stockholder. As president of Newport Distribution, Ms. Saban has insight into the development and construction industry, to which the Company has exposure as a result of its investments in joint ventures. Ms. Saban is able to convey these insights to our board, thus making a valuable addition to our board.

Ms. Saban received her bachelor degree from MacMurray College, Jacksonville, Illinois, and her master of business administration from DePaul University, Chicago, Illinois. She holds Series 7 and 63 certifications from FINRA. She is a former president of the Fairview Elementary School PTA and a former trustee of both the Goodman Theatre and Urban Gateways. She served as Legislative Chair of Illinois PTA District 37 and as liaison to the No Child Left Behind Task Force of School District 54.

William J. Wierzbicki, 64. Independent director since October 2005. Mr. Wierzbicki is a registered Professional Planner in the Province of Ontario, Canada, and is a member of both the Canadian Institute of Planners and the Ontario Professional Planners Institute. Mr. Wierzbicki is the sole proprietor of “Planning Advisory Services,” a land-use planning consulting service providing consultation and advice to various local governments, developers and individuals. Through Planning Advisory Services, Mr. Wierzbicki is the planner for the Municipalities of Huron Shores and Price Township as well as the Town of Chapleau. Mr. Wierzbicki previously served as the Coordinator of Current Planning with the City of Sault Ste. Marie, Ontario. In that capacity, his expertise was in the review of residential, commercial and industrial development proposals. Mr. Wierzbicki led the program to develop a new Comprehensive Zoning By-Law for the City of Sault Ste. Marie. Mr. Wierzbicki was the leader of the team that developed the Sault Ste. Marie’s Industrial Development Strategy. More recently he has completed a Community Development Plan for Batchwana First Nation’s Rankin site and an Official Plan for the Township of Prince. Mr. Wierzbicki received an architectural technologist diploma from the Sault Ste. Marie Technical and Vocational School in Ontario, Canada, and attended Sault College and Algoma University.

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Mr. Wierzbicki’s extensive experience in the commercial real estate industry, including with real estate developments, qualifies him to serve on our board. In addition, if we determine to acquire any real estate assets in Canada in the future, Mr. Wierzbicki’s expertise in the Canadian real estate market will be useful to our board.

Executive Officers

In addition to Mr. Parks and Ms. Gujral, whose biographies are set forth above, the following individuals serve as our executive officers. All ages are stated as of January 1, 2011.

Roberta S. Matlin, 66. Vice president – administration since October 2004. Ms. Matlin joined IREIC in 1984 as director of investor administration and currently serves as a director and senior vice president of IREIC, in the latter capacity directing its day-to-day internal operations. Ms. Matlin also has been a director of IPCC since May 2001, a director of Inland Institutional Capital Partners Corporation since May 2006 and a director of Pan American Bank since December 2007. She also has served as a director and president of Inland Investment Advisors, Inc. since June 1995 and Intervest Southern Real Estate Corporation since July 1995 and a director and vice president of Inland Securities Corporation since July 1995. Ms. Matlin also has served as the president of our business manager since its inception in October 2004. She has served as vice president of Inland Diversified Real Estate Trust, Inc. since June 2008, and served as vice president of administration of Inland Western Retail Real Estate Trust, Inc. from 2003 until 2007, vice president of administration of Inland Retail Real Estate Trust, Inc. from 1998 until 2004, vice president of administration of Inland Real Estate Corporation from 1995 until 2000 and trustee and executive vice president of Inland Mutual Fund Trust from 2001 until 2004. Prior to joining Inland, Ms. Matlin worked for the Chicago Region of the Social Security Administration of the United States Department of Health and Human Services. Ms. Matlin is a graduate of the University of Illinois in Champaign. She holds Series 7, 22, 24, 39, 63 and 65 certifications from FINRA.

Lori Foust, 46. Treasurer since October 2005 and our principal financial officer since September 2007. Ms. Foust also has served as the chief financial officer of our business manager since October 2005 and as a director and the treasurer of our consolidated joint venture Minto Builders (Florida), Inc. since January 2006. Ms. Foust also served as the treasurer of Inland Diversified Real Estate Trust, Inc. from June 2008 to November 2009 and served as the principal accounting officer of Inland Western Retail Real Estate Trust, Inc. from February 2004 to March 2006. Ms. Foust joined the Inland organization in 2003, in the capacity of vice president of Inland Western Retail Real Estate Advisory Services, Inc. Prior to joining the Inland organization, Ms. Foust worked in the field of public accounting and was a senior manager in the real estate division for Ernst and Young, LLP. She received her bachelor of science degree in accounting and her master of business administration from the University of Central Florida. Ms. Foust is a certified public accountant and a member of the American Institute of Certified Public Accountants.

Jack Potts, 41. Principal accounting officer since September 2007. Mr. Potts also has served as the chief accounting officer of our business manager since September 2007. Prior to joining the Inland organization, Mr. Potts held various positions with Equity Office Properties Trust, Inc., in accounting and financial reporting. Prior to working at Equity Office, Mr. Potts worked in the field of public accounting and was a manager in the real estate division for Ernst and Young LLP. He received a bachelor degree in accounting from the Michigan State University in East Lansing, Michigan. Mr. Potts is a certified public accountant.

Scott W. Wilton, 50. Secretary since October 2004. Mr. Wilton joined The Inland Group in January 1995. He is assistant vice president of The Inland Real Estate Group, Inc. and assistant counsel with The Inland Real Estate Group law department. Mr. Wilton previously served as secretary of Inland Western Retail Real Estate Trust, Inc. from March 2003 to November 2005, as secretary of IPCC from May 2001 to August 2009 and as secretary of Inland Retail Real Estate Trust, Inc. and Inland Retail Real Estate Advisory Services, Inc. from September 1998 to December 2004. Mr. Wilton is involved in all aspects of The Inland Group’s business, including real estate acquisitions and financing, securities law and corporate governance matters, leasing and tenant matters and

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litigation management. He received bachelor degrees in economics and history from the University of Illinois, Champaign, in 1982 and his law degree from Loyola University, Chicago, Illinois, in 1985. Prior to joining The Inland Group, Mr. Wilton worked for the Chicago law firm of Williams, Rutstein, Goldfarb, Sibrava and Midura, Ltd., specializing in real estate, corporate transactions and litigation.

Audit Committee

Our board has formed an audit committee comprised of four independent directors, Messrs. Borden, Glavin, Meagher and Ms. Saban. The board has determined that Mr. Glavin, the chairman of the committee, qualifies as an “audit committee financial expert,” as defined by the SEC, and that each member of the committee is independent in accordance with the standards set forth in the committee’s charter. The audit committee assists the board in fulfilling its oversight responsibility relating to: (1) the integrity of our financial statements; (2) our compliance with legal and regulatory requirements; (3) the qualifications and independence of the independent registered public accounting firm; (4) the adequacy of our internal controls; and (5) the performance of our independent registered public accounting firm. The audit committee has adopted a written charter, which is available on our website at www.inland-american.com under the “Corporate Governance” tab.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires each director, officer and individual beneficially owning more than 10% of our common stock to file initial statements of beneficial ownership (Form 3) and statements of changes in beneficial ownership (Forms 4 and 5) of our common stock with the SEC. Officers, directors and greater than 10% beneficial owners are required by SEC rules to furnish us with copies of all such forms they file. Based solely on a review of the copies of such forms furnished to us during and with respect to the fiscal year ended December 31, 2010, or written representations that no additional forms were required, we believe that all of our officers and directors and persons that beneficially own more than 10% of the outstanding shares of our common stock complied with these filing requirements in 2010.

Code of Ethics

We have adopted a code of ethics applicable to our directors, officers and employees, which is available on our website free of charge at http://www.inlandamerican.com. We will provide the code of ethics free of charge upon request to our customer relations group.

Item 11. Executive Compensation

Compensation of Executive Officers

All of our executive officers are officers and employees, respectively, of one or more of the affiliates of our business manager and are compensated by those entities, in part, for services rendered to us. We do not separately compensate our executive officers, nor do we reimburse either our business manager or our property managers for any compensation paid to their employees who also serve as our executive officers, other than through the general fees we pay to them under the business management agreement or the property management agreements. As a result, we do not have, and our board of directors has not considered, a compensation policy or program for our executive officers and has not included in this Form 10-K a “Compensation Discussion and Analysis” or a report from our board of directors with respect to executive compensation. The fees we pay to the business manager and property managers under the business management agreement or the property management agreements are described in more detail in Item 13 of this Form 10-K.

If we decide to pay our named executive officers in the future, the board of directors will review all forms of compensation and approve all stock option grants, warrants, stock appreciation rights and other current or deferred compensation payable to the executive officers with respect to the current or future value of our shares.

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Independent Director Compensation

We pay each of our independent directors an annual fee of $30,000 plus $1,000 for each in-person meeting of the board and $500 for each meeting of the board attended by telephone. We also pay the chairperson of the audit committee an annual fee of $10,000 plus $1,000 for our independent directors for each in-person meeting of the audit committee and $500 for each meeting of the audit committee attended by telephone, and the chairperson of any other committee, including any special committee, an annual fee of $5,000. We pay our independent directors $500 for each meeting of any committee of the board attended by telephone. We reimburse all of our directors for any out-of-pocket expenses incurred by them in attending meetings. In addition, on the date of each annual meeting of stockholders, we grant to each independent director then in office options to purchase 500 shares of our common stock under our independent director stock option plan. We do not compensate any director that also is an employee of our Company, our business manager or its affiliates.

The following table further summarizes compensation earned by the independent directors for the year ended December 31, 2010.

	Fees Earned in Cash ($)		Option Awards* ($)(1)		Total ($)
J. Michael Borden		45,000		5,000		50,000
Thomas F. Glavin		51,500		5,000		56,500
David Mahon (2)		54,500		5,000		59,500
Thomas F. Meagher		47,500		5,000		52,500
Paula Saban		51,500		5,000		56,500
William J. Wierzbicki		46,500		5,000		51,500

* Each director receives 500 shares at each annual stockholder meeting, with an exercise price equal to the fair market value of our shares.

(1) With the exception of Mr. Glavin, each independent director had options to purchase 5,500 shares of our common stock outstanding at December 31, 2010. Mr. Glavin had options to purchase 4,500 shares of our common stock outstanding at December 31, 2010. All options have been granted pursuant to our independent director stock option plan.

(2) Mr. Mahon resigned from the board, effective November 15, 2010.

Stock Option Grants

Under our independent director stock option plan, we have authorized and reserved a total of 75,000 shares of our common stock for issuance. The number and type of shares that could be issued under the plan may be adjusted if we are the surviving entity after a reorganization or merger or if we split our stock, are consolidated or are recapitalized. If this occurs, the exercise price of the options will be correspondingly adjusted.

The independent director stock option plan generally provides for the grant of non-qualified stock options to purchase 3,000 shares to each independent director upon his or her appointment subject to satisfying the conditions set forth in the plan. The plan also provides for subsequent grants of options to purchase 500 shares on the date of each annual stockholder’s meeting to each independent director then in office. The exercise price for all options is equal to the fair market value of our shares, as defined in the plan, on the date of each grant. However, options may not be granted at any time when the grant, along with the grants to be made at the same time to other independent directors, would exceed 9.8% in value of our issued and outstanding shares of stock or 9.8% in value or number of shares, whichever is more restrictive, of our issued and outstanding shares of common stock.

One-third of the options granted following an individual initially becoming an independent director are exercisable beginning on the date of their grant, one-third become exercisable on the first anniversary of the date of their grant and the remaining one-third become exercisable on the second anniversary of the date of their grant. All other options granted under the independent director stock option plan become fully exercisable on the second anniversary of their date of grant.

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Options granted under the independent director stock option plan are exercisable until the first to occur of: the tenth anniversary of the date of grant; the removal for cause of the person as an independent director; or three months following the date the person ceases to be an independent director for any other reason except death or disability.

All options generally are exercisable in the case of death or disability for a period of one year after death or the disabling event, provided that the death or disabling event occurs while the person is an independent director. However, if the option is exercised within the first six months after it becomes exercisable, any shares issued pursuant to such exercise may not be sold until the six month anniversary of the date of the grant of the option. Notwithstanding any other provisions of the independent director stock option plan to the contrary, no option issued pursuant thereto may be exercised if exercise would jeopardize our status as a REIT under the Internal Revenue Code of 1986, as amended.

No option may be sold, pledged, assigned or transferred by an independent director in any manner otherwise than by will or by the laws of descent or distribution.

Upon our dissolution, liquidation, reorganization, merger or consolidation as a result of which we are not the surviving corporation, or upon sale of all or substantially all of our assets, the independent director stock option plan will terminate, and any outstanding unexercised options will terminate and be forfeited. However, holders of options may exercise any options that are otherwise exercisable immediately prior to the dissolution, liquidation, consolidation or merger. Additionally, our board may provide for other alternatives in the case of a dissolution, liquidation, consolidation or merger.

Compensation Committee Interlocks and Insider Participation

None of our current or former officers or employees, or the current or former officers or employees of our subsidiaries, participated in any deliberations of our board of directors concerning executive officer compensation during the year ended December 31, 2010. In addition, during the year ended December 31, 2010, none of our executive officers served as a director or a member of the compensation committee of any entity that has one or more executive officers serving as a member of our board of directors.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plan Information

The following table provides information regarding our equity compensation plans as of December 31, 2010.

Plan category	Number of securities to be issued upon exercise of outstanding  options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders:
Independent Director Stock Option Plan		32,000	$	9.05		43,000
Total:		32,000	$	9.05		43,000

We have adopted an Independent Director Stock Option Plan which, subject to certain conditions, provides for the grant to each independent director of an option to purchase 3,000 shares following their becoming a director and for the grant of additional options to purchase 500 shares on the date of each annual stockholder’s meeting. The options for the initial 3,000 shares are exercisable as follows: 1,000 shares on the date of grant and 1,000 shares on each of the first and second anniversaries of the date of grant. All other options are exercisable on the second anniversary of the date of grant.

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Stock Owned by Certain Beneficial Owners and Management

Based on a review of filings with the SEC, the following table shows the amount of common stock beneficially owned (unless otherwise indicated) by (1) persons that beneficially own more than 5% of the outstanding shares of our common stock; (2) our directors and each nominee for director; (3) our executive officers; and (4) our directors and executive officers as a group. All information is as of March 1, 2011.

Name and Address of Beneficial Owner (1)	Amount and Nature of Beneficial Ownership (2)			Percent of Class
J. Michael Borden, Independent Director		136,281	(3)		*
Thomas F. Glavin, Independent Director		23,384	(4)		*
Brenda G. Gujral, Director and President		8,126	(5)		*
Thomas F. Meagher, Independent Director		17,442	(6)		*
Robert D. Parks, Director and Chairman of the Board		508,522	(7)		*
Paula Saban, Independent Director		4,500	(8)		*
William J. Wierzbicki, Independent Director		5,806	(9)		*
Roberta S. Matlin, Vice President—Administration		3,091	(10)		*
Lori J. Foust, Treasurer and Principal Financial Officer		3,500	(11)		*
Jack Potts, Principal Accounting Officer		—			—
Scott W. Wilton, Secretary		3,928	(12)		*
All Directors and Officers as a group (eleven persons)		714,580			*

* Less than 1%

(1) The business address of each person listed in the table is c/o Inland American Real Estate Trust, Inc., 2901 Butterfield Road, Oak Brook, Illinois 60523.

(2) All fractional ownership amounts have been rounded to the nearest whole number.

(3) Mr. Borden has sole voting and dispositive power over 130,857 shares, including 75,347 shares owned by St. Anthony Padua Charitable Trust, for which Mr. Borden is the trustee, and Mr. Borden and his wife share voting and dispositive power over 5,424 shares. Mr. Borden’s shares include vested options exercisable into 4,500 shares of common stock.

(4) Mr. Glavin and his wife share voting and dispositive power over 19,884 shares. Mr. Glavin’s shares include vested options exercisable into 3,500 shares of common stock.

(5) Ms. Gujral has sole voting and dispositive power over 2,921 shares. Ms. Gujral and her husband share voting and dispositive power over 5,205 shares.

(6) Mr. Meagher has sole voting and dispositive power over all of the shares that he owns. Mr. Meagher’s shares include vested options exercisable into 4,500 shares of common stock.

(7) Mr. Parks has sole voting and dispositive power over all 508,522 shares, which include 26,316 shares owned by Mr. Parks’ mother in the Evelyn G. Parks Survivors Trust and 27,286 shares in the Parks Family Trust, for which Mr. Parks is the trustee.

(8) Ms. Saban has sole voting and dispositive power over all of the shares that she owns. Ms. Saban’s ownership is comprised of vested options exercisable into 4,500 shares of common stock.

(9) Mr. Wierzbicki and his wife share voting and dispositive power over 1,306 shares. Mr. Wierzbicki’s shares include vested options exercisable into 4,500 shares of common stock.

(10) Ms. Matlin has sole voting and dispositive power over all of the shares that she owns.

(11) Ms. Foust has sole voting and dispositive power over all of the shares that she owns.

(12) Mr. Wilton and his wife share voting and dispositive power over all 3,928 shares, which include 677 shares owned by Mr. Wilton’s spouse through her individual IRA.

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Item 13. Certain Relationships and Related Transactions, and Director Independence.

Director Independence

Our business is managed under the direction and oversight of our board. The members of our board are J. Michael Borden, Thomas F. Glavin, Brenda G. Gujral, Thomas F. Meagher, Robert D. Parks, Paula Saban and William J. Wierzbicki. As required by our charter, a majority of our directors must be “independent”. As defined by our charter, an “independent director” is a person who: (1) is not directly or indirectly associated, and has not been directly or indirectly associated within the two years prior to becoming an independent director, with the Company, IREIC or our business manager whether by ownership of, ownership interest in, employment by, any material business or professional relationship with or as an officer or director of the Company, IREIC, our business manager or any of their affiliates; (2) does not serve as a director for another REIT sponsored by IREIC or advised by our business manager or any of its affiliates; and (3) performs no other services for the Company, except as director.

Although our shares are not listed for trading on any national securities exchange and therefore our board of directors is not subject to the independence requirements of the New York Stock Exchange (“NYSE”) or any other national securities exchange, our board has evaluated whether our directors are “independent” as defined by the NYSE. The NYSE standards provide that to qualify as an independent director, in addition to satisfying certain bright-line criteria, the board of directors must affirmatively determine that a director has no material relationship with the Company (either directly or as a partner, stockholder or officer of an organization that has a relationship with the Company).

Consistent with these considerations, after a review of all relevant transactions or relationships between each director, or any of his or her family members, and the Company, our management and our independent registered public accounting firm, the board has determined that Messrs. Borden, Glavin, Meagher and Wierzbicki and Ms. Saban qualify as independent directors.

Related Party Transactions

We pay our business manager, an affiliate of our sponsor, and its affiliates various fees and compensation. The following is a summary of the fees and compensation we paid to our business manager and its affiliates since January 1, 2010.

After our stockholders have received a non-cumulative, non-compounded return of 5.0% per annum on their “invested capital,” we pay our business manager an annual business management fee of up to 1% of the “average invested assets,” payable quarterly in an amount equal to 0.25% of the average invested assets as of the last day of the immediately preceding quarter. For these purposes, “average invested assets” means, for any period, the average of the aggregate book value of our assets, including lease intangibles, invested, directly or indirectly, in financial instruments, debt and equity securities and equity interests in and loans secured by real estate assets, including amounts invested in REITs and other real estate operating companies, before reserves for depreciation or bad debts or other similar non-cash reserves, computed by taking the average of these values at the end of each month during the period. We pay this fee for services provided or arranged by our business manager, such as managing our day-to-day business operations, arranging for the ancillary services provided by other affiliates and overseeing these services, administering our bookkeeping and accounting functions, consulting with our board, overseeing our real estate assets and providing other services as our board deems appropriate. Since January 1, 2010, we have incurred a business management fee in an amount equal to $36 million, or approximately .32% of our “average invested assets” on an annual basis, of which $10 million remained unpaid as of March 1, 2011.

We pay Inland Investment Advisors, Inc. an annual fee, paid on a monthly basis, totaling 1% of the first $1 to $5 million of marketable securities under management, 0.85% of marketable securities from $5 to $10 million, 0.75% of marketable securities from $10 to $25 million, 0.65% of marketable securities from $25 to $50 million, 0.60% of marketable securities from $50 to $100 million and 0.50% of marketable securities above $100 million.

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Notwithstanding the above, the total annual fees paid to Inland Investment Advisors plus the annual business management fee paid to our business manager may not exceed the amounts we may pay as the annual business management fee. Since January 1, 2010, we have paid fees equal to approximately $1.4 million.

We also reimburse our business manager or its affiliates for all expenses that it, or any affiliate, including Inland Securities, pays or incurs on our behalf, including the salaries and benefits of persons employed by the business manager or its affiliates and performing services for us, except for the salaries and benefits of persons who also serve as one of the executive officers or as an executive officer of the business manager. Since January 1, 2010, we have incurred approximately $8.2 million of these costs. In addition, for any year in which we qualify as a REIT, our business manager must reimburse us for the amounts, if any, by which the total operating expenses paid during the previous year exceed the greater of 2% of the average invested assets for that year or 25% of net income for that year, subject to certain adjustments. Our total operating expenses did not exceed these limits during the year ended December 31, 2010.

Additionally, we pay the business manager a fee for services performed in connection with acquiring a controlling interest in a REIT or other real estate operating company. Acquisition fees, however, are not paid for acquisitions solely of a fee interest in property. The amount of the acquisition fee is equal to 2.5% of the aggregate purchase price paid to acquire the controlling interest. We have not paid any acquisition fees since January 1, 2010.

We pay our property managers, entities owned principally by individuals who are employed by or affiliated with our business manager, a monthly fee equal to up to 4.5% of the gross income of each property managed directly by the property managers, their affiliates or agents. We also pay our property managers, based on the type of property managed, a monthly oversight fee of up to 1% of the gross income from each property managed directly by entities other than our property managers, their affiliates or agents. We do not pay any oversight fees with respect to our lodging properties. We have paid our property managers management fees of approximately $30.8 million since January 1, 2010. We have not paid any oversight fees since January 1, 2010. We also reimbursed the property managers $4.4 million related to property level payroll costs.

We pay Inland Mortgage Servicing Corporation, an affiliate of our business manager, $200 per loan per month for servicing our loans and $225 per loan per month in respect of any loans related to our lodging properties. Since January 1, 2010, we have paid loan servicing fees totaling approximately $586 thousand. We also pay Inland Mortgage Brokerage Corporation, another affiliate of our business manager, a fee equal to 0.2% of the principal amount of each loan placed for us. Since January 1, 2010, we have paid Inland Mortgage Brokerage Corporation fees totaling approximately $845 thousand.

As of December 31, 2010, we had deposited $370 thousand in Inland Bank and Trust, a subsidiary of Inland Bancorp, Inc., an affiliate of The Inland Real Estate Group, Inc.

The Company is party to an agreement with an LLC formed as an insurance association captive (the “Captive”), which is wholly-owned by the Company and three related parties, Inland Real Estate Corporation (IRC), Inland Western Real Estate Trust, Inc. and Inland Diversified Real Estate Trust, Inc.. The Company paid insurance premiums of $9.9 million for the years ended December 31, 2010.

The Company held 843,200 shares of IRC valued $7.4 million as of December 31, 2010.

Policies and Procedures with Respect to Related Party Transactions

Our charter contains provisions setting forth our ability to engage in certain related party transactions. Our board reviews all of these transactions and, as a general rule, any related party transactions must be approved by a majority of the directors, including a majority of the independent directors, not otherwise interested in the

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transaction. In determining whether to approve or authorize a particular related party transaction, these directors will consider whether the transaction between us and the related party is fair and reasonable to us and has terms and conditions no less favorable to us than those available from unaffiliated third parties. We believe that our general policies and procedures regarding related party transactions also are evidenced by the disclosures in this Form 10-K and our prior proxy statements under the caption “Certain Relationships and Related Transactions.” We may in the future adopt more specific written policies and procedures regarding related party transactions.

Item 14. Principal Accounting Fees and Services.

Fees to Independent Registered Public Accounting Firm

The following table presents fees for professional services rendered by our independent registered public accounting firm, KPMG LLC (“KPMG”), for the audit of our annual financial statements for the years ended December 31, 2010 and 2009, together with fees for audit-related services and tax services rendered by KPMG for the years ended December 31, 2010 and 2009, respectively.

	Year ended December 31,
Description	2010		2009
Audit fees (1)	$	1,282,500	$	1,308,000
Audit-related fees (2)		—		13,000
Tax fees (3)		248,768		454,883
All other fees (4)		99,500		—
TOTAL	$	1,630,768	$	1,775,883

(1) Audit fees consist principally of fees paid for the audit of our annual consolidated financial statements and review of our consolidated financial statements included in our quarterly reports.

(2) Audit-related fees are fees paid for professional services performed in connection with the review of our consolidated financial statements that were included in the registration statement, as amended, for the public offering of our common stock and the review of pro forma financial statements for property acquisitions.

(3) Tax fees are comprised of tax compliance fees.

(4) Other fees relate to due diligence assistance services provided in connection with a potential investment in a joint venture.

Approval of Services and Fees

Our audit committee has reviewed and approved all of the fees charged by KPMG, and actively monitors the relationship between audit and non-audit services provided by KPMG. The audit committee concluded that all services rendered by KPMG during the years ended December 31, 2010 and 2009, respectively, were consistent with maintaining KPMG’s independence. Accordingly, the audit committee has approved all of the services provided by KPMG. As a matter of policy, the Company will not engage its primary independent registered public accounting firm for non-audit services other than “audit-related services,” as defined by the SEC, certain tax services and other permissible non-audit services as specifically approved by the chairperson of the audit committee and presented to the full committee at its next regular meeting. The policy also includes limits on hiring partners of, and other professionals employed by, KPMG to ensure that the SEC’s auditor independence rules are satisfied.

Under the policy, the audit committee must pre-approve any engagements to render services provided by the Company’s independent registered public accounting firm and the fees charged for these services including an annual review of audit fees, audit-related fees, tax fees and other fees with specific dollar value limits for each category of service. During the year, the audit committee will periodically monitor the levels of fees charged by KPMG and compare these fees to the amounts previously approved. The audit committee also will consider on a case-by-case basis and, if appropriate, approve specific engagements that are not otherwise pre-approved. Any proposed engagement that does not fit within the definition of a pre-approved service may be presented to the chairperson of the audit committee for approval.

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Part IV

Item 15. Exhibits and Financial Statement Schedules

(a) List of documents filed:

(1) Financial Statements:

Report of Independent Registered Public Accounting Firm

The consolidated financial statements of the Company are set forth in the report in Item 8.

(2) Financial Statement Schedules:

Financial statement schedule for the year ended December 31, 2009 is submitted herewith.

Real Estate and Accumulated Depreciation (Schedule III)

(3) Exhibits:

The list of exhibits filed as part of this Annual Report is set forth on the Exhibit Index attached hereto.

(b) Exhibits:

The exhibits filed in response to Item 601 of Regulation S-K are listed on the Exhibit Index attached hereto.

(c) Financial Statement Schedules

All schedules other than those indicated in the index have been omitted as the required information is inapplicable or the information is presented in the consolidated financial statements or related notes.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INLAND AMERICAN REAL ESTATE TRUST, INC.

	/s/    Brenda G. Gujral
By:	Brenda G. Gujral
	President and Director
Date:	March 11, 2011

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

	Signature	Title	Date
By:	/s/    Robert D. Parks         Robert D. Parks	Director and chairman of the board	March 11, 2011
Name:
By:	/s/    Brenda G. Gujral         Brenda G. Gujral	Director and president (principal executive officer)	March 11, 2011
Name:
By:	/s/    Lori J. Foust         Lori J. Foust	Treasurer and principal financial officer	March 11, 2011
Name:
By:	/s/    Jack Potts         Jack Potts	Principal accounting officer	March 11, 2011
Name:
By:	/s/    J. Michael Borden         J. Michael Borden	Director	March 11, 2011
Name:
By:	/s/    Thomas F. Meagher         Thomas F. Meagher	Director	March 11, 2011
Name:
By:	/s/    Paula Saban         Paula Saban	Director	March 11, 2011
Name:
By:	/s/    William J. Wierzbicki         William J. Wierzbicki	Director	March 11, 2011
Name:
By:	/s/    Thomas F. Glavin         Thomas F. Glavin	Director	March 11, 2011
Name:

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EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
3.1	Sixth Articles of Amendment and Restatement of Inland American Real Estate Trust, Inc. (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on August 26, 2010)
3.2	Amended and Restated Bylaws of Inland American Real Estate Trust, Inc., effective as of April 1, 2008 (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on April 1, 2008), as amended by the Amendment to the Amended and Restated Bylaws of Inland American Real Estate Trust, Inc., effective as of January 20, 2009 (incorporated by reference to Exhibit 3.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 23, 2009)
4.1	Second Amended and Restated Distribution Reinvestment Plan (incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 23, 2010)
4.2	Share Repurchase Program (incorporated by reference to Exhibit 4.2 to the Registrant’s Form S-11 Registration Statement, as filed by the Registrant with the SEC on December 20, 2006 (file number 333-139504))
4.4	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit 4.4 to the Registrant’s Amendment No. 1 to Form S-11 Registration Statement, as filed by the Registrant with the SEC on July 31, 2007 (file number 333-139504))
10.1	First Amended and Restated Business Management Agreement, dated as of July 30, 2007, by and between Inland American Real Estate Trust, Inc. and Inland American Business Manager & Advisor, Inc. (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on August 3, 2009)
10.2.1	Master Management Agreement, dated as of August 31, 2005, by and between Inland American Real Estate Trust, Inc. and Inland American Retail Management LLC (incorporated by reference to Exhibit 10.2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 7, 2005), as amended by the First Amendment to Master Management Agreement, dated September 10, 2008 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 16, 2008) and the Second Amendment to Master Management Agreement, dated December 30, 2010 (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 4, 2011)
10.2.2	Master Management Agreement, dated as of August 31, 2005, by and between Inland American Real Estate Trust, Inc. and Inland American Apartment Management LLC (incorporated by reference to Exhibit 10.2.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 7, 2005), as amended by the First Amendment to Master Management Agreement, dated September 10, 2008 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 16, 2008) and the Second Amendment to Master Management Agreement, dated December 30, 2010 (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 4, 2011)

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10.2.3	Master Management Agreement, dated as of August 31, 2005, by and between Inland American Real Estate Trust, Inc. and Inland American Industrial Management LLC (incorporated by reference to Exhibit 10.2.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 7, 2005), as amended by the First Amendment to Master Management Agreement, dated September 10, 2008 (incorporated by reference to Exhibit 10.4 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 16, 2008) and the Second Amendment to Master Management Agreement, dated December 30, 2010 (incorporated by reference to Exhibit 10.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 4, 2011)
10.2.4	Master Management Agreement, dated as of August 31, 2005, by and between Inland American Real Estate Trust, Inc. and Inland American Office Management LLC (incorporated by reference to Exhibit 10.2.4 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 7, 2005), as amended by the First Amendment to Master Management Agreement, dated September 10, 2008 (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on September 16, 2008) and the Second Amendment to Master Management Agreement, dated December 30, 2010 (incorporated by reference to Exhibit 10.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 4, 2011)
10.3	First Amended and Restated Property Acquisition Agreement, dated as of July 30, 2007, by and between Inland American Real Estate Trust, Inc. and Inland American Real Estate Acquisitions, Inc. (incorporated by reference to Exhibit 10.3.1 to the Registrant’s Amendment No. 1 to Form S-11 Registration Statement, as filed by the Registrant with the SEC on July 31, 2007 (file number 333-139504))
10.4	Form of Indemnification Agreement (previously filed and incorporated by reference to Exhibit 10.5 to the Registrant’s Amendment No. 4 to Form S-11 Registration Statement, as filed by the Registrant with the SEC on August 18, 2005 (file number 333-122743))
10.5	Securities Purchase And Subscription Agreement among Minto Builders (Florida), Inc., Minto (Delaware), LLC, Minto Holdings Inc. and Inland American Real Estate Trust, Inc. dated as of October 11, 2005 (incorporated by reference to Exhibit 10.5 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
10.6	Put/Call Agreement, dated as of October 11, 2005, by and among Minto Builders (Florida), Inc., Inland American Real Estate Trust, Inc., Minto Holdings Inc. and Holders of Common Stock and Series A Preferred Stock as Listed on Schedule A Thereto (incorporated by reference to Exhibit 10.6 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
10.7	Shareholders Agreement, dated as of October 11, 2005, by and among Minto Builders (Florida), Inc., Minto Holdings Inc., Inland American Real Estate Trust, Inc. and Holders of Common Stock and Series A Preferred Stock as Listed on Schedule A Thereto (incorporated by reference to Exhibit 10.7 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
10.8	Supplemental Shareholders Agreement, dated as of October 11, 2005 by and among Inland American Real Estate Trust, Inc. and Holders of Common Stock and Series A Preferred Stock as Listed on Schedule A Thereto (incorporated by reference to Exhibit 10.8 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
10.9	Indemnity Agreement, dated as of June 9, 2008, by Inland American Real Estate Trust, Inc. in favor of and for the benefit of Inland Real Estate Acquisitions, Inc. (incorporated by reference to Exhibit 10.177 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on June 13, 2008)

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10.10	Amended and Restated Independent Director Stock Option Plan (incorporated by reference to Exhibit 10.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on July 26, 2010)
10.11	Agreement and Plan of Merger, dated as of April 2, 2007, by and between Inland American Real Estate Trust, Inc., Winston Hotels, Inc., Winn Limited Partnership and Inland American Acquisition (Winston), LLC (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on April 6, 2007)
10.12	Agreement and Plan of Merger, dated as of July 25, 2007, by and between Inland American Real Estate Trust, Inc., Apple Hospitality Five, Inc. and Inland American Orchard Hotels, Inc. (incorporated by reference to Exhibit 2.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on July 27, 2007)
10.13	Agreement and Plan of Merger, dated as of August 12, 2007, by and among Inland American Real Estate Trust, Inc., RLJ Urban Lodging Master, LLC, RLJ Urban Lodging REIT, LLC and RLJ Urban Lodging REIT (PF#1), LLC, as amended (incorporated by reference to Exhibit 2.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on January 25, 2008)
10.14	Articles of Association of Oak Real Estate Association by and among Inland Real Estate Corporation, Inland Real Estate Trust, Inc., Inland Western Retail Real Estate Trust, Inc. and Inland American Real Estate Trust, Inc., dated September 29, 2006 (incorporated by reference to Exhibit 10.139 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the SEC on November 7, 2006)
10.15	Operating Agreement of Oak Property and Casualty L.L.C. by and among Inland Real Estate Corporation, Inland Retail Real Estate Trust, Inc., Inland Western Retail Real Estate Trust, Inc. and Inland American Real Estate Trust, Inc, dated September 29, 2006 (incorporated by reference to Exhibit 10.140 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the SEC on November 7, 2006)
10.16	Oak Property and Casualty L.L.C. Membership Participation Agreement by and among Inland Real Estate Corporation, Inland Retail Real Estate Trust, Inc., Inland Western Retail Real Estate Trust, Inc., Inland American Real Estate Trust, Inc., and Oak Property and Casualty L.L.C. dated September 29, 2006 (incorporated by reference to Exhibit 10.141 to the Registrant’s Quarterly Report on Form 10-Q, as filed by the Registrant with the SEC on November 7, 2006)
21.1	Subsidiaries of the Registrant*
23.1	Consent of KPMG LLP*
31.1	Certification by Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
31.2	Certification by Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002*
32.1	Certification by Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification by Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
99.1	Non-Retaliation Policy (incorporated by reference to Exhibit 99.1 to the Registrant’s Form S-11 Registration Statement, as filed by the Registrant with the SEC on February 11, 2005 (file number 333-122743))

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99.2	Responsibilities of the Compliance Officer of the Company (incorporated by reference to Exhibit 99.2 to the Registrant’s Form S-11 Registration Statement, as filed by the Registrant with the SEC on February 11, 2005 (file number 333-122743))
99.3	First Amended and Restated Articles of Incorporation of Minto Builders (Florida), Inc. (incorporated by reference to Exhibit 99.1 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
99.4	Articles of Amendment to the First Amended and Restated Articles of Incorporation of Minto Builders (Florida), Inc. with Respect to 3.5% Series A Cumulative Redeemable Preferred Stock (incorporated by reference to Exhibit 99.2 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
99.5	Second Amended and Restated Articles of Incorporation of Minto Builders (Florida), Inc. (incorporated by reference to Exhibit 99.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
99.6	Articles of Amendment to the Second Amended and Restated Articles of Incorporation of Minto Builders (Florida), Inc. with Respect to Convertible Special Voting Stock (incorporated by reference to Exhibit 99.4 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
99.7	Articles of Amendment to the Second Amended and Restated Articles of Incorporation of Minto Builders (Florida), Inc. with Respect to 125 Shares of 12.5% Series B Cumulative Non-Voting Preferred Stock (incorporated by reference to Exhibit 99.5 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on October 17, 2005)
99.8	Amended and Restated Share Repurchase Program, effective April 11, 2011 (incorporated by reference to Exhibit 99.3 to the Registrant’s Form 8-K, as filed by the Registrant with the SEC on March 11, 2011)

* Filed as part of this Annual Report on Form 10-K.

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