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

Attached files

file	filename
8-K - FORM 8-K - Cogdell Spencer Inc.	c13580e8vk.htm
EX-99.1 - EXHIBIT 99.1 - Cogdell Spencer Inc.	c13580exv99w1.htm

Exhibit 99.2

INVESTOR
INFORMATION

Board of Directors


James W. Cogdell		Raymond W. Braun
Chairman		President & CEO
John R. Georgius		Richard B. Jennings
Christopher E. Lee		David J. Lubar
Richard C. Neugent		Scott A. Ransom
Randolph D. Smoak, Jr. M.D.

Executive Management


Raymond W. Braun	Brian L. Happ	Rex A. Noble
Chief Executive Officer & President	Executive VP & Chief Operating Officer	Executive VP Portfolio Management

Charles M. Handy	Andrea L. Hopkins	Sal G. Parente
Executive VP & Chief Financial Officer	VP Human Resources	Executive VP Business Development

Equity Research Coverage


BMO Capital Markets	Jefferies & Co.	Raymond James & Associates
Richard Anderson — 212.885.4180	Tayo Okusanya — 212.336.7076	Paul Puryear — 727.567.2253

Janney Montgomery Scott	KeyBanc Capital Markets	SmithBarney Citigroup
Dan Donlan — 215.665.6476	Karin Ford — 917.368.2293	Quentin Velleley — 212.816.6981

Company Information


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

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 our 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 our reports filed with the Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2009 and our Quarterly Report on Form 10-Q for the quarter ended June 30, 2010. Although we believe the expectations reflected in such forward-looking statements are based on reasonable assumptions, we can give no assurance that our expectations will be realized. We disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SUMMARY

(in thousands, except per share amounts and portfolio statistics)


	For 3 Months Ended						For the Year Ended
	Dec. 31, 2010			Dec. 31, 2009			Dec. 31, 2010			Dec. 31, 2009
Revenue	$	48,498		$	51,296		$	182,417		$	229,601
EBITDA⁽¹⁾		11,466			15,926			51,880			57,106
Net income (loss) available to Cogdell Spencer Inc. common shareholders		(92,469	)		1,556			(103,043	)		(69,728	)
Net income (loss) per share available to Cogdell Spencer Inc. common shareholders	$	(1.82	)	$	0.04		$	(2.17	)	$	(2.14	)

FFOM available to common shareholders and operating partnership unitholders⁽²⁾		(98,878	)		8,812			(89,243	)		(71,132	)
FFOM available to common shareholders and operating partnership unitholders, excluding non-recurring events and impairment charges⁽²⁾		6,994			7,907			30,022			31,229

Per share and operating partnership unit data:
FFOM available to common shareholders and operating partnership unitholders⁽²⁾	$	(1.69	)	$	0.17		$	(1.62	)	$	(1.75	)
FFOM available to common shareholders and operating partnership unitholders, excluding non-recurring events and impairment charges⁽²⁾	$	0.12		$	0.16		$	0.54		$	0.77

Debt / Gross assets⁽³⁾		45	%		46	%		45	%		46	%

Portfolio statistics:
Number of properties		66			62			66			62
Total square footage		3,676			3,382			3,676			3,382


(1)		For a definition, discussion, and a quantitative reconciliation of the differences between EBITDA and net income (loss), see page 11.

(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)		Gross assets represents total assets before accumulated depreciation and amortization. (4) Consolidated, in-service properties

(4)		Consolidated, in-service properties

CAPITALIZATION

(in thousands, except per share amounts)


	December 31, 2010
	Shares/Units		Share Price		Value
Common Stock		50,870	$	5.80	$	295,046
Common Operating Partnership Units		7,518		5.80		43,604
Preferred Stock		2,600		24.95		64,870

Equity value						403,520
Consolidated debt						362,303

Market capitalization					$	765,823

HealthPartners Medical & Dental Clinic — Sartell, Minnesota

RESULTS

For the Three Months and Year Ended
December 31, 2010

(in thousands, except per share and operating partnership unit data)
(unaudited)


	For the 3 Months Ended						For the Year Ended
	Dec. 31, 2010			Dec. 31, 2009			Dec. 31, 2010			Dec. 31, 2009
FFOM⁽¹⁾	$	(98,878	)	$	8,812		$	(89,243	)	$	(71,132	)
Non-recurring events and impairment charges⁽²⁾		105,872			(905	)		119,265			102,361

FFOM, excluding non-recurring events and impairment charges	$	6,994		$	7,907		$	30,022		$	31,229


Per share and operating partnership unit data:
FFOM⁽¹⁾	$	(1.69	)	$	0.17		$	(1.62	)	$	(1.75	)
Non-recurring events and impairment charges⁽²⁾		1.81			(0.01	)		2.16			2.52
FFOM, excluding non-recurring events and impairment charges		0.12			0.16			0.54			0.77


	For the 3 Months Ended						For the Year Ended
	Dec. 31, 2010			Dec. 31, 2009			Dec. 31, 2010			Dec. 31, 2009
FFO⁽¹⁾	$	(99,252	)	$	8,782		$	(90,738	)	$	(73,897	)
Non-recurring events and impairment charges⁽²⁾		105,872			(905	)		119,265			102,361

FFO, excluding non-recurring events and impairment charges	$	6,620		$	7,877		$	28,527		$	28,464


Per share and operating partnership unit data:
FFO⁽¹⁾	$	(1.70	)	$	0.17		$	(1.64	)	$	(1.82	)
Non-recurring events⁽²⁾		1.81			(0.01	)		2.16			2.52
FFO, excluding non-recurring events and impairment charges		0.11			0.16			0.52			0.70


	For the 3 Months Ended						For the Year Ended
	Dec. 31, 2010			Dec. 31, 2009			Dec. 31, 2010			Dec. 31, 2009
Net income (loss) available to Cogdell Spencer Inc. common shareholders	$	(92,469	)	$	1,556		$	(103,043	)	$	(69,728	)
Non-recurring events and impairment charges attributable to Cogdell Spencer Inc. common shareholders⁽²⁾		92,003			(766	)		102,568			82,298

Net income (loss) available to Cogdell Spencer Inc. common shareholders, excluding non-recurring events and impairment charges⁽²⁾	$	(466	)	$	790		$	(475	)	$	12,570

Per share data:
Net income (loss) available to Cogdell Spencer Inc. common shareholders	$	(1.82	)	$	0.04		$	(2.18	)	$	(2.14	)
Non-recurring events and impairment charges attributable to Cogdell Spencer Inc. common shareholders ⁽²⁾		1.81			(0.02	)		2.17			2.52
Net income (loss) available to Cogdell Spencer Inc. common shareholders, excluding non-recurring events and impairment charges⁽²⁾		(0.01	)		0.02			(0.01	)		0.38


(1)		For a definition, 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)


	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009
Assets
Real estate properties:
Operating real estate properties	$	635,663		$	632,844		$	616,154		$	582,050		$	561,124
Less: Accumulated depreciation		(119,141	)		(112,581	)		(106,004	)		(99,544	)		(93,247	)

Total real estate properties, net		516,522			520,263			510,150			482,506			467,877
Construction in process		22,075			15,120			7,951			29,401			43,338

Total real estate properties, net		538,597			535,383			518,101			511,907			511,215
Cash and cash equivalents		12,203			16,028			31,196			18,544			25,914
Restricted cash		6,794			11,649			7,888			3,215			3,060
Tenant and accounts receivable, net		11,383			9,656			8,070			11,502			12,993
Goodwill		22,882			102,195			102,195			108,683			108,683
Trade names and trademarks		—			34,093			34,093			41,240			41,240
Intangible assets, net		18,601			20,025			18,670			20,185			21,742
Other assets		23,684			23,642			24,018			24,724			25,599
Other assets — held for sale		—			—			—			2,243			2,217

Total assets	$	634,144		$	752,671		$	744,231		$	742,243		$	752,663


Liabilities and Equity
Mortgage notes payable	$	317,303		$	296,701		$	291,199		$	286,295		$	280,892
Revolving credit facility		45,000			65,000			55,000			80,000			80,000
Term Loan		—			50,000			50,000			50,000			50,000
Accounts payable		11,368			11,814			11,081			9,838			15,293
Billings in excess of costs and estimated earnings on uncompleted contracts		1,930			2,145			4,657			5,353			13,189
Deferred income taxes		—			11,406			13,543			15,688			15,993
Other liabilities		39,819			51,991			48,123			47,879			47,312
Other liabilities — held for sale		—			—			—			2,206			2,204

Total liabilities		415,420			489,057			473,603			497,259			504,883
Commitments and contingencies
Equity:
Cogdell Spencer Inc. stockholders’ equity:
Preferred stock		65,000			—			—			—			—
Common stock		509			507			500			428			427
Additional paid-in capital		417,960			419,439			418,194			370,951			370,593
Accumulated other comprehensive loss		(3,339	)		(6,011	)		(4,843	)		(2,868	)		(1,861	)
Accumulated deficit		(286,752	)		(189,219	)		(182,332	)		(165,314	)		(164,321	)

Total Cogdell Spencer Inc. stockholders’ equity		193,378			224,716			231,519			203,197			204,838
Noncontrolling interests:
Real estate partnerships		6,452			5,660			3,810			4,437			5,220
Operating partnership		18,894			33,238			35,299			37,350			37,722

Total noncontrolling interests		25,346			38,898			39,109			41,787			42,942

Total equity		218,724			263,614			270,628			244,984			247,780

Total liabilities and equity	$	634,144		$	752,671		$	744,231		$	742,243		$	752,663

CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)
(unaudited)


	Three Months Ended
	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009
Revenues:
Rental revenue	$	22,799		$	22,765		$	20,995		$	21,245		$	20,375
Design-Build contract revenue and other sales		24,850			15,734			15,236			35,436			30,016
Property management and other fees		824			809			761			818			807
Development management and other income		25			1			17			103			98

Total revenues		48,498			39,309			37,009			57,602			51,296

Expenses:
Property operating and management		8,012			9,067			8,387			8,198			8,021
Design-Build contracts and development management		22,169			13,806			11,407			24,619			21,388
Selling, general, and administrative		8,561			6,684			9,345			5,820			11,067
Depreciation and amortization		8,283			8,293			8,182			8,085			7,470
Impairment charges		113,406			—			13,635			—			—

Total expenses		160,431			37,850			50,956			46,722			47,946

Income (loss) from continuing operations before other income (expense) and income tax benefit (expense)		(111,933	)		1,459			(13,947	)		10,880			3,350
Other income (expense):
Interest and other income		210			151			134			160			164
Gain on settlement from MEA Holdings, Inc. transaction		—			—			—			—			4,905
Interest expense		(5,662	)		(5,851	)		(5,393	)		(5,089	)		(5,123	)
Debt extinguishment and interest rate derivative expense		(339	)		(7	)		(9	)		(15	)		(10	)
Equity in earnings (loss) of unconsolidated partnerships		7			3			—			3			10

Total other income (expense)		(5,784	)		(5,704	)		(5,268	)		(4,941	)		(54	)

Income (loss) from continuing operations before income tax benefit		(117,717	)		(4,245	)		(19,215	)		5,939			3,296
Income tax benefit (expense)		11,815			2,294			5,174			(1,726	)		60

Income (loss) from continuing operations		(105,902	)		(1,951	)		(14,041	)		4,213			3,356
Discontinued operations:
Income (loss) from discontinued operations		—			—			24			(18	)		(41	)
Impairment of real estate property		—			—			—			—			(1,359	)
Gain on sale of real estate property		—			—			264			—			—

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


Net income (loss)		(105,902	)		(1,951	)		(13,753	)		4,195			1,956

Net income attributable to the noncontrolling interest in real estate partnerships		(171	)		(172	)		(177	)		(311	)		(131	)
Net (income) loss attributable to the noncontrolling interest in operating partnership		13,812			285			1,909			(598	)		(269	)
Dividends on preferred stock		(208	)		—			—			—			—

Net income (loss) available to Cogdell Spencer Inc. common shareholders	$	(92,469	)	$	(1,838	)	$	(12,021	)	$	3,286		$	1,556


Per share data — basic and diluted:
Income (loss) from continuing operations attributable to Cogdell Spencer Inc. common shareholders	$	(1.82	)	$	(0.04	)	$	(0.27	)	$	0.08		$	0.06
Income (loss) from discontinued operations attributable to Cogdell Spencer Inc. common shareholders		—			—			0.01			—			(0.02	)

Net income (loss) per share available to Cogdell Spencer Inc. common shareholders	$	(1.82	)	$	(0.04	)	$	(0.26	)	$	0.08		$	0.04


Weighted average common shares — basic and diluted		50,745			50,083			46,111			42,768			42,615


Net income (loss) available to Cogdell Spencer Inc. common shareholders:
Continuing operations, net of tax	$	(92,469	)	$	(1,838	)	$	(12,267	)	$	3,301		$	2,740
Discontinued operations		—			—			246			(15	)		(1,184	)

Net income (loss) available to Cogdell Spencer Inc. common shareholders	$	(92,469	)	$	(1,838	)	$	(12,021	)	$	3,286		$	1,556

BUSINESS SEGMENT
REPORTING

(in thousands)
(unaudited)


				Design-Build
	Property			and			Intersegment			Unallocated
Three months ended Dec. 31, 2010	Operations			Development			Eliminations			and Other			Total

Revenues:
Rental revenue	$	22,821		$	—		$	(22	)	$	—		$	22,799
Design-Build contract revenue and other sales		—			31,640			(6,790	)		—			24,850
Property management and other fees		824			—			—			—			824
Development management and other income		—			419			(394	)		—			25

Total revenues		23,645			32,059			(7,206	)		—			48,498

Certain operating expenses:
Property operating and management		8,012			—			—			—			8,012
Design-Build contracts and development management		—			29,007			(6,838	)		—			22,169
Selling, general, and administrative		—			4,651			(22	)		—			4,629
Impairment charges		—			113,406			—			—			113,406

Total certain operating expenses		8,012			147,064			(6,860	)		—			148,216

		15,633			(115,005	)		(346	)		—			(99,718	)
Interest and other income		178			—			—			32			210
Corporate general and administrative expenses		—			—			—			(3,932	)		(3,932	)
Interest expense		—			—			—			(5,662	)		(5,662	)
Interest rate derivative expense		—			—			—			(339	)		(339	)
Benefit from income taxes applicable to funds from operations modified		—			—			—			11,576			11,576
Non-real estate related depreciation and amortization		—			(292	)		—			(51	)		(343	)
Earnings from unconsolidated real estate partnerships, before real estate related depreciation and amortization		10			—			—			—			10
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		(472	)		—			—			—			(472	)
Dividends on preferred stock		—			—			—			(208	)		(208	)

Funds from operations modified (FFOM)		15,349			(115,297	)		(346	)		1,416			(98,878	)

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

Funds from operations (FFO)		15,307			(115,868	)		(346	)		1,655			(99,252	)

Real estate related depreciation and amortization		(7,330	)		—			—			—			(7,330	)
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		472			—			—			—			472
Dividends on preferred stock		—			—			—			208			208

Net income (loss)	$	8,449		$	(115,868	)	$	(346	)	$	1,863		$	(105,902	)

BUSINESS SEGMENT
REPORTING

(in thousands)
(unaudited)


				Design-Build
	Property			and			Intersegment			Unallocated
Year ended Dec. 31, 2010:	Operations			Development			Eliminations			and Other			Total

Revenues:
Rental revenue	$	87,895		$	—		$	(92	)	$	—		$	87,803
Design-Build contract revenue and other sales		—			113,997			(22,741	)		—			91,256
Property management and other fees		3,212			—			—			—			3,212
Development management and other income		—			5,861			(5,715	)		—			146

Total revenues		91,107			119,858			(28,548	)		—			182,417

Certain operating expenses:
Property operating and management		33,664			—			—			—			33,664
Design-Build contracts and development management		—			97,561			(25,560	)		—			72,001
Selling, general, and administrative		—			17,373			(92	)		—			17,281
Impairment charges		—			127,041			—			—			127,041

Total certain operating expenses		33,664			241,975			(25,652	)		—			249,987

		57,443			(122,117	)		(2,896	)		—			(67,570	)
Interest and other income		607			3			—			45			655
Corporate general and administrative expenses		—			—			—			(13,130	)		(13,130	)
Interest expense		—			—			—			(21,994	)		(21,994	)
Interest rate derivative expense		—			—			—			(371	)		(371	)
Benefit from income taxes applicable to funds from operations modified		—			—			—			16,600			16,600
Non-real estate related depreciation and amortization		—			(997	)		—			(229	)		(1,226	)
Earnings from unconsolidated real estate partnerships, before real estate related depreciation and amortization		26			—			—			—			26
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		(2,031	)		—			—			—			(2,031	)
Discontinued operations		9			—			—			(3	)		6
Dividends on preferred stock		—			—			—			(208	)		(208	)

Funds from operations modified (FFOM)		56,054			(123,111	)		(2,896	)		(19,290	)		(89,243	)

Amortization of intangibles related to purchase accounting, net of income tax benefit		(169	)		(2,282	)		—			956			(1,495	)

Funds from operations (FFO)		55,885			(125,393	)		(2,896	)		(18,334	)		(90,738	)

Real estate related depreciation and amortization		(29,177	)		—			—			—			(29,177	)
Gain on sale of real estate property		264			—			—			—			264
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		2,031			—			—			—			2,031
Dividends on preferred stock		—			—			—			208			208

Net income (loss)	$	29,003		$	(125,393	)	$	(2,896	)	$	(18,126	)	$	(117,412	)

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
	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009
Net income (loss)	$	(105,902	)	$	(1,951	)	$	(13,753	)	$	4,195		$	1,956
Add:
Real estate related depreciation and amortization⁽²⁾:
Wholly-owned and consolidated properties, including amounts in discontinued operations		7,327			7,372			7,272			7,194			7,197
Unconsolidated real estate partnerships		3			3			3			3			3

Less:
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		(472	)		(476	)		(479	)		(616	)		(374	)
Dividends on preferred stock		(208	)		—			—			—			—
Gain on sale of real estate property		—			—			(264	)		—			—

Funds from Operations (FFO)⁽¹⁾		(99,252	)		4,948			(7,221	)		10,776			8,782
Amortization of intangibles related to purchase accounting, net of tax benefit		374			374			374			373			30

Funds from Operations Modified (FFOM)⁽¹⁾		(98,878	)		5,322			(6,847	)		11,149			8,812
Non-recurring events and impairment charges:
Intangible asset impairment charges, net of tax benefit		93,826			—			10,848			—			—
Deferred tax asset valuation allowance		10,553			—			—			—			—
Mr. Cogdell’s retirement compensation expense		1,493			—			—			—			—
Mr. Spencer’s retirement compensation expense, net of income tax benefit		—			—			2,545			—			—
Strategic planning professional fees		—			—			—			—			2,641
Impairment of real estate property held for sale		—			—			—			—			1,359
Gain on settlement from MEA Holdings, Inc. transaction		—			—			—			—			(4,905	)

Impact of non-recurring events and impairment charges		105,872			—			13,393			—			(905	)

FFOM, excluding non-recurring events and impairment charges	$	6,994		$	5,322		$	6,546		$	11,149		$	7,907


FFO per share and unit — basic and diluted	$	(1.70	)	$	0.09		$	(0.13	)	$	0.21		$	0.17
FFOM per share and unit — basic and diluted	$	(1.69	)	$	0.09		$	(0.13	)	$	0.22		$	0.17
FFOM per share and unit — basic and diluted, excluding non-recurring events	$	0.12		$	0.09		$	0.12		$	0.22		$	0.16

Weighted average shares and units outstanding		58,389			57,849			53,913			50,559			50,386


(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. We present FFO and FFOM because we consider them important supplemental measures of operational performance. We believe 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. We believe that FFOM allows securities analysts, investors and other interested parties to evaluate current period results to results prior to the acquisition of MEA Holdings, Inc. FFO and FFOM are 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 and FFOM excludes depreciation and amortization unique to real estate, gains and losses from property dispositions and extraordinary items, they provide performance measures that, when compared year over year, reflect 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. We compute 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 and FFOM utilized by other equity REITs and, accordingly, may not be comparable to such other REITs. We adjust the NAREIT definition to add back noncontrolling interests in consolidated real estate partnerships before real estate related depreciation and amortization and deduct dividends on preferred stock. 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 our performance, nor are they indicative of funds available to fund our cash needs, including our 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 our share of real estate depreciation and amortization from consolidated and unconsolidated real estate partnerships.

COVERAGE
RATIOS

(in thousands, except ratio amounts)


	Three Months Ended
	Dec. 31, 2010		Sept. 30, 2010		June 30, 2010		March 31, 2010		Dec. 31, 2009
Interest coverage ratio:
EBITDA	$	11,466	$	9,906	$	11,364	$	19,144	$	15,926
Cash paid for interest		5,901		5,515		5,542		5,289		5,336

Interest coverage ratio		1.94		1.80		2.05		3.62		2.98


Fixed charge coverage ratio:
EBITDA	$	11,466	$	9,906	$	11,364	$	19,144	$	15,926
Fixed charges:
Cash paid for interest		5,901		5,515		5,542		5,289		5,336
Principal payments		1,111		1,096		1,019		1,031		928

Total fixed charges	$	7,012	$	6,611	$	6,561	$	6,320	$	6,264

Fixed charge coverage ratio		1.64		1.50		1.73		3.03		2.54

MIMA Gateway — Melbourne, Florida

RECONCILIATION OF
EARNINGS

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


	For the Three
	Months Ended
	Dec. 31, 2010
Reconciliation of net income (loss) to EBITDA:
Net loss	$	(105,902	)
Interest expense		5,662
Income tax benefit		(11,815	)
Depreciation and amortization		8,283
Impairment charges		113,406
Mr. Cogdell’s retirement compensation expense		1,493
Debt extinguishment and interest rate derivative expense		339

EBITDA⁽¹⁾	$	11,466

Frontier Cancer Center and Blood Institute — Billings, Montana


(1)		We believe that earnings before interest, income taxes, depreciation and amortization, or EBITDA, is a useful supplemental performance measure because it allows investors to view our performance without the impact of noncash depreciation and amortization or the cost of debt or minority interests. In addition, we believe 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 our business, its utility as a measure of our 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, our EBITDA may not be comparable to such other equity REITs’ EBITDA.

CONSOLIDATED
DEBT ANALYSIS

as of December 31, 2010
(dollars in thousands)


	Stated Interest		Interest			Principal		Maturity		Amortization
	Rate (%)		Rate (%)			Balance		Date		(years)
Secured mortgage loans — wholly-owned properties:
St. Francis CMOB, St. Francis Professional Medical Center	LIBOR + 1.85			5.17	⁽¹⁾	$	6,688		6/15/2011		39
St. Francis Medical Plaza (Greenville), St. Francis Women’s	LIBOR + 1.85			5.17	⁽¹⁾		7,184		6/15/2011		39
Beaufort Medical Plaza	LIBOR + 1.85			5.65	⁽¹⁾		4,637		8/18/2011		39
Mulberry Medical Park		6.25		6.25			863		9/15/2011		10
Methodist Professional Center I	LIBOR + 1.30			1.56			25,250		10/31/2011		30
St. Francis Outpatient Surgery Center	LIBOR + 3.25			3.51			13,000		11/29/2011		Interest only
River Hills Medical Plaza	LIBOR + 3.75			5.53	⁽¹⁾		3,445		12/22/2011		22
East Jefferson Medical Plaza	LIBOR + 3.75			5.55	⁽¹⁾		11,600		1/31/2012		Interest only
Barclay Downs		6.50		6.50			4,278		11/15/2012		25
Providence Medical Office Building I, II and III		6.12		6.12			8,067		1/12/2013		25
One Medical Park		5.93		5.93			4,852		11/1/2013		20
Three Medical Park		5.55		5.55			7,455		3/25/2014		25
Medical Arts Center of Orangeburg	LIBOR + 3.25			6.00	⁽²⁾		2,259		5/5/2014		20
Lancaster Rehabilitation Hospital		6.71		6.71			9,463		6/26/2014		25
Lancaster Rehabilitation Hospital		6.79		6.79			2,084		6/26/2014		25
Rowan Outpatient Surgery Center		6.00		6.00			3,148		7/6/2014		25
East Jefferson MOB		6.01		6.01			8,735		8/10/2014		25
Rocky Mount Kidney Center		6.75		6.75			962		8/21/2014		15
Randolph Medical Park, Lincoln/Lakemont Family Practice, and Northcross Family Physicians		7.00		7.00			7,303		10/15/2014		20
Rocky Mount Medical Park	LIBOR + 3.50			3.76	⁽³⁾		10,279		10/22/2014		25
MRMC MOB I		7.33		7.33			5,905		11/1/2014		25
HealthPartners Medical & Dental Clinics	LIBOR + 3.25			6.80	⁽¹⁾		12,065		11/1/2014		22.5
Copperfield Medical Mall, Harrisburg Medical Mall, Midland Medical Park and Weddington & Internal/Pediatric Medicine	LIBOR + 1.50			3.25	⁽⁵⁾		8,017		12/15/2014		25
Peerless Crossing Medical Center		6.06		6.06			7,253		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	⁽⁶⁾
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			6,901		12/1/2019		25
Medical Center Physicians Tower	LIBOR + 2.50			6.19	⁽¹⁾		14,707		3/1/2019		25
University Physicians — Grants Ferry	LIBOR + 2.25			5.95	⁽¹⁾		10,408		4/20/2019		25
Roper Medical Office Building		7.10		7.10			9,281		6/1/2019		25

Total / weighted average mortgages — wholly-owned properties				5.31			270,014


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

(2)		Minimum interest of 6.00%.

(3)		Maximum interest of 6.50%.

(4)		Interest only during construction period.

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

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

(7)		We have entered into a forward starting interest rate swap agreement that effectively fixes the interest rate 6.44% beginning

CONSOLIDATED
DEBT ANALYSIS

as of December 31, 2010
(continued)
(dollars in thousands)

Stated Interest

Interest

Principal

Maturity

Amortization

Rate (%)

Balance

Date

(years)

Secured revolving credit facility:

Tranche I

LIBOR + 1.15

4.26

⁽¹⁾

30,000

3/10/2011

Interest only

Tranche II

LIBOR + 1.15

1.41

15,000

3/10/2011

Interest only

Total / weighted average secured revolving credit facility

3.31

45,000

Consolidated real estate partnerships:

Alamance Regional Mebane Outpatient Center

LIBOR + 1.30

1.56

10,838

5/1/2011

Alamance Regional Mebane Outpatient Center

LIBOR + 4.00

4.26

1,470

5/1/2011

Interest only

English Road Medical Center

6.03

5,162

3/1/2012

Lancaster ASC MOB

LIBOR + 1.20

5.23

⁽¹⁾

10,210

3/2/2015

Woodlands Center for Specialized Medicine

LIBOR + 1.50

6.21

⁽¹⁾

16,610

9/26/2018

Bonney Lake Medical Office Building

LIBOR + 3.25

3.51

⁽⁷⁾

2,937

2/5/2019

⁽⁴⁾

Total / weighted average consolidated real estate partnerships

4.68

47,227

Total / weighted average debt

362,241

Unamortized premium

Total / weighted average debt

4.98

362,303

Woodlands Center for Specialized Medicine — Pensacola, Florida


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

(2)		Minimum interest of 6.00%.

(3)		Maximum interest of 6.50%.

(4)		Interest only during construction period.

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

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

(7)		The Company has entered into a forward starting interest rate swap agreement that effectively fixes the interest rate 6.44% beginning

CONSOLIDATED
DEBT ANALYSIS

as of December 31, 2010

Future Scheduled Repayments


										Weighted
										Average
										Interest Rate on
							Percent of Total			Maturing
Year	Amortization		Maturities		Total		Mortgages			Debt⁽¹⁾
2011	$	4,598	$	72,845	$	77,443		24	%		3.0	%
2012		4,400		23,646		28,046		9	%		5.9	%
2013		4,399		11,577		15,976		5	%		6.0	%
2014		3,590		60,622		64,212		20	%		5.3	%
2015		2,189		9,233		11,422		4	%		5.2	%
Thereafter		5,727		114,415		120,142		38	%		6.2	%

Total mortgages	$	24,903	$	292,338	$	317,241		100	%		5.2	%
Secured revolving credit facility (March 2014 maturity)		—		45,000		45,000

Total	$	24,903	$	337,338	$	362,241


(1)		Includes the fixed rate swapped interest rates.

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

CONSOLIDATED
DEBT ANALYSIS

as of December 31, 2010
(continued)


						Weighted Average
	Balance		Percent of Total			Interest Rate⁽¹⁾			Maturity (Years)
Debt Profile
Fixed rate mortgages — wholly-owned properties	$	221,485		61	%		6.1	%		4.7
Variable rate mortgages — wholly-owned properties		48,529		13	%		1.8	%		0.7
Secured revolving credit facility		45,000		12	%		3.3	%		0.2
Mortgages — consolidated real estate partnerships		47,227		13	%		4.7	%		4.3

Total	$	362,241		100	%		5.0	%		3.6


Secured revolving credit facility as of December 31, 2010
Facility	$	150,000
Less: Outstanding		45,000
Less: Letters of credit		8,128

Availability	$	96,872


Capitalized interest 4Q 2010	$	135

Current

Covenant summary

Required

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

> 1.50

1.94

Yes

Minimum required tangible net worth

> $235,636

329,051

Yes

Maximum total debt to real estate value ratio

< 90

Yes


(1)		Includes the fixed rate swapped interest rates.

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

PROPERTY
SUMMARY

(dollars and square feet in thousands)


	Same Property Operating Results
	As of and for Quarter Ended									As of and for Year Ended
	Dec. 31, 2010			Sept. 30, 2010			Dec. 31, 2009			Dec. 31, 2010			Dec. 31, 2009
Property count		61			61			61			61			61
Square feet		3,310			3,310			3,310			3,310			3,310
Occupancy		90.0	%		90.8	%		91.3	%		90.0	%		91.3	%

Rental revenue	$	20,461		$	20,463		$	20,529		$	81,324		$	80,833
Costs related to property operations		(7,339	)		(8,146	)		(7,486	)		(30,895	)		(29,719	)

Net operating income		13,122			12,317			13,043			50,429			51,114
Straight line rent		(234	)		(122	)		(101	)		(505	)		(509	)
Fair value of lease revenues⁽¹⁾		(104	)		(100	)		(132	)		(437	)		(542	)

Adjusted net operating income	$	12,784		$	12,095		$	12,810		$	49,487		$	50,063


	Total Property Operating Results
	As of and for Quarter Ended									As of and for Year Ended
	Dec. 31, 2010			Sept. 30, 2010			Dec. 31, 2009			Dec. 31, 2010			Dec. 31, 2009
Property count		66			66			62			66			62
Square feet		3,676			3,676			3,382			3,676			3,382
Occupancy		90.2	%		90.9	%		91.5	%		90.2	%		91.5	%

Rental revenue	$	22,799		$	22,765		$	20,375		$	87,803		$	79,486
Property management and other fees		824			809			807			3,212			3,336
Costs related to property operations		(8,012	)		(9,067	)		(8,021	)		(33,664	)		(31,810	)

Net operating income		15,611			14,507			13,161			57,351			51,012
Straight line rent		(429	)		(323	)		(149	)		(1,206	)		(556	)
Fair value of lease revenues⁽¹⁾		(99	)		(97	)		(132	)		(429	)		(542	)

Adjusted net operating income	$	15,083		$	14,087		$	12,880		$	55,716		$	49,914


(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.

PROPERTY
LISTING

as of December 31, 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	%		64,056		93.1	%	$	1,930,055	$	32.35
Verdugo Hills Professional Bldg II	Glendale		100.0	%		42,906		99.5	%		1,439,002		33.70

						106,962		95.7	%		3,369,057		32.91
Florida
Woodlands Center for Specialized Medicine	Pensacola		40.0	%		75,985		100.0	%		2,452,055		32.27

Georgia
Augusta POB I	Augusta		100.0	%		99,494		93.2	%		1,356,650		14.63
Augusta POB II	Augusta		100.0	%		125,634		87.6	%		2,304,051		20.93
Augusta POB III	Augusta		100.0	%		47,034		90.0	%		909,175		21.48
Augusta POB IV	Augusta		100.0	%		55,134		83.1	%		895,774		19.54
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	%		1,760,881		28.34

						424,568		90.5	%		8,085,241		21.05
Indiana
Methodist Professional Center I⁽¹⁾	Indianapolis		100.0	%		150,243		95.2	%		3,480,256		24.34
Methodist Professional Center II (sub-lease)	Indianapolis		100.0	%		24,080		100.0	%		653,679		27.15

						174,323		95.8	%		4,133,935		24.75
Kentucky
OLBH Same Day Surgery Center and MOB	Ashland		100.0	%		46,907		95.7	%		978,786		21.81
OLBH Parking Garage											890,962

						46,907		95.7	%		1,869,748		21.81
Louisiana
East Jefferson MOB	Metairie		100.0	%		119,921		99.1	%		2,574,872		21.67
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		99.6	%		6,356,440		25.14
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	%		1,619,447		32.02

New York
Central NY Medical Center⁽³⁾	Syracuse		100.0	%		111,634		97.8	%		2,918,133		26.73


(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 $100,000 per month, or $1,200,000 annualized.

PROPERTY
LISTING

as of December 31, 2010
(continued)


												Annualized
												Rent Per
					Net Rentable		Occupancy			Annualized		Leased
	Location	Ownership			Square Feet		Rate			Rent		Square Foot

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	%		645,085		16.80
Birkdale Bldgs C, D, E and Birkdale Wellness	Huntersville		100.0	%		64,669		96.4	%		1,389,705		22.29
Birkdale II	Huntersville		100.0	%		8,269		100.0	%		203,672		24.63
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 Gaston Parking	Gastonia		100.0	%		114,956		100.0	%		2,739,964		23.83
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	%		858,662		24.77
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	%		467,570		21.50
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
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	%		2,091,904		21.57
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	%		19,469,829		24.28

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


(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 $100,000 per month, or $1,200,000 annualized.

PROPERTY
LISTING

as of December 31, 2010
(continued)


												Annualized
												Rent Per
					Net Rentable		Occupancy			Annualized		Leased
	Location	Ownership			Square Feet		Rate			Rent		Square Foot

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	%		795,812		26.55
One Medical Park	Columbia		100.0	%		69,840		83.9	%		1,448,084		24.73
Palmetto Health Parkridge	Columbia		100.0	%		89,451		94.6	%		2,147,120		25.37
Providence MOB I	Columbia		100.0	%		48,500		82.0	%		879,088		22.10
Providence MOB II	Columbia		100.0	%		23,280		88.8	%		424,702		20.55
Providence MOB III	Columbia		100.0	%		54,417		73.3	%		783,493		19.64
River Hills Medical Plaza	Little River		100.0	%		27,566		70.9	%		637,881		32.63
Roper Medical Office Building	Charleston		100.0	%		122,785		84.7	%		2,223,487		21.37
St. Francis CMOB	Greenville		100.0	%		45,140		96.6	%		1,154,968		26.49
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		67.6	%		825,515		19.46
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	%		972,590		21.31
Three Medical Park	Columbia		100.0	%		88,755		82.3	%		1,722,577		23.60

						1,090,698		85.3	%		22,159,080		23.81

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	%		1,008,848		24.91

						92,657		93.7	%		2,739,730		31.56

Virginia
MRMC MOB I	Mechanicsville		100.0	%		56,610		77.2	%		1,275,077		29.19
St. Mary’s MOB North — (Floors 6 & 7)	Richmond		100.0	%		30,617		100.0	%		783,450		25.59

						87,227		85.2	%		2,058,527		27.71


Total						3,569,637		90.6	%	$	82,816,853	$	25.14


(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 $100,000 per month, or $1,200,000 annualized.

PROPERTY
OCCUPANCY RATE


	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009
California
Verdugo Professional Bldg I		93.1	%		94.3	%		94.3	%		94.3	%		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	%		100.0	%

Georgia
Augusta POB I		93.2	%		90.7	%		90.7	%		77.7	%		81.9	%
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		83.1	%		82.5	%		82.5	%		82.5	%		82.5	%
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	%		95.2	%		96.4	%		96.4	%		96.4	%
Methodist Professional Center II		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Kentucky
OLBH Same Day Surgery Center and MOB		95.7	%		100.0	%		91.5	%		100.0	%		95.9	%

Louisiana
East Jefferson MOB		99.1	%		98.8	%		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	%		94.9	%		n/a			n/a

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

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

PROPERTY
OCCUPANCY RATE
(continued)


	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009
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	%		96.4	%		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	%		69.1	%		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	%		66.0	%		66.9	%		62.9	%
Medical Arts Building		93.3	%		93.3	%		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	%		87.0	%		77.7	%		87.0	%
Northcross Family Physicians		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Randolph Medical Park		69.2	%		69.2	%		71.8	%		71.8	%		71.8	%
Rocky Mount Kidney Center		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Rocky Mount Medical Park		100.0	%		100.0	%		92.8	%		92.8	%		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	%

PROPERTY
OCCUPANCY RATE
(continued)


	Dec. 31, 2010			Sept. 30, 2010			June 30, 2010			March 31, 2010			Dec. 31, 2009
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	%		78.0	%		80.4	%
Mount Pleasant Medical Office Long Point		77.4	%		77.4	%		77.4	%		77.4	%		77.4	%
One Medical Park		83.9	%		78.2	%		80.8	%		80.8	%		80.8	%
Palmetto Health Parkridge		94.6	%		94.6	%		94.6	%		94.6	%		94.6	%
Providence MOB I		82.0	%		87.2	%		87.2	%		87.2	%		87.2	%
Providence MOB II		88.8	%		100.0	%		100.0	%		100.0	%		100.0	%
Providence MOB III		73.3	%		55.5	%		49.6	%		55.5	%		55.5	%
River Hills Medical Plaza		70.9	%		70.9	%		70.9	%		70.9	%		79.5	%
Roper Medical Office Building		84.7	%		95.6	%		95.6	%		95.6	%		99.3	%
St. Francis CMOB		96.6	%		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)		67.6	%		61.5	%		50.7	%		50.7	%		50.7	%
St. Francis Outpatient Surgery Center		100.0	%		100.0	%		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	%		79.2	%		76.5	%		76.5	%		76.5	%
Three Medical Park		82.3	%		100.0	%		100.0	%		100.0	%		100.0	%

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

Virginia
MRMC MOB I		77.2	%		92.7	%		100.0	%		100.0	%		100.0	%
St. Mary’s MOB North — (Floors 6 & 7)		100.0	%		100.0	%		100.0	%		100.0	%		90.1	%

LEASE
EXPIRATIONS

for Leases in Place at
December 31, 2010


					Percentage of					Percentage of			Annualized
	Number of		Net Rentable		Net Rentable			Annualized		Property			Rent Per Leased
	Leases Expiring		Square Feet		Square Feet			Rent		Annualized Rent			Square Foot

Available		—		335,140		9.4	%	$	—		—		$	—
2011		118		380,104		10.6	%		8,822,530		10.7	%		23.21
2012		137		563,865		15.8	%		15,488,211		18.7	%		24.81	⁽¹⁾
2013		88		371,802		10.4	%		8,558,824		10.3	%		23.02
2014		80		367,583		10.3	%		9,143,332		11.0	%		24.87
2015		69		266,544		7.5	%		6,117,214		7.4	%		22.95
2016		31		150,487		4.2	%		3,093,863		3.7	%		20.56
2017		47		285,658		8.0	%		7,617,039		9.2	%		26.66
2018		19		112,358		3.1	%		2,886,922		3.5	%		25.69
2019		19		143,101		4.0	%		3,188,922		3.9	%		22.28
2020		13		87,324		2.4	%		2,017,720		2.4	%		23.11
Thereafter		17		505,671		14.2	%		15,882,276		19.2	%		31.41


Total		638		3,569,637		100.0	%	$	82,816,853		100.0	%	$	25.14	⁽¹⁾

St. Francis Outpatient Surgery Center — Greenville, South Carolina


(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
December 31, 2010


	Annualized		Percent of
Tenant	Rent		Portfolio
1. Carolinas Healthcare System	$	5,755,211		6.9	%
2. Bon Secours St. Francis Hospital		5,545,679		6.7	%
3. Palmetto Health Alliance		2,947,052		3.6	%
4. Lancaster General Hospital		2,904,486		3.5	%
5. Woodlands Medical		2,452,055		3.0	%
6. Clarian Health Partners		2,360,612		2.9	%
7. Jefferson Parish Hospital District #2		1,903,291		2.3	%
8. Gaston Memorial Hospital		1,889,533		2.3	%
9. University Hospital, Augusta, GA		1,866,583		2.3	%
10. HealthPartners, Inc.		1,835,923		2.2	%

	$	29,460,425		35.6	%

Lancaster ASC MOB — Lancaster, Pennsylvania

GROUND & AIR RIGHTS
LEASES

as of December 31, 2010


			Ground or Air
	Net Rentable		Rights Lease
	Square Feet		Expiration⁽¹⁾
200 Andrews		25,902		2063
Alamance Regional Mebane Outpatient Ctr		68,206		2086
Beaufort Medical Plaza		59,340		2070
East Jefferson Medical Plaza		123,184		2043
East Jefferson MOB		119,921		2035
East Jefferson MRI		10,809		2027
Gaston MOB and Surgery Center		114,956		2035
Gateway Medical Office Building		61,789		2054
Good Samaritan Medical Office Building (2)		79,641		2111
Lancaster ASC MOB		64,215		2091
Lancaster Rehabilitation Hosp		57,508		2092
Mary Black Westside Medical Office Building		37,455		2061
Medical Arts Building		84,972		2070
Medical Center Physicians Tower		106,772		2089
Methodist Professional Center I (and adjacent parking deck)		150,243		2060
Mount Pleasant Medical Office Longpoint		38,735		2070
Mulberry Medical Park		24,992		2057
OLBH Same Day Surgery MOB/Parking Garage		46,907		2067
One Medical Park		69,840		2033
Parkridge MOB LLC		89,451		2053
Providence MOB I		48,500		2049
Providence MOB II		23,280		2034
Roper Medical Office Building		122,784		2042
St Francis CMOB		45,140		2060
St Francis Medical Plaza (Greenville)		62,724		2070
St Francis Outpatient Surgery Center		72,491		2060
St Francis Women’s		57,590		2070
St. Francis Medical Plaza (Charleston)		28,734		2073
St. Francis Professional Medical Center		49,767		2050
St. Mary’s MOB North (Floors 6 & 7)		30,617		2058
Three Medical Park		88,755		2039


(1)		Year of expiration assumes we have exercised lease renewal options.

(2)		Property in construction as of December 31, 2010.

PIPELINE

Orthopaedic Hospital of Wisconsin — Glendale, Wisconsin

INTER-COMPANY
PROFIT ELIMINATION EXAMPLE

We are required to account for the operations of our Design-Build and Development segment separately from that of our Property Operations segment due to Federal income tax guidelines (see Note 2 in our Consolidated Financial Statements on Form 10-K or 10-Q for further explanation of Real Estate Investment Trust organizational and operational guidance). Generally accepted accounting principles require that we eliminate these inter-company profits upon consolidation.

At times, the Design-Build and Development segment will construct a building for the Property Operations segment. Upon consolidation, the profits earned by the Design-Build and Development segment must be eliminated and the corresponding value of the building reduced by the same amount.

In the example below, Property Operations pays Design-Build and Development a market value of $10.0 million to construct a building. Design-Build and Development’s cost to construct the building is $9.0 million. Upon consolidation, we eliminate the $1.0 million profit and reduce the carrying value of the building to $9.0 million. Had we hired a third party general contractor, our carrying value would have been $10.0 million.

Regardless of who constructs the building, Property Operations establishes the rental rate based on the building’s market value of $10.0 million. Assuming an 8.0% return on cost, the rental rate is set at $0.8 million. Since we self-constructed the building, our consolidated (and internal) cost is actually $9.0 million which then increases our return on investment to 8.9% ($0.8 million divided by $9.0 million).


	Building		Return on
	Carrying Value		Investment

Building results as constructed by a third-party	$	10,000,000		8.0	%

Building results as constructed internally	$	9,000,000		8.9	%


	Property			Design-Build &			Profit			Consolidated
	Operations			Development			Elimination			Cogdell Spencer

Assets:
Cash	$	(10,000,000	)	$	1,000,000		$	—		$	(9,000,000	)
Building		10,000,000			—			(1,000,000	)		9,000,000

	$	—		$	1,000,000		$	(1,000,000	)		—


Liabilities and equity:
Secured Credit Facility	$	—		$	—		$	—		$	—
Equity (current year earnings)		—			1,000,000			(1,000,000	)		—

	$	—		$	1,000,000		$	(1,000,000	)	$	—


Income statement:
Design-Build Revenue	$	—		$	10,000,000		$	(10,000,000	)	$	—
Design-Build Cost of Sales		—			(9,000,000	)		9,000,000			—

Gross Margin	$	—			1,000,000		$	(1,000,000	)	$	—

ACQUISITIONS &
COMPLETED DEVELOPMENTS

for the Period January 1, 2009
through December 31, 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

Alamance Regional Mebane Outpatient Surgery Center — Mebane, North Carolina


(1)		Owned by Mebane Medical Investors, LLC, which is a consolidated real estate partnership. We had a 35.1% ownership interest at December 31, 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. We had a 40.0% ownership interest at December 31, 2010.

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

LEASE-UP
PROPERTY

as of December 31, 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

20,998

100

%⁽¹⁾

Medical Center Physicians Tower — Jackson, Tennessee


(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 December 31, 2010
(dollars in thousands)


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

Good Sam MOB Investors, LLC	Puyallup, WA		4Q 2011		80,000	$	8,854	$	24,700		73	%
Bonney Lake MOB Investors, LLC⁽¹⁾	Bonney Lake, WA		3Q 2011		56,000		10,173		17,700		98	%
Land and pre-construction developments					—		3,048		—

					136,000	$	22,075	$	42,400

Bonney Lake Medical Office Building — Bonney Lake, Washington


(1)		We had a 61.7% ownership interest at December 31, 2010.

INVESTMENT IN
REAL ESTATE PROPERTIES

(dollars in thousands)


	Three Months
	Ended		Year Ended
	Dec. 31, 2010		Dec. 31, 2010
Investment in real estate properties:
Development, redevelopment, and acquisitions	$	9,084	$	38,841
Second generation tenant improvements		274		2,977
Recurring property capital expenditures		731		1,096

Total	$	10,089	$	42,914

University Physicians — Grants Ferry — Flowood, Mississippi

Attached files

Cogdell Spencer Inc. Reports

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