Cautionary Notice Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this Report, including, without limitation, those related to our future operations, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe," "estimate," "expect," "anticipate," "intend," "plan," "seek," "may," and similar expressions or statements regarding future periods are intended to identify forward-looking statements.

These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this Report. Some of the risks, uncertainties and other important factors that may affect future results include, among others:

• Changes in general economic and business conditions, including, without limitation, the impact of the current credit crisis and economic down-turn, which are having and may continue to have a negative effect on the fundamentals of our business, the financial condition of our tenants and our lenders, and the value of our real estate assets;

• Our continued qualification as a real estate investment trust, or "REIT", for U.S. federal income tax purposes;

• Heightened competition for tenants and potential decreases in property occupancy;

• Potential increases in real estate construction costs;

• Potential changes in the financial markets and interest rates;

• Our continuing ability to raise funds on favorable terms, if at all, through the issuance of debt and equity in the capital markets, which may negatively affect both our ability to refinance our existing debt as well as our future interest expense;

• Our ability to successfully identify, acquire, develop and/or manage properties on terms that are favorable to us;

• Our ability to be flexible in the development and operations of joint venture properties;

• Our ability to successfully dispose of properties, if at all, on terms that are favorable to us;

• Inherent risks in the real estate business including, but not limited to, tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments; and

• Other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the Securities and Exchange Commission ("SEC").

Although we presently believe that the plans, expectations and results expressed in or suggested by the forward-looking statements are reasonable, all forward-looking statements are inherently subjective, uncertain and subject to change, as they involve substantial risks and uncertainties beyond our control. New factors emerge from time to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any of our forward-looking statements for events or circumstances that arise after the statement is made, except as otherwise may be required by law.

This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included under the caption "Risk Factors" in Part II, Item 1A of this Report, and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, which we filed with the SEC on February 25, 2009. The risk factors contained in our Annual Report are updated by us from time to time in Quarterly Reports on Form 10-Q and other public filings.

Business Overview

We are a self-administered and self-managed REIT that began operations through a related entity in 1972. A more complete description of our business, and of management's philosophy and priorities, is included in our Annual Report on Form 10-K.

As of September 30, 2009, we:

• Owned or jointly controlled 766 industrial, office, healthcare and other properties, of which 752 properties with more than 132.9 million square feet are in service and 14 properties with more than 2.9 million square feet are under development. The 752 in-service properties are comprised of 545 consolidated properties with more than 91.3 million square feet and 207 jointly controlled properties with more than 41.6 million square feet. The 14 properties under development consist of 10 consolidated properties with approximately 1.4 million square feet and 4 jointly controlled properties with approximately 1.6 million square feet.

• Owned, including through ownership interest in unconsolidated joint ventures, approximately 5,100 acres of land and controlled an additional 1,900 acres through purchase options.

Through our Service Operations reportable segment, which includes our taxable REIT subsidiary, we provide the following services for our properties and for certain properties owned by third parties and joint ventures:

• Property leasing;

• Property management;

• Asset management;

• Construction;

• Development; and

• Other tenant-related services.

Through our Service Operations, we have historically developed or acquired properties with the intent to sell (hereafter referred to as "Build-for-Sale" properties). Build-for-Sale properties were generally identified as such prior to construction commencement and were sold within a relatively short time after being placed in service. We do not anticipate that Build-for-Sale properties will represent a significant component of our operations in the future.

Key Performance Indicators

Our operating results depend primarily upon rental income from our industrial, office, healthcare and retail properties (collectively referred to as "Rental Operations"). The following discussion highlights the areas of Rental Operations that we consider critical for future revenues.

Occupancy Analysis: Our ability to maintain high occupancy rates is a principal driver of maintaining and increasing rental revenue from continuing operations. The following table sets forth occupancy information regarding our in-service portfolio of consolidated rental properties as of September 30, 2009 and 2008, respectively (in thousands, except percentage data):

                                                                        Percent of
                                             Total Square Feet      Total Square Feet          Percent Occupied
Type                                          2009        2008      2009          2008        2009          2008
Industrial                                    56,843      56,344      62.3 %       62.6 %      87.8 %        87.2 %
Office                                        31,639      31,972      34.6 %       35.5 %      85.5 %        87.7 %
Other (Healthcare and Retail)                  2,822       1,679       3.1 %        1.9 %      84.6 %        87.8 %

Total                                         91,304      89,995     100.0 %      100.0 %      86.9 %        87.4 %

Lease Expiration and Renewals: Our ability to maintain and improve occupancy rates primarily depends upon our continuing ability to re-lease expiring space. The following table reflects our consolidated in-service portfolio lease expiration schedule by property type as of September 30, 2009. The table indicates square footage and annualized net effective rents (based on September 2009 rental revenue) under expiring leases (in thousands, except percentage data):

                                         Total Portfolio                     Industrial                 Office                    Other
Year of                          Square      Ann. Rent     % of        Square      Ann. Rent    Square      Ann. Rent    Square       Ann. Rent
Expiration                        Feet        Revenue     Revenue       Feet        Revenue      Feet        Revenue      Feet         Revenue
Remainder of 2009                 1,473      $   11,048         2 %       798      $    2,860      675      $    8,188       -       $        -
2010                              7,883          56,247         9 %     5,052          21,350    2,817          34,672       14              225
2011                              9,578          68,753        11 %     6,304          26,117    3,193          41,300       81            1,336
2012                              8,750          64,775        10 %     5,444          22,257    3,231          41,117       75            1,401
2013                             10,679          84,149        13 %     6,559          26,570    4,039          56,194       81            1,385
2014                              8,541          60,913        10 %     5,712          22,533    2,668          35,589      161            2,791
2015                              7,737          48,458         8 %     5,870          23,255    1,854          24,941       13              262
2016                              5,859          37,055         6 %     4,207          14,623    1,413          19,070      239            3,362
2017                              4,983          41,031         7 %     3,037          12,532    1,502          20,821      444            7,678
2018                              3,253          40,974         6 %     1,281           6,476    1,388          20,548      584           13,950
2019 and Thereafter              10,600         117,229        18 %     5,649          28,076    4,256          73,450      695           15,703

Total Leased                     79,336      $  630,632       100 %    49,913      $  206,649   27,036      $  375,890    2,387      $    48,093

Total Portfolio
Square Feet                      91,304                                56,843                   31,639                    2,822

Percent Occupied 86.9 % 87.8 % 85.5 % 84.6 %

Within our consolidated properties, we renewed 86.0% and 81.9% of our leases up for renewal in the three and nine months ended September 30, 2009, totaling approximately 3.2 million and 6.3 million square feet, respectively. This compares to renewals of 70.3% and 73.3% for the three and nine months ended September 30, 2008, which totaled approximately 1.5 million and 3.9 million square feet, respectively. There was a 0.8% decline and 1.5% growth, respectively, in average contractual rents on the renewals in the three and nine months ended September 30, 2009.

The average term of renewals for the three and nine months ended September 30, 2009 was 5.1 and 4.9 years, respectively, compared to an average term of 4.2 and 3.6 years for the three and nine months ended September 30, 2008, respectively.

Recent and Future Development:

We had 2.9 million square feet of property under development with total estimated costs upon completion of $722.2 million at September 30, 2009 compared to 7.0 million square feet with total costs of $832.1 million at September 30, 2008. The square footage and estimated costs include both consolidated and joint venture development activity at 100%. Considering the continued downturn in the economy, we have substantially reduced our level of development activities and are focused on the lease-up of recent projects.

The following table summarizes our properties under development as of September 30, 2009 (in thousands, except percentage data):

                                                    Total
                                                  Estimated      Total        Amount
                            Square   Percent       Project     Incurred      Remaining
 Ownership Type              Feet    Leased         Costs       to Date     to be Spent
 Consolidated properties     1,365        92 %    $  223,627   $ 152,530   $      71,097
 Joint venture properties    1,576        47 %       498,528     264,224         234,304 (1)

 Total                       2,941        68 %    $  722,155   $ 416,754   $     305,401

(1) These costs will be primarily financed by remaining availability under in-place construction loan facilities.

Acquisition and Disposition Activity: Gross sales proceeds related to the dispositions of wholly owned undeveloped land and held-for-rental properties were $116.1 million and $95.2 million for the nine months ended September 30, 2009 and 2008, respectively.

Gross sales proceeds related to dispositions of wholly-owned Build-for-Sale properties were $33.0 million and $222.8 million for the nine months ended September 30, 2009 and 2008, respectively.

Our share of proceeds from sales of properties within unconsolidated joint ventures, in which we have less than a 100% interest, totaled $35.1 million for the nine months ended September 30, 2008. We had no such dispositions in the same period in 2009.

For the nine months ended September 30, 2009, we acquired $17.0 million of income producing properties comprised of two industrial real estate properties in Savannah, Georgia, compared to acquisitions of $60.5 million of income producing properties in the same market during the same period in 2008. We also acquired $6.2 million of undeveloped land in the nine months ended September 30, 2009, compared to $37.4 million in the same period in 2008.

Funds From Operations

Funds From Operations ("FFO") is used by industry analysts and investors as a supplemental operating performance measure of a REIT. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of the National Association of Real Estate Investment Trusts ("NAREIT"). NAREIT created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from net income determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). FFO is a non-GAAP financial measure. The most comparable GAAP measure is net income (loss) attributable to common shareholders. FFO attributable to common shareholders should not be considered as a substitute for net income or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies.

Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated real estate assets, plus certain non-cash items such as real estate depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures.

Management believes that the use of FFO attributable to common shareholders, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that, by excluding gains or losses related to sales of previously depreciated real estate assets and excluding real estate asset depreciation and amortization, investors and analysts are able to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assist in comparing these operating results between periods or as compared to different companies.

The following table shows a reconciliation of net income (loss) attributable to common shareholders to the calculation of FFO for the three and nine months ended September 30, 2009 and 2008, respectively (in thousands):

                                                  Three Months Ended             Nine Months Ended
                                                    September 30,                  September 30,
                                                  2009           2008           2009           2008
Net income (loss) attributable to common
shareholders                                   $ (322,882 )    $ 11,490      $ (330,168 )    $  30,280
Adjustments:
Depreciation and amortization                      87,647        75,260         254,673        230,956
Company share of joint venture depreciation
and amortization                                    8,543        14,450          28,013         28,769
Earnings from depreciable property
sales-wholly owned                                     -         (1,299 )        (5,168 )      (11,940 )
Earnings from depreciable property
sales-share of joint venture                           -             -               -            (495 )
Noncontrolling interest share of adjustments       (2,771 )      (4,363 )        (9,302 )      (12,351 )

Funds From Operations attributable to common
shareholders                                   $ (229,463 )    $ 95,538      $  (61,952 )    $ 265,219

Results of Operations

A summary of our operating results and property statistics for the three and
nine months ended September 30, 2009 and 2008, respectively, is as follows (in
thousands, except number of properties and per share data):



                                                   Three Months Ended           Nine Months Ended
                                                      September 30,               September 30,
                                                   2009           2008         2009           2008
Rental and related revenue                      $  224,013      $ 215,264   $  669,713      $ 638,512
General contractor and service fee revenue         100,880         93,316      335,412        271,847
Operating income (loss)                           (235,650 )       74,804     (148,100 )      209,726
Net income (loss) attributable to common
shareholders                                      (322,882 )       11,490     (330,168 )       30,280
Weighted average common shares outstanding         223,952        146,966      193,520        146,680
Weighted average common shares and potential
dilutive securities                                223,952        154,836      193,520        154,623
Basic income (loss) per common share:
Continuing operations                           $    (1.44 )    $     .07   $    (1.73 )    $     .10
Discontinued operations                         $       -       $     .01   $      .02      $     .10
Diluted income (loss) per common share:
Continuing operations                           $    (1.44 )    $     .07   $    (1.73 )    $     .10
Discontinued operations                         $       -       $     .01   $      .02      $     .10
Number of in-service consolidated properties
at end of period                                       545            538          545            538
In-service consolidated square footage at end
of period                                           91,304         89,995       91,304         89,995
Number of in-service joint venture properties
at end of period                                       207            202          207            202
In-service joint venture square footage at
end of period                                       41,637         38,315       41,637         38,315

Comparison of Three Months Ended September 30, 2009 to Three Months Ended
September 30, 2008

Rental and Related Revenue

Overall, rental and related revenue from continuing operations increased from
$215.3 million for the quarter ended September 30, 2008 to $224.0 million for
the same period in 2009. The following table sets forth rental and related
revenue from continuing operations by reportable segment for the three months
ended September 30, 2009 and 2008, respectively (in thousands):



                                                 2009        2008
                 Rental and Related Revenue:
                 Office                        $ 142,259   $ 140,237
                 Industrial                       63,837      62,856
                 Non-reportable segments          17,917      12,171

                 Total                         $ 224,013   $ 215,264

The following factors contributed to these results:

• We acquired or consolidated nine properties and placed 47 developments in service from January 1, 2008 to September 30, 2009 that provided incremental revenues of $13.4 million in the third quarter of 2009, as compared to the same period in 2008.

• The incremental revenues described above were partially offset by a slight decrease in occupancy in our existing base of properties.

Rental Expenses and Real Estate Taxes

The following table sets forth rental expenses and real estate taxes by
reportable segment for the three months ended September 30, 2009 and 2008,
respectively (in thousands):



                                                2009       2008
                    Rental Expenses:
                    Office                    $ 38,682   $ 38,163
                    Industrial                   6,061      5,988
                    Non-reportable segments      5,178      3,894

                    Total                     $ 49,921   $ 48,045

                    Real Estate Taxes:
                    Office                    $ 19,331   $ 17,426
                    Industrial                   9,015      7,585
                    Non-reportable segments      1,750        739

                    Total                     $ 30,096   $ 25,750

Overall, rental expenses increased by $1.9 million in the third quarter of 2009, compared to the same period in 2008. The increase was primarily driven by $3.0 million of incremental costs associated with properties acquired or consolidated and developments placed in service from January 1, 2008 to September 30, 2009.

Of the overall $4.3 million increase in real estate taxes in the third quarter of 2009, compared to the same period in 2008, $2.4 million was attributable to properties acquired or consolidated and developments placed in service from January 1, 2008 to September 30, 2009. The remaining increase was driven by increases in taxes on our existing properties.

Service Operations

The following table sets forth the components of the Service Operations
reportable segment for the three months ended September 30, 2009 and 2008,
respectively (in thousands):



                                                              2009           2008
Service Operations:
General contractor and service fee revenue                  $ 100,880      $  93,316
General contractor and Service Operations expenses            (96,241 )      (96,155 )
Gain on disposition of Build-for-Sale properties, pre-tax          -          20,338

Total                                                       $   4,639      $  17,499

Service Operations primarily consist of the leasing, management, development, construction management and general contractor services for joint venture properties and properties owned by third parties. In previous years, sales of Build-for-Sale properties comprised a significant portion of Service Operations. Service Operations are heavily influenced by the current state of the economy, as leasing and property management fees are dependent upon occupancy while construction and development services rely on the expansion of business operations of third-party property owners and joint venture partners. Earnings from Service Operations decreased from $17.5 million for the three months ended September 30, 2008 to $4.6 million for the three months ended September 30, 2009. The decrease was primarily a result of gains on the sale of seven properties totaling $20.3 million for the three months ended September 30, 2008 compared to no such sales in the same period in 2009. This was somewhat offset by general contractor expenses being higher than usual in the third quarter of 2008 as a result of increases in our total cost estimates for two third-party fixed price construction contracts, which reduced the margins on the contracts.

Depreciation and Amortization

Depreciation and amortization expense increased from $74.2 million during the third quarter of 2008 to $87.6 million for the same period in 2009 primarily due to increases in our held-for-rental asset base from properties acquired, consolidated or placed in service during 2008 and 2009. Also contributing to the increase was a $3.0 million increase in the amortization of lease commissions and tenant improvements in the third quarter of 2009 compared to the third quarter of 2008 as a result of lease terminations.

Equity in Earnings of Unconsolidated Companies

Equity in earnings represents our ownership share of net income from investments in unconsolidated companies that generally own and operate rental properties and develop properties for sale. These earnings increased from $204,000 in the three months ended September 30, 2008 to $2.4 million for the same period in 2009. This increase was primarily a result of consolidating two of our retail joint ventures in April 2009 where our share of the equity in earnings was a loss of $5.6 million in the third quarter of 2008 due to additional depreciation expense recognized when the two underlying properties were removed from held-for-sale classification. The increase was partially offset by our $2.1 million share of the gain on sale of a property from an unconsolidated entity in the third quarter of 2008, while there were no such sales in the same period in 2009. The increase resulting from the consolidation of the retail joint ventures was also partially offset by a deceased share of operating income within certain of our . . .