Third Quarter Report

Quarter ended September 30, 2011

10 & 120 South Riverside Plaza in Chicago, Illinois (left) and 4440 El Camino Real in Los Altos, California (right) are assets of Behringer Harvard REIT I, Inc.

Third Quarter Overview

·

Occupancy at the end of the third quarter was approximately 85%, up 1% compared with second quarter occupancy.

·

During the quarter, 1.2 million square feet of leases were executed, including 603,000 square feet of renewals (representing a 67% renewal rate); 76,000 square feet of expansions; and 551,000 square feet of new leases. The new leases include 305,000 square feet, or 100%, of Three Eldridge Place in Houston, Texas, and 97,000 square feet, or 100%, of 4440 El Camino Real in Los Altos, California.

·

Subsequent to the end of the third quarter, the REIT entered into a new secured credit agreement providing for borrowings of up to $340 million, in the form of a $200 million term loan and a $140 million revolving line of credit. The credit agreement matures in October 2014 with two one-year renewal options available. The credit agreement allows for an increase by up to $110 million in aggregate borrowings upon lender approval and payment of certain fees to the lenders and agent. Proceeds from the $200 million term loan and $57 million drawn on the revolving line of credit were used to pay off loans secured by the REIT’s 10 & 120 South Riverside Plaza properties in Chicago, Illinois, and an unsecured $26 million bridge loan. With this financing, the REIT has repaid $684.9 million, or 99% of its $691.4 million of debt (as of December 31, 2010) maturing in 2011.

·

Four properties were sold during the third quarter for an aggregate sales price of $70.2 million, resulting in an aggregate gain on sale of $15.3 million and a gain on troubled debt restructuring of $1.6 million.

·

The REIT’s advisor waived $1.4 million of asset management fees for the third quarter 2011, which brings the total of fees waived since the second quarter of 2009 to $21.3 million.

Financial Highlights

(in thousands, except per share data)

3 mos. ended

3 mos. ended

9 mos. ended

9 mos. ended

Some numbers have been rounded for presentation purposes.

Sep. 30, 2011

Sep. 30, 2010

Sep. 30, 2011

Sep. 30, 2010

Modified FFO attributable to common stockholders

$

7,535

$

16,624

$

32,304

$

47,563

Modified FFO, per share

$

0.03

$

0.06

$

0.11

$

0.16

Distributions declared on common shares

$

7,414

$

7,364

$

22,207

$

44,058

Distributions declared per share

$

0.025

$

0.025

(in thousands)

As of Sep. 30, 2011

Total assets

$

3,630,728

Total liabilities

$

2,658,223

Investor Information

A copy of the REIT’s Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission, is available without charge at www.sec.gov or by written request to the REIT at its corporate headquarters. You may also elect to sign up for electronic delivery by visiting behringerharvard.com and selecting the option to “Go Paperless” at the top of the home page. For additional information about Behringer Harvard and its real estate programs, please contact us at 866.655.3650.

(in thousands, except per share amounts)

3 mos. ended
Sep. 30, 2011

3 mos. ended
Sep. 30, 2010

9 mos. ended
Sep. 30, 2011

9 mos. ended
Sep. 30, 2010

Net loss

$

(105,136

)

$

(75,861

)

$

(177,196

)

$

(192,847

)

Net loss attributable to noncontolling interests

151

216

395

599

Real estate depreciation and amortization from consolidated properties

52,461

58,403

168,515

181,515

Real estate depreciation and amortization from unconsolidated properties

2,080

1,772

5,532

5,240

Gain on sale of depreciable real estate

(15,347

)

(2,755

)

(17,371

)

(2,755

)

Noncontrolling interest share of above adjustments

(239

)

(304

)

(839

)

(950

)

FFO attributable to common stockholders

(66,030

)

(18,529

)

(20,964

)

(9,198

)

Impairment charges

84,974

41,812

91,972

93,815

Fair value adjustments to derivatives

—

(66

)

—

(153

)

Acquisition-related costs

63

—

238

—

Straight-line rent adjustment

(6,873

)

(3,403

)

(18,354

)

(11,555

)

Amortization of above- and below-market rents, net

(3,051

)

(3,139

)

(15,921

)

(9,366

)

Gain on troubled debt restructuring

(1,441

)

—

(4,590

)

(15,898

)

Noncontrolling interest share of above adjustments

(107

)

(51

)

(77

)

(82

)

MFFO attributable to common stockholders

$

7,535

$

16,624

$

32,304

$

47,563

Weighted average common shares outstanding–basic

296,579

294,546

296,108

293,901

Weighted average common shares outstanding–diluted

296,593

294,546

296,122

293,901

Net loss per common share–basic and diluted

$

(0.35

)

$

(0.26

)

$

(0.60

)

$

(0.65

)

FFO per common share–basic and diluted

$

(0.22

)

$

(0.06

)

$

(0.07

)

$

(0.03

)

MFFO per common share–basic and diluted

$

0.03

$

0.06

$

0.11

$

0.16

Presorted
Standard
U.S. Postage Paid
Behringer Harvard

15601 Dallas Parkway, Suite 600

Addison, TX 75001

Date Published 12/11

1016-1 RE1 Q3 2011 Report

© 2011 Behringer Harvard