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

Attached files

file	filename
8-K - FORM 8-K - Cogdell Spencer Inc.	c20961e8vk.htm
EX-99.1 - EXHIBIT 99.1 - Cogdell Spencer Inc.	c20961exv99w1.htm

Exhibit 99.2



1. Investor Information			1

2. Summary			2

3. Capitalization			3

4. Results			4

5. Condensed Consolidated Balance Sheets			5

6. Condensed Consolidated Statements of Operations			6

7. Business Segment Reporting			7

8. Reconciliation of Net Loss to FFO and FFOM			9

9. Coverage Ratios			10

10. Reconciliation of Earnings to EBITDA			11

11. Consolidated Debt Analysis			12

12. Property Summary			16

13. Stabilized Property Listing			17

14. Stabilized Property Occupancy Rates			19

15. Tenant Lease Expirations			23

16. Ten Largest Tenants			24

17. Ground & Air Rights Leases			25

18. Pipeline			26

19. Inter-company Profit Elimination Example			27

20. Acquisitions, Completed Developments, & Properties in Lease-up			28

21. Development Construction and Capital Expenditures			29

Board of Directors


Richard C. Neugent		Raymond W. Braun
Chairman		President & CEO
John R. Georgius		Richard B. Jennings
Christopher E. Lee		David J. Lubar
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 Barclay Downs Drive, Suite 300	CSA	First Shareholder Services
Charlotte, NC 28209
Tel: 704.940.2900	Stock Exchange Listing	Investor Relations
Fax: 704.940.2959	New York Stock Exchange	Jaime Buell — 704.940.2929
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 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, 2010 and our Quarterly
Report on Form 10-Q for the quarter ended June 30, 2011. 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.


	For 3 Months Ended						For 6 Months Ended
(in thousands, except per share amounts and portfolio statistics)	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010

Revenue	$	41,578		$	37,009		$	80,722		$	94,610
EBITDA (1)		10,919			11,364			21,741			30,508
Net loss attributable to Cogdell Spencer Inc. common stockholders		(4,986	)		(12,021	)		(8,116	)		(8,736	)
Net loss per share attributable to Cogdell Spencer Inc. common stockholder	$	(0.10	)	$	(0.26	)	$	(0.16	)	$	(0.20	)

FFOM attributable to common stockholders and operating partnership unitholders ⁽²⁾	$	2,064		$	(6,847	)	$	5,724		$	4,303
FFOM attributable to common stockholders and operating partnership unitholders, excluding litigation provision, impairment charges, and CEO retirement expense⁽²⁾	$	3,864		$	6,546		$	7,524		$	17,696

Per share and operating partnership unit data:
FFOM attributable to common stockholders and operating partnership unitholders⁽²⁾	$	0.04		$	(0.13	)	$	0.10		$	0.08
FFOM attributable to common stockholders and operating partnership unitholders, excluding litigation provision, impairment charges, and CEO retirement expense ⁽²⁾	$	0.07		$	0.12		$	0.13		$	0.34

Debt / Gross Assets⁽³⁾		48	%		44	%		48	%		44	%

Portfolio statistics:
Total properties		69			65			69			65
Total square footage		3,889,168			3,603,918			3,889,168			3,603,918


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

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

(3)		Gross Assets represents total assets before accumulated depreciation and amortization.

(4)		Stabilized properties.


	June 30, 2011
	Shares/Units		Share Price		Value
Common Stock		51,080	$	5.99	$	305,969
Common Operating Partnership Units		7,385	$	5.99		44,236
Preferred Stock		2,940	$	25.10		73,794

Equity value						423,999
Consolidated debt						420,644

Market capitalization					$	844,643


	For the 3 Months Ended					For the 6 Months Ended
	June 30, 2011		June 30, 2010			June 30, 2011		June 30, 2010
FFOM and FFOM per share and operating partnership unit for the three months and six months ended June 30, 2011, and a comparison to our prior year results:
FFOM⁽¹⁾	$	2,064	$	(6,847	)	$	5,724	$	4,303
Impact of litigation provision, impairment charges, and CEO retirement expense		1,800		13,393			1,800		13,393

FFOM, excluding litigation provision, impairment charges, and CEO retirement expense	$	3,864	$	6,546		$	7,524	$	17,696


Per share and operating partnership unit data:
FFOM⁽¹⁾	$	0.04	$	(0.13	)	$	0.10	$	0.08
Impact of litigation provision, impairment charges, and CEO retirement expense		0.03		0.25			0.03		0.26
FFOM, excluding litigation provision, impairment charges, and CEO retirement expense		0.07		0.12			0.13		0.34


	For the 3 Months Ended					For the 6 Months Ended
	June 30, 2011		June 30, 2010			June 30, 2011		June 30, 2010
FFO and FFO per share and operating partnership unit for the three months and six months ended June 30, 2011, and a comparison to our prior year results:
FFO⁽¹⁾	$	1,833	$	(7,221	)	$	5,261	$	3,555
Impact of litigation provision, impairment charges, and CEO retirement expense		1,800		13,393			1,800		13,393

FFO, excluding litigation provision, impairment charges, and CEO retirement expense	$	3,633	$	6,172		$	7,061	$	16,948


Per share and operating partnership unit data:
FFO⁽¹⁾	$	0.03	$	(0.13	)	$	0.09	$	0.07
Impact of litigation provision, impairment charges, and CEO retirement expense		0.03		0.24			0.03		0.25
FFO, excluding litigation provision, impairment charges, and CEO retirement expense		0.06		0.11			0.12		0.32


	For the 3 Months Ended						For the 6 Months Ended
	June 30, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Net loss attributable to Cogdell Spencer Inc. and net loss attributable to Cogdell Spencer Inc. per share for the three and six months ended June 30, 2011, and a comparison to our prior year results:

Net loss available to Cogdell Spencer Inc. common stockholders	$	(4,986	)	$	(12,019	)	$	(8,116	)	$	(8,736	)

Impact of litigation provision, impairment charges, and CEO retirement expense attributable to Cogdell Spencer Inc. common stockholders		1,571			11,451			1,571			11,397

Net income (loss) available to Cogdell Spencer Inc. common stockholders, excluding litigation provision, impairment charges, and CEO retirement expense	$	(3,415	)	$	(568	)	$	(6,545	)	$	2,661


Per share data:

Net loss available to Cogdell Spencer Inc. common stockholders	$	(0.10	)	$	(0.26	)	$	(0.16	)	$	(0.20	)

Impact of litigation provision, impairment charges, and CEO retirement expense attributable to Cogdell Spencer Inc. common stockholders		0.03			0.25			0.03			0.26

Net income (loss) available to Cogdell Spencer Inc. common stockholders, excluding litigation provision, impairment charges, and CEO retirement expense		(0.07	)		(0.01	)		(0.13	)		0.06


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


	June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010
Assets
Real estate properties:
Operating real estate properties	$	677,880		$	641,712		$	634,291		$	632,844		$	616,154
Less: Accumulated depreciation		(132,198	)		(125,610	)		(119,141	)		(112,581	)		(106,004	)

Total real estate properties, net		545,682			516,102			515,150			520,263			510,150
Construction in process		45,010			29,985			22,243			15,120			7,951

Total real estate properties, net		590,692			546,087			537,393			535,383			518,101
Cash and cash equivalents		16,383			17,235			12,203			16,028			31,196
Restricted cash		4,241			6,784			6,794			11,649			7,888
Tenant and accounts receivable, net		12,368			10,247			11,383			9,656			8,070
Goodwill		22,882			22,882			22,882			102,195			102,195
Trade names and trademarks		—			—			—			34,093			34,093
Intangible assets, net		22,249			18,418			18,601			20,025			18,670
Other assets		27,551			28,162			23,684			23,642			24,018

Total assets	$	696,366		$	649,815		$	632,940		$	752,671		$	744,231


Liabilities and Equity
Mortgage notes payable	$	325,644		$	319,419		$	317,303		$	296,701		$	291,199
Revolving credit facility		95,000			55,000			45,000			65,000			55,000
Term Loan		—			—			—			50,000			50,000
Accounts payable		15,315			11,628			11,368			11,814			11,081
Billings in excess of costs and estimated earnings on uncompleted contracts		2,432			2,314			1,930			2,145			4,657
Deferred income taxes		—			—			—			11,406			13,543
Other liabilities		52,707			43,558			39,819			51,991			48,123

Total liabilities		491,098			431,919			415,420			489,057			473,603
Commitments and contingencies
Equity:
Cogdell Spencer Inc. stockholders’ equity:
Preferred stock		73,500			73,500			65,000			—			—
Common stock		511			510			509			507			500
Additional paid-in capital		418,553			418,374			417,960			419,439			418,194
Accumulated other comprehensive loss		(3,772	)		(2,712	)		(3,339	)		(6,011	)		(4,843	)
Accumulated deficit		(306,022	)		(295,981	)		(287,798	)		(189,219	)		(182,332	)

Total Cogdell Spencer Inc. stockholders’ equity		182,770			193,691			192,332			224,716			231,519
Noncontrolling interests:
Real estate partnerships		6,756			6,772			6,452			5,660			3,810
Operating partnership		15,742			17,433			18,736			33,238			35,299

Total noncontrolling interests		22,498			24,205			25,188			38,898			39,109

Total equity		205,268			217,896			217,520			263,614			270,628

Total liabilities and equity	$	696,366		$	649,815		$	632,940		$	752,671		$	744,231


	Three Months Ended
	June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010
Revenues:
Rental revenue	$	23,136		$	23,054		$	22,799		$	22,765		$	20,995
Design-Build contract revenue and other sales		17,641			15,241			24,850			15,734			15,236
Property management and other fees		760			775			824			809			761
Development management and other income		41			74			25			1			17

Total revenues		41,578			39,144			48,498			39,309			37,009

Expenses:
Property operating and management		9,824			9,287			8,012			9,067			8,387
Design-Build contracts and development management		15,977			13,013			22,169			13,806			11,407
Selling, general, and administrative		6,822			6,208			8,561			6,684			9,345
Depreciation and amortization		7,986			7,830			8,283			8,293			8,182
Impairment charges		—			—			113,406			—			13,635

Total expenses		40,609			36,338			160,431			37,850			50,956

Income (loss) from continuing operations before other income (expense) and income tax benefit (expense)		969			2,806			(111,933	)		1,459			(13,947	)
Other income (expense):
Interest and other income		159			178			210			151			134
Interest expense		(5,027	)		(4,850	)		(5,662	)		(5,851	)		(5,393	)
Debt extinguishment and interest rate derivative expense		—			—			(339	)		(7	)		(9	)
Equity in earnings of unconsolidated partnerships		5			8			7			3			—

Total other income (expense)		(4,863	)		(4,664	)		(5,784	)		(5,704	)		(5,268	)

Loss from continuing operations before income tax benefit (expense)		(3,894	)		(1,858	)		(117,717	)		(4,245	)		(19,215	)
Income tax benefit (expense)		(19	)		(18	)		10,611			2,294			5,174

Loss from continuing operations		(3,913	)		(1,876	)		(107,106	)		(1,951	)		(14,041	)
Discontinued operations:
Income from discontinued operations		—			—			—			—			24
Gain on sale of real estate property		—			—			—			—			264

Total discontinued operations		—			—			—			—			288


Net loss		(3,913	)		(1,876	)		(107,106	)		(1,951	)		(13,753	)

Net income attributable to the noncontrolling interest in real estate partnerships		(235	)		(200	)		(171	)		(172	)		(177	)
Net loss attributable to the noncontrolling interest in operating partnership		724			508			13,970			285			1,909
Dividends on preferred stock		(1,562	)		(1,562	)		(208	)		—			—

Net loss available to Cogdell Spencer Inc. common stockholders	$	(4,986	)	$	(3,130	)	$	(93,515	)	$	(1,838	)	$	(12,021	)


Per share data — basic and diluted:
Loss from continuing operations attributable to Cogdell Spencer Inc. common stockholders	$	(0.10	)	$	(0.06	)	$	(1.84	)	$	(0.04	)	$	(0.27	)
Income from discontinued operations attributable to Cogdell Spencer Inc. common stockholders		—			—			—			—			0.01

Net loss per share available to Cogdell Spencer Inc. common stockholders	$	(0.10	)	$	(0.06	)	$	(1.84	)	$	(0.04	)	$	(0.26	)


Weighted average common shares — basic and diluted		51,058			51,009			50,745			50,083			46,111


Net loss available to Cogdell Spencer Inc. common stockholders:
Continuing operations, net of tax	$	(4,986	)	$	(3,130	)	$	(93,515	)	$	(1,838	)	$	(12,267	)
Discontinued operations		—			—			—			—			246

Net loss available to Cogdell Spencer Inc. common stockholders	$	(4,986	)	$	(3,130	)	$	(93,515	)	$	(1,838	)	$	(12,021	)


				Design-Build
	Property			and			Intersegment			Unallocated
Three months ended June 30, 2011	Operations			Development			Eliminations			and Other			Total
Revenues:
Rental revenue	$	23,136		$	—		$	—		$	—		$	23,136
Design-Build contract revenue and other sales		—			31,744			(14,103	)		—			17,641
Property management and other fees		760			—			—			—			760
Development management and other income		—			571			(530	)		—			41

Total revenues		23,896			32,315			(14,633	)		—			41,578

Certain operating expenses:
Property operating and management		9,426			—			—			—			9,426
Design-Build contracts and development management		—			30,009			(14,032	)		—			15,977
Selling, general, and administrative		—			4,887			—			—			4,887

Total certain operating expenses		9,426			34,896			(14,032	)		—			30,290

		14,470			(2,581	)		(601	)		—			11,288

Interest and other income		144			8			—			7			159
Corporate general and administrative expenses		—			—			—			(1,935	)		(1,935	)
Interest expense		—			—			—			(5,027	)		(5,027	)
Income taxes expense applicable to funds from operations modified		—			—			—			(19	)		(19	)
Non-real estate related depreciation and amortization		—			(278	)		—			(44	)		(322	)
Earnings from unconsolidated real estate partnerships, before real estate related depreciation and amortization		8			—			—			—			8
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		(526	)		—			—			—			(526	)

Dividends on preferred stock		—			—			—			(1,562	)		(1,562	)

Funds from operations modified (FFOM)		14,096			(2,851	)		(601	)		(8,580	)		2,064

Amortization of intangibles related to purchase accounting		(42	)		(189	)		—			—			(231	)

Funds from operations (FFO)		14,054			(3,040	)		(601	)		(8,580	)		1,833

Real estate related depreciation and amortization		(7,436	)		—			—			—			(7,436	)
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		526			—			—			—			526

Acquisition-related expenses		(398	)		—			—			—			(398	)
Dividends on preferred stock		—			—			—			1,562			1,562

Net income (loss)	$	6,746		$	(3,040	)	$	(601	)	$	(7,018	)	$	(3,913	)


				Design-Build
	Property			and			Intersegment			Unallocated
Six months ended June 30, 2011	Operations			Development			Eliminations			and Other			Total
Revenues:
Rental revenue	$	46,190		$	—		$	—		$	—		$	46,190
Design-Build contract revenue and other sales		—			55,527			(22,646	)		—			32,881
Property management and other fees		1,536			—			—			—			1,536
Development management and other income		—			1,450			(1,335	)		—			115

Total revenues		47,726			56,977			(23,981	)		—			80,722

Certain operating expenses:
Property operating and management		18,629			—			—			—			18,629
Design-Build contracts and development management		—			51,496			(22,506	)		—			28,990
Selling, general, and administrative		—			8,663			—			—			8,663

Total certain operating expenses		18,629			60,159			(22,506	)		—			56,282

		29,097			(3,182	)		(1,475	)		—			24,440
Interest and other income		308			16			—			13			337
Corporate general and administrative expenses		—			—			—			(4,366	)		(4,366	)
Interest expense		—			—			—			(9,877	)		(9,877	)
Income taxes expense applicable to funds from operations modified		—			—			—			(37	)		(37	)
Non-real estate related depreciation and amortization		—			(556	)		—			(87	)		(643	)
Earnings from unconsolidated real estate partnerships, before real estate related depreciation and amortization		18			—			—			—			18
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		(1,024	)		—			—			—			(1,024	)
Dividends on preferred stock		—			—			—			(3,124	)		(3,124	)

Funds from operations modified (FFOM)		28,399			(3,722	)		(1,475	)		(17,478	)		5,724

Amortization of intangibles related to purchase accounting		(85	)		(378	)		—			—			(463	)

Funds from operations (FFO)		28,314			(4,100	)		(1,475	)		(17,478	)		5,261

Real estate related depreciation and amortization		(14,716	)		—			—			—			(14,716	)
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		1,024			—			—			—			1,024

Acquisition-related expenses		(482	)											(482	)
Dividends on preferred stock		—			—			—			3,124			3,124

Net income (loss)	$	14,140		$	(4,100	)	$	(1,475	)	$	(14,354	)	$	(5,789	)


	Three Months Ended
	June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010
Net loss	$	(3,913	)	$	(1,876	)	$	(107,106	)	$	(1,951	)	$	(13,753	)
Add:
Real estate related depreciation and amortization⁽²⁾:
Wholly-owned and consolidated properties		7,433			7,277			7,327			7,372			7,272
Unconsolidated real estate partnerships		3			2			3			3			3
Acquisition-related expenses		398			84			—			—			—
Less:
Noncontrolling interests in real estate partnerships, before real estate related depreciation and amortization		(526	)		(498	)		(472	)		(476	)		(479	)
Dividends on preferred stock		(1,562	)		(1,562	)		(208	)		—			—
Gain on sale of real estate property		—			—			—			—			(264	)

Funds from Operations (FFO)⁽¹⁾		1,833			3,427			(100,456	)		4,948			(7,221	)
Amortization of intangibles related to purchase accounting, net of tax benefit		231			231			374			374			374

Funds from Operations Modified (FFOM)⁽¹⁾		2,064			3,658			(100,082	)		5,322			(6,847	)
Non-recurring events and certain other charges:
Litigation provision		1,800			—			—			—			—
Goodwill and intangible asset impairment charges, net of tax benefit		—			—			93,826			—			10,848
Tax valuation allowance		—			—			10,553			—			—
Mr. Cogdell’s employment non-renewal compensation expense		—			—			1,493			—			—
CEO retirement compensation expense, net of tax benefit		—			—			—			—			2,545

Impact of non-recurring events and certain other charges		1,800			—			105,872			—			13,393

FFOM, excluding non-recurring events and certain other charges	$	3,864		$	3,658		$	5,790		$	5,322		$	6,546


FFO per share and unit — basic and diluted	$	0.03		$	0.06		$	(1.72	)	$	0.09		$	(0.13	)
FFOM per share and unit — basic and diluted	$	0.04		$	0.06		$	(1.71	)	$	0.09		$	(0.13	)
FFOM per share and unit — basic and diluted, excluding non-recurring events and certain other charges	$	0.07		$	0.06		$	0.10		$	0.09		$	0.12

Weighted average shares and units outstanding		58,465			58,438			58,389			57,849			53,913


(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, acquisition-related expenses, 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 the Company’s share of real estate depreciation and amortization from consolidated and unconsolidated real estate partnerships.


	Three Months Ended
	June 30, 2011		March 31, 2011		Dec. 31, 2010		Sept. 30, 2010		June 30, 2010
Interest coverage ratio:
EBITDA	$	10,919	$	10,822	$	11,466	$	9,906	$	11,364
Cash paid for interest		5,055		4,622		5,901		5,515		5,542

Interest coverage ratio		2.16		2.34		1.94		1.80		2.05


Fixed charge coverage ratio:
EBITDA	$	10,919	$	10,822	$	11,466	$	9,906	$	11,364
Fixed charges:
Cash paid for interest		5,055		4,622		5,901		5,515		5,542
Principal payments		1,220		1,258		1,111		1,096		1,019
Dividends on preferred stock		1,562		1,562		208		—		—

Total fixed charges	$	7,837	$	7,442	$	7,220	$	6,611	$	6,561

Fixed charge coverage ratio		1.39		1.45		1.59		1.50		1.73


	Three Months Ended
	June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010
Reconciliation of net loss to EBITDA:
Net loss	$	(3,913	)	$	(1,876	)	$	(107,106	)	$	(1,951	)	$	(13,753	)
Interest expense		5,027			4,850			5,662			5,851			5,393
Income tax expense (benefit)		19			18			(10,611	)		(2,294	)		(5,174	)
Depreciation and amortization		7,986			7,830			8,283			8,293			8,182
Litigation provision		1,800			—			—			—			—
Goodwill and impairment charges		—			—			113,406			—			13,635
Mr. Cogdell’s retirement compensation expense		—			—			1,493			—			—
Debt extinguishment and interest rate derivative expense		—			—			339			7			9
CEO retirement compensation expense		—			—			—			—			3,072

EBITDA	$	10,919		$	10,822		$	11,466		$	9,906		$	11,364


(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.


	Stated Interest		Interest			Principal		Maturity		Amortization
	Rate (%)		Rate (%)			Balance		Date		(years)
Secured mortgage loans — wholly-owned properties:
Beaufort Medical Plaza	LIBOR + 1.85			5.65	⁽¹⁾	$	4,573		8/18/2011		39
St. Francis CMOB, St. Francis Professional Medical Center	LIBOR + 1.85			2.04			6,597		9/15/2011		39
St. Francis Medical Plaza (Greenville), St. Francis Women’s	LIBOR + 1.85			2.04			7,086		9/15/2011		39
Mulberry Medical Park		6.25		6.25			827		9/15/2011		10
Methodist Professional Center I	LIBOR + 1.30			1.49			25,135		10/31/2011		30
St. Francis Outpatient Surgery Center	LIBOR + 3.25			3.44			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			4,226		11/15/2012		25
Providence Medical Office Building I, II and III		6.12		6.12			7,931		1/12/2013		25
One Medical Park		5.93		5.93			4,725		11/1/2013		20
Three Medical Park		5.55		5.55			7,341		3/25/2014		25
Medical Arts Center of Orangeburg	LIBOR + 3.25			6.00	⁽²⁾		2,204		5/5/2014		20
Lancaster Rehabilitation Hospital		6.71		6.71			9,379		6/26/2014		25
Lancaster Rehabilitation Hospital		6.79		6.79			2,068		6/26/2014		25
Rowan Outpatient Surgery Center		6.00		6.00			3,100		7/6/2014		25
East Jefferson MOB		6.01		6.01			8,611		8/10/2014		25
Rocky Mount Kidney Center		6.75		6.75			942		8/21/2014		15
Randolph Medical Park, Lincoln/Lakemont Family Practice, and Northcross Family Physicians		7.00		7.00			7,208		10/15/2014		20
MRMC MOB I		7.33		7.33			5,859		11/1/2014		25
HealthPartners Medical & Dental Clinics	LIBOR + 3.25			6.80	⁽¹⁾		11,935		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⁾		7,884		12/15/2014		25
Good Sam Medical Office Building		7.85		7.85	⁽⁸⁾		5,938		6/30/2015		25
Peerless Crossing Medical Center		6.06		6.06			7,199		9/1/2016		30
Rocky Mount Medical Park	LIBOR + 3.50			3.69	⁽³⁾		10,181		10/22/2016		25
Palmetto Health Parkridge		5.68		5.68			13,500		6/1/2017	Interest only		⁽⁶⁾
Central NY Medical Center		6.22		6.22			24,500		7/1/2017	Interest only
Summit Professional Plaza I and II		6.18		6.18			15,925		9/1/2017	Interest only
Medical Center Physicians Tower	LIBOR + 2.50			6.19	⁽¹⁾		14,580		3/1/2019		25
University Physicians — Grants Ferry	LIBOR + 2.25			5.95	⁽¹⁾		10,314		4/20/2019		25
Roper Medical Office Building		7.10		7.10			9,203		6/1/2019		25
Health Park Medical Office Building		7.50		7.50			6,848		12/1/2019		25

Total / weighted average mortgages — wholly-owned properties				5.33			273,864


(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 October 2011, when the construction phase of the loan expires and converts to an amortizing loan.

(8)		Interest of 7.85% during construction, 7.5% @ occupancy, 7.1% @ 75% occupancy with $1,615,000 NOI.

Stated Interest

Interest

Principal

Maturity

Amortization

Rate (%)

Balance

Date

(years)

Secured revolving credit facility:

Tranche I

LIBOR + 3.00

3.19

95,000

3/1/2014

Interest only

Total / weighted average secured revolving credit facility

3.19

95,000

Consolidated real estate partnerships:

Alamance Regional Mebane Outpatient Center

LIBOR + 1.30

1.49

10,805

5/15/2012

Alamance Regional Mebane Outpatient Center

LIBOR + 4.00

4.19

1,468

5/15/2012

Lancaster ASC MOB

LIBOR + 1.20

5.23

10,093

3/2/2015

English Road Medical Center

4.99

5,104

4/1/2016

Woodlands Center for Specialized Medicine

LIBOR + 1.50

6.21

16,462

9/26/2018

Bonney Lake Medical Office Building

LIBOR + 3.25

3.44

7,796

2/5/2019

⁽⁴⁾

Total / weighted average consolidated real estate partnerships

4.44

51,728

Total / weighted average debt

420,592

Unamortized premium

Total / weighted average debt

4.74

420,644


(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 October 2011, when the construction phase of the loan expires and converts to an amortizing loan.

(8)		Interest of 7.85% during construction, 7.5% @ occupancy, 7.1% @ 75% occupancy with $1,615,000 NOI.


	Future Scheduled Repayments
										Weighted
										Average
										Interest Rate on
							Percent of Total			Maturing
Year	Amortization		Maturities		Total		Mortgages			Debt⁽¹⁾

2011	$	2,271	$	60,480	$	62,751		19	%		2.4	%
2012		4,392		27,839		32,231		10	%		5.8	%
2013		4,294		11,577		15,871		5	%		6.0	%
2014		3,518		60,617		64,135		20	%		6.1	%
2015		2,140		15,170		17,310		5	%		6.2	%
Thereafter		5,524		127,770		133,294		41	%		5.9	%

Total mortgages		22,139		303,453		325,592		100	%		5.2	%
Secured revolving credit facility (March 2014 maturity)		—		95,000		95,000					3.2	%

Total	$	22,139	$	398,453	$	420,592					4.7	%


(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.


	Weighted Average
Debt Profile	Balance			Percent of Total			Interest Rate⁽¹⁾			Maturity (Years)
Fixed rate mortgages — wholly-owned properties	$	211,865			50	%		6.2	%		4.5
Variable rate mortgages — wholly-owned properties		61,999			15	%		2.4	%		1.1
Secured revolving credit facility		95,000			23	%		3.2	%		2.7
Mortgages — consolidated real estate partnerships		51,728			12	%		4.4	%		4.8

Total	$	420,592			100	%		4.7	%		3.6


Secured revolving credit facility — matures March 2014
Facility	$	200,000


Borrowing base availability	$	121,471
Less: Outstanding		(95,000	)
Less: Letters of credit		(8,128	)

Availability	$	18,343


Capitalized interest 2Q 2011	$	366

Current

Covenant summary

Required

Quarter

In Compliance

Secured revolving credit facility⁽²⁾:

Maximum total leverage ratio

< 65

Yes

Maximum secured recourse indebtedness ratio

< 20

Yes

Minimum fixed charge coverage ratio

> 1.35x

1.51x

Yes

Minimum required tangible net worth

> $237,106

285,578

Yes

Minimum facility interest coverage

> 1.50x

9.62x

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.


	Same Property Operating Results
	As of and for Quarter Ended									As of and for Year Ended
	June 30,2011			March 31, 2011			June 30, 2010			June 30, 2011			June 30, 2010
Property count		62			62			62			62			62
Square feet		3,387			3,387			3,387			3,387			3,387
Occupancy		90.6	%		90.6	%		90.3	%		90.6	%		90.3	%

Rental revenue	$	21,146		$	21,131		$	20,624		$	84,722		$	83,100
Costs related to property operations		(8,123	)		(7,954	)		(7,898	)		(31,731	)		(30,652	)

Net operating income		13,023			13,177			12,726			52,991			52,448
Straight line rent		(398	)		(401	)		(214	)		(1,430	)		(751	)
Fair value of lease revenues⁽¹⁾		(100	)		(100	)		(112	)		(404	)		(521	)

Adjusted net operating income	$	12,525		$	12,676		$	12,400		$	51,157		$	51,176


	Total Property Operating Results
	As of and for Quarter Ended									As of and for Year Ended
	June 30, 2011			March 31, 2010			June 30, 2010			June 30, 2011			June 30, 2010
Property count		69			67			65			69			65
Square feet		3,889			3,730			3,604			3,889			3,604
Occupancy		91.2	%		90.3	%		90.5	%		91.2	%		90.5	%

Rental revenue	$	23,136		$	23,054		$	20,995		$	91,754		$	82,575
Property management and other fees		760			775			761			3,168			3,202
Costs related to property operations		(9,426	)		(9,203	)		(8,387	)		(35,708	)		(32,709	)
Acquisition-related expenses		(398	)		(84	)		—			(482	)		—

Net operating income		14,072			14,542			13,369			58,732			53,068
Straight line rent		(463	)		(466	)		(231	)		(1,682	)		(773	)
Fair value of lease revenues⁽¹⁾		(98	)		(107	)		(112	)		(401	)		(521	)

Adjusted net operating income	$	13,511		$	13,969		$	13,026		$	56,649		$	51,774


(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.


												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		94.3	%	$	1,983,134	$	32.84
Verdugo Hills Professional Bldg II	Glendale		100.0	%		42,906		99.5	%		1,475,112		34.55

						106,962		96.4	%		3,458,246		33.54

Florida
Woodlands Center for Specialized Medicine	Pensacola		40.0	%		75,985		100.0	%		2,544,183		33.48

Georgia
Augusta POB I	Augusta		100.0	%		99,494		95.1	%		1,384,681		14.63
Augusta POB II	Augusta		100.0	%		125,634		86.1	%		2,288,751		21.16
Augusta POB III	Augusta		100.0	%		47,034		100.0	%		958,294		20.37
Augusta POB IV	Augusta		100.0	%		55,134		70.6	%		762,959		19.59
Summit Professional Plaza I	Brunswick		100.0	%		33,039		93.5	%		861,470		27.89
Summit Professional Plaza II	Brunswick		100.0	%		64,233		96.7	%		1,779,432		28.63

						424,568		89.9	%		8,035,587		21.05

Indiana
Methodist Professional Center I⁽¹⁾	Indianapolis		100.0	%		150,243		100.0	%		3,669,564		24.42
Methodist Professional Center II (sub-lease)	Indianapolis		100.0	%		24,080		100.0	%		679,892		28.23

						174,323		100.0	%		4,349,456		24.95

Kentucky
OLBH Same Day Surgery Center and MOB	Ashland		100.0	%		46,907		100.0	%		1,006,468		21.46
OLBH Parking Garage											880,000

						46,907		100.0	%		1,886,468		21.46	⁽²⁾

Louisiana
East Jefferson MOB	Metairie		100.0	%		119,921		95.9	%		2,476,653		21.53
East Jefferson Medical Plaza	Metairie		100.0	%		123,184		100.0	%		2,894,005		23.49
East Jefferson MRI	Metairie		100.0	%		10,809		100.0	%		1,005,991		93.07

						253,914		98.1	%		6,376,649		25.60

Minnesota
Health Partners Medical & Dental Clinics	Sartell		100.0	%		60,108		94.9	%		2,204,260		38.63

Mississippi
University Physicians — Grants Ferry	Flowood		100.0	%		50,575		100.0	%		1,717,816		33.97

New York
Central NY Medical Center⁽³⁾	Syracuse		100.0	%		111,634		97.8	%		2,874,072		26.33


(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.


												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	%		1,868,562		38.55
Barclay Downs	Charlotte		100.0	%		38,395		100.0	%		683,077		17.79
Birkdale Bldgs C, D, E and Birkdale Wellness	Huntersville		100.0	%		64,669		93.0	%		1,347,156		22.40
Birkdale II	Huntersville		100.0	%		8,269		100.0	%		204,850		24.77
Copperfield Medical Mall	Concord		100.0	%		26,000		100.0	%		634,655		24.41
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	%		960,002		28.36
Gaston Professional & Ambulatory Surgery Centers	Gastonia		100.0	%		114,956		100.0	%		2,773,743		24.13
Gaston Parking											606,141
Gateway Medical Office Building	Concord		100.0	%		61,789		69.1	%		1,123,454		26.30
Harrisburg Family Physicians	Harrisburg		100.0	%		8,202		100.0	%		228,787		27.89
Harrisburg Medical Mall	Harrisburg		100.0	%		18,360		100.0	%		514,742		28.04
Lincoln/Lakemont Family Practice	Lincolnton		100.0	%		16,500		100.0	%		405,458		24.57
Mallard Crossing Medical Park	Charlotte		100.0	%		52,540		63.8	%		842,997		25.13
Medical Arts Building	Concord		100.0	%		84,972		93.3	%		1,850,443		23.35
Midland Medical Park	Midland		100.0	%		14,610		100.0	%		449,849		30.79
Mulberry Medical Park	Lenoir		100.0	%		24,992		100.0	%		508,347		20.34
Northcross Family Physicians	Charlotte		100.0	%		8,018		100.0	%		239,186		29.83
Randolph Medical Park	Charlotte		100.0	%		84,131		69.2	%		1,287,771		22.13
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	%		2,088,260		21.53
Rowan Outpatient Surgery Center	Salisbury		100.0	%		19,464		100.0	%		440,139		22.61
Weddington Internal & Pediatric Medicine	Concord		100.0	%		7,750		100.0	%		204,204		26.35

						872,357		89.1	%		19,625,622		24.48

Pennsylvania
Doylestown Health & Wellness Center	Doylestown		99.0	%		99,132		98.8	%		3,100,092		31.64
Lancaster Rehabilitation Hospital	Lancaster		100.0	%		57,508		100.0	%		1,517,947		26.40
Lancaster ASC MOB	Lancaster		80.9	%		64,214		100.0	%		2,220,166		34.57

						220,854		99.5	%		6,838,205		31.12


(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.


												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	%		635,812		24.55
Beaufort Medical Plaza	Beaufort		100.0	%		59,340		100.0	%		1,382,867		23.30
Carolina Forest Medical Plaza	Myrtle Beach		100.0	%		38,902		43.5	%		547,848		32.40
Mary Black Westside Medical Office Bldg	Spartanburg		100.0	%		37,455		100.0	%		732,042		19.54
Medical Arts Center of Orangeburg	Orangeburg		100.0	%		49,324		78.0	%		674,507		17.54
Mount Pleasant Medical Office Long Point	Mt. Pleasant		100.0	%		38,735		69.8	%		726,111		26.84
One Medical Park	Columbia		100.0	%		69,840		79.3	%		1,321,235		23.84
Palmetto Health Parkridge	Columbia		100.0	%		89,451		94.6	%		2,243,493		26.51
Providence MOB I	Columbia		100.0	%		48,500		82.0	%		829,424		20.85
Providence MOB II	Columbia		100.0	%		23,280		80.6	%		389,343		20.74
Providence MOB III	Columbia		100.0	%		54,417		78.8	%		803,743		18.74
River Hills Medical Plaza	Little River		100.0	%		27,566		70.9	%		636,227		32.55
Roper Medical Office Building	Charleston		100.0	%		122,784		82.7	%		2,210,511		21.76
St. Francis CMOB	Greenville		100.0	%		45,140		96.6	%		1,189,373		27.27
St. Francis Medical Plaza (Charleston)	Charleston		100.0	%		28,734		100.0	%		861,219		29.97
St. Francis Medical Plaza (Greenville)	Greenville		100.0	%		62,724		88.1	%		1,017,670		18.42
St. Francis Outpatient Surgery Center	Greenville		100.0	%		72,491		100.0	%		2,181,970		30.10
St. Francis Professional Medical Center	Greenville		100.0	%		49,767		100.0	%		1,169,200		23.49
St. Francis Women’s	Greenville		100.0	%		57,590		79.2	%		980,016		21.47
Three Medical Park	Columbia		100.0	%		88,755		84.1	%		1,779,367		23.82

						1,090,697		86.0	%		22,311,978		23.79

Tennessee
Health Park Medical Office Building	Chattanooga		100.0	%		52,151		100.0	%		1,532,566		29.39
Peerless Crossing Medical Center	Cleveland		100.0	%		40,506		100.0	%		1,021,030		25.21

						92,657		100.0	%		2,553,596		27.56

Virginia
MRMC MOB I	Mechanicsville		100.0	%		56,610		73.6	%		1,230,661		29.53
St. Mary’s MOB North — (Floors 6 & 7)	Richmond		100.0	%		30,617		100.0	%		761,468		24.87

						87,227		82.9	%		1,992,129		27.56


Total						3,668,768		91.2	%	$	86,768,267	$	25.48	⁽²⁾


(1)		Parking revenue from an adjacent parking deck is approximately $94,000 per month, or $1,128,000 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 $102,000 per month, or $1,224,000 annualized.


	June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010
California
Verdugo Professional Bldg I		94.3	%		91.2	%		93.1	%		94.3	%		94.3	%
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		95.1	%		97.2	%		93.2	%		90.7	%		90.7	%
Augusta POB II		86.1	%		86.1	%		87.6	%		87.6	%		87.6	%
Augusta POB III		100.0	%		90.0	%		90.0	%		90.0	%		90.0	%
Augusta POB IV		70.6	%		83.1	%		83.1	%		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		100.0	%		96.4	%		95.2	%		95.2	%		96.4	%
Methodist Professional Center II		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

Kentucky
OLBH Same Day Surgery Center and MOB		100.0	%		91.8	%		95.7	%		100.0	%		91.5	%

Louisiana
East Jefferson MOB		95.9	%		99.1	%		99.1	%		98.8	%		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	%		94.9	%		94.9	%

Mississippi
University Physicians — Grants Ferry		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

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


	June 30, 2011			March 31, 2011			Dec. 31, 2010			Sept. 30, 2010			June 30, 2010
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		93.0	%		96.4	%		96.4	%		96.4	%		96.4	%
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	%		69.1	%
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		63.8	%		63.8	%		66.0	%		66.0	%		66.0	%
Medical Arts Building		93.3	%		93.3	%		93.3	%		93.3	%		98.2	%
Midland Medical Park		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Mulberry Medical Park		100.0	%		77.6	%		87.0	%		87.0	%		87.0	%
Northcross Family Physicians		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Randolph Medical Park		69.2	%		69.2	%		69.2	%		69.2	%		71.8	%
Rocky Mount Kidney Center		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
Rocky Mount Medical Park		100.0	%		100.0	%		100.0	%		100.0	%		92.8	%
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
Doylestown Health & Wellness Center		98.8	%		N/A			N/A			N/A			N/A
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	%


	March 31, 2011			Dec. 31,2010			Sept. 30, 2010			June 30, 2010			March 31, 2010
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	%		78.0	%
Mount Pleasant Medical Office Long Point		69.8	%		77.4	%		77.4	%		77.4	%		77.4	%
One Medical Park		79.3	%		83.9	%		83.9	%		78.2	%		80.8	%
Palmetto Health Parkridge		94.6	%		94.6	%		94.6	%		94.6	%		94.6	%
Providence MOB I		82.0	%		82.0	%		82.0	%		87.2	%		87.2	%
Providence MOB II		80.6	%		80.6	%		88.8	%		100.0	%		100.0	%
Providence MOB III		78.8	%		73.3	%		73.3	%		55.5	%		49.6	%
River Hills Medical Plaza		70.9	%		70.9	%		70.9	%		70.9	%		70.9	%
Roper Medical Office Building		82.7	%		82.7	%		84.7	%		95.6	%		95.6	%
St. Francis CMOB		96.6	%		96.6	%		96.6	%		100.0	%		100.0	%
St. Francis Medical Plaza (Charleston)		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%
St. Francis Medical Plaza (Greenville)		88.1	%		88.1	%		67.6	%		61.5	%		50.7	%
St. Francis Outpatient Surgery Center		100.0	%		100.0	%		100.0	%		100.0	%		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	%		79.2	%		79.2	%		76.5	%
Three Medical Park		84.1	%		84.1	%		82.3	%		100.0	%		100.0	%

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

Virginia
MRMC MOB I		73.6	%		77.2	%		77.2	%		92.7	%		100.0	%
St. Mary’s MOB North — (Floors 6 & 7)		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

TENANT LEASE EXPIRATIONS for Leases in Place at June 30, 2001 Lease Expiration


	Number of		Net Rentable Square		Percentage of Net			Annualized		Percentage of Property			Annualized Rent Per
	Leases Expiring		Feet		Rentable Square Feet			Rent		Annualized Rent			Leased Square Foot
Available		—		321,470		8.8	%	$	—		—		$	—
2011		74		217,341		5.9	%		5,114,628		5.9	%		23.53
2012		141		575,049		15.7	%		14,824,891		17.1	%		24.73	⁽¹⁾
2013		91		356,070		9.7	%		8,374,863		9.7	%		23.52
2014		87		384,252		10.5	%		9,691,620		11.2	%		25.22
2015		77		297,054		8.1	%		8,018,300		9.2	%		24.03	⁽¹⁾
2016		57		270,725		7.4	%		6,164,847		7.1	%		22.77
2017		50		299,728		8.2	%		8,119,341		9.4	%		27.09
2018		28		176,523		4.8	%		4,382,787		5.1	%		24.83
2019		19		143,101		3.9	%		3,196,681		3.7	%		22.34
2020		15		95,171		2.6	%		2,126,532		2.5	%		22.34
Thereafter		21		532,284		14.5	%		16,753,777		19.3	%		31.47

Total		660		3,668,768		100.0	%	$	86,768,267		100.0	%	$	25.48	⁽¹⁾


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


	Annualized		Percent of
Tenant	Rent		Portfolio
1. Bon Secours St. Francis Hospital	$	5,978,169		6.9	%
2. Carolinas Healthcare System		5,840,124		6.7	%
3. East Jefferson General Hospital		3,590,711		4.1	%
4. Lancaster General Hospital		3,021,814		3.5	%
5. Palmetto Health Alliance		2,594,812		3.0	%
6. Woodlands Medical		2,544,183		2.9	%
7. Caromont Health		2,370,761		2.7	%
8. IU Health (formerly Clarion)		2,368,718		2.7	%
9. HealthPartners Inc.		2,051,708		2.4	%
10. University Hospital, Augusta, GA		1,885,329		2.2	%

	$	32,246,329		37.2	%


			Ground or Air
	Net Rentable		Rights Lease
	Square Feet		Expiration⁽¹⁾
East Jefferson MRI		10,809		2027
One Medical Park		69,840		2033
Providence MOB II		23,280		2034
East Jefferson MOB		119,921		2035
Gaston MOB and Surgery Center		114,956		2035
Three Medical Park		88,755		2039
Roper Medical Office Building		122,784		2042
East Jefferson Medical Plaza		123,184		2043
Providence MOB I		48,500		2049
St. Francis Professional Medical Center		49,767		2050
Palmetto Health Parkridge		89,451		2053
Gateway Medical Office Building		61,789		2054
Mulberry Medical Park		24,992		2057
St. Mary’s MOB North (Floors 6 & 7)		30,617		2058
Methodist Professional Center I (and adjacent parking deck)		150,243		2060
St Francis CMOB		45,140		2060
St Francis Outpatient Surgery Center		72,491		2060
Mary Black Westside Medical Office Building		37,455		2061
200 Andrews		25,902		2063
OLBH Same Day Surgery MOB/Parking Garage		46,907		2067
St. Elizabeth Covington Medical Center		59,794		2068
Beaufort Medical Plaza		59,340		2070
Medical Arts Building		84,972		2070
Mount Pleasant Medical Office Longpoint		38,735		2070
St Francis Medical Plaza (Greenville)		62,724		2070
St Francis Women’s		57,590		2070
St. Francis Medical Plaza (Charleston)		28,734		2073
St. Elizabeth Florence MOB		53,833		2080
St. Lukes Medical Office Building		176,000		2081
Alamance Regional Mebane Outpatient Ctr		68,206		2086
Medical Center Physicians Tower		106,772		2089
Lancaster ASC MOB		64,215		2091
Lancaster Rehabilitation Hosp		57,508		2092
Good Samaritan Medical Office Building ⁽²⁾		79,641		2111


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

(2)		Property in construction as of June 30, 2011.

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	)	$	—

ACQUISITION COMPLETED DEVELOPMENTS & PROPERTIES IN FILL-UP for the Period January 1, 2010 through June 30, 2011 (dollars in thousands)


											Fill-up
			Completion/	Net Rentable		Percentage					Underwriting
Property	Location	Type	Acquired Date	Square Feet		Leased			Investment		Date

Stabilized:
HealthPartners Medical Office Building	St. Cloud, MN	Development	2Q 2010		60,108		95	%	$	15,624		n/a
University Physicians — Grant’s Ferry	Brandon, MS	Development	2Q 2010		50,575		100	%		14,032		n/a
Lancaster Rehabilitation Hospital⁽¹⁾	Lancaster, PA	Development	2Q 2010		4,630		100	%		1,991		n/a
St. Francis Outpatient Surgery Center	Greenville, SC	Acquisition	3Q 2010		72,491		100	%		16,638		n/a
Doylestown Health & Wellness Center	Doylestown, PA	Acquisition	2Q 2011		99,132		99	%		22,500		n/a

					286,936					70,785

Fill up:
Medical Center Physicians Tower	Jackson, TN	Development	2Q 2010		106,772		100	%		21,139		3Q 2011	⁽²⁾
St. Elizabeth Florence Medical Office Building	Florence, KY	Acquisition	1Q 2011		53,833		76	%		6,150		1Q 2013
St. Elizabeth Covington Medical Center	Covington, KY	Acquisition	2Q 2011		59,794		58	%		12,300		2Q 2013

					220,399				$	39,589


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

(2)		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.


		Estimated
		Completion	Net Rentable		Investment to		Estimated Total		Percentage
Development Construction	Location	Date	Square Feet		Date⁽¹⁾		Investment		Leased
Bonney Lake Medical Office Building (2)	Bonney Lake, WA	3Q 2011		56,000	$	14,213	$	17,700		98	%
Good Sam Medical Office Building	Puyallup, WA	4Q 2011		80,000		12,012		24,700		73	%
St. Luke’s Medical Office Building	Duluth, MN	3Q 2012		176,000		948		27,800		100	%


	Three Months		Six Months
	Ended		Ended
Capital Expenditures	June 30, 2011		June 30, 2011
Development, redevelopment, and acquisitions	$	49,635	$	63,892
Second generation tenant improvements		3,789		4,911
Recurring property capital expenditures		637		876

Total	$	54,061	$	69,679


(1)		Represents our investment in the project before intersegment eliminations.

(2)		We had a 61.7% ownership interest at June 30, 2011.

Cogdell Spencer Inc. - FORM 8-K - EX-99.2 - EXHIBIT 99.2 - August 4, 2011

Attached files

Cogdell Spencer Inc. Reports