TRINET CORPORATE REALTY TRUST, INC.
(Exact name of registrant as specified in its charter)

Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None

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

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12-b-2). Yes o No ý

THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING
THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.

TriNet Corporate Realty Trust, Inc.

(A wholly-owned subsidiary of iStar Financial Inc.)

Index to Form 10-Q

		Page
PART I.	Consolidated Financial Information	3
Item 1.	Financial Statements:
	Consolidated Balance Sheets at September 30, 2004 and December 31, 2003	3
	Consolidated Statements of Operations—For the three and nine months ended September 30, 2004 and 2003	4
	Consolidated Statement of Changes in Shareholder's Equity—For the nine months ended September 30, 2004	5
	Consolidated Statements of Cash Flows—For the three and nine months ended September 30, 2004 and 2003	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	19
Item 4.	Controls and Procedures	22
PART II.	Other Information	23
Item 1.	Legal Proceedings	23
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 3.	Defaults Upon Senior Securities	23
Item 4.	Submission of Matters to a Vote of Security Holders	23
Item 5.	Other Information	23
Item 6.	Exhibits	23
SIGNATURES	24

TriNet Corporate Realty Trust, Inc.

(A wholly-owned subsidiary of iStar Financial Inc.)

Consolidated Balance Sheets

(In thousands, except share and per share data)

(unaudited)

TriNet Corporate Realty Trust, Inc.

(A wholly-owned subsidiary of iStar Financial Inc.)

Consolidated Statements of Operations

(In thousands)

(unaudited)

TriNet Corporate Realty Trust, Inc.

(A wholly-owned subsidiary of iStar Financial Inc.)

Consolidated Statement of Changes in Shareholder's Equity

(In thousands)

(unaudited)

TriNet Corporate Realty Trust, Inc.

(A wholly-owned subsidiary of iStar Financial Inc.)

Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

TriNet Corporate Realty Trust, Inc.

(A wholly-owned subsidiary of iStar Financial Inc.)

Notes to Consolidated Financial Statements

Business—TriNet Corporate Realty Trust, Inc., a Maryland Corporation (the "Company"), is a wholly-owned subsidiary of iStar Financial Inc., a Maryland Corporation ("iStar Financial"). iStar Financial and its subsidiaries provide custom-tailored financing to high-end private and corporate owners of real estate nationwide, including senior and junior mortgage debt, senior and mezzanine corporate capital, and corporate net lease financing. The Company typically provides capital to corporations, as well as borrowers, who control facilities leased to single creditworthy tenants. The Company's net leased assets are generally mission-critical headquarters or distribution facilities that are subject to long-term leases with rated corporate credit tenants, and which provide for all expenses at the property to be paid by the corporate tenant on a triple net lease basis. Corporate tenant lease ("CTL") transactions have terms generally ranging from ten to 20 years and typically range in size from $20 million to $150 million. As of September 30, 2004, the Company's portfolio consisted of 67 facilities principally subject to net leases to approximately 99 customers, comprising 7.8 million square feet in 17 states. Of the 67 total facilities, there is one facility held in one unconsolidated joint venture.

Organization—The Company became a wholly-owned subsidiary of iStar Financial through a merger on November 4, 1999. As a wholly-owned subsidiary of iStar Financial, a real estate investment trust ("REIT"), the Company operates as a qualified real estate investment trust subsidiary ("QRS") under the Internal Revenue Code of 1986, as amended (the "Code").

The accompanying unaudited Consolidated Financial Statements have been prepared in conformity with the instructions to Form 10-Q and Article 10, Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, they do not include all the information and footnotes required by generally accepted accounting principles in the United States of America ("GAAP") for complete financial statements. The Consolidated Financial Statements include the accounts of the Company, its wholly-owned subsidiary corporations and partnerships and its partnership that is consolidated under the provisions of FASB Interpretation No. 46 ("FIN 46") (see Note 6).

Certain other investments in partnerships or joint ventures which the Company does not control are accounted for under the equity method (see Note 6). All significant intercompany balances and transactions have been eliminated in consolidation.

In the opinion of management, the accompanying Consolidated Financial Statements contain all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the Company's consolidated financial position at September 30, 2004 and December 31, 2003 and the results of its operations, changes in shareholder's equity and its cash flows for the three and nine months ended September 30, 2004 and 2003, respectively. Such operating results are not necessarily indicative of the results that may be expected for any other interim periods or the entire year.

Loans and other lending investments, net—As described in Note 4, "Loans and Other Lending Investments," includes corporate/partnership loans. Management considers its investments in this category to be either held-to-maturity or available-for-sale. Items classified as held-to-maturity are reflected at amortized historical cost. Items classified as available-for-sale are reported at fair value, with unrealized gains and losses included in "Accumulated other comprehensive income (losses)" on the Company's Consolidated Balance Sheets and are not included in the Company's net income.

Corporate tenant lease assets and depreciation—CTL assets are generally recorded at cost less accumulated depreciation. Certain improvements and replacements are capitalized when they extend the useful life, increase capacity or improve the efficiency of the asset. Repairs and maintenance items are expensed as incurred. Depreciation is computed using the straight-line method of cost recovery over estimated useful lives of 40.0 years for facilities, five years for furniture and equipment, the shorter of the remaining lease term or expected life for tenant improvements and the remaining life of the facility for facility improvements.

CTL assets to be disposed of are reported at the lower of their carrying amount or fair value less cost to sell. The Company also periodically reviews long-lived assets to be held and used for an impairment in value whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. In management's opinion, CTL assets to be held and used are not carried at amounts in excess of their estimated recoverable amounts.

In accordance with the recent adoption, in July 2001, of Statement of Financial Accounting Standards No. 141 ("SFAS No. 141"), "Business Combinations" regarding the Company's acquisition of facilities, purchase costs are allocated to the tangible and intangible assets and liabilities acquired based on their estimated fair values. the value of the tangible assets, consisting of land, buildings and tenant improvements, are determined as if vacant, that is, at replacement cost. Intangible assets including the above-market or below-market value of leases, the value of in-place leases and the value of customer relationships are recorded at their relative fair values.

Above-market and below-market in-place lease values for owned CTL assets are recorded based on the present value (using a discount rate reflecting the risks associated with the leases acquired) of the difference between: (1) the contractual amounts to be paid pursuant to the leases negotiated and in-place at the time of acquisition of the facilities; and (2) management's estimate of fair market lease rates for the facility or equivalent facility, measured over a period equal to the remaining non-cancelable term of the lease. The capitalized above-market (or below-market) lease value is amortized as a reduction of (or, increase to) operating lease income over the remaining non-cancelable term of each lease plus any renewal periods with fixed rental terms that are considered to be below-market. The Company generally engages in sale/leaseback transactions and typically executes leases simultaneously with the purchase of the CTL asset at market rate rents. Because of this, no above-market or below-market lease value is ascribed to these transactions.

The total amount of other intangible assets are allocated to in-place lease values and customer relationship intangible values based on management's evaluation of the specific characteristics of each customer's lease and the Company's overall relationship with each customer. Characteristics to be considered in allocating these values include the nature and extent of the existing relationship with the customer, prospects for developing new business with the customer, the customer's credit quality and the expectation of lease renewals among other factors. Factors considered by management's analysis include the estimated carrying costs of the facility during a hypothetical expected lease-up period, current market conditions and costs to execute similar leases. Management also considers information obtained about a property in connection with its pre-acquisition due diligence. Estimated carrying costs include real estate taxes, insurance, other property operating costs and estimates of lost operating lease income at market rates during the hypothetical expected lease-up periods, based on management's assessment of specific market conditions. Management estimates costs to execute leases including commissions and legal costs to the extent that such costs are not already incurred with a new lease that has been negotiated in connection

with the purchase of the facility. Management's estimates are used to determine these values. These intangible assets are included in "Deferred expenses and other assets" on the Company's Consolidated Balance Sheets.

The value of above-market or below-market in-place leases are amortized to expense over the remaining initial term of each lease. The value of customer relationship intangibles are amortized to expense over the initial and renewal terms of the leases, but no amortization period for intangible assets will exceed the remaining depreciable life of the building. In the event that a customer terminates its lease, the unamortized portion of each intangible, including market rate adjustments, lease origination costs, in-place lease values and customer relationship values, would be charged to expense.

Capitalized interest—The Company capitalizes interest costs incurred during the construction period on qualified build-to-suit projects for corporate tenants, including investments in joint ventures accounted for under the equity method. No interest was capitalized during the three and nine months ended September 30, 2004 and 2003.

Cash and cash equivalents—Cash and cash equivalents include all cash held in banks or invested in money market funds with original maturity terms of less than 90 days.

Restricted cash—Restricted cash represents amounts required to be maintained in escrow under certain of the Company's debt obligations.

Non-cash activity—On March 3, 2003, a remarketing agent purchased all of the outstanding 6.75% Dealer Remarketable Securities and agreed to amend the notes to substitute iStar Financial as the obligor. The remarketing agent subsequently exchanged these notes with iStar Financial for newly issued iStar Financial notes. The 6.75% Dealer Remarketable Securities were immediately retired after this exchange and the liability was effectively eliminated through a contribution from iStar Financial to the Company of approximately $128.1 million.

During the nine months ended September 30, 2004, the Company disposed of one CTL asset and acquired two CTL assets and their related liabilities through transfers to and from iStar Financial at their respective carrying values.

Revenue recognition—The Company's revenue recognition policies are as follows:

Leasing investments: Operating lease revenue is recognized on the straight-line method of accounting from the later of the date of the origination of the lease or the date of acquisition of the facility subject to existing leases. Accordingly, contractual lease payment increases are recognized evenly over the term of the lease. The cumulative difference between lease revenue recognized under this method and contractual lease payment terms is recorded as "Deferred operating lease income receivable" on the Company's Consolidated Balance Sheets.

Allowance for doubtful accounts—The Company's accounting policy requires a reserve on the Company's accrued operating lease income receivable balances and on the deferred operating lease income receivable balances. The reserve covers asset specific problems (e.g., bankruptcy) as they arise, as well as, a portfolio reserve based on management's evaluation of the credit risks associated with these receivables.

Accounting for derivative instruments and hedging activity—In accordance with Statement of Financial Accounting Standards No. 133 ("SFAS No. 133"), "Accounting for Derivative Instruments and Hedging Activities" as amended by Statement of Financial Accounting Standards No. 137 "Accounting for

Derivative Instruments and Hedging Activity—Deferral of the Effective date of FASB 133," Statement of Financial Accounting Standards No. 138 "Accounting for Certain Derivative Instruments and Certain Hedging Activities—an Amendment of FASB Statement 133" and Statement of Financial Accounting Standards No. 149 "Amendment of Statement 133 on Derivative Instruments and Hedging Activities," the Company recognizes all derivatives as either assets or liabilities in the statement of financial position and measures those instruments at fair value. If certain conditions are met, a derivative may be specifically designated as: (1) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment; (2) a hedge of the exposure to variable cash flows of a forecasted transaction; or (3) in certain circumstances, a hedge of a foreign currency exposure.

Accounting for the impairment or disposal of long-lived assets—In accordance with the Statement of Financial Accounting Standards No. 144 ("SFAS No. 144"), "Accounting for the Impairment or Disposal of Long-Lived Assets" the Company presents current operations prior to the disposition of CTL assets and prior period results of such operations in discontinued operations in the Company's Consolidated Statements of Operations.

Reclassification of extraordinary loss on early extinguishment of debt—In accordance with the Statement of Financial Accounting Standards No. 145 ("SFAS No. 145"), "Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections," the Company can no longer aggregate the gains and losses from the extinguishment of debt and, if material, classify them as an extraordinary item. The Company is not prohibited from classifying such gains and losses as extraordinary items, so long as they meet the criteria in paragraph 20 of Accounting Principles Board Opinion No. 30 ("APB 30"), "Reporting the Results of Operations—Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual and Infrequently Occurring Events and Transactions"; however, due to the nature of the Company's operations, such treatment may not be available to the Company. Any gains or losses on extinguishments of debt that were previously classified as extraordinary items in prior periods presented that do not meet the criteria in APB 30 for classification as an extraordinary item are reclassified to income from continuing operations.

Income taxes—The Company is taxed as a QRS under the Code. As a QRS, the Company is included in the consolidated tax return of iStar Financial. TriNet Management Operating Company, Inc. ("TMOC"), the Company's taxable REIT subsidiary, is not consolidated for federal income tax purposes and is taxed as a corporation. Accordingly, except for the Company's taxable REIT subsidiaries, no provision has been made for federal income taxes in the accompanying Consolidated Financial Statements. During the third quarter 2003, TMOC was liquidated.

Interest rate risk management—The Company has entered into various interest rate protection agreements that, together with a swap agreement, fix the interest rate on a portion of the Company's LIBOR-based borrowings. The related cost of these agreements is amortized over their respective lives and such amortization is recorded as "Interest expense" on the Company's Consolidated Statements of Operations. The Company enters into interest rate risk management arrangements with financial institutions meeting certain minimum financial criteria, and the related credit risk of non-performance by counterparties is not considered to be significant.

Credit risk concentration—The Company underwrites the credit of prospective customers and may require them to provide some form of additional credit support such as corporate guarantees, letters of credit and/or cash security deposits. Although the Company's assets are geographically diverse and its customers operate in a variety of industries, to the extent the Company has a significant concentration of

operating lease revenue from any single customer, the inability of that customer to make its payments could have an adverse effect on the Company.

Earnings per share—Earnings per share is not calculated for the three and nine months ended September 30, 2004 and 2003, respectively, since all 100 shares outstanding are held by iStar Financial.

Use of estimates—The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

New accounting standards—In December 2003, the SEC issued Staff Accounting Bulletin No. 104 ("SAB 104"), "Revenue Recognition" which supercedes SAB 101, "Revenue Recognition in Financial Statements." SAB 104's primary purpose is to rescind the accounting guidance contained in SAB 101 related to multiple element revenue arrangements, superceded as a result of the issuance of EITF 00-21. The Company adopted the provisions of this statement immediately, as required, and it did not have a significant impact on the Company's Consolidated Financial Statements.

EITF 00-21, "Accounting for Revenue Arrangements with Multiple Deliverables," issued during the third quarter of 2003, provides guidance on revenue recognition for revenues derived from a single contract that contain multiple products or services. EITF 00-21 also provides additional requirements to determine when these revenues may be recorded separately for accounting purposes. The Company adopted EITF 00-21 on July 1, 2003, as required, and it did not have a significant impact on the Company's Consolidated Financial Statements.

In May 2003, the FASB issued Statement of Financial Accounting Standards No. 150 ("SFAS No. 150"), "Accounting for Certain Financial Instruments With Characteristics of Both Liabilities and Equity." This standard requires issuers to classify as liabilities the following three types of freestanding financial instruments: (1) mandatorily redeemable financial instruments, (2) obligations to repurchase the issuer's equity shares by transferring assets; and (3) certain obligations to issue a variable number of shares. The FASB recently issued FASB Staff Position ("FSP") 150-3, which defers the provisions of paragraphs 9 and 10 of SFAS No. 150 indefinitely as they apply to mandatorily redeemable noncontrolling interests associated with finite-lived entities. The Company adopted the provisions of this statement, as required, on July 1, 2003, and it did not have a significant financial impact on the Company's Consolidated Financial Statements.

In January 2003, the FASB issued FASB Interpretation No. 46, "Consolidation of Variable Interest Entities," an interpretation of ARB 51. FIN 46 provides guidance on identifying entities for which control is achieved through means other than through voting rights (a "variable interest entity" or "VIE"), and how to determine when and which business enterprise should consolidate a VIE. In addition, FIN 46 requires that both the primary beneficiary and all other enterprises with a significant variable interest in a VIE make additional disclosures. The transitional disclosure requirements took effect immediately and were required for all financial statements initially issued or modified after January 31, 2003. Immediate consolidation is required for VIEs entered into or modified after February 1, 2003 in which the Company is deemed the primary beneficiary. For VIEs in which the Company entered into prior to February 1, 2003, FIN 46 was deferred to the quarter ended March 31, 2004. In December 2003, the FASB issued a revised FIN 46 that modifies and clarifies various aspects of the original Interpretation. FIN 46 applies when either

(1) the equity investors (if any) lack one or more of the essential characteristics of controlling financial interest, (2) the equity investment at risk is insufficient to finance that entity's activities without additional subordinated financial support or (3) the equity investors have voting rights that are not proportionate to their economic interest. The adoption of the additional consolidation provisions of FIN 46 did not have a material impact on the Company's Consolidated Financial Statements (see Note 6).

In December 2002, the FASB issued Statement of Financial Accounting Standards No. 148 ("SFAS No. 148"), "Accounting for Stock-Based Compensation—Transition and Disclosure," an amendment of FASB Statement No. 123 ("SFAS No. 123"). This statement provides alternative transition methods for a voluntary change to the fair value basis of accounting for stock-based employee compensation. However, this Statement does not permit the use of the original SFAS No. 123 prospective method of transition for changes to the fair value based method made in fiscal years beginning after December 15, 2003. In addition, this Statement amends the disclosure requirements of SFAS No. 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation, description of transition method utilized and the effect of the method used on reported results. The new interim disclosure provisions are effective for the first interim period beginning after December 15, 2002. The Company adopted SFAS No. 148 with retroactive application to January 1, 2002 with no material effect on the Company's Consolidated Financial Statements.

In November 2002, the FASB issued FASB Interpretation No. 45 ("FIN 45"), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others," an interpretation of Statement of Financial Accounting Standards No. 5 ("SFAS No. 5"), "Accounting for Contingencies," Statement of Financial Accounting Standards No. 57, "Related Party Disclosures," Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments" and rescinds FASB Interpretation No. 34, "Disclosure of Indirect Guarantees of Indebtedness of Others, an Interpretation of SFAS No. 5." It requires that upon issuance of a guarantee, the guarantor must recognize a liability for the fair value of the obligation it assumes under that guarantee regardless if the Company receives separately identifiable consideration (e.g., a premium). The disclosure requirements became effective December 31, 2002. The adoption of FIN 45 did not have a material impact on the Company's Consolidated Financial Statements.

On March 30, 2003, $2.0 million of convertible debt securities of a real estate company that trades on the Mexican Stock Exchange were reflected as part of the Company's loans and lending investments as a result of the consolidation of TMOC (see Note 6) which held such investment. On June 30, 2003, the note was fully repaid and during the third quarter 2003 the entity was liquidated.

The Company's investments in CTL assets, at cost, were as follows (in thousands):

		September 30, 2004			December 31, 2003
Facilities and improvements		$	642,415		$	627,824
Land and land improvements			190,751			182,898
Less: accumulated depreciation			(76,249	)		(62,976	)

	Corporate tenant lease assets, net	$	756,917		$	747,746

The Company receives reimbursements from customers for certain facility operating expenses including common area costs, insurance and real estate taxes. Customer expense reimbursements for the three months ended September 30, 2004 and 2003 were approximately $3.6 million and $4.0 million, respectively, and $11.4 million and $13.0 million for the nine months ended September 30, 2004 and 2003, respectively, and are included as a reduction of "Operating costs—corporate tenant lease assets" on the Company's Consolidated Statements of Operations.

The Company is subject to expansion option agreements with one existing customer which could require the Company to fund and to construct up to 126,100 square feet of additional adjacent space on which the Company would receive additional operating lease income under the terms of the option agreements. In addition, upon exercise of such expansion option agreements, the corporate tenant would be required to simultaneously extend its existing lease terms for an additional six years.

As of September 30, 2004, there were six CTL assets with book values of $37.4 million classified as "Asset held for sale" on the Company's Consolidated Balance Sheets. The Company began marketing this portfolio of assets for sale primarily to reduce the Company's exposure in the suburban Boston market. All six properties are located in the suburban Boston market. The Company has accepted a bid of $43.7 million and has entered into a contract for sale. On September 9, 2004, the Company received a deposit towards the sale and expects the sale to close in the beginning of November 2004.

On September 17, 2004, the Company sold one CTL asset for net proceeds of $5.7 million and realized a gain of approximately $750,000. On August 26, 2004, the Company disposed of one CTL asset at its respective carrying value by transferring it to iStar Financial. No gain or loss resulted from this transfer. During the second quarter of 2004, the Company acquired two CTL assets transferred from iStar Financial at their respective carrying amounts. No gain or loss resulted from these transfers. On February 25, 2004, the Company sold one CTL asset for net proceeds of $2.8 million, and realized a gain of approximately $136,000.

On August 14, 2003, the Company sold two CTL assets for net proceeds of $7.6 million and realized a gain of approximately $701,000. During the second quarter of 2003, the Company disposed of 17 CTL assets at their respective carrying value by transferring them to iStar Financial. No gain or loss resulted from these transfers. On January 7, 2003, the Company sold one CTL asset for net proceeds of $4.0 million and realized a gain of approximately $264,000.

The results of operations from CTL assets sold, transferred to iStar Financial or held for sale in the current and prior periods are classified as "Income from discontinued operations" on the Company's Consolidated Statements of Operations even though such income was actually recognized by the Company prior to the asset sale. Gains from the sale of CTL assets are classified as "Gain from discontinued operations" on the Company's Consolidated Statements of Operations.

Income or loss generated from the Company's joint venture investments and unconsolidated subsidiaries is included in "Equity in earnings (loss) from joint ventures and unconsolidated subsidiaries" on the Company's Consolidated Statements of Operations.

The Company's ownership percentage, its equity investment, and its respective loss for the three months ended September 30, 2004, are presented below (in thousands):

Investments in and advances to unconsolidated joint ventures: At September 30, 2004, the Company had an investment in Corporate Technology Centre Associates LLC ("CTC"), whose external member is Corporate Technology Centre Partners LLC. This venture was formed for the purpose of operating, acquiring and, in certain cases, developing CTL facilities.

At September 30, 2004, the venture held one net leased facility. The Company's investment in this joint venture at September 30, 2004 was $11.8 million. The joint venture's carrying value for the one facility owned at September 30, 2004 was $18.0 million. In aggregate, the joint venture had total assets of $32.0 million and total liabilities of approximately $40,000 as of September 30, 2004, and net loss of $(3.1) million and net income of $7.7 million for the three and nine months ended September 30, 2004, respectively. The Company accounts for this investment under the equity method because the Company's joint venture partner has certain participating rights giving them shared control over the venture.

On March 31, 2004, the Company began accounting for its 44.70% interest in TriNet Sunnyvale Partners L.P. ("Sunnyvale") as a VIE (see Note 3) because the limited partners of Sunnyvale have the option to put their interest to the Company for cash; however, the Company may elect to deliver 297,728 shares of Common Stock in lieu of cash. Therefore, the Company consolidates this partnership for financial statement reporting purposes. Prior to its consolidation, the Company accounted for this joint venture under the equity method for financial statement reporting purposes and it was presented in "Investments in and advances to joint ventures and unconsolidated subsidiaries," on the Company's Consolidated Balance Sheets and earnings from the joint venture were included in "Equity in earnings (loss) from joint ventures and unconsolidated subsidiaries" in the Company's Consolidated Statements of Operations.

On November 3, 2003, the primary customer at the CTC joint venture that was a tenant under four leases, filed a plan of reorganization under Chapter 11 of the U.S. Bankruptcy Code. On December 19, 2003, the U.S. Bankruptcy Court for the District of Delaware approved their plan of reorganization at which time all four of their leases were terminated. The plan of reorganization became effective on January 2, 2004, and the company exited from Chapter 11, at which time CTC received termination payments for all four leases. At the same time, the customer entered into a new three-year lease at one of the four buildings it previously occupied. On March 30, 2004, CTC Associates II L.P., a wholly-owned subsidiary of the CTC joint venture, conveyed its interest in two buildings and the related property to the mortgage lender in exchange for satisfaction of the entity's obligations of the related loan. On September 27, 2004, CTC Associates I L.P., a wholly-owned subsidiary of the Company's CTC joint venture, sold its interest in five buildings to a third party investor and was released from its debt obligation with the mortgage lender. This transaction resulted in a net loss of $1.9 million to the entity.

Investments in and advances to unconsolidated subsidiaries: The Company had an investment in TMOC, an entity originally formed to make a $2.0 million investment in the convertible debt securities of a real estate company that trades on the Mexican Stock Exchange. On June 30, 2003, the $2.0 million investment was fully repaid and during the third quarter 2003 the entity was liquidated.

Minority Interest: Income or loss allocable to external partners in consolidated entities is included in "Minority interest in consolidated entities" on the Company's Consolidated Statements of Operations.

As discussed above, on March 31, 2004, the Company began accounting for its 44.70% interest in the Sunnyvale joint venture as a VIE and therefore consolidates this partnership for financial statement reporting purposes and records the minority interest of the external partner in "Minority interest in consolidated entities" on the Company's Consolidated Balance Sheets.

The Company also holds a 98.00% interest in TriNet Property Partners, L.P with the external partners holding the remaining 2.00% interest. As of August 1999, the external partners have the option to convert their partnership interest into cash; however, the Company may elect to deliver 72,819 shares of common stock of iStar Financial in lieu of cash. The Company consolidates this partnership for financial statement purposes and records the minority interest of the external partner in "Minority interest in consolidated entities" on the Company's Consolidated Balance Sheets.

As of September 30, 2004 and December 31, 2003, the Company has debt obligations under various arrangements with financial institutions as follows (in thousands):

		Carrying Value as of
		September 30, 2004			December 31, 2003			Stated Interest Rates(1)	Scheduled Maturity Date
Secured term loans:
	Secured by CTL assets	$	—		$	193,000		LIBOR + 1.85%	July 2006
	Secured by CTL assets(2)		80,382			85,552		6.55% - 8.80%	Various through 2009
	Secured by CTL assets		24,000			—		LIBOR + 1.25%	November 2004

	Total term loans		104,382			278,552
	Less: debt discount		(258	)		(128	)

	Total secured term loans		104,124			278,424
Unsecured notes(3):
	7.70% Notes		100,000			100,000		7.70%	July 2017
	7.95% Notes		50,000			50,000		7.95%	May 2006

	Total unsecured notes		150,000			150,000
	Less: debt discount(4)		(12,684	)		(13,340	)

	Total unsecured notes		137,316			136,660

Total debt obligations		$	241,440		$	415,084

Due to the provisions of FIN 46, the Company began consolidating the Sunnyvale joint venture as of March 31, 2004 (see Note 6). As a result of the consolidation, the Company now reflects an additional $24.0 million of secured term loans in the Company's Consolidated Balance Sheets as of September 30, 2004. In relation to this debt, Sunnyvale Partners, LP, which is wholly owned by the Sunnyvale joint venture, has an interest rate cap agreement outstanding that limits the venture's exposure to interest rate movements on $24.0 million of LIBOR-based debt to an interest rate of 9.00% through November 9, 2004.

On March 3, 2003, a remarketing agent purchased all of the outstanding 6.75% Dealer Remarketable Securities and agreed to amend the Notes to substitute iStar Financial as the obligor. The remarketing agent subsequently exchanged these Notes with iStar Financial for newly issued iStar Financial notes. The 6.75% Dealer Remarketable Securities were immediately retired after this exchange and the liability was effectively eliminated through a contribution from iStar Financial to the Company.

The Company has entered into an interest rate swap agreement, which together with an existing LIBOR interest rate cap agreement struck at 7.75%, effectively fixed the interest rate on $75.0 million of the Company's LIBOR-based borrowings at 5.58% plus the applicable margin through December 1, 2004. The Company has also entered into a LIBOR interest rate cap struck at 7.75% in the notional amount of $35.0 million. All three cash flow hedges expire in December 2004.

On March 10, 2004, the Company repaid its $193.0 million LIBOR-based term loan secured by 15 CTL assets, which had an original maturity of July 2004. As a result, the cash flow hedges described above became ineffective and no longer qualified for cash flow hedge accounting under SFAS No. 133. Due to the cash flow hedges becoming ineffective, the Company reclassified approximately $0 and $2.8 million for the three and nine months ended September 30, 2004, respectively, from "Accumulated other comprehensive income" on the Company's Consolidated Balance Sheets to "Interest expense" on the Company's Consolidated Statements of Operations. Through their maturity in December 2004, the Company will record changes in fair market value of these cash flow hedges in "Interest expense" on the Company's Consolidated Statements of Operations.

During the three and nine months ended September 30, 2004, the Company incurred a loss on early extinguishment of debt of approximately $0 and $287,000, respectively, as a result of the early retirement of certain debt obligations.

As of September 30, 2004, future expected/scheduled maturities of outstanding long-term debt obligations are as follows (in thousands):

2004 (remaining three months)	$	24,000
2005		76,994
2006		50,000
2007		2,753
2008		—
Thereafter		100,635

Total principal maturities		254,382
Net unamortized debt discounts		(12,942	)

Total debt obligations	$	241,440

Impact of Merger—The Company's stock incentive plans were terminated effective with the merger, at which time each holder of a stock option, with the exception of the Company's directors and certain senior executives, elected to receive one of the following for each stock option: (1) cash equal to the difference between the market price and the exercise price of the stock option, whether vested or unvested; or (2) a number of options to purchase iStar Financial common stock on substantially the same terms, in each case giving effect to the 1.15 exchange ratio. Unvested options were exchanged for unvested iStar Financial options and resumed the same vesting schedules.

Employee Benefits—Effective January 1, 1994, the Company implemented the TriNet Corporate Realty Trust, Inc. Savings and Retirement Plan, which is a voluntary, defined contribution plan. On November 4, 1999, as a result of the merger with iStar Financial, all participants became part of the iStar Financial Inc. Savings and Retirement Plan.

Statement of Financial Accounting Standards No. 130 ("SFAS No. 130"), "Reporting Comprehensive Income" requires that all components of comprehensive income shall be reported in the financial statements in the period in which they are recognized. Furthermore, a total amount for comprehensive income shall be displayed in the financial statements. Total comprehensive income was $7.4 million and $9.7 million for the three months ended September 30, 2004 and 2003, respectively, and $28.8 million and $33.3 million for the nine months ended September 30, 2004 and 2003, respectively. The primary component of comprehensive income other than net income was the adoption and continued application of SFAS No. 133 to the Company's cash flow hedges and changes in the fair value of the Company's available-for-sale investment.

For the three and nine months ended September 30, 2004, the change in the fair market value of the Company's unrealized gains (losses) on available-for-sale investments and cash flow hedges was an increase of $188,000 and of $4.7 million, respectively, and was recorded as an adjustment to accumulated other comprehensive income. The reconciliation to other comprehensive income is as follows (in thousands):

		For the Three Months Ended September 30,				For the Nine Months Ended September 30,
		2004		2003		2004		2003
Net income		$	7,232	$	7,892	$	24,118	$	28,752
Other comprehensive income:
	Reclassification of unrealized losses into earnings upon realization		—		—		2,875		—
	Unrealized gains (losses) on available-for-sale investments		188		853		901		2,533
	Unrealized gains on cash flow hedges		—		935		900		1,968

Comprehensive income		$	7,420	$	9,680	$	28,794	$	33,253

Unrealized gains (losses) on available-for-sale investments and cash flow hedges are recorded as adjustments to shareholder's equity through "Accumulated other comprehensive income (losses)" on the Company's Consolidated Balance Sheets and are not included in net income unless realized.

As of September 30, 2004 and December 31, 2003, accumulated other comprehensive income (losses) reflected in the Company's shareholder's equity is comprised of the following (in thousands):

	As of September 30, 2004		As of December 31, 2003
Unrealized gains on available-for-sale investments	$	4,461	$	3,560
Unrealized losses on cash flow hedges		—		(3,775	)

Accumulated other comprehensive income (losses)	$	4,461	$	(215	)

Over time, the unrealized gains and losses held in other comprehensive income will be reclassified to earnings in the same period(s) in which the hedged items are recognized in earnings. The current balance held in other comprehensive income is expected to be reclassified into earnings over the lives of the current hedging instruments, or for the realized losses on forecasted debt transactions, over the related term of the debt obligation, as applicable.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

As a wholly-owned subsidiary of iStar Financial, the Company specializes in providing investment capital to major corporations and real estate owners nationwide by structuring sale/leaseback transactions and acquiring CTL assets subject to existing long-term leases to creditworthy customers occupying office and industrial facilities. The Company uses its corporate credit and real estate underwriting expertise to structure investments that it believes will generate attractive risk-adjusted returns. As of September 30, 2004, the Company's portfolio consisted of 67 facilities principally subject to net leases to approximately 99 customers, comprising 7.8 million square feet in 17 states. Of the 67 total facilities, there is one facility held in one joint venture partnership.

On November 4, 1999, iStar Financial, a Maryland corporation, acquired all of the Company's outstanding capital stock through a merger of the Company with and into a wholly-owned subsidiary of iStar Financial, with the Company surviving as a wholly-owned subsidiary of iStar Financial. Prior to the merger, the Company elected to be taxed as a real estate investment trust ("REIT") under the Internal Revenue Code of 1986, as amended (the "Code"). iStar Financial has elected to be taxed as a REIT under the Code and the Company is presently treated as a qualified REIT subsidiary.

During the nine months ended September 30, 2004, the Company acquired two CTL assets transferred from iStar Financial at their respective carrying values and disposed of two CTL assets for net proceeds of $8.6 million and recognized a gain of approximately $886,000. In addition, the Company disposed of one CTL asset by transferring it to iStar Financial at its respective carrying value. No gain or loss resulted from this transfer.

Three Months Ended September 30, 2004 Compared to Three Months Ended September 30, 2003

Interest income—For the three months ended September 30, 2004, interest income decreased by $1,000 to $11,000 from $12,000 for the same period in 2003.

Operating lease income—Operating lease income decreased by $165,000 for the three months ended September 30, 2004 compared to the same period in 2003. This decrease is primarily due to vacancies and lower rental rates on certain CTL assets. This decrease is partially offset by the transfer of CTL assets from iStar Financial and the consolidation of Sunnyvale (See Note 6).

Other income—Other income generally consists of lease termination fees, project management fees, dividend income, financial advisory fees, earnest deposit forfeitures, credit enhancement fees, bankruptcy claims, lease restoration fees, and insurance proceeds. During the three months ended September 30, 2004, other income consisted of dividend income of $150,000 and income from tenant bankruptcy claims of $26,000.

During the three months ended September 30, 2003, other income consisted of a lease termination fee of $450,000, dividend income of $125,000 and income from tenant bankruptcy claims of $82,000.

Interest expense—For the three months ended September 30, 2004, interest expense decreased by $2.4 million to $4.9 million from $7.3 million for the same period in 2003. This decrease is primarily the result of the repayment of a portion of the Company's secured debt in the first quarter of 2004 and a decrease in interest expense due to the mark-to-market of ineffective cash flow hedges arising from that repayment. The decrease was partially offset by increased interest expense related to the consolidation of Sunnyvale (see Note 6 to the Company's Consolidated Financial Statements).

Operating costs—corporate tenant lease assets—For the three months ended September 30, 2004, operating costs decreased by $57,000 from $4.3 million to $4.2 million for the same period in 2003. This decrease is related to a recovery from a disputed claim with a tenant.

Depreciation and amortization—Depreciation and amortization increased by approximately $679,000 to $4.7 million for the three months ended September 30, 2004 from $4.0 million for the same period in 2003. This increase is primarily due to the consolidation of Sunnyvale (see Note 6 to the Company's Consolidated Financial Statements), additional capital improvements and the result of the transfer of CTL assets from iStar Financial.

General and administrative—For the three months ended September 30, 2004, general and administrative expenses decreased by approximately $554,000 to $506,000, compared to $1.1 million for the same period in 2003 due to a decrease of allocated shared costs from iStar Financial resulting from reduced operations.

Loss on early extinguishment of debt—During the three months ended September 30, 2004 and 2003, the Company did not incur any losses on early extinguishment of debt.

Equity in earnings (loss) from joint ventures and unconsolidated subsidiaries—For the three months ended September 30, 2004, equity in earnings (loss) from joint ventures and unconsolidated subsidiaries decreased by $2.3 million to $(1.6) million from approximately $706,000 for the same period in 2003. This decrease is primarily due to the sale of the Company's CTL joint venture interest in five buildings, vacancies and the consolidation of Sunnyvale in March 2004 (see Note 6 to the Company's Consolidated Financial Statements).

Income from discontinued operations—For the three months ended September 30, 2004 and 2003, operating income earned by the Company on CTL assets sold (prior to their sale), assets transferred to iStar Financial and assets held for sale of $1.5 million and $1.5 million, respectively, is classified as "discontinued operations," even though such income was recognized by the Company prior to the asset dispositions, transfers or classified as "Asset held for sale" on the Company's Consolidated Balance Sheets.

Gain from discontinued operations—During the three months ended September 30, 2004, the Company disposed of one CTL asset for net proceeds of $5.7 million and recognized a gain of approximately $750,000.

During the three months ended September 30, 2003, the Company disposed of two CTL assets for net proceeds of $7.6 million and recognized a gain of approximately $701,000.

Nine Months Ended September 30, 2004 Compared to Nine Months Ended September 30, 2003

Interest income—For the nine months ended September 30, 2004, interest income decreased by $378,000 to $40,000 from $418,000 for the same period in 2003. The decrease is due to the repayment of the $2.0 million investment in the convertible debt securities of a real estate company that trades on the Mexican Stock Exchange during the second quarter 2003 (see Note 6 to the Company's Consolidated Financial Statements).

Operating lease income—Operating lease income decreased by $2.8 million to $62.0 million for the nine months ended September 30, 2004 from $64.8 million for the same period in 2003. This decrease is primarily due to vacancies and lower rental rates on certain CTL assets. This decrease is partially offset by the transfer of CTL assets from iStar Financial and the consolidation of Sunnyvale (See Note 6 to the Company's Consolidated Financial Statements).

other income consisted of dividend income of $450,000, lease termination fees of $350,000 and income from tenant bankruptcy claims of $26,000.

During the nine months ended September 30, 2003, other income consisted of lease termination fees of $1.1 million, dividend income of $362,000 and income from tenant bankruptcy claims of $265,000.

Interest expense—For the nine months ended September 30, 2004, interest expense decreased by $4.4 million to $19.4 million from $23.8 million for the same period in 2003. This decrease is primarily the result of the repayment of a portion of the Company's secured debt in the first quarter of 2004 and the assumption of an unsecured debt obligation in the first quarter of 2003 to iStar Financial. The decrease was partially offset by increased interest expense due to the mark-to market of ineffective cash flow hedges resulting from the repayment of certain debt and the consolidation of Sunnyvale (see Note 6 to the Company's Consolidated Financial Statements).

Operating costs—corporate tenant lease assets—For the nine months ended September 30, 2004, operating costs increased by $1.3 million from $10.6 million to $11.9 million for the same period in 2003. This increase is related to the higher unrecoverable operating costs due to vacancies on certain CTL assets.

Depreciation and amortization—Depreciation and amortization increased by $1.1 million to $13.3 million for the nine months ended September 30, 2004 from $12.2 million for the same period in 2003. This increase is primarily due to the consolidation of Sunnyvale (see Note 6 to the Company's Consolidated Financial Statements), additional capital improvements and the result of the transfer of CTL assets from iStar Financial.

General and administrative—For the nine months ended September 30, 2004, general and administrative expenses decreased by approximately $1.1 million to $2.0 million, compared to $3.1 million for the same period in 2003 due to a decrease of allocated shared costs from iStar Financial resulting from reduced operations.

Loss on early extinguishment of debt—During the nine months ended September 30, 2004, the Company incurred $287,000 of losses associated with the amortization of deferred financing fees related to the early repayment of the Company's $193.0 million term loan.

During the nine months ended September 30, 2003, the Company had no losses on early extinguishment of debt.

Equity in earnings (loss) from joint ventures and unconsolidated subsidiaries—For the nine months ended September 30, 2004, equity in earnings (loss) from joint ventures and unconsolidated subsidiaries increased by approximately $981,000 to $3.7 million from $2.7 million for the same period in 2003. This increase is primarily due to the conveyance of the Company's CTL joint venture interest in two buildings and the related property to the mortgage lender in exchange for satisfaction of its obligations of the related loan and is partially offset by the sale of the Company's CTL joint venture interest in five buildings, vacancies and the consolidation of Sunnyvale in March 2004 (see Note 6 to the Company's Consolidated Financial Statements).

Income from discontinued operations—For the nine months ended September 30, 2004 and 2003, operating income earned by the Company on CTL assets sold (prior to their sale), assets transferred to iStar Financial and assets held for sale of $3.7 million and $7.9 million, respectively, is classified as "discontinued operations," even though such income was recognized by the Company prior to the asset dispositions, transfers or classification as "Assets held for sale" on the Company's Consolidated Balance Sheets.

Gain from discontinued operations—During the nine months ended September 30, 2004, the Company disposed of two CTL assets for net proceeds of $8.6 million and recognized a gain of approximately $886,000.

During the nine months ended September 30, 2003, the Company disposed of three CTL assets for net proceeds of $11.6 million and recognized a gain of approximately $964,000.

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company has formed a disclosure committee that is responsible for considering the materiality of information and determining the disclosure obligations of the Company on a timely basis. The disclosure committee reports directly to the Company's Chief Executive Officer and Chief Financial Officer. The Chief Financial Officer is currently a member of the disclosure committee.

As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the disclosure committee and other members of management, including its Chief Executive Officer and Chief Financial Officer, of the effectiveness of the Company's disclosure controls and procedures pursuant to Exchange Act Rule 13a-15. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective to timely alert them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's Exchange Act filings.

There have been no changes during the last fiscal quarter in the Company's internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2004
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Maryland (State or other jurisdiction of incorporation or organization)		94-3175659 (I.R.S. Employer Identification Number)

1114 Avenue of the Americas, 27^th Floor New York, NY (Address of principal executive offices)		10036 (Zip code)

		As of September 30, 2004			As of December 31, 2003
ASSETS
Corporate tenant lease assets, net		$	756,917		$	747,746
Investments in and advances to joint ventures and unconsolidated subsidiaries			11,811			19,993
Assets held for sale			37,427			—
Cash and cash equivalents			90,767			12,594
Restricted cash			907			—
Accrued interest and operating lease income receivable			2,570			2,339
Deferred operating lease income receivable			17,965			15,936
Deferred expenses and other assets			18,804			39,189

	Total assets	$	937,168		$	837,797

LIABILITIES AND SHAREHOLDER'S EQUITY
Liabilities:
Accounts payable, accrued expenses and other liabilities		$	27,686		$	33,457
Debt obligations			241,440			415,084

	Total liabilities		269,126			448,541

Commitments and contingencies			—			—
Minority interest in consolidated entities			9,952			2,496
Shareholder's equity:
Common stock, $0.01 par value, 100 shares authorized: 100 shares issued and outstanding at September 30, 2004 and December 31, 2003, respectively			—			—
Additional paid-in capital			693,925			427,271
Retained earnings			—			—
Accumulated other comprehensive income (losses) (See Note 9)			4,461			(215	)
Common stock of iStar Financial (parent) held in treasury (at cost)			(40,296	)		(40,296	)

	Total shareholder's equity		658,090			386,760

	Total liabilities and shareholder's equity	$	937,168		$	837,797

			For the Three Months Ended September 30,						For the Nine Months Ended September 30,
			2004			2003			2004			2003
Revenue:
	Interest income		$	11		$	12		$	40		$	418
	Operating lease income			20,756			20,921			61,979			64,754
	Other income			176			657			828			1,727

		Total revenue		20,943			21,590			62,847			66,899

Costs and expenses:
	Interest expense			4,900			7,260			19,414			23,815
	Operating costs—corporate tenant lease assets			4,205			4,262			11,934			10,617
	Depreciation and amortization			4,668			3,989			13,300			12,151
	General and administrative			506			1,060			2,000			3,059
	Loss on early extinguishment of debt			—			—			287			—

		Total costs and expenses		14,279			16,571			46,935			49,642

Net income before equity in earnings (loss) from joint ventures and unconsolidated subsidiaries, minority interest and other items				6,664			5,019			15,912			17,257
Equity in earnings (loss) from joint ventures and unconsolidated subsidiaries				(1,613	)		706			3,706			2,725
Minority interest in consolidated entities				(43	)		(40	)		(123	)		(119	)

Net income from continuing operations				5,008			5,685			19,495			19,863
Income from discontinued operations				1,474			1,506			3,737			7,925
Gain from discontinued operations				750			701			886			964

Net income			$	7,232		$	7,892		$	24,118		$	28,752

	Additional Paid-In Capital			Retained Earnings (Deficit)			Accumulated Other Comprehensive Income (Losses)			Treasury Stock			Total
Balance at December 31, 2003	$	427,271		$	—		$	(215	)	$	(40,296	)	$	386,760
Non-cash contribution/(distribution) of assets from/to iStar Financial, net		9,762			—			—			—			9,762
Contribution from iStar Financial		262,800			—			—			—			262,800
Dividends paid to iStar Financial		(5,908	)		(27,292	)		—			—			(33,200	)
Dividends received on iStar Financial shares held in treasury		—			3,174			—			—			3,174
Net income for the period		—			24,118			—			—			24,118
Change in accumulated other comprehensive income (losses)		—			—			4,676			—			4,676

Balance at September 30, 2004	$	693,925		$	—		$	4,461		$	(40,296	)	$	658,090

									Pro Rata Share of Third-Party Non-Recourse Debt	Third-Party Debt
						JV Loss for the Three Months Ended September 30, 2004				Third-Party Debt
		Ownership %		Equity Investment		JV Loss for the Three Months Ended September 30, 2004				Interest Rate	Scheduled Maturity Date
Unconsolidated Joint Venture:
	CTC	50.00	%	$	11,811	$	(1,613	)	—	N/A	N/A

a.	Exhibits
	31.0 Certifications pursuant to Section 302 of the Sarbanes-Oxley Act.
	32.0 Certifications pursuant to Section 906 of the Sarbanes-Oxley Act.

	TRINET CORPORATE REALTY TRUST, INC. Registrant
Date: November 9, 2004	/s/ JAY SUGARMAN Jay Sugarman Chairman of the Board of Directors and Chief Executive Officer
Date: November 9, 2004	/s/ CATHERINE D. RICE Catherine D. Rice Chief Financial Officer