Note G - Capital and Financing Transactions

Notes Payable to Banks

At March 31, 2013, the Company did not have any amounts outstanding under its senior unsecured revolving credit facilities and had $125.0 million outstanding under its unsecured term loan. The Company was in compliance with all loan covenants under its revolving credit facilities and term loan.

		Interest				Outstanding
Credit Facilities	Lender	Rate			Maturity	Balance
$10.0 Million Unsecured Working Capital Revolving Credit Facility (1)	PNC Bank		-	%	03/29/16	$	-
$215.0 Million Unsecured Revolving Credit Facility (1)	Wells-Fargo		-	%	03/29/16		-
$125.0 Million Unsecured Term Loan (2)	Key Bank		2.2	%	09/27/17		125,000
			2.2	%		$	125,000

(1)

The interest rate on the credit facilities is based on LIBOR plus an applicable margin of 160 to 235 basis points, depending upon overall Company leverage as defined in the loan agreements for the Company's credit facilities, with the current rate set at 160 basis points. Additionally, the Company pays fees on the unused portion of the credit facilities ranging between 25 and 35 basis points based upon usage of the aggregate commitment, with the current rate set at 35 basis points.

(2)

The interest rate on the term loan is based on LIBOR plus an applicable margin of 150 to 230 basis points depending on overall Company leverage (with the current rate set at 150 basis points). On September 28, 2012, the Company executed two floating-to-fixed interest rate swaps totaling $125 million, locking LIBOR at 0.7% for five years which was effective October 1, 2012.

Mortgage Notes Payable

Mortgage notes payable at March 31, 2013 totaled $768.0 million, with an average interest rate of 5.0% and were secured by office properties.

On February 21, 2013, the Company obtained an $80.0 million first mortgage secured by Phoenix Tower, a 629,000 square foot office property located in the Greenway Plaza submarket of Houston, Texas. The mortgage loan bears interest at a fixed rate of 3.9% and matures on March 1, 2023. Payments of interest only are due on the loan for two years, after which the principal amount of the loan begins amortizing over a 25-year period until maturity. The loan is pre-payable after March 1, 2015, but any such prepayment is subject to a yield maintenance premium. The agreement governing the mortgage loan contains customary rights of the lender to accelerate the loan upon, among other things, a payment default or if certain representations and warranties made by the borrower are untrue.

On March 7, 2013, simultaneously with the purchase of the Deerwood Portfolio, the Company obtained an $84.5 million first mortgage, which is secured by the office properties in the portfolio. The mortgage bears interest at a fixed rate of 3.9% and matures on April 1, 2023. Payments of interest only are due on the loan for three years, after which the principal amount of the loan begins amortizing over a 30-year period until maturity. The loan is pre-payable after May 1, 2015, but any such prepayment is subject to a yield maintenance premium. The agreement governing the mortgage contains customary rights of the lender to accelerate the loan upon, among other things, a payment default or if certain representations and warranties made by the borrower are untrue.

On March 25, 2013, simultaneously with the purchase of its co-investor's 70% interest in the Tampa Fund II assets, the Company assumed $40.7 million of existing first mortgages that are secured by the properties, which represents its co-investor's 70% share of the approximately $58.1 million of the existing first mortgage indebtedness.

Interest Rate Swaps

The Company has entered into interest rate swap agreements. The Company designated the swaps as cash flow hedges of the variable interest rates on the Company's borrowings under the $125.0 million unsecured term loan and the debt secured by 245 Riverside, Corporate Center IV at International Plaza, Cypress Center I, II, and III, Bank of America Center, Two Ravinia, Hayden Ferry I, Hayden Ferry II, and NASCAR Plaza. These swaps are considered to be fully effective and changes in the fair value of the swaps are recognized in accumulated other comprehensive loss.

The Company's interest rate hedge contracts at March 31, 2013, and 2012 are summarized as follows (in thousands):

									Fair Value
									Asset (Liability)
Type of	Balance Sheet	Notional		Maturity		Fixed			March 31
Hedge	Location	Amount		Date	Reference Rate	Rate			2013			2012
Swap	Accounts payable and other liabilities	$	12,088	11/18/15	1-month LIBOR		4.1	%	$	(541	)	$	(575	)
Swap	Accounts payable and other liabilities	$	30,000	02/01/16	1-month LIBOR		2.3	%		(1,666	)		-
Swap	Accounts payable and other liabilities	$	50,000	09/27/17	1-month LIBOR		2.2	%		26			-
Swap	Accounts payable and other liabilities	$	75,000	09/27/17	1-month LIBOR		2.2	%		39			-
Swap	Accounts payable and other liabilities	$	33,875	11/18/17	1-month LIBOR		4.7	%		(3,113	)		(2,715	)
Swap	Accounts payable and other liabilities	$	22,000	01/25/18	1-month LIBOR		4.5	%		(1,804	)		(1,454	)
Swap	Accounts payable and other liabilities	$	47,500	01/25/18	1-month LIBOR		5.0	%		(1,447	)		(403	)
Swap	Accounts payable and other liabilities	$	9,250	09/30/18	1-month LIBOR		5.2	%		(1,140	)		(1,010	)
Swap	Accounts payable and other liabilities	$	22,500	10/08/18	1-month LIBOR		5.4	%		(2,935	)		(2,641	)
Swap	Accounts payable and other liabilities	$	22,100	11/18/18	1-month LIBOR		5.0	%		(2,458	)		(2,062	)
									$	(15,039	)	$	(10,860	)

On March 25, 2013, in connection with the purchase of its co-investor's interest in the Tampa Fund II Assets, the Company assumed the remaining 70% of two interest rate swaps, which have a total notional amount of $34.6 million.