Cogdell Spencer Inc. - FORM 8-K - EX-99.2 - EXHIBIT 99.2

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8-K - FORM 8-K - Cogdell Spencer Inc.	c07856e8vk.htm
EX-99.1 - EXHIBIT 99.1 - Cogdell Spencer Inc.	c07856exv99w1.htm

Exhibit 99.2

SUPPLEMENTAL OPERATING AND
FINANCIAL DATA

FOR THE QUARTER ENDED
SEPTEMBER 30, 2010

All amounts shown in this report are unaudited.

This Supplemental Operating and Financial Data package is not an offer to sell or solicitation to buy securities of Cogdell
Spencer Inc. Any offer to sell or solicitation to buy securities of Cogdell Spencer Inc. shall be made only by means of a
prospectus approved for that purpose.

Company Overview

Cogdell Spencer Inc. (the “Company”) is a fully-integrated, self-administered, and self-managed real estate investment trust (“REIT”) that invests in specialty office buildings for the medical profession, including medical offices and ambulatory surgery and diagnostic centers. The Company focuses on the ownership, strategic planning, delivery (design/build), acquisition and management of strategically located medical office buildings and other healthcare related facilities in the United States of America. The Company has been built around understanding and addressing the specialized real estate needs of the healthcare industry.

The Company is building a national portfolio of healthcare properties primarily located on hospital campuses. Since the Company’s initial public offering in 2005, the Company has grown through acquisitions and facility development to encompass a national footprint, including seven regional offices (Atlanta, Charlotte, Dallas, Denver, Madison, Seattle, and Washington, D.C.) and more than 25 property management offices located throughout the United States. Client relationships and advance planning services give the Company the ability to be included in the initial project discussions that can lead to ownership and investment in healthcare properties.

In June 2010, the Company completed University Physicians — Grants Ferry in Flowood, Mississippi (a suburb of Brandon, Mississippi) and HealthPartners Medical & Dental Central Minnesota Clinics in Sartell, Minnesota (a suburb of St. Cloud). These two projects utilized the full spectrum of integrated services offered by the Company, including design and construction, development, financing and ownership, and full service property management.

During 2010, the Company began construction on two projects located in the state of Washington. The first project is an approximately 56,000 square foot medical office building located in Bonney Lake, Washington. The second project is an approximately 80,000 square foot medical office building located in Puyallup, Washington. The two projects represent an estimated total investment of $42.4 million.

Since the Company’s founding in 1951, the Company and its predecessors have a 59 year track record and reputation for delivering healthcare facilities with appropriate design, longevity, sustainability and excellent operational efficiency. Cogdell Spencer ERDMAN has been ranked in the top three healthcare design-build firms for five consecutive years by Modern Healthcare’s Annual Construction and Design Survey.

The Company’s property management team has a proactive, customer-focused service approach that leads to faster response times and greater resources to serve tenants. The Company’s management believes that a strong internal property management capability is a vital component of the Company’s business, both for the properties that the Company owns and for those that the Company manages.

As of September 30, 2010, the Company owned or managed healthcare properties located in 14 states and had regional and property management offices located throughout the country to support property management and design-build services. The majority of the Company’s wholly-owned properties are located on hospital campuses.

Cogdell Spencer Inc.
Investor Information


Board of Directors		Senior Management
James W. Cogdell	Raymond W. Braun	James W. Cogdell	Raymond W. Braun
Chairman	President & CEO	Chairman	President & CEO

John R. Georgius	Frank C. Spencer	Charles M. Handy
		Chief Financial Officer

Christopher E. Lee	Richard B. Jennings

Richard C. Neugent	David J. Lubar

Randolph D. Smoak, Jr. M.D.	Scott A. Ransom


Equity Research Coverage

BMO Capital Markets		KeyBanc Capital Markets
Richard Anderson — 212.885.4180		Karin Ford — 917.368.2293

Janney Montgomery Scott, LLC		Raymond James & Associates
Dan Donlan — 215.665.6476		Paul Puryear — 727.567.2253

Jefferies & Co., Inc.		SmithBarney Citigroup
Tayo Okusanya — 212.336.7076		Quentin Velleley — 212.816.6981


Company Information
Corporate Headquarters	Trading Symbol	Transfer Agent	Investor Relations
4401 Barclay Downs Drive	CSA	Continental Stock	Jaime Buell
Suite 300		Transfer & Trust	704.940.2929
Charlotte, NC 28209	Stock Exchange Listing	Company
Tel: 704.940.2900	New York Stock Exchange
Fax: 704.940.2959
www.cogdell.com

This supplemental operating and financial data package contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements reflect the Company’s views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause actual results to differ materially. Factors that may contribute to these differences include, but are not limited to the following: our business strategy; our ability to comply with financial covenants in our debt instruments; our ability to obtain future financing arrangements; estimates relating to our future distributions; our understanding of our competition; our ability to renew our ground leases; changes in the reimbursement available to our tenants by government or private payors; our tenants’ ability to make rent payments; defaults by tenants; customers’ access to financing; delays in project starts and cancellations by customers; market trends; and projected capital expenditures. For a further list and description of such risks and uncertainties, see the reports filed by the Company with the Securities and Exchange Commission, including the Company’s Form 10-K for the year ended December 31, 2009 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2010. Although the Company believes the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be realized. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Financial and Operating Highlights
(in thousands, except per share amounts, years, ratios and portfolio statistics)


	For the Three			For the Nine
	Months Ended			Months Ended
	Sept. 30, 2010			Sept. 30, 2010
Selected Operating Data
Rental income	$	22,345		$	63,900
Straight line rent		323			775
Fair value lease revenues⁽¹⁾		97			330

Rental revenue		22,765			65,005
Property management and other fees		809			2,388

Revenue from property operations	$	23,574		$	67,393
Costs related to property operations	$	9,067		$	25,652
Property operations gross margin		62	%		62	%

Design-Build and development revenue	$	15,735		$	66,527
Costs related to design-build contracts and development	$	13,806		$	49,832
Design-Build and development gross margin		12	%		25	%

FFOM, excluding non-recurring event and impairment charges, per share and operating partnership unit ⁽²⁾	$	0.09		$	0.43
FFOM, excluding non-recurring event and impairment charges ⁽²⁾	$	5,322		$	23,016

EBITDA ⁽³⁾	$	9,906		$	40,379
Interest expense	$	(5,851	)	$	(16,332	)


	As of
	Sept. 30, 2010
Selected Balance Sheet Data
Cash and cash equivalents	$	16,028
Book value of real estate assets before depreciation	$	647,964
Total assets	$	752,671
Total liabilities	$	489,057
Noncontrolling interests and equity	$	263,614

Debt
Weighted average interest rate		5.3	%
Weighted average remaining maturity (years)		3.3
Debt / total assets		55	%

Capitalization
Common shares outstanding		50,709
Units outstanding		7,680
Total common shares and units outstanding		58,389
Share price at end of period	$	6.32
Equity value at end of period ⁽⁴⁾	$	369,018
Debt	$	411,701
Total market capitalization	$	780,719

Portfolio Statistics — In-service, Consolidated Properties
Number of properties		65
Total square footage		3,569,468
Occupancy		91.4	%


(1)		Represents the net adjustment for above and below market leases which are being amortized over the remaining term of the respective lease from the date of the acquisition.

(2)		For a definition, discussion, and a quantitative reconciliation of the differences between FFOM and net income (loss), see page 9. For a detailed listing of non-recurring events and impairment charges, see FFO reconciliation on page 9.

(3)		For a definition and discussion and a quantitative reconciliation of the differences between EBITDA and net income (loss), see page 10.

(4)		Assuming conversion of 100% of the operating partnership units into shares of common stock.

Results for the Three and Nine Months Ended September 30, 2010
(in thousands, except per share and operating partnership unit data)
(unaudited)

The Company reports FFOM and FFOM per share and operating partnership unit for the three and nine months ended September 30, 2010, as follows:


	For the Three Months Ended				For the Nine Months Ended
	Sept. 30, 2010		Sept. 30, 2009		Sept. 30, 2010		Sept. 30, 2009
FFOM ⁽¹⁾	$	5,322	$	8,828	$	9,623	$	(79,946	)
Non-recurring events and impairment charges ⁽²⁾		—		—		13,393		103,266

FFOM, excluding non-recurring events and impairment charges	$	5,322	$	8,828	$	23,016	$	23,320


Per share and operating partnership unit data:
FFOM⁽¹⁾	$	0.09	$	0.18	$	0.18	$	(2.14	)
Non-recurring events and impairment charges ⁽²⁾		—		—		0.25		2.77
FFOM, excluding non-recurring events and impairment charges		0.09		0.18		0.43		0.62

The Company reports FFO and FFO per share and operating partnership unit for the three and nine months ended September 30, 2010, as follows:


	For the Three Months Ended				For the Nine Months Ended
	Sept. 30, 2010		Sept. 30, 2009		Sept. 30, 2010		Sept. 30, 2009
FFO ⁽¹⁾	$	4,948	$	8,475	$	8,502	$	(82,681	)
Non-recurring events and impairment charges ⁽²⁾		—		—		13,393		103,266

FFO, excluding non-recurring events and impairment charges	$	4,948	$	8,475	$	21,895	$	20,585


Per share and operating partnership unit data:
FFO ⁽¹⁾	$	0.09	$	0.17	$	0.16	$	(2.22	)
Non-recurring events ⁽²⁾		—		—		0.25		2.77
FFO, excluding non-recurring events and impairment charges		0.09		0.17		0.41		0.55

The Company reports net income (loss) attributable to Cogdell Spencer Inc. and net income (loss) attributable to Cogdell Spencer Inc. per share for the three and nine months ended September 30, 2010, as follows:


	For the Three Months Ended					For the Nine Months Ended
	Sept. 30, 2010			Sept. 30, 2009		Sept. 30, 2010			Sept. 30, 2009
Net income (loss) attributable to Cogdell Spencer Inc.	$	(1,838	)	$	1,248	$	(10,574	)	$	(71,285	)
Non-recurring events and impairment charges attributable to Cogdell Spencer Inc. ⁽²⁾		—			—		11,451			71,088

Net income (loss) attributable to Cogdell Spencer Inc., excluding non-recurring events and impairment charges ⁽²⁾	$	(1,838	)	$	1,248	$	877		$	(197	)


Per share data:
Net income (loss) attributable to Cogdell Spencer Inc.	$	(0.04	)	$	0.03	$	(0.24	)	$	(2.43	)
Non-recurring events and impairment charges attributable to Cogdell Spencer Inc. ⁽²⁾		—			—		0.25			2.42
Net income (loss) attributable to Cogdell Spencer Inc., excluding non-recurring events and impairment charges ⁽²⁾		(0.04	)		0.03		0.01			(0.01	)


(1)		For a definition and discussion and a quantitative reconciliation of the differences between FFO, FFOM, and net income (loss), see page 9.

(2)		For a detailed listing of non-recurring events and impairment charges, see FFO reconciliation on page 9.

Condensed Consolidated Balance Sheets
(in thousands)
(unaudited)


	Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009			Sept. 30, 2009
Assets
Real estate properties:
Operating real estate properties	$	632,844		$	616,154		$	582,050		$	561,124		$	534,887
Less: Accumulated depreciation		(112,581	)		(106,004	)		(99,544	)		(93,247	)		(87,109	)

Total real estate properties, net		520,263			510,150			482,506			467,877			447,778
Construction in process		15,120			7,951			29,401			43,338			52,260

Total real estate properties, net		535,383			518,101			511,907			511,215			500,038
Cash and cash equivalents		16,028			31,196			18,544			25,914			24,954
Restricted cash		11,649			7,888			3,215			3,060			13,924
Tenant and accounts receivable, net		9,656			8,070			11,502			12,993			17,910
Goodwill		102,195			102,195			108,683			108,683			108,683
Trade names and trademarks		34,093			34,093			41,240			41,240			41,240
Intangible assets, net		20,025			18,670			20,185			21,742			22,837
Other assets		23,642			24,018			24,724			25,599			29,226
Other assets — held for sale		—			—			2,243			2,217			3,691

Total assets	$	752,671		$	744,231		$	742,243		$	752,663		$	762,503


Liabilities and Equity
Mortgage notes payable	$	296,701		$	291,199		$	286,295		$	280,892		$	264,752
Revolving credit facility		65,000			55,000			80,000			80,000			80,000
Term Loan		50,000			50,000			50,000			50,000			50,000
Accounts payable		11,814			11,081			9,838			15,293			18,708
Billings in excess of costs and estimated earnings on uncompleted contracts		2,145			4,657			5,353			13,189			23,216
Deferred income taxes		11,406			13,543			15,688			15,993			14,635
Payable to prior MEA Holdings shareholders		—			—			—			—			18,002
Other liabilities		51,991			48,123			47,879			47,312			47,655
Other liabilities — held for sale		—			—			2,206			2,204			2,311

Total liabilities		489,057			473,603			497,259			504,883			519,279
Commitments and contingencies
Equity:
Cogdell Spencer Inc. stockholders’ equity:
Preferred stock		—			—			—			—			—
Common stock		507			500			428			427			425
Additional paid-in capital		419,439			418,194			370,951			370,593			369,539
Accumulated other comprehensive loss		(6,011	)		(4,843	)		(2,868	)		(1,861	)		(3,160	)
Accumulated deficit		(189,219	)		(182,332	)		(165,314	)		(164,321	)		(161,604	)

Total Cogdell Spencer Inc. stockholders’ equity		224,716			231,519			203,197			204,838			205,200
Noncontrolling interests:
Real estate partnerships		5,660			3,810			4,437			5,220			4,857
Operating partnership		33,238			35,299			37,350			37,722			33,167

Total noncontrolling interests		38,898			39,109			41,787			42,942			38,024

Total equity		263,614			270,628			244,984			247,780			243,224

Total liabilities and equity	$	752,671		$	744,231		$	742,243		$	752,663		$	762,503

Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
(unaudited)


	Three Months Ended
	Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009			Sept. 30, 2009
Revenues:
Rental revenue	$	22,765		$	20,995		$	21,245		$	20,375		$	19,960
Design-Build contract revenue and other sales		15,734			15,236			35,436			30,016			30,298
Property management and other fees		809			761			818			807			816
Development management and other income		1			17			103			98			239

Total revenues		39,309			37,009			57,602			51,296			51,313

Expenses:
Property operating and management		9,067			8,387			8,198			8,021			8,103
Design-Build contracts and development management		13,806			11,407			24,619			21,388			21,166
Selling, general, and administrative		6,684			9,345			5,820			11,067			7,876
Depreciation and amortization		8,293			8,182			8,085			7,470			8,012
Impairment charges		—			13,635			—			—			—

Total expenses		37,850			50,956			46,722			47,946			45,157

Income (loss) from continuing operations before other income (expense) and income tax benefit (expense)		1,459			(13,947	)		10,880			3,350			6,156
Other income (expense):
Interest and other income		151			134			160			164			161
Gain on settlement from MEA Holdings, Inc. transaction		—			—			—			4,905			—
Interest expense		(5,851	)		(5,393	)		(5,089	)		(5,123	)		(5,039	)
Debt extinguishment and interest rate derivative expense		(7	)		(9	)		(15	)		(10	)		(10	)
Equity in earnings (loss) of unconsolidated partnerships		3			—			3			10			(4	)

Total other income (expense)		(5,704	)		(5,268	)		(4,941	)		(54	)		(4,892	)

Income (loss) from continuing operations before income tax benefit		(4,245	)		(19,215	)		5,939			3,296			1,264
Income tax benefit (expense)		2,294			5,174			(1,726	)		60			231

Net income (loss) from continuing operations		(1,951	)		(14,041	)		4,213			3,356			1,495
Discontinued operations:
Loss from discontinued operations		—			24			(18	)		(41	)		(39	)
Impairment of real estate property		—			—			—			(1,359	)		—
Gain on sale of real estate property		—			264			—			—			—

Total discontinued operations		—			288			(18	)		(1,400	)		(39	)

Net income (loss)		(1,951	)		(13,753	)		4,195			1,956			1,456
Net loss (income) attributable to the noncontrolling interest in:
Real estate partnerships		(172	)		(177	)		(311	)		(131	)		(17	)
Operating partnership		285			1,909			(598	)		(269	)		(191	)

Net income (loss) attributable to Cogdell Spencer Inc.	$	(1,838	)	$	(12,021	)	$	3,286		$	1,556		$	1,248


Per share data — basic and diluted:
Income (loss) from continuing operations attributable to Cogdell Spencer Inc.	$	(0.04	)	$	(0.27	)	$	0.08		$	0.06		$	0.03
Loss from discontinued operations attributable to Cogdell Spencer Inc.		—			0.01			—			(0.02	)		—

Net income (loss) per share sttributable to Cogdell Spencer Inc.	$	(0.04	)	$	(0.26	)	$	0.08		$	0.04		$	0.03


Weighted average common shares — basic and diluted		50,083			46,111			42,768			42,615			42,539


Net income (loss) attributable to Cogdell Spencer Inc.:
Income (loss) from continuing operations, net of tax	$	(1,838	)	$	(12,267	)	$	3,301		$	2,740		$	1,281
Discontinued operations		—			246			(15	)		(1,184	)		(33	)

Net income (loss)	$	(1,838	)	$	(12,021	)	$	3,286		$	1,556		$	1,248

Business Segment Reporting
(in thousands)
(unaudited)


				Design-Build
	Property			and			Intersegment			Unallocated
Three months ended Sept. 30, 2010:	Operations			Development			Eliminations			and Other			Total
Revenues:
Rental revenue	$	22,788		$	—		$	(23	)	$	—		$	22,765
Design-Build contract revenue and other sales		—			18,927			(3,193	)		—			15,734
Property management and other fees		809			—			—			—			809
Development management and other income		—			2,290			(2,289	)		—			1

Total revenues		23,597			21,217			(5,505	)		—			39,309

Certain operating expenses:
Property operating and management		9,067			—			—			—			9,067
Design-Build contracts and development management		—			18,965			(5,159	)		—			13,806
Selling, general, and administrative		—			4,226			(23	)		—			4,203

Total certain operating expenses		9,067			23,191			(5,182	)		—			27,076

		14,530			(1,974	)		(323	)		—			12,233
Interest and other income		145			—			—			6			151
Corporate general and administrative expenses		—			—			—			(2,481	)		(2,481	)
Interest expense		—			—			—			(5,851	)		(5,851	)
Interest rate derivative expense		—			—			—			(7	)		(7	)
Provision for income taxes applicable to funds from operations modified		—			—			—			2,055			2,055
Non-real estate related depreciation and amortization		—			(247	)		—			(61	)		(308	)
Earnings from unconsolidated real estate partnerships, before real estate related depreciation and amortization		6			—			—			—			6
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		(476	)		—			—			—			(476	)

Funds from operations modified (FFOM)		14,205			(2,221	)		(323	)		(6,339	)		5,322

Amortization of intangibles related to purchase accounting, net of income tax benefit		(42	)		(571	)		—			239			(374	)

Funds from operations (FFO)		14,163			(2,792	)		(323	)		(6,100	)		4,948

Real estate related depreciation and amortization		(7,375	)		—			—			—			(7,375	)
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		476			—			—			—			476

Net income (loss)		7,264			(2,792	)		(323	)		(6,100	)		(1,951	)
Net income (loss) attributable to the noncontrolling interest in:
Real estate partnerships		(172	)		—			—			—			(172	)
Operating partnership		—			—			—			285			285

Net income (loss) attributable to Cogdell Spencer Inc.	$	7,092		$	(2,792	)	$	(323	)	$	(5,815	)	$	(1,838	)

Reconciliation of Net Income (Loss) to Funds from Operations and Funds from Operations Modified ⁽¹⁾
(in thousands, except per share and unit amounts)
(unaudited)


	Three Months Ended
	Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009			Sept. 30, 2009
Net income (loss)	$	(1,951	)	$	(13,753	)	$	4,195		$	1,956		$	1,456
Add:
Real estate related depreciation and amortization:
Wholly-owned and consolidated properties, including amounts in discontinued operations		7,372			7,272			7,194			7,197			7,222
Unconsolidated real estate partnerships		3			3			3			3			3
Less:
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		(476	)		(479	)		(616	)		(374	)		(206	)
Gain on sale of real estate property		—			(264	)		—			—			—

Funds from Operations (FFO) ⁽¹⁾		4,948			(7,221	)		10,776			8,782			8,475
Amortization of intangibles related to purchase accounting, net of tax benefit		374			—			373			30			353

Funds from Operations Modified (FFOM) ⁽¹⁾		5,322			(7,221	)		11,149			8,812			8,828
Non-recurring events and impairment charges:
Gain on settlement from MEA Holdings, Inc. transaction		—			—			—			(4,905	)		—
Impairment of real estate property held for sale		—			—			—			1,359			—
Strategic planning professional fees		—			—			—			2,641			—
Intangible asset impairment charges, net of tax benefit					10,848			—			—			—
CEO retirement compensation expense, net of income tax benefit		—			2,545			—			—			—

Impact of non-recurring events and impairment charges		—			13,393			—			(905	)		—

FFOM, excluding non-recurring events and impairment charges	$	5,322		$	6,172		$	11,149		$	7,907		$	8,828


FFO per share and unit — basic and diluted	$	0.09		$	(0.13	)	$	0.21		$	0.17		$	0.17
FFOM per share and unit — basic and diluted	$	0.09		$	(0.13	)	$	0.22		$	0.17		$	0.18
FFOM per share and unit — basic and diluted, excluding non-recurring events	$	0.09		$	0.11		$	0.22		$	0.16		$	0.18

Weighted average shares and units outstanding		57,849			53,913			50,559			50,386			50,070


(1)		FFO is a supplemental non-GAAP financial measure used by the real estate industry to measure the operating performance of real estate companies. FFOM adds back to traditionally defined FFO non-cash amortization of non-real estate related intangible assets associated with purchase accounting. The Company presents FFO and FFOM because it considers them important supplemental measures of operational performance. The Company believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate assets diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. Because FFO excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, it provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities and interest costs, providing a perspective not immediately apparent from net income. The Company computes FFO in accordance with standards established by the Board of Governors of NAREIT in its March 1995 White Paper (as amended in November 1999 and April 2002), which may differ from the methodology for calculating FFO utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. Further, FFO and FFOM do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations, or other commitments and uncertainties. FFO and FFOM should not be considered as an alternative to net income (loss) (computed in accordance with GAAP) as an indicator of the Company’s performance, nor are they indicative of funds available to fund its cash needs, including its ability to pay dividends or make distributions.

(2)		Real estate depreciation and amortization consists of depreciation and amortization from wholly-owned real estate properties and the Company’s share of real estate depreciation and amortization from consolidated and unconsolidated real estate partnerships.

Coverage Ratios
(in thousands, except ratio amounts)


	Three Months Ended
	Sept. 30, 2010		June 30, 2010		March 31, 2010		Dec. 31, 2009		Sept. 30, 2009
Interest coverage ratio:
EBITDA	$	9,906	$	11,364	$	19,144	$	15,926	$	14,285
Cash paid for interest		5,515		5,542		5,289		5,336		5,319

Interest coverage ratio		1.80		2.05		3.62		2.98		2.70


Fixed charge coverage ratio:
EBITDA	$	9,906	$	11,364	$	19,144	$	15,926	$	14,285
Fixed charges:
Cash paid for interest		5,515		5,542		5,289		5,336		5,319
Principal payments		1,096		1,019		1,031		928		943

Total fixed charges	$	6,611	$	6,561	$	6,320	$	6,264	$	6,262

Fixed charge coverage ratio		1.50		1.73		3.03		2.54		2.29

Reconciliation of Earnings Before Interest, Taxes,
Depreciation, and Amortization (“EBITDA”) ⁽¹⁾
(in thousands)


	For the Three			For the Nine
	Months Ended			Months Ended
	Sept. 30, 2010			Sept. 30, 2010
Reconciliation of net income (loss) to EBITDA:
Net loss	$	(1,951	)	$	(11,509	)
Interest expense		5,851			16,332
Income tax expense (benefit)		(2,294	)		(5,742	)
Depreciation and amortization		8,293			24,559
Impairment charges		—			13,635
CEO retirement expense		—			3,072
Debt extinguishment and interest rate derivative expense		7			32

EBITDA	$	9,906		$	40,379


(1)		The Company believes that earnings before interest, income taxes, depreciation and amortization, or EBITDA, is a useful supplemental performance measure because it allows investors to view the Company’s performance without the impact of noncash depreciation and amortization or the cost of debt or minority interests. In addition, the Company believes that EBITDA is frequently used by securities analysts, investors, and other interested parties in the evaluation of REITs. Because EBITDA is calculated before recurring cash charges including interest expense and income taxes, and is not adjusted for capital expenditures or other recurring cash requirements of the Company’s business, its utility as a measure of the Company’s performance is limited. Accordingly, EBITDA should be considered only as a supplement to net loss (computed in accordance with GAAP) as a measure of financial performance. Other equity REITs may calculate EBITDA differently; accordingly, the Company’s EBITDA may not be comparable to such other equity REITs’ EBITDA.

Consolidated Debt Analysis as of September 30, 2010
(dollars in thousands)


	Stated Interest		Interest			Principal		Maturity		Amortization
	Rate (%)		Rate (%)			Balance		Date		(years)
Secured mortgage loans — wholly-owned properties:
Rocky Mount Medical Park	Prime			4.25	⁽¹⁾	$	6,397		12/15/2010		25
St. Francis CMOB LLC, St. Francis Professional Medical Center	LIBOR + 1.85			5.17	⁽²⁾		6,733		6/15/2011		39
St. Francis Medical Plaza (Greenville), St. Francis Women’s	LIBOR + 1.85			5.17	⁽²⁾		7,233		6/15/2011		39
Beaufort Medical Plaza	LIBOR + 1.85			5.65	⁽²⁾		4,668		8/18/2011		39
Mulberry Medical Park		6.25		6.25			880		9/15/2011		10
Methodist Professional Center I	LIBOR + 1.30			1.56			25,305		10/31/2011		30
River Hills Medical Plaza	LIBOR + 3.75			5.53	⁽²⁾		3,445		12/22/2011		22
East Jefferson Medical Plaza	LIBOR + 3.75			5.55	⁽²⁾		11,600		1/31/2012	Interest only
Barclay Downs		6.50		6.50			4,304		11/15/2012		25
Providence Medical Office Building I, II and III		6.12		6.12			8,134		1/12/2013		25
One Medical Park		5.93		5.93			4,914		11/1/2013		20
Three Medical Park		5.55		5.55			7,511		3/25/2014		25
Medical Arts Center of Orangeburg	LIBOR + 3.25			6.00	⁽³⁾		2,287		5/5/2014		20
Lancaster Rehabilitation Hospital		6.71		6.71			9,503		6/26/2014		25
Lancaster Rehabilitation Hospital		6.79		6.79			2,093		6/26/2014		25
Rowan Outpatient Surgery Center		6.00		6.00			3,171		7/6/2014		25
East Jefferson MOB		6.01		6.01			8,795		8/10/2014		25
Rocky Mount Kidney Center		6.75		6.75			972		8/21/2014		15
Randolph Medical Park, Lincoln/Lakemont Family Practice, and Northcross Family Physicians		7.00		7.00			7,349		10/15/2014		20
MRMC MOB I		7.33		7.33			5,928		11/1/2014		25
HealthPartners Medical & Dental Clinics (construction loan)	LIBOR + 3.25			6.00	⁽⁴⁾		11,188		11/1/2014		22.5	⁽⁵⁾
Copperfield Medical Mall, Harrisburg Medical Mall, Midland Medical Park and Weddington & Internal/Pediatric Medicine	LIBOR + 1.50			3.25	⁽⁶⁾		8,080		12/15/2014		25
Peerless Crossing Medical Center		6.06		6.06			7,279		9/1/2016		30
Central NY Medical Center		6.22		6.22			24,500		7/15/2017	Interest only
Palmetto Health Parkridge		5.68		5.68			13,500		6/1/2017	Interest only		⁽⁷⁾
Summit Professional Plaza I and II		6.18		6.18			15,925		9/1/2017	Interest only
Health Park Medical Office Building		7.50		7.50			6,926		12/1/2019		25
Medical Center Physicians Tower (construction loan)	LIBOR + 2.50			4.50	⁽⁸⁾		14,770		3/1/2019		25	⁽⁵⁾
University Physicians — Grants Ferry (construction loan)	LIBOR + 2.25			2.48	⁽⁹⁾		9,450		4/20/2019		25	⁽⁵⁾
Roper Medical Office Building		7.10		7.10			9,319		6/1/2019		25

Total / weighted average mortgages — wholly-owned properties				5.32		$	252,159

Secured revolving credit facility:
Tranche I	LIBOR + 1.15			3.97	⁽²⁾		25,000		3/10/2011	Interest only
Tranche II	LIBOR + 1.15			4.26	⁽²⁾		30,000		3/10/2011	Interest only
Tranche III	LIBOR + 1.15			1.41			10,000		3/10/2011	Interest only

Total / weighted average secured revolving credit facility				3.71			65,000

Term loan	LIBOR + 4.50			7.32	⁽²⁾		50,000		3/10/2011	Interest only

Consolidated real estate partnerships:
Alamance Regional Mebane Outpatient Center	LIBOR + 1.30			1.56			10,864		5/1/2011		30
Alamance Regional Mebane Outpatient Center	LIBOR + 4.00			4.26			1,470		5/1/2011	Interest only
English Road Medical Center		6.03		6.03			5,188		3/1/2012		25
Lancaster ASC MOB	LIBOR + 1.20			5.23	⁽²⁾		10,269		3/2/2015		25
Woodlands Center for Specialized Medicine	LIBOR + 1.50			6.21	⁽²⁾		16,682		9/26/2018		25

Total / weighted average consolidated real estate partnerships				4.76			44,473

Total / weighted average debt							411,632
Unamortized premium							69

Total / weighted average debt				5.25		$	411,701


(1)		Maximum interest of 7.25%; minimum interest of 4.25%.

(2)		Represents the fixed rate for floating rate loans that have been swapped to fixed.

(3)		Minimum interest of 6.00%.

(4)		Minimum interest of 6.00%. The Company has entered into a forward starting interest rate swap agreement that effectively fixes the interest rate at 6.80% beginning December 2010, when the construction phase of the loan expires and converts to an amortizing loan.

(5)		Interest only during construction period.

(6)		Maximum interest of 8.25%; minimum interest of 3.25%.

(7)		Interest only through June 2012. Principal and interest payments from July 2012 through June 2017.

(8)		Minimum interest of 4.50%. The Company has entered into a forward starting interest rate swap agreement that effectively fixes the interest rate at 6.19% beginning October 2010, when the construction phase of the loan expires and converts to an amortizing loan.

(9)		The Company has entered into a forward starting interest rate swap agreement that effectively fixes the interest rate 5.95% beginning November 2010, when the construction phase of the loan expires and converts to an amortizing loan.

Consolidated Debt Analysis as of September 30, 2010

(dollars in thousands)

Future maturities and principal payments


										Weighted Average
	Future Scheduled Repayments						Percent of Total			Interest Rate on
Year	Amortization		Maturities		Total		Mortgages			Maturing Debt⁽¹⁾
remainder of 2010	$	1,088	$	6,397	$	7,485		3	%		4.3	%
2011		4,344		59,842		64,186		22	%		2.9	%
2012		4,147		20,712		24,859		8	%		5.9	%
2013		4,145		11,577		15,722		5	%		6.0	%
2014		3,336		59,735		63,071		21	%		6.0	%
Thereafter		7,450		113,859		121,309		41	%		5.7	%

Total mortgages	$	24,510	$	272,122	$	296,632		100	%		5.2	%
Secured revolving credit facility (March 2011 maturity)		—		65,000		65,000
Term loan (March 2011 maturity)		—		50,000		50,000

Total	$	24,510	$	387,122	$	411,632

Debt profile


						Weighted Average
	Balance		Percent of Total			Interest Rate⁽¹⁾			Maturity (Years)
Fixed rate mortgages — wholly-owned properties	$	226,854		55	%		5.7	%		4.8
Variable rate mortgages — wholly-owned properties		25,305		6	%		1.6	%		1.1
Secured revolving credit facility		65,000		16	%		3.7	%		0.4
Term loan		50,000		12	%		7.3	%		0.4
Mortgages — consolidated real estate partnerships		44,473		11	%		4.8	%		4.3

Total	$	411,632		100	%		5.3	%		3.3

Secured revolving credit facility — matures March 2011


Facility	$	150,000
Less: Outstanding		65,000
Less: Letters of credit		8,187

Availability	$	76,813


Capitalized interest 3Q 2010	$	88

Covenant summary

Required

Current Quarter

In Compliance

Secured revolving credit facility ⁽²⁾:

Maximum total leverage ratio

< 70%

Yes

Maximum real estate leverage ratio

< 70%

Yes

Minimum fixed charge coverage ratio

> 1.50x

2.11

Yes

Minimum required tangible net worth

> $182,457

247,329

Yes

Maximum total debt to real estate value ratio

< 90%

Yes

Term loan ⁽²⁾:

Maximum Erdman senior indebtedness to adjusted EBITDA

< 3.50x ⁽³⁾

3.49x

Yes

Maximum Erdman total indebtedness to adjusted EBITDA

< 5.50x

3.49x

Yes

Minimum adjusted EBITDA to fixed charges

> 2.00x

2.83x

Yes


(1)		Includes the fixed rate swapped interest rates.

(2)		For covenant definitions and a listing of non-financial debt covenants, please refer to the Company’s filings with the Securities and Exchange Commission.

(3)		The term loan covenant allows for a one-time ability to exceed 3.50x, but not to exceed 3.75x.

Property Listing as of September 30, 2010


												Annualized
												Rent Per
					Net Rentable		Occupancy			Annualized		Leased
	Location	Ownership			Square Feet		Rate			Rent		Square Foot
California
Verdugo Hills Professional Bldg I	Glendale		100.0	%		63,887		94.3	%	$	1,944,837	$	32.30
Verdugo Hills Professional Bldg II	Glendale		100.0	%		42,906		99.5	%		1,440,108		33.73

						106,793		96.4	%		3,384,945		32.89

Florida
Woodlands Center for Specialized Medicine	Pensacola		40.0	%		75,985		100.0	%		2,402,922		31.62

Georgia
Augusta POB I	Augusta		100.0	%		99,494		90.7	%		1,320,305		14.63
Augusta POB II	Augusta		100.0	%		125,634		87.6	%		2,302,463		20.91
Augusta POB III	Augusta		100.0	%		47,034		90.0	%		908,672		21.47
Augusta POB IV	Augusta		100.0	%		55,134		82.5	%		892,591		19.62
Summit Professional Plaza I	Brunswick		100.0	%		33,039		93.5	%		858,710		27.80
Summit Professional Plaza II	Brunswick		100.0	%		64,233		96.7	%		1,773,437		28.54

						424,568		89.8	%		8,056,178		21.14

Indiana
Methodist Professional Center I ⁽¹⁾	Indianapolis		100.0	%		150,243		95.2	%		3,479,097		24.33
Methodist Professional Center II (sub-lease)	Indianapolis		100.0	%		24,080		100.0	%		653,679		27.15

						174,323		95.8	%		4,132,776		24.74

Kentucky
OLBH Same Day Surgery Center and MOB	Ashland		100.0	%		46,907		100.0	%		1,182,154		25.20
OLBH Parking Garage											882,838

						46,907		100.0	%		2,064,992		25.20	⁽²⁾

Louisiana
East Jefferson MOB	Metairie		100.0	%		119,921		98.8	%		2,586,589		21.84
East Jefferson Medical Plaza	Metairie		100.0	%		123,184		100.0	%		2,785,905		22.62
East Jefferson MRI	Metairie		100.0	%		10,809		100.0	%		995,663		92.11

						253,914		99.4	%		6,368,157		25.23

Minnesota
Health Partners Medical & Dental Clinics	Sartell		100.0	%		60,108		94.9	%		1,970,692		34.54

Mississippi
University Physicians — Grants Ferry	Flowood		100.0	%		50,575		100.0	%		1,622,481		32.08

New York
Central NY Medical Center ⁽³⁾	Syracuse		100.0	%		111,634		97.8	%		3,000,215		27.48

North Carolina
Alamance Regional Mebane Outpatient Center	Mebane		35.1	%		68,206		71.1	%		1,853,215		38.24
Barclay Downs	Charlotte		100.0	%		38,395		100.0	%		874,173		22.77
Birkdale Bldgs C, D, E and Birkdale Wellness	Huntersville		100.0	%		64,669		96.4	%		1,385,500		22.23
Birkdale II	Huntersville		100.0	%		8,269		100.0	%		223,784		27.06
Copperfield Medical Mall	Concord		100.0	%		26,000		100.0	%		631,660		24.29
East Rocky Mount Kidney Center	Rocky Mount		100.0	%		8,043		100.0	%		161,232		20.05
English Road Medical Center	Rocky Mount		34.5	%		35,393		95.7	%		950,728		28.08
Gaston Professional & Ambulatory Surgery Centers	Gastonia		100.0	%		114,956		100.0	%		2,752,278		23.94
Gaston Parking											606,141
Gateway Medical Office Building	Concord		100.0	%		61,789		69.1	%		1,119,819		26.21
Harrisburg Family Physicians	Harrisburg		100.0	%		8,202		100.0	%		224,301		27.35
Harrisburg Medical Mall	Harrisburg		100.0	%		18,360		100.0	%		500,851		27.28
Lincoln/Lakemont Family Practice	Lincolnton		100.0	%		16,500		100.0	%		397,713		24.10
Mallard Crossing Medical Park	Charlotte		100.0	%		52,540		66.0	%		858,437		24.76
Medical Arts Building	Concord		100.0	%		84,972		93.3	%		1,817,675		22.93
Midland Medical Park	Midland		100.0	%		14,610		100.0	%		441,985		30.25
Mulberry Medical Park	Lenoir		100.0	%		24,992		87.0	%		466,653		21.46
Northcross Family Physicians	Charlotte		100.0	%		8,018		100.0	%		234,496		29.25
Randolph Medical Park	Charlotte		100.0	%		84,131		69.2	%		1,292,498		22.21

Property Listing as of September 30, 2010


												Annualized
												Rent Per
					Net Rentable		Occupancy			Annualized		Leased
	Location	Ownership			Square Feet		Rate			Rent		Square Foot
North Carolina (continued)
Rocky Mount Kidney Center	Rocky Mount		100.0	%		10,105		100.0	%		202,567		20.05
Rocky Mount Medical Park	Rocky Mount		100.0	%		96,993		100.0	%		2,090,850		21.56
Rowan Outpatient Surgery Center	Salisbury		100.0	%		19,464		100.0	%		435,162		22.36
Weddington Internal & Pediatric Medicine	Concord		100.0	%		7,750		100.0	%		203,224		26.22

						872,357		89.1	%		19,724,942		24.61	⁽²⁾

Pennsylvania
Lancaster Rehabilitation Hospital	Lancaster		100.0	%		57,508		100.0	%		1,484,740		25.82
Lancaster ASC MOB	Lancaster		80.9	%		64,214		100.0	%		2,130,199		33.17

						121,722		100.0	%		3,614,939		29.70

South Carolina
200 Andrews	Greenville		100.0	%		25,902		100.0	%		628,047		24.25
Beaufort Medical Plaza	Beaufort		100.0	%		59,340		100.0	%		1,346,384		22.69
Carolina Forest Medical Plaza	Myrtle Beach		100.0	%		38,902		43.5	%		533,125		31.53
Mary Black Westside Medical Office Bldg	Spartanburg		100.0	%		37,455		100.0	%		728,004		19.44
Medical Arts Center of Orangeburg	Orangeburg		100.0	%		49,324		78.0	%		766,672		19.94
Mount Pleasant Medical Office Long Point	Mt. Pleasant		100.0	%		38,735		77.4	%		802,594		26.78
One Medical Park	Columbia		100.0	%		69,840		78.2	%		1,361,685		24.92
Palmetto Health Parkridge	Columbia		100.0	%		89,451		94.6	%		2,113,884		24.98
Providence MOB I	Columbia		100.0	%		48,500		87.2	%		950,048		22.46
Providence MOB II	Columbia		100.0	%		23,280		100.0	%		481,018		20.66
Providence MOB III	Columbia		100.0	%		54,417		55.5	%		604,424		20.02
River Hills Medical Plaza	Little River		100.0	%		27,566		70.9	%		635,928		32.53
Roper Medical Office Building	Charleston		100.0	%		122,785		95.6	%		2,519,512		21.46
St. Francis CMOB	Greenville		100.0	%		45,140		100.0	%		1,191,782		26.40
St. Francis Medical Plaza (Charleston)	Charleston		100.0	%		28,734		100.0	%		840,813		29.26
St. Francis Medical Plaza (Greenville)	Greenville		100.0	%		62,724		61.5	%		759,669		19.68
St. Francis Outpatient Surgery Center	Greenville		100.0	%		72,491		100.0	%		2,169,417		29.93
St. Francis Professional Medical Center	Greenville		100.0	%		49,767		100.0	%		1,131,301		22.73
St. Francis Women’s	Greenville		100.0	%		57,590		79.2	%		972,385		21.31
Three Medical Park	Columbia		100.0	%		88,755		100.0	%		2,172,104		24.47

						1,090,698		87.0	%		22,708,796		23.93

Tennessee
Health Park Medical Office Building	Chattanooga		100.0	%		52,151		88.8	%		1,730,882		37.38
Peerless Crossing Medical Center	Cleveland		100.0	%		40,506		100.0	%		1,231,652		30.41

						92,657		93.7	%		2,962,534		34.13

Virginia
MRMC MOB I	Mechanicsville		100.0	%		56,610		92.7	%		1,541,362		29.37
St. Mary’s MOB North — (Floors 6 & 7)	Richmond		100.0	%		30,617		100.0	%		785,346		25.65

						87,227		95.3	%		2,326,708		28.00

Total						3,569,468		91.4	%	$	84,341,277	$	25.41	⁽²⁾


⁽¹⁾		Parking revenue from an adjacent parking deck is approximately $90,000 per month, or $1,080,000 annualized.

⁽²⁾		Excludes annualized rent of adjacent parking decks to OLBH Same Day Surgery Center and MOB and Gaston Professional Center from calculation.

⁽³⁾		Parking revenue from an adjacent parking deck is approximately $98,000 per month, or $1,176,000 annualized.

Property Occupancy Rates


	September 30,			June 30,			March 31,			December 31,			September 30,
	2010			2010			2010			2009			2009
California
Verdugo Professional Bldg I		94.3	%		94.3	%		94.3	%		95.2	%		95.2	%
Verdugo Professional Bldg II		99.5	%		99.5	%		99.5	%		99.5	%		99.5	%

Florida
Woodlands Center for Specialized Medicine		100.0	%		100.0	%		100.0	%		100.0	%		n/a

Georgia
Augusta POB I		90.7	%		90.7	%		77.7	%		81.9	%		82.2	%
Augusta POB II		87.6	%		87.6	%		87.6	%		87.6	%		87.6	%
Augusta POB III		90.0	%		90.0	%		90.0	%		90.0	%		90.0	%
Augusta POB IV		82.5	%		82.5	%		82.5	%		82.5	%		88.9	%
Summit Professional Plaza I		93.5	%		93.5	%		93.5	%		93.5	%		93.5	%
Summit Professional Plaza II		96.7	%		96.7	%		96.7	%		96.7	%		96.7	%

Indiana
Methodist Professional Center I		95.2	%		96.4	%		96.4	%		96.4	%		95.6	%
Methodist Professional Center II		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Kentucky
OLBH Same Day Surgery Center and MOB		100.0	%		91.5	%		100.0	%		95.9	%		95.9	%

Louisiana
East Jefferson MOB		98.8	%		100.0	%		100.0	%		100.0	%		100.0	%
East Jefferson Medical Plaza		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
East Jefferson MRI		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Minnesota
Health Partners Medical & Dental Clinics		94.9	%		94.9	%		n/a			n/a			n/a

Mississippi
University Physicians — Grants Ferry		100.0	%		100.0	%		n/a			n/a			n/a

New York
Central NY Medical Center		97.8	%		97.8	%		95.4	%		96.7	%		96.7	%

North Carolina
Alamance Regional Mebane Outpatient Ctr		71.1	%		71.1	%		71.1	%		71.1	%		71.1	%
Barclay Downs		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Birkdale Bldgs C, D, E and Birkdale Wellness		96.4	%		96.4	%		96.4	%		100.0	%		100.0	%
Birkdale II		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Copperfield Medical Mall		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
East Rocky Mount Kidney Center		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
English Road Medical Center		95.7	%		95.7	%		95.7	%		95.7	%		95.7	%
Gaston Professional & Ambulatory Surgery Centers		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Gateway Medical Office Building		69.1	%		69.1	%		69.1	%		87.9	%		87.9	%
Harrisburg Family Physicians		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Harrisburg Medical Mall		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Lincoln/Lakemont Family Practice		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Mallard Crossing Medical Park		66.0	%		66.0	%		66.9	%		62.9	%		62.9	%
Medical Arts Building		93.3	%		98.2	%		98.2	%		98.2	%		98.2	%
Midland Medical Park		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Mulberry Medical Park		87.0	%		87.0	%		77.7	%		87.0	%		87.0	%
Northcross Family Physicians		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Randolph Medical Park		69.2	%		71.8	%		71.8	%		71.8	%		71.8	%
Rocky Mount Kidney Center		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Property Occupancy Rates


	September 30,			June 30,			March 31,			December 31,			September 30,
	2010			2010			2010			2009			2009
North Carolina (continued)
Rocky Mount Medical Park		100.0	%		92.8	%		92.8	%		100.0	%		100.0	%
Rowan Outpatient Surgery Center		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Weddington Internal & Pediatric Medicine		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Pennsylvania
Lancaster Rehabilitation Hospital		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Lancaster ASC MOB		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

South Carolina
200 Andrews		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Beaufort Medical Plaza		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Carolina Forest Medical Plaza		43.5	%		43.5	%		43.5	%		43.5	%		43.5	%
Mary Black Westside Medical Office Bldg		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Medical Arts Center of Orangeburg		78.0	%		78.0	%		78.0	%		80.4	%		80.1	%
Mount Pleasant Medical Office Long Point		77.4	%		77.4	%		77.4	%		77.4	%		77.4	%
One Medical Park		78.2	%		80.8	%		80.8	%		80.8	%		80.8	%
Palmetto Health Parkridge		94.6	%		94.6	%		94.6	%		94.6	%		94.6	%
Providence MOB I		87.2	%		87.2	%		87.2	%		87.2	%		91.7	%
Providence MOB II		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Providence MOB III		55.5	%		49.6	%		55.5	%		55.5	%		51.4	%
River Hills Medical Plaza		70.9	%		70.9	%		70.9	%		79.5	%		79.5	%
Roper Medical Office Building		95.6	%		95.6	%		95.6	%		99.3	%		100.0	%
St. Francis CMOB		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
St. Francis Medical Plaza (Charleston)		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
St. Francis Medical Plaza (Greenville)		61.5	%		50.7	%		50.7	%		50.7	%		52.5	%
St. Francis Outpatient Surgery Center		100.0	%		n/a			n/a			n/a			n/a
St. Francis Professional Medical Center		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
St. Francis Women’s		79.2	%		76.5	%		76.5	%		76.5	%		73.4	%
Three Medical Park		100.0	%		100.0	%		100.0	%		100.0	%		93.8	%

Tennessee
Health Park Medical Office Building		88.8	%		88.8	%		100.0	%		100.0	%		100.0	%
Peerless Crossing Medical Center		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Virginia
MRMC MOB I		92.7	%		100.0	%		100.0	%		100.0	%		92.7	%
St. Mary’s MOB North — (Floors 6 & 7)		100.0	%		100.0	%		100.0	%		90.1	%		90.1	%

Lease Expirations for Leases In Place at September 30, 2010


					Percentage of Net					Percentage of			Annualized Rent
	Number of		Net Rentable		Rentable Square			Annualized		Property			Per Leased
	Leases Expiring		Square Feet		Feet			Rent		Annualized Rent			Square Foot
Available				308,606		8.6	%	$	—		—		$	—
2010		58		202,255		5.7	%		4,721,932		5.6	%		23.35
2011		93		309,588		8.7	%		7,303,036		8.7	%		23.59
2012		134		560,950		15.7	%		15,431,059		18.3	%		24.85	⁽¹⁾
2013		85		385,520		10.8	%		8,762,239		10.4	%		22.73
2014		81		373,879		10.5	%		9,262,501		11.0	%		24.77
2015		54		206,354		5.8	%		5,056,828		6.0	%		24.51
2016		27		135,112		3.8	%		2,854,336		3.4	%		21.13
2017		43		274,159		7.7	%		7,657,278		9.1	%		27.93
2018		16		90,383		2.5	%		2,413,130		2.9	%		26.70
2019		19		143,101		4.0	%		3,188,922		3.8	%		22.28
2020		10		73,833		2.1	%		1,631,035		1.9	%		22.09
Thereafter		17		505,728		14.2	%		16,058,981		19.0	%		31.75

Total		637		3,569,468		100.0	%	$	84,341,277		100.0	%	$	25.41	⁽¹⁾


⁽¹⁾		Excludes annualized rent of adjacent parking decks to OLBH Same Day Surgery Center and MOB and Gaston Professional Center from calculation.

Ten Largest Tenants by Annualized Rent at September 30, 2010


Tenant	Annualized Rent		Percent of Portfolio
1 Carolinas Healthcare System	$	5,770,316		6.8	%
2 Bon Secours St. Francis Hospital		5,678,959		6.7	%
3 Palmetto Health Alliance		3,441,812		4.1	%
4 Lancaster General Hospital		2,904,486		3.4	%
5 Woodlands Medical		2,402,922		2.8	%
6 Clarian Health Partners		2,181,137		2.6	%
7 University Hospital — Augusta, GA		1,950,096		2.3	%
8 Gaston Memorial Hospital		1,901,846		2.3	%
9 Jefferson Parish Hospital District #2		1,871,268		2.2	%
10 HealthPartners, Inc.		1,835,923		2.2	%

	$	29,938,765		35.5	%

Acquisitions and Completed Developments for the period January 1, 2009 through September 30, 2010
(dollars in thousands)

Purchase Price

Date Acquired /

Net Rentable

/ Construction

Property

Location

Type

In-service

Square Feet

Cost

Alamance Regional Mebane Outpatient Center ⁽¹⁾

Mebane, NC

Development

3Q 2009

68,206

17,449

Woodlands Center for Specialized Medicine ⁽²⁾

Pensacola, FL

Development

4Q 2009

75,985

24,732

HealthPartners Medical Office Building

St. Cloud, MN

Development

2Q 2010

60,108

15,624

University Physicians — Grant’s Ferry

Brandon, MS

Development

2Q 2010

50,575

14,032

Lancaster Rehabilitation Hospital ⁽³⁾

Lancaster, PA

Development

2Q 2010

4,630

1,991

St. Francis Outpatient Surgery Center

Greenville, SC

Acquisition

3Q 2010

72,491

16,638

Total 2009 and 2010

331,995

90,466


(1)		Owned by Mebane Medical Investors, LLC, which is a consolidated real estate partnership. The Company had a 35.1% ownership interest at September 30, 2010. Alamance Regional Mebane Outpatient Center consists of a MOB and a cancer center, which became operational during 2Q 2009 and 3Q 2009, respectively.

(2)		Owned by Genesis Property Holding, LLC, which is a consolidated real estate partnership. The Company had a 40.0% ownership interest at September 30, 2010.

(3)		Represents 4,630 square foot expansion to the existing property.

Lease-up Property as of September 30, 2010
(dollars in thousands)

Completion

Net Rentable

Construction

Percentage

Property

Location

Date

Square Feet

Cost to Date

Leased

Medical Center Physicians Tower

Jackson, TN

2Q 2010

106,772

20,615

100

%⁽¹⁾


(1)		The property is 75% leased and income producing with the remaining 25% leased and under construction for a third quarter 2011 scheduled date of occupancy.

Construction in Progress as of September 30, 2010
(dollars in thousands)


		Estimated						Estimated
		Completion		Net Rentable		Investment		Total		Percentage
Property	Location	Date		Square Feet		to Date		Investment		Leased

Good Sam MOB Investors, LLC	Puyallup, WA		3Q 2011		80,000	$	5,981	$	24,700		73	%
Bonney Lake MOB Investors, LLC ⁽¹⁾	Bonney Lake, WA		3Q 2011		56,000		7,112		17,700		98	%
Land and pre-construction developments					—		2,027		—

					136,000	$	15,120	$	42,400


(1)		The Company has a 61.7% ownership interest at September 30, 2010.

Investment in Real Estate Properties
(in thousands)


	Three Months Ended		Nine Months Ended
	Sept. 30, 2010		Sept. 30, 2010
Investment in real estate properties:
Development, redevelopment, and acquisitions	$	24,322	$	44,566
Second generation tenant improvements		1,382		2,703
Recurring property capital expenditures		323		365

Total	$	26,027	$	47,634

Cogdell Spencer Inc. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - November 4, 2010

Attached files

Cogdell Spencer Inc. Reports