Maryland

36-3953261

(State or other jurisdiction

(I.R.S. Employer Identification No.)

of incorporation or organization)

2901 Butterfield Road, Oak Brook, Illinois

60523

(Address of principal executive offices)

(Zip code)

Part I – Financial Information

Page

Item 1.

Financial Statements

Consolidated Balance Sheets at March 31, 2005 (unaudited) and December 31,
    2004 (audited)

3

Consolidated Statements of Operations for the three months ended March 31,
    2005 and 2004 (unaudited)

5

Consolidated Statement of Stockholders' Equity for the three months ended
    March 31, 2005 (unaudited)

7

Consolidated Statements of Cash Flows for the three months ended March 31,
    2005 and 2004 (unaudited)

8

Notes to Consolidated Financial Statements (unaudited)

11

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of
    Operations

29

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

48

Item 4.

Controls and Procedures

49

Part II – Other Information

Item 1.

Legal Proceedings

50

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

50

Item 3.

Defaults upon Senior Securities

50

Item 4.

Submission of Matters to a Vote of Security Holders

50

Item 5.

Other Information

50

Item 6.

Exhibits

50

SIGNATURES

52

March 31, 2005
(unaudited)

December 31, 2004

Investment properties:

  Land

$

331,075

318,361

  Construction in progress

1,336

1,326

  Building and improvements

906,705

862,647

1,239,116

1,182,334

  Less accumulated depreciation

167,116

156,854

Net investment properties

1,072,000

1,025,480

Cash and cash equivalents

41,133

35,508

Investment in securities (net of an unrealized loss of $126 at March
  31, 2005 and an unrealized gain of $114 at December 31, 2004)

7,233

5,978

Assets held for sale (net of accumulated depreciation of $4,624 and
  $6,402 at March 31, 2005 and December 31, 2004, respectively)

20,934

28,400

Restricted cash

5,032

4,226

Accounts and rents receivable (net of provision for doubtful accounts
  of $2,581 and $2,710 at March 31, 2005 and December 31, 2004,
  respectively)

33,666

29,646

Investment in and advances to joint venture

39,724

42,789

Deposits and other assets

4,103

4,433

Acquired above market lease intangibles (net of accumulated
  amortization of $1,874 and $1,648 at March 31, 2005 and
  December 31, 2004, respectively)

5,781

5,966

Acquired in-place lease intangibles (net of accumulated amortization
  of $2,791 and $2,218 at March 31, 2005 and December 31,
  2004, respectively)

25,568

18,404

Leasing fees (net of accumulated amortization of $1,326 and
  $1,189 at March 31, 2005 and December 31, 2004, respectively)

2,524

2,467

Loan fees (net of accumulated amortization of $5,084 and
  $4,780 at March 31, 2005 and December 31, 2004, respectively)

4,438

3,795

Total assets

$

1,262,136

1,207,092

March 31, 2005
(unaudited)

December 31, 2004

Liabilities:

  Accounts payable and accrued expenses

$

3,306

4,341

  Acquired below market lease intangibles (net of accumulated
    amortization of $3,180 and $2,733 at March 31, 2005 and
    December 31, 2004, respectively)

9,500

7,456

  Accrued interest

2,449

2,282

  Accrued real estate taxes

24,521

22,520

  Dividends payable

5,261

5,537

  Security and other deposits

2,377

2,318

  Mortgages payable

634,001

596,125

  Line of credit

100,000

85,000

  Prepaid rents and unearned income

3,764

4,073

  Liabilities associated with assets held for sale, including mortgages
    payable

4,173

4,035

  Other liabilities

806

971

Total liabilities

790,158

734,658

Minority interest

19,731

19,942

Stockholders' Equity:

  Preferred stock, $.01 par value, 6,000 Shares authorized; none
    issued and outstanding at March 31, 2005 and December 31, 2004

-

-

  Common stock, $.01 par value, 100,000 Shares authorized;
    67,184 and 67,025 Shares issued and outstanding at March 31,
    2005 and December 31, 2004, respectively

672

670

  Additional paid-in capital (net of offering costs of $58,816)

645,877

644,278

  Deferred stock compensation

(538)

(580)

  Accumulated distributions in excess of net income

(193,638)

(191,990)

  Accumulated other comprehensive income

(126)

114

Total stockholders' equity

452,247

452,492

Commitments and contingencies

Total liabilities and stockholders' equity

$

1,262,136

1,207,092

Three months
ended
March 31, 2005

Three months
ended
March 31, 2004

Revenues:

  Rental income

$

31,603

33,149

  Tenant recoveries

13,302

14,344

  Lease termination income

54

-

  Other property income

169

155

Total revenues

45,128

47,648

Expenses:

  Property operating expenses

7,930

6,917

  Real estate tax expense

7,818

8,125

  Bad debt expense

326

1,053

  Depreciation and amortization

9,439

9,301

  Stock exchange listing expenses

62

-

  General and administrative expenses

2,011

1,713

Total expenses

27,586

27,109

Operating income

17,542

20,539

Other income

660

673

Interest expense

(10,183)

(10,588)

Minority interest

(254)

(216)

Equity in earnings of unconsolidated joint ventures

991

-

Income from continuing operations

8,756

10,408

Discontinued operations:

  Income from discontinued operations (including lease termination
     fee of $6,100 for the three moths ended March 31, 2005 and gain
     on sale of investment property of $873 for the three months ended
     March 31, 2004)

5,349

1,477

Net income available to common stockholders

14,105

11,885

Other comprehensive income:

  Unrealized gain (loss) on investment securities

(240)

37

  Comprehensive income

$

13,865

11,922

Three months ended
March 31, 2005

Three months ended
March 31, 2004

Basic and diluted earnings available to common shares per weighted
  average common share:

Income from continuing operations

$

0.13

0.16

Discontinued operations

0.08

0.02

Net income available to common stockholders per weighted average
  common share – basic and diluted

$

0.21

0.18

Weighted average number of common shares outstanding – basic

67,065

65,850

Weighted average number of common shares outstanding – diluted

67,114

65,853

Three months ended
March 31, 2005

Number of shares

Balance at beginning of period

$

67,025

Shares issued from DRP

153

Stock compensation

-

Exercise of stock options

8

Repurchase of fractional shares

(2)

Balance at end of period

67,184

Common Stock

Balance at beginning of period

670

Proceeds from DRP

2

Stock compensation

-

Exercise of stock options

-

Repurchase of fractional shares

-

Balance at end of period

672

Additional Paid-in capital

Balance at beginning of period

644,278

Proceeds from DRP

1,540

Stock compensation

-

Exercise of stock options

78

Repurchase of fractional shares

(19)

Balance at end of period

645,877

Deferred stock compensation

Balance at beginning of period

(580)

Stock compensation

-

Amortization of stock compensation

42

Balance at end of period

(538)

Accumulated distributions in excess of net income

Balance at beginning of period

(191,990)

Net income available to common stockholders

14,105

Distributions declared ($0.23, in the aggregate for the three months ended
   March 31, 2005 per basic and diluted weighted average common share
   outstanding

(15,753)

Balance at end of period

(193,638)

Accumulated other comprehensive income

Balance at beginning of period

114

Other comprehensive loss

(240)

Balance at end of period

(126)

Total stockholders' equity

$

452,247

Three months
ended
March 31, 2005

Three months
ended
March 31, 2004

Cash flows from operating activities:

  Net income

$

14,105

11,885

  Adjustments to reconcile net income to net cash provided by     operating activities:

    Depreciation and amortization

9,439

9,475

    Non-cash charges associated with discontinued operations

4

27

    Amortization of deferred stock compensation

42

12

    Amortization on acquired above market lease intangibles

256

201

    Amortization on acquired below market lease intangibles

(447)

(352)

    Gain on sale of investment properties

-

(873)

    Minority interest

254

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