Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Environmental Matters

Substantially all of the Properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (collectively, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

Operating Ground Lease Agreements

Future minimum rental payments under the terms of all non-cancelable operating ground leases under which the Company is the lessee, as of June 30, 2012, were as follows (in thousands):

Year	Amount
2012	$	79
2013	163
2014	158
2015	153
2016	153
2017 though 2054	5,237
Total	$	5,943

Operating ground lease expense during the three and six months ended June 30, 2012 were $41,000 and $81,000, respectively, as compared to $65,000 and $142,000, respectively, for the same periods in 2011.

Legal Matters

From time to time, the Company is a party to a variety of legal proceedings, claims and assessments arising in the normal course of business. The Company believes that as of June 30, 2012 there were no legal proceedings, claims or assessments expected to have a material adverse effect on the Company’s business or financial statements.

Other

As of June 30, 2012, the Company had miscellaneous guarantees related to its unconsolidated joint ventures for up to a maximum of $229,000.

As of June 30, 2012, the Company had letter of credit obligations of $6.3 million related to development requirements. The Company believes that it is remote that there will be a draw upon these letter of credit obligations.

As of June 30, 2012, the Company had initiated the development of 13 buildings. These buildings are expected to contain a total of 3.3 million square feet of leasable space and represent an anticipated aggregate investment of $310.1 million. At June 30, 2012, Development in progress totaled $198.5 million. In addition, as of June 30, 2012, the Company invested $6.3 million in deferred leasing costs related to these development buildings. Also, the Company has a signed commitment for a build-to-suit development not yet commenced for $30.3 million.

As of June 30, 2012, the Company was committed to $2.4 million in improvements on certain buildings and land parcels.

As of June 30, 2012, the Company was obligated to pay for tenant improvements not yet completed for a maximum of $24.9 million.

The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed 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 the risk is not significant.