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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-K


ý

 

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2008

o

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-13274

MACK-CALI REALTY CORPORATION
(Exact Name of Registrant as specified in its charter)

Maryland
(State or other jurisdiction of
incorporation or organization)
  22-3305147
(IRS Employer Identification No.)

343 Thornall Street, Edison, New Jersey
(Address of principal executive offices)

 

08837-2206
(Zip code)

(732) 590-1000
(Registrant's telephone number, including area code)

         Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class   Name of Each Exchange on Which Registered
Common Stock, $0.01 par value
Preferred Share Purchase Rights
  New York Stock Exchange

         Securities registered pursuant to Section 12(g) of the Act:
None

         Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý    No o

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes o    No ý

         Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý    No o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. ý

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer," and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý   Accelerated filer o   Non-accelerated filer o
(Do not check if a smaller reporting company)
  Smaller reporting company o

         Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.)Yes o    No ý

         As of June 30, 2008, the aggregate market value of the voting stock held by non-affiliates of the registrant was $2,207,789,785. The aggregate market value was computed with reference to the closing price on the New York Stock Exchange on such date. This calculation does not reflect a determination that persons are affiliates for any other purpose.

         As of February 5, 2009, 66,421,465 shares of common stock, $0.01 par value, of the Company ("Common Stock") were outstanding.

         LOCATION OF EXHIBIT INDEX: The index of exhibits is contained herein on page number 118.

         DOCUMENTS INCORPORATED BY REFERENCE: Portions of the registrant's definitive proxy statement for fiscal year ended December 31, 2008 to be issued in conjunction with the registrant's annual meeting of shareholders expected to be held on June 2, 2009 are incorporated by reference in Part III of this Form 10-K. The definitive proxy statement will be filed by the registrant with the SEC not later than 120 days from the end of the registrant's fiscal year ended December 31, 2008.



FORM 10-K

Table of Contents

 
   
  Page No.

PART I

       

Item 1

 

Business

  3

Item 1A

 

Risk Factors

  9

Item 1B

 

Unresolved Staff Comments

  20

Item 2

 

Properties

  20

Item 3

 

Legal Proceedings

  39

Item 4

 

Submission of Matters to a Vote of Security Holders

  39

PART II

       

Item 5

 

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

  40

Item 6

 

Selected Financial Data

  42

Item 7

 

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

  43

Item 7A

 

Quantitative and Qualitative Disclosures About Market Risk

  64

Item 8

 

Financial Statements and Supplementary Data

  64

Item 9

 

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

  65

Item 9A

 

Controls and Procedures

  65

Item 9B

 

Other Information

  66

PART III

       

Item 10

 

Directors, Executive Officers and Corporate Governance

  66

Item 11

 

Executive Compensation

  66

Item 12

 

Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters

  66

Item 13

 

Certain Relationships and Related Transactions, and Director Independence

  66

Item 14

 

Principal Accounting Fees and Services

  66

PART IV

       

Item 15

 

Exhibits and Financial Statement Schedules

  67

SIGNATURES

 
128

EXHIBIT INDEX

 
130

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PART I

ITEM 1.    BUSINESS

GENERAL

        Mack-Cali Realty Corporation, a Maryland corporation (together with its subsidiaries, the "Company"), is a fully-integrated, self-administered and self-managed real estate investment trust ("REIT") that owns and operates a real estate portfolio comprised predominantly of Class A office and office/flex properties located primarily in the Northeast. The Company performs substantially all commercial real estate leasing, management, acquisition, development and construction services on an in-house basis. Mack-Cali Realty Corporation was incorporated on May 24, 1994. The Company's executive offices are located at 343 Thornall Street, Edison, New Jersey 08837-2206, and its telephone number is (732) 590-1000. The Company has an internet website at www.mack-cali.com.

        As of December 31, 2008, the Company owned or had interests in 293 properties, aggregating approximately 33.5 million square feet, plus developable land (collectively, the "Properties"), which are leased to approximately 2,100 tenants. The Properties are comprised of: (a) 255 wholly-owned or Company-controlled properties consisting of 150 office buildings and 95 office/flex buildings aggregating approximately 28.8 million square feet, six industrial/warehouse buildings totaling approximately 387,400 square feet, two stand-alone retail properties totaling approximately 17,300 square feet, and two land leases (collectively, the "Consolidated Properties"); and (b) 37 buildings, which are primarily office properties, aggregating approximately 4.3 million square feet, and a 350-room hotel, which are owned by unconsolidated joint ventures in which the Company has investment interests. Unless otherwise indicated, all references to square feet represent net rentable area. As of December 31, 2008, the office, office/flex, industrial/warehouse and stand-alone retail properties included in the Consolidated Properties were 91.3 percent leased. Percentage leased includes all leases in effect as of the period end date, some of which have commencement dates in the future, and leases that expire at the period end date. Leases that expire as of December 31, 2008 aggregate 67,473 square feet, or 0.2 percent of the net rentable square footage. The Properties are located in six states, primarily in the Northeast, and the District of Columbia. See Item 2: Properties.

        The Company's strategy has been to focus its operations, acquisition and development of office properties in high-barrier-to-entry markets and sub-markets where it believes it is, or can become, a significant and preferred owner and operator. The Company plans to continue this strategy by expanding through acquisitions and/or development in Northeast markets where it has, or can achieve, similar status. The Company believes that its Properties have excellent locations and access and are well-maintained and professionally managed. As a result, the Company believes that its Properties attract high quality tenants and achieve among the highest rental, occupancy and tenant retention rates within their markets. The Company also believes that its extensive market knowledge provides it with a significant competitive advantage, which is further enhanced by its strong reputation for, and emphasis on, delivering highly responsive, professional management services. See "Business Strategies."

        As of December 31, 2008, executive officers and directors of the Company and their affiliates owned approximately 9 percent of the Company's outstanding shares of Common Stock (including Units redeemable into shares of Common Stock). As used herein, the term "Units" refers to limited partnership interests in Mack-Cali Realty, L.P., a Delaware limited partnership (the "Operating Partnership") through which the Company conducts its real estate activities. The Company's executive officers have been employed by the Company and/or its predecessor companies for an average of approximately 20 years.

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BUSINESS STRATEGIES

Operations

        Reputation:    The Company has established a reputation as a highly-regarded landlord with an emphasis on delivering quality tenant services in buildings it owns and/or manages. The Company believes that its continued success depends in part on enhancing its reputation as an operator of choice, which will facilitate the retention of current tenants and the attraction of new tenants. The Company believes it provides a superior level of service to its tenants, which should in turn, allow the Company to outperform the market with respect to occupancy rates, as well as improve tenant retention.

        Communication with tenants:    The Company emphasizes frequent communication with tenants to ensure first-class service to the Properties. Property management personnel generally are located on site at the Properties to provide convenient access to management and to ensure that the Properties are well-maintained. Property management's primary responsibility is to ensure that buildings are operated at peak efficiency in order to meet both the Company's and tenants' needs and expectations. Property management personnel additionally budget and oversee capital improvements and building system upgrades to enhance the Properties' competitive advantages in their respective markets and to maintain the quality of the Properties.

        Additionally, the Company's in-house leasing representatives develop and maintain long-term relationships with the Company's diverse tenant base and coordinate leasing, expansion, relocation and build-to-suit opportunities within the Company's portfolio. This approach allows the Company to offer office space in the appropriate size and location to current or prospective tenants in any of its sub-markets.

        Portfolio Management:    The Company plans to continue to own and operate a portfolio of properties in high-barrier-to-entry markets, with a primary focus in the Northeast. The Company's primary objectives are to maximize operating cash flow and to enhance the value of its portfolio through effective management, acquisition, development and property sales strategies, as follows:

        The Company seeks to maximize the value of its existing portfolio through implementing operating strategies designed to produce the highest effective rental and occupancy rates and lowest tenant installation cost within the markets that it operates, and further within the parameters of those markets. The Company continues to pursue internal growth through re-leasing space at higher effective rents with contractual rent increases and developing or redeveloping space for its diverse base of high credit tenants, including New Cingular Wireless PCS LLC, National Union Fire Insurance and The United States of America—GSA. In addition, the Company seeks economies of scale through volume discounts to take advantage of its size and dominance in particular sub-markets, and operating efficiencies through the use of in-house management, leasing, marketing, financing, accounting, legal, development and construction services.

        Acquisitions:    The Company also believes that growth opportunities exist through acquiring operating properties or properties for redevelopment with attractive returns in its core Northeast sub-markets where, based on its expertise in leasing, managing and operating properties, it believes it is, or can become, a significant and preferred owner and operator. The Company intends either directly or through joint ventures to acquire, invest in or redevelop additional properties that: (i) are expected to provide attractive initial yields with potential for growth in cash flow from operations; (ii) are well-located, of high quality and competitive in their respective sub-markets; (iii) are located in its existing sub-markets or in sub-markets in which the Company can become a significant and preferred owner and operator; and (iv) it believes have been under-managed or are otherwise capable of improved performance through intensive management, capital improvements and/or leasing that should result in increased effective rental and occupancy rates.

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        Development:    The Company seeks to selectively develop additional properties either directly or through joint ventures where it believes such development will result in a favorable risk-adjusted return on investment in coordination with the above operating strategies. Such development primarily will occur: (i) when leases have been executed prior to construction; (ii) in stable core Northeast sub-markets where the demand for such space exceeds available supply; and (iii) where the Company is, or can become, a significant and preferred owner and operator.

        Property Sales:    While management's principal intention is to own and operate its properties on a long-term basis, it periodically assesses the attributes of each of its properties, with a particular focus on the supply and demand fundamentals of the sub-markets in which they are located. Based on these ongoing assessments, the Company may, from time to time, decide to sell any of its properties.

Financial

        The Company currently intends to maintain a ratio of debt-to-undepreciated assets (total debt of the Company as a percentage of total undepreciated assets) of 50 percent or less, however there can be no assurance that the Company will be successful in maintaining this ratio. As of December 31, 2008 and 2007, the Company's total debt constituted approximately 40.6 and 40.2 percent of total undepreciated assets of the Company, respectively. The Company has three investment grade credit ratings. Standard & Poor's Rating Services ("S&P") and Fitch, Inc. ("Fitch") have each assigned their BBB rating to existing and prospective senior unsecured debt of the Operating Partnership. Fitch has assigned its BBB- rating and S&P has assigned its BB+ rating to existing and prospective preferred stock offerings of the Company. Moody's Investors Service ("Moody's") has assigned its Baa2 rating to existing and prospective senior unsecured debt of the Operating Partnership and its Baa3 rating to existing and prospective preferred stock offerings of the Company. Although there is no limit in the Company's organizational documents on the amount of indebtedness that the Company may incur or a requirement for the maintenance of investment grade credit ratings, the Company has entered into certain financial agreements which contain covenants that limit the Company's ability to incur indebtedness under certain circumstances. The Company intends to conduct its operations so as to best be able to maintain its investment grade debt rating status. The Company intends to utilize the most appropriate sources of capital for future acquisitions, development, capital improvements and other investments, which may include funds from operating activities, proceeds from property and land sales, short-term and long-term borrowings (including draws on the Company's revolving credit facility), and the issuance of additional debt or equity securities.

EMPLOYEES

        As of December 31, 2008, the Company had approximately 444 full-time employees.

COMPETITION

        The leasing of real estate is highly competitive. The Properties compete for tenants with lessors and developers of similar properties located in their respective markets primarily on the basis of location, the quality of properties, leasing terms (including rent and other charges and allowances for tenant improvements), services provided, the design and condition of the Properties, and reputation as an owner and operator of quality office properties in the relevant market. The Company also experiences competition when attempting to acquire or dispose of real estate, including competition from domestic and foreign financial institutions, other REITs, life insurance companies, pension trusts, trust funds, partnerships, individual investors and others.

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REGULATIONS

        Many laws and governmental regulations apply to the ownership and/or operation of the Properties and changes in these laws and regulations, or their interpretation by agencies and the courts, occur frequently.

        Under various laws and regulations relating to the protection of the environment, an owner of real estate may be held liable for the costs of removal or remediation of certain hazardous or toxic substances located on or in the property. These laws often impose liability without regard to whether the owner was responsible for, or even knew of, the presence of such substances. The presence of such substances may adversely affect the owner's ability to rent or sell the property or to borrow using such property as collateral and may expose it to liability resulting from any release of, or exposure to, such substances. Persons who arrange for the disposal or treatment of hazardous or toxic substances at another location may also be liable for the costs of removal or remediation of such substances at the disposal or treatment facility, whether or not such facility is owned or operated by such person. Certain environmental laws impose liability for the release of asbestos-containing materials into the air, and third parties may also seek recovery from owners or operators of real properties for personal injury associated with asbestos-containing materials and other hazardous or toxic substances.

        In connection with the ownership (direct or indirect), operation, management and development of real properties, the Company may be considered an owner or operator of such properties or as having arranged for the disposal or treatment of hazardous or toxic substances and, therefore, potentially liable for removal or remediation costs, as well as certain other related costs, including governmental penalties and injuries to persons and property.

        There can be no assurance that (i) future laws, ordinances or regulations will not impose any material environmental liability, (ii) the current environmental condition of the Properties will not be affected by tenants, by the condition of land or operations in the vicinity of the Properties (such as the presence of underground storage tanks), or by third parties unrelated to the Company, or (iii) the Company's assessments reveal all environmental liabilities and that there are no material environmental liabilities of which the Company is aware. If compliance with the various laws and regulations, now existing or hereafter adopted, exceeds the Company's budgets for such items, the Company's ability to make expected distributions to stockholders could be adversely affected.

        There are no other laws or regulations which have a material effect on the Company's operations, other than typical federal, state and local laws affecting the development and operation of real property, such as zoning laws.

INDUSTRY SEGMENTS

        The Company operates in two industry segments: (i) real estate; and (ii) construction services. As of December 31, 2008, the Company does not have any foreign operations and its business is not seasonal. In May 2006, in conjunction with the Company's acquisition of the Gale Company and related businesses, the Company acquired a business specializing solely in construction and related services whose operations comprise the Company's construction services segment. Please see our financial statements attached hereto and incorporated by reference herein for financial information relating to our industry segments.

RECENT DEVELOPMENTS

        The Company's core markets continue to be weak. The percentage leased in the Company's consolidated portfolio of stabilized operating properties was 91.3 percent at December 31, 2008, as compared to 92.7 percent at December 31, 2007 and 92.0 percent at December 31, 2006. Percentage leased includes all leases in effect as of the period end date, some of which have commencement dates

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in the future and leases that expire at the period end date. Leases that expired as of December 31, 2008, 2007 and 2006 aggregate 67,473, 146,261 and 103,477 square feet, respectively, or 0.2, 0.5 and 0.4 percentage of the net rentable square footage, respectively. Rental rates on the Company's space that was re-leased (based on first rents payable) during the year ended December 31, 2008 increased an average of 1.5 percent compared to rates that were in effect under the prior leases, as compared to a 0.2 percent decrease in 2007 and a 0.2 percent decrease in 2006. The Company believes that vacancy rates may continue to increase in some of its markets through 2009 and possibly beyond. As a result, the Company's future earnings and cash flow may continue to be negatively impacted by current market conditions.

        Deteriorating economic conditions have resulted in a reduction of the availability of financing and overall higher borrowing rates. These factors, coupled with a slowing economy, have reduced the volume of real estate transactions and created credit stresses on most businesses. On September 15, 2008, Lehman Brothers Holdings Inc. ("Lehman") filed a petition under Chapter 11 of the U.S. Bankruptcy Code with the United States Bankruptcy Court for the Southern District of New York. Lehman leases 270,063 square feet of office space from the Company at 101 Hudson Street in Jersey City, New Jersey, which are scheduled to expire through 2018. Lehman has currently sublet 54.1 percent of its leased space to subtenants. Should Lehman's lease no longer be in effect, the subtenants would become direct tenants of the Company for the remainder of the term of their respective subleases. This would mitigate a portion of the Company's potential future loss of the Lehman lease as a result of Lehman's bankruptcy.

        The Company expects that the impact of the current state of the economy, including rising unemployment and the unprecedented volatility and illiquidity in the financial and credit markets, will continue to have a dampening effect on the fundamentals of its business, including increases in past due accounts, defaults, lower occupancy and reduced effective rents. These conditions would negatively affect the Company's future net income and cash flows and could have a material adverse effect on the Company's financial condition. In addition to the financial constraints on the Company's tenants, many of the debt capital markets that real estate companies like the Company frequently access, such as the unsecured bond market and the convertible debt market, are not currently available to the Company on terms that management believes are economically attractive. Although the Company believes that the quality of its assets and its strong balance sheet will enable it to raise capital from other sources such as traditional term or secured loans from banks, pension funds and life insurance companies, these sources are lending fewer dollars, under stricter terms and at higher borrowing rates, and there can be no assurance that the Company will be able to do so on terms that are economically attractive or at all.

FINANCING ACTIVITY

        On October 28, 2008, the Company obtained $240 million in mortgage financing from The Northwestern Mutual Life Insurance Company and New York Life Insurance Company as co-lenders. The mortgage loan, which is collateralized by its Harborside Plaza 5 office property, bears interest at a rate of 6.8 percent per annum and carries a 10-year term. Proceeds from the loan were used to pay down outstanding borrowings under the Company's unsecured revolving credit facility.

        On November 17, 2008, the Company accepted for purchase $100.3 million principal amount of its 7.25 percent Senior Unsecured Notes due March 15, 2009 (the "Notes"), validly tendered pursuant to its previously announced cash tender offer on November 6, 2008 (the "Tender Offer"). The Notes accepted for purchase represented approximately 33.4 percent of the principal amount of Notes outstanding prior to the Tender Offer. The aggregate consideration for Notes accepted for payment, including accrued and unpaid interest, was approximately $101.5 million, which was funded primarily from borrowing on the Company's revolving credit facility. The Notes purchased pursuant to the Tender Offer have been cancelled and approximately $199.7 million principal amount of the Notes remain outstanding.

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        On January 27, 2009, the Company obtained $64.5 million in mortgage financing from Guardian Life Insurance Company of America. The two mortgage loans, which are collateralized by one and three office properties located in Clark and Red Bank, New Jersey, respectively, both bear interest at a rate of 7.25 percent per annum and carry a 10-year term.

AVAILABLE INFORMATION

        The Company's internet website is www.mack-cali.com. The Company makes available free of charge on or through its website its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934, as amended, as soon as reasonably practicable after it electronically files or furnishes such materials to the Securities and Exchange Commission. In addition, the Company's internet website includes other items related to corporate governance matters, including, among other things, the Company's corporate governance principles, charters of various committees of the Board of Directors, and the Company's code of business conduct and ethics applicable to all employees, officers and directors. The Company intends to disclose on its internet website any amendments to or waivers from its code of business conduct and ethics as well as any amendments to its corporate governance principles or the charters of various committees of the Board of Directors. Copies of these documents may be obtained, free of charge, from our internet website. Any shareholder also may obtain copies of these documents, free of charge, by sending a request in writing to: Mack-Cali Investor Relations Department, 343 Thornall Street, Edison, NJ 08837-2206.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

        We consider portions of this report, including the documents incorporated by reference, to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 21E of such act. Such forward-looking statements relate to, without limitation, our future economic performance, plans and objectives for future operations and projections of revenue and other financial items. Forward-looking statements can be identified by the use of words such as "may," "will," "plan," "should," "expect," "anticipate," "estimate," "continue" or comparable terminology. Forward-looking statements are inherently subject to risks and uncertainties, many of which we cannot predict with accuracy and some of which we might not even anticipate. Although we believe that the expectations reflected in such forward-looking statements are based upon reasonable assumptions at the time made, we can give no assurance that such expectations will be achieved. Future events and actual results, financial and otherwise, may differ materially from the results discussed in the forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements.

        Among the factors about which we have made assumptions are:

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        For further information on factors which could impact us and the statements contained herein, see Item 1A: Risk Factors. We assume no obligation to update and supplement forward-looking statements that become untrue because of subsequent events, new information or otherwise.

ITEM 1A.    RISK FACTORS

        Our results from operations and ability to make distributions on our equity and debt service on our indebtedness may be affected by the risk factors set forth below. All investors should consider the following risk factors before deciding to purchase securities of the Company. The Company refers to itself as "we" or "our" in the following risk factors.

Adverse economic and geopolitical conditions in general and the Northeastern office markets in particular could have a material adverse effect on our results of operations, financial condition and our ability to pay distributions to you.

        Our business may be affected by the unprecedented volatility and illiquidity in the financial and credit markets, the general global economic recession, and other market or economic challenges experienced by the U.S. economy or real estate industry as a whole. Our business may also be adversely affected by local economic conditions, as substantially all of our revenues are derived from our properties located in the Northeast, particularly in New Jersey, New York and Pennsylvania. Because our portfolio consists primarily of office and office/flex buildings (as compared to a more diversified real estate portfolio) located principally in the Northeast, if economic conditions persist or deteriorate, then our results of operations, financial condition and ability to service current debt and to pay distributions to our shareholders may be adversely affected by the following, among other potential conditions:

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        These conditions, which could have a material adverse effect on our results of operations, financial condition and ability to pay distributions, may continue or worsen in the future.

Our performance is subject to risks associated with the real estate industry.

        General:    Our business and our ability to make distributions or payments to our investors depend on the ability of our properties to generate funds in excess of operating expenses (including scheduled principal payments on debt and capital expenditures). Events or conditions that are beyond our control may adversely affect our operations and the value of our Properties. Such events or conditions could include:

        We may suffer adverse consequences if our revenues decline since our operating costs do not necessarily decline in proportion to our revenue:    We earn a significant portion of our income from renting our properties. Our operating costs, however, do not necessarily fluctuate in relation to changes in our rental revenue. This means that our costs will not necessarily decline even if our revenues do. Our operating costs could also increase while our revenues do not. If our operating costs increase but our rental revenues do not, we may be forced to borrow to cover our costs, we may incur losses and we may not have cash available for distributions to our stockholders.

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        Financially distressed tenants may be unable to pay rent:    If a tenant defaults, we may experience delays and incur substantial costs in enforcing our rights as landlord and protecting our investments. If a tenant files for bankruptcy, a potential court judgment rejecting and terminating such tenant's lease could adversely affect our ability to make distributions or payments to our investors as we may be unable to replace the defaulting tenant with a new tenant at a comparable rental rate without incurring significant expenses or a reduction in rental income.

        Renewing leases or re-letting space could be costly:    If a tenant does not renew its lease upon expiration or terminates its lease early, we may not be able to re-lease the space. If a tenant does renew its lease or we re-lease the space, the terms of the renewal or new lease, including the cost of required renovations or concessions to the tenant, may be less favorable than the current lease terms, which could adversely affect our ability to make distributions or payments to our investors.

        Adverse developments concerning some of our major tenants and industry concentrations could have a negative impact on our revenue:    Recent developments in the general economy and the global credit markets have had a significant adverse effect on many companies in numerous industries. We have tenants concentrated in various industries that may be experiencing adverse effects of current economic conditions. Our business could be adversely affected if any of these tenants or any other tenants became insolvent, declared bankruptcy or otherwise refused to pay rent in a timely manner or at all.

        Our insurance coverage on our properties may be inadequate or our insurance providers may default on their obligations to pay claims:    We currently carry comprehensive insurance on all of our properties, including insurance for liability, fire and flood. We cannot guarantee that the limits of our current policies will be sufficient in the event of a catastrophe to our properties. We cannot guarantee that we will be able to renew or duplicate our current insurance coverage in adequate amounts or at reasonable prices. In addition, while our current insurance policies insure us against loss from terrorist acts and toxic mold, in the future, insurance companies may no longer offer coverage against these types of losses, or, if offered, these types of insurance may be prohibitively expensive. If any or all of the foregoing should occur, we may not have insurance coverage against certain types of losses and/or there may be decreases in the limits of insurance available. Should an uninsured loss or a loss in excess of our insured limits occur, we could lose all or a portion of the capital we have invested in a property or properties, as well as the anticipated future revenue from the property or properties. Nevertheless, we might remain obligated for any mortgage debt or other financial obligations related to the property or properties. We cannot guarantee that material losses in excess of insurance proceeds will not occur in the future. If any of our properties were to experience a catastrophic loss, it could seriously disrupt our operations, delay revenue and result in large expenses to repair or rebuild the property. Such events could adversely affect our ability to make distributions or payments to our investors. If one or more of our insurance providers were to fail to pay a claim as a result of insolvency, bankruptcy or otherwise, the nonpayment of such claims could have an adverse effect on our financial condition and results of operations. In addition, if one or more of our insurance providers were to become subject to insolvency, bankruptcy or other proceedings and our insurance policies with the provider were terminated or canceled as a result of those proceedings, we cannot guarantee that we would be able to find alternative coverage in adequate amounts or at reasonable prices. In such case, we could experience a lapse in any or adequate insurance coverage with respect to one or more properties and be exposed to potential losses relating to any claims that may arise during such period of lapsed or inadequate coverage.

        Illiquidity of real estate limits our ability to act quickly:    Real estate investments are relatively illiquid. Such illiquidity may limit our ability to react quickly in response to changes in economic and other conditions. If we want to sell an investment, we might not be able to dispose of that investment in the time period we desire, and the sales price of that investment might not recoup or exceed the amount of our investment. The prohibition in the Internal Revenue Code of 1986, as amended (the

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"Code"), and related regulations on a real estate investment trust holding property for sale also may restrict our ability to sell property. In addition, we acquired a significant number of our properties from individuals to whom we issued Units as part of the purchase price. In connection with the acquisition of these properties, in order to preserve such individual's income tax deferral, we contractually agreed not to sell or otherwise transfer the properties for a specified period of time, except in a manner which does not result in recognition of any built-in-gain (which may result in an income tax liability) or which reimburses the appropriate individuals for the income tax consequences of the recognition of such built-in-gains. As of December 31, 2008, 11 of our properties, with an aggregate net book value of approximately $203.5 million, were subject to these restrictions, which expire periodically through 2016. For those properties where such restrictions have lapsed, we are generally required to use commercially reasonable efforts to prevent any sale, transfer or other disposition of the subject properties from resulting in the recognition of built-in gain to the appropriate individuals. 126 of our properties, with an aggregate net book value of approximately $1.8 billion, have lapsed restrictions and are subject to these conditions. The above limitations on our ability to sell our investments could adversely affect our ability to make distributions or payments to our investors.

        Americans with Disabilities Act compliance could be costly:    Under the Americans with Disabilities Act of 1990 ("ADA"), all public accommodations and commercial facilities must meet certain federal requirements related to access and use by disabled persons. Compliance with the ADA requirements could involve removal of structural barriers from certain disabled persons' entrances. Other federal, state and local laws may require modifications to or restrict further renovations of our properties with respect to such accesses. Although we believe that our properties are substantially in compliance with present requirements, noncompliance with the ADA or related laws or regulations could result in the United States government imposing fines or private litigants being awarded damages against us. Such costs may adversely affect our ability to make distributions or payments to our investors.

        Environmental problems are possible and may be costly:    Various federal, state and local laws and regulations subject property owners or operators to liability for the costs of removal or remediation of certain hazardous or toxic substances located on or in the property. These laws often impose liability without regard to whether the owner or operator was responsible for or even knew of the presence of such substances. The presence of or failure to properly remediate hazardous or toxic substances (such as toxic mold) may adversely affect our ability to rent, sell or borrow against contaminated property and may impose liability upon us for personal injury to persons exposed to such substances. Various laws and regulations also impose liability on persons who arrange for the disposal or treatment of hazardous or toxic substances at another location for the costs of removal or remediation of such substances at the disposal or treatment facility. These laws often impose liability whether or not the person arranging for such disposal ever owned or operated the disposal facility. Certain other environmental laws and regulations impose liability on owners or operators of property for injuries relating to the release of asbestos-containing or other materials into the air, water or otherwise into the environment. As owners and operators of property and as potential arrangers for hazardous substance disposal, we may be liable under such laws and regulations for removal or remediation costs, governmental penalties, property damage, personal injuries and related expenses. Payment of such costs and expenses could adversely affect our ability to make distributions or payments to our investors.

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        We face risks associated with property acquisitions:    We have acquired in the past, and our long-term strategy is to continue to pursue the acquisition of properties and portfolios of properties in New Jersey, New York and Pennsylvania and in the Northeast generally, including large real estate portfolios that could increase our size and result in alterations to our capital structure. We may be competing for investment opportunities with entities that have greater financial resources. Several office building developers and real estate companies may compete with us in seeking properties for acquisition, land for development and prospective tenants. Such competition may adversely affect our ability to make distributions or payments to our investors by:

        Our acquisition activities and their success are subject to the following risks:

        New acquisitions may fail to perform as expected:    We may acquire new office properties, assuming that we are able to obtain capital on favorable terms. Such newly acquired properties may not perform as expected and may subject us to unknown liability with respect to liabilities relating to such properties for clean-up of undisclosed environmental contamination or claims by tenants, vendors or other persons against the former owners of the properties. Inaccurate assumptions regarding future rental or occupancy rates could result in overly optimistic estimates of future revenues. In addition, future operating expenses or the costs necessary to bring an acquired property up to standards established for its intended market position may be underestimated.

        Development of real estate could be costly:    As part of our operating strategy, we may acquire land for development or construct on owned land, under certain conditions. Included among the risks of the real estate development business are the following, which may adversely affect our ability to make distributions or payments to our investors:

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        Property ownership through joint ventures could subject us to the contrary business objectives of our co-venturers:    We, from time to time, invest in joint ventures or partnerships in which we do not hold a controlling interest in the assets underlying the entities in which we invest, including joint ventures in which (i) we own a direct interest in an entity which controls such assets, or (ii) we own a direct interest in an entity which owns indirect interests, through one or more intermediaries, of such assets. These investments involve risks that do not exist with properties in which we own a controlling interest with respect to the underlying assets, including the possibility that our co-venturers or partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives. Because we lack a controlling interest, our co-venturers or partners may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives. While we seek protective rights against such contrary actions, there can be no assurance that we will be successful in procuring any such protective rights, or if procured, that the rights will be sufficient to fully protect us against contrary actions. Our organizational documents do not limit the amount of available funds that we may invest in joint ventures or partnerships. If the objectives of our co-venturers or partners are inconsistent with ours, it may adversely affect our ability to make distributions or payments to our investors.

Our real estate construction management activities are subject to risks particular to third-party construction projects.

        As we perform fixed price construction services for third parties, we are subject to a variety of risks unique to these activities. If construction costs of a project exceed original estimates, such costs may have to be absorbed by us, thereby making the project less profitable than originally estimated, or possibly not profitable at all. In addition, a construction project may be delayed due to government or regulatory approvals, supply shortages, or other events and circumstances beyond our control, or the time required to complete a construction project may be greater than originally anticipated. If any such excess costs or project delays were to be material, such events may adversely effect our cash flow and liquidity and thereby impact our ability to pay dividends or make distributions to our investors.

Debt financing could adversely affect our economic performance.

        Scheduled debt payments and refinancing could adversely affect our financial condition:    We are subject to the risks normally associated with debt financing. These risks, including the following, may adversely affect our ability to make distributions or payments to our investors:

        As of December 31, 2008, we had total outstanding indebtedness of $2.2 billion comprised of $1.5 billion of senior unsecured notes, outstanding borrowings of $161 million under our $775 million revolving credit facility and approximately $531 million of mortgage loans payable and other obligations indebtedness. We may have to refinance the principal due on our current or future indebtedness at maturity, and we may not be able to do so.

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        If we are unable to refinance our indebtedness on acceptable terms, or at all, events or conditions that may adversely affect our ability to make distributions or payments to our investors include the following:

        We are obligated to comply with financial covenants in our indebtedness that could restrict our range of operating activities:    The mortgages on our properties contain customary negative covenants, including limitations on our ability, without the prior consent of the lender, to further mortgage the property, to enter into new leases outside of stipulated guidelines or to materially modify existing leases. In addition, our revolving credit facility contains customary requirements, including restrictions and other limitations on our ability to incur debt, debt to assets ratios, secured debt to total assets ratios, interest coverage ratios and minimum ratios of unencumbered assets to unsecured debt. The indentures under which our senior unsecured debt have been issued contain financial and operating covenants including coverage ratios and limitations on our ability to incur secured and unsecured debt. These covenants limit our flexibility in conducting our operations and create a risk of default on our indebtedness if we cannot continue to satisfy them. Some of our debt instruments are cross-collateralized and contain cross default provisions with other debt instruments. Due to this cross-collateralization, a failure or default with respect to certain debt instruments or properties could have an adverse impact on us or our properties that are subject to the cross-collateralization under the applicable debt instrument. Failure to comply with these covenants could cause a default under the agreements and, in certain circumstances, our lenders may be entitled to accelerate our debt obligations. Defaults under our debt agreements could materially and adversely affect our financial condition and results of operations.

        Rising interest rates may adversely affect our cash flow:    As of December 31, 2008, outstanding borrowings of approximately $161 million under our revolving credit facility bear interest at variable rates. We may incur additional indebtedness in the future that also bears interest at variable rates. Variable rate debt creates higher debt service requirements if market interest rates increase. Higher debt service requirements could adversely affect our ability to make distributions or payments to our investors and/or cause us to default under certain debt covenants.

        Our degree of leverage could adversely affect our cash flow:    We fund acquisition opportunities and development partially through short-term borrowings (including our revolving credit facility), as well as from proceeds from property sales and undistributed cash. We expect to refinance projects purchased with short-term debt either with long-term indebtedness or equity financing depending upon the economic conditions at the time of refinancing. Our Board of Directors has a general policy of limiting the ratio of our indebtedness to total undepreciated assets (total debt as a percentage of total undepreciated assets) to 50 percent or less, although there is no limit in Mack-Cali Realty, L.P.'s or our organizational documents on the amount of indebtedness that we may incur. However, we have entered into certain financial agreements which contain financial and operating covenants that limit our ability under certain circumstances to incur additional secured and unsecured indebtedness. The Board of

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Directors could alter or eliminate its current policy on borrowing at any time at its discretion. If this policy were changed, we could become more highly leveraged, resulting in an increase in debt service that could adversely affect our cash flow and our ability to make distributions or payments to our investors and/or could cause an increased risk of default on our obligations.

        We are dependent on external sources of capital for future growth:    To qualify as a real estate investment trust under the Code, we must distribute to our shareholders each year at least 90 percent of our net taxable income, excluding any net capital gain. Because of this distribution requirement, it is not likely that we will be able to fund all future capital needs, including for acquisitions and developments, from income from operations. Therefore, we will have to rely on third-party sources of capital, which may or may not be available on favorable terms or at all. Our access to third-party sources of capital depends on a number of things, including the market's perception of our growth potential and our current and potential future earnings. Moreover, additional equity offerings may result in substantial dilution of our shareholders' interests, and additional debt financing may substantially increase our leverage.

Competition for skilled personnel could increase our labor costs.

        We compete with various other companies in attracting and retaining qualified and skilled personnel. We depend on our ability to attract and retain skilled management personnel who are responsible for the day-to-day operations of our company. Competitive pressures may require that we enhance our pay and benefits package to compete effectively for such personnel. We may not be able to offset such added costs by increasing the rates we charge our tenants. If there is an increase in these costs or if we fail to attract and retain qualified and skilled personnel, our business and operating results could be harmed.

We are dependent on our key personnel whose continued service is not guaranteed.

        We are dependent upon our executive officers for strategic business direction and real estate experience. While we believe that we could find replacements for these key personnel, loss of their services could adversely affect our operations. We have entered into an employment agreement (including non-competition provisions) which provides for a continuous four-year employment term with each of Mitchell E. Hersh, Barry Lefkowitz and Roger W. Thomas, a continuous one-year employment term with Michael A. Grossman, and an initial three-year employment term with Mark Yeager which, as of May 9, 2009, shall convert to a continuous one-year employment term. We do not have key man life insurance for our executive officers.

Certain provisions of Maryland law and our charter and bylaws as well as our stockholder rights plan could hinder, delay or prevent changes in control.

        Certain provisions of Maryland law, our charter and our bylaws, as well as our stockholder rights plan have the effect of discouraging, delaying or preventing transactions that involve an actual or threatened change in control. These provisions include the following:

        Classified Board of Directors:    Our Board of Directors is divided into three classes with staggered terms of office of three years each. The classification and staggered terms of office of our directors make it more difficult for a third party to gain control of our board of directors. At least two annual meetings of stockholders, instead of one, generally would be required to affect a change in a majority of the board of directors.

        Removal of Directors:    Under our charter, subject to the rights of one or more classes or series of preferred stock to elect one or more directors, a director may be removed only for cause and only by the affirmative vote of at least two-thirds of all votes entitled to be cast by our stockholders generally

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in the election of directors. Neither the Maryland General Corporation Law nor our charter define the term "cause." As a result, removal for "cause" is subject to Maryland common law and to judicial interpretation and review in the context of the facts and circumstances of any particular situation.

        Number of Directors, Board Vacancies, Terms of Office:    We have, in our bylaws, elected to be subject to certain provisions of Maryland law which vest in the Board of Directors the exclusive right to determine the number of directors and the exclusive right, by the affirmative vote of a majority of the remaining directors, even if the remaining directors do not constitute a quorum, to fill vacancies on the board. These provisions of Maryland law, which are applicable even if other provisions of Maryland law or the charter or bylaws provide to the contrary, also provide that any director elected to fill a vacancy shall hold office for the remainder of the full term of the class of directors in which the vacancy occurred, rather than the next annual meeting of stockholders as would otherwise be the case, and until his or her successor is elected and qualifies.

        Stockholder Requested Special Meetings:    Our bylaws provide that our stockholders have the right to call a special meeting only upon the written request of the stockholders entitled to cast not less than a majority of all the votes entitled to be cast by the stockholders at such meeting.

        Advance Notice Provisions for Stockholder Nominations and Proposals:    Our bylaws require advance written notice for stockholders to nominate persons for election as directors at, or to bring other business before, any meeting of stockholders. This bylaw provision limits the ability of stockholders to make nominations of persons for election as directors or to introduce other proposals unless we are notified in a timely manner prior to the meeting.

        Exclusive Authority of the Board to Amend the Bylaws:    Our bylaws provide that our board of directors has the exclusive power to adopt, alter or repeal any provision of the bylaws or to make new bylaws. Thus, our stockholders may not effect any changes to our bylaws.

        Preferred Stock:    Under our charter, our Board of Directors has authority to issue preferred stock from time to time in one or more series and to establish the terms, preferences and rights of any such series of preferred stock, all without approval of our stockholders.

        Duties of Directors with Respect to Unsolicited Takeovers:    Maryland law provides protection for Maryland corporations against unsolicited takeovers by limiting, among other things, the duties of the directors in unsolicited takeover situations. The duties of directors of Maryland corporations do not require them to (a) accept, recommend or respond to any proposal by a person seeking to acquire control of the corporation, (b) authorize the corporation to redeem any rights under, or modify or render inapplicable, any stockholders rights plan, (c) make a determination under the Maryland Business Combination Act or the Maryland Control Share Acquisition Act, or (d) act or fail to act solely because of the effect of the act or failure to act may have on an acquisition or potential acquisition of control of the corporation or the amount or type of consideration that may be offered or paid to the stockholders in an acquisition. Moreover, under Maryland law, the act of a director of a Maryland corporation relating to or affecting an acquisition or potential acquisition of control is not subject to any higher duty or greater scrutiny than is applied to any other act of a director. Maryland law also contains a statutory presumption that an act of a director of a Maryland corporation satisfies the applicable standards of conduct for directors under Maryland law.

        Ownership Limit:    In order to preserve our status as a real estate investment trust under the Code, our charter generally prohibits any single stockholder, or any group of affiliated stockholders, from beneficially owning more than 9.8 percent of our outstanding capital stock unless our Board of Directors waives or modifies this ownership limit.

        Maryland Business Combination Act:    The Maryland Business Combination Act provides that unless exempted, a Maryland corporation may not engage in business combinations, including mergers,

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dispositions of 10 percent or more of its assets, certain issuances of shares of stock and other specified transactions, with an "interested stockholder" or an affiliate of an interested stockholder, for five years after the most recent date on which the interested stockholder became an interested stockholder, and thereafter unless specified criteria are met. An interested stockholder is generally a person owning or controlling, directly or indirectly, 10 percent or more of the voting power of the outstanding stock of the Maryland corporation. Our board of directors has exempted from this statute business combinations between the Company and certain affiliated individuals and entities. However, unless our board adopts other exemptions, the provisions of the Maryland Business Combination Act will be applicable to business combinations with other persons.

        Maryland Control Share Acquisition Act:    Maryland law provides that "control shares" of a corporation acquired in a "control share acquisition" shall have no voting rights except to the extent approved by a vote of two-thirds of the votes eligible to cast on the matter under the Maryland Control Share Acquisition Act. "Control shares" means shares of stock that, if aggregated with all other shares of stock previously acquired by the acquirer, would entitle the acquirer to exercise voting power in electing directors within one of the following ranges of the voting power: one-tenth or more but less than one-third, one-third or more but less than a majority or a majority or more of all voting power. A "control share acquisition" means the acquisition of control shares, subject to certain exceptions.

        If voting rights of control shares acquired in a control share acquisition are not approved at a stockholder's meeting, then subject to certain conditions and limitations, the issuer may redeem any or all of the control shares for fair value. If voting rights of such control shares are approved at a stockholder's meeting and the acquirer becomes entitled to vote a majority of the shares of stock entitled to vote, all other stockholders may exercise appraisal rights. Our bylaws contain a provision exempting from the Maryland Control Share Acquisition Act any acquisitions of shares by certain affiliated individuals and entities, any directors, officers or employees of the Company and any person approved by the board of directors prior to the acquisition by such person of control shares. Any control shares acquired in a control share acquisition which are not exempt under the foregoing provisions of our bylaws will be subject to the Maryland Control Share Acquisition Act.

        Stockholder Rights Plan:    We have adopted a stockholder rights plan that may discourage any potential acquirer from acquiring more than 15 percent of our outstanding common stock since, upon this type of acquisition without approval of our Board of Directors, all other common stockholders will have the right to purchase a specified amount of common stock at a substantial discount from market price.

Consequences of failure to qualify as a real estate investment trust could adversely affect our financial condition.

        Failure to maintain ownership limits could cause us to lose our qualification as a real estate investment trust:    In order for us to maintain our qualification as a real estate investment trust under the Code, not more than 50 percent in value of our outstanding stock may be actually and/or constructively owned by five or fewer individuals (as defined in the Code to include certain entities). We have limited the ownership of our outstanding shares of our common stock by any single stockholder to 9.8 percent of the outstanding shares of our common stock. Our Board of Directors could waive this restriction if they were satisfied, based upon the advice of tax counsel or otherwise, that such action would be in our best interests and would not affect our qualification as a real estate investment trust under the Code. Common stock acquired or transferred in breach of the limitation may be redeemed by us for the lesser of the price paid and the average closing price for the 10 trading days immediately preceding redemption or sold at the direction of us. We may elect to redeem such shares of common stock for Units, which are nontransferable except in very limited circumstances. Any transfer of shares of common stock which, as a result of such transfer, causes us to be in violation of any ownership limit, will be deemed void. Although we currently intend to continue to operate in a manner which will

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enable us to continue to qualify as a real estate investment trust under the Code, it is possible that future economic, market, legal, tax or other considerations may cause our Board of Directors to revoke the election for us to qualify as a real estate investment trust. Under our organizational documents, our Board of Directors can make such revocation without the consent of our stockholders.

        In addition, the consent of the holders of at least 85 percent of Mack-Cali Realty, L.P.'s partnership units is required: (i) to merge (or permit the merger of) us with another unrelated person, pursuant to a transaction in which Mack-Cali Realty, L.P. is not the surviving entity; (ii) to dissolve, liquidate or wind up Mack-Cali Realty, L.P.; or (iii) to convey or otherwise transfer all or substantially all of Mack-Cali Realty, L.P.'s assets. As of February 5, 2009, as general partner, we own approximately 82.1 percent of Mack-Cali Realty, L.P.'s outstanding common partnership units.

        Tax liabilities as a consequence of failure to qualify as a real estate investment trust:    We have elected to be treated and have operated so as to qualify as a real estate investment trust for federal income tax purposes since our taxable year ended December 31, 1994. Although we believe we will continue to operate in such manner, we cannot guarantee that we will do so. Qualification as a real estate investment trust involves the satisfaction of various requirements (some on an annual and some on a quarterly basis) established under highly technical and complex tax provisions of the Code. Because few judicial or administrative interpretations of such provisions exist and qualification determinations are fact sensitive, we cannot assure you that we will qualify as a real estate investment trust for any taxable year.

        If we fail to qualify as a real estate investment trust in any taxable year, we will be subject to the following:

        A loss of our status as a real estate investment trust could have an adverse effect on us. Failure to qualify as a real estate investment trust also would eliminate the requirement that we pay dividends to our stockholders.

        Other tax liabilities:    Even if we qualify as a real estate investment trust under the Code, we are subject to certain federal, state and local taxes on our income and property and, in some circumstances, certain other state and local taxes. In addition, our taxable REIT subsidiaries will be subject to federal, state and local income tax for income received in connection with certain non-customary services performed for tenants and/or third parties.

        Risk of changes in the tax law applicable to real estate investment trusts:    Since the Internal Revenue Service, the United States Treasury Department and Congress frequently review federal income tax legislation, we cannot predict whether, when or to what extent new federal tax laws, regulations, interpretations or rulings will be adopted. Any of such legislative action may prospectively or retroactively modify our and Mack-Cali Realty, L.P.'s tax treatment and, therefore, may adversely affect taxation of us, Mack-Cali Realty, L.P., and/or our investors.

Changes in market conditions could adversely affect the market price of our common stock.

        As with other publicly traded equity securities, the value of our common stock depends on various market conditions, which may change from time to time. The market price of our common stock could

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change in ways that may or may not be related to our business, our industry or our operating performance and financial condition. Among the market conditions that may affect the value of our common stock are the following:

        The market value of our common stock is based primarily upon the market's perception of our growth potential and our current and potential future earnings and cash dividends. Consequently, our common stock may trade at prices that are higher or lower than our net asset value per share of common stock.

ITEM 1B.    UNRESOLVED STAFF COMMENTS

        None.

ITEM 2.    PROPERTIES

PROPERTY LIST

        As of December 31, 2008, the Company's Consolidated Properties consisted of 251 in-service office, office/flex and industrial/warehouse properties, as well as two stand-alone retail properties and two land leases. The Consolidated Properties are located primarily in the Northeast. The Consolidated Properties are easily accessible from major thoroughfares and are in close proximity to numerous amenities. The Consolidated Properties contain a total of approximately 29.2 million square feet, with the individual properties ranging from 6,216 to 1,246,283 square feet. The Consolidated Properties, managed by on-site employees, generally have attractively landscaped sites and atriums in addition to quality design and construction. The Company's tenants include many service sector employers, including a large number of professional firms and national and international businesses. The Company believes that all of its properties are well-maintained and do not require significant capital improvements.

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Office Properties

Property Location
  Year
Built
  Net
Rentable Area
(Sq. Ft.)
  Percentage
Leased as of
12/31/08
(%) (a)
  2008
Base Rent
($000's)
(b) (c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($) (c) (d)
  2008
Average
Effective Rent
Per Sq. Ft.
($) (c) (e)
 

NEW JERSEY

                                           
                                             

Bergen County

                                           

Fair Lawn

                                           

17-17 Route 208 North

    1987     143,000     63.2     2,150     0.36     23.79     21.29  

Fort Lee

                                           

One Bridge Plaza

    1981     200,000     82.3     3,753     0.63     22.80     19.87  

2115 Linwood Avenue

    1981     68,000     56.5     859     0.14     22.36     20.61  

Little Ferry

                                           

200 Riser Road

    1974     286,628     100.0     2,076     0.35     7.24     6.69  

Montvale

                                           

95 Chestnut Ridge Road

    1975     47,700     100.0     801     0.13     16.79     15.39  

135 Chestnut Ridge Road

    1981     66,150     99.7     1,539     0.26     23.34     19.59  

Paramus

                                           

15 East Midland Avenue

    1988     259,823     80.5     4,859     0.82     23.23     22.48  

140 East Ridgewood Avenue

    1981     239,680     93.0     4,686     0.79     21.02     18.87  

461 From Road

    1988     253,554     98.6     6,074     1.02     24.30     24.21  

650 From Road

    1978     348,510     88.8     7,301     1.22     23.59     20.65  

61 South Paramus Avenue

    1985     269,191     97.5     7,533     1.27     28.70     25.33  

Ridgefield Park

                                           

105 Challenger Road

    1992     150,050     100.0     4,271     0.72     28.46     26.14  

Rochelle Park

                                           

120 Passaic Street

    1972     52,000     99.6     1,402     0.24     27.07     25.51  

365 West Passaic Street

    1976     212,578     98.0     4,558     0.77     21.88     19.84  

395 West Passaic Street

    1979     100,589     98.5     2,343     0.39     23.65     19.86  

Upper Saddle River

                                           

1 Lake Street

    1973/94     474,801     100.0     7,465     1.26     15.72     15.72  

10 Mountainview Road

    1986     192,000     72.2     3,759     0.63     27.12     24.70  

Woodcliff Lake

                                           

400 Chestnut Ridge Road

    1982     89,200     100.0     1,950     0.33     21.86     16.32  

470 Chestnut Ridge Road

    1987     52,500     100.0     1,328     0.22     25.30     22.82  

530 Chestnut Ridge Road

    1986     57,204     100.0     1,246     0.21     21.78     20.21  

50 Tice Boulevard

    1984     235,000     99.1     6,281     1.06     26.97     24.78  

300 Tice Boulevard

    1991     230,000     98.2     5,741     0.97     25.42     22.82  

Burlington County

                                           

Moorestown

                                           

224 Strawbridge Drive

    1984     74,000     94.2     1,430     0.24     20.51     18.12  

228 Strawbridge Drive

    1984     74,000     100.0     1,226     0.21     16.57     15.39  

232 Strawbridge Drive

    1986     74,258     98.8     1,461     0.25     19.91     16.22  

Essex County

                                           

Millburn

                                           

150 J.F. Kennedy Parkway

    1980     247,476     100.0     7,495     1.26     30.29     26.21  

Roseland

                                           

101 Eisenhower Parkway

    1980     237,000     87.4     5,382     0.91     25.98     23.44  

103 Eisenhower Parkway

    1985     151,545     78.9     2,721     0.46     22.76     19.51  

105 Eisenhower Parkway

    2001     220,000     91.9     4,891     0.82     24.19     18.09  

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Office Properties
(Continued)

Property Location
  Year
Built
  Net
Rentable Area
(Sq. Ft.)
  Percentage
Leased as of
12/31/08
(%) (a)
  2008
Base Rent
($000's)
(b) (c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($) (c) (d)
  2008
Average
Effective Rent
Per Sq. Ft.
($) (c) (e)
 

Hudson County

                                           

Jersey City

                                           

Harborside Financial Center Plaza 1

    1983     400,000     100.0     11,186     1.88     27.97     24.39  

Harborside Financial Center Plaza 2

    1990     761,200     99.6     18,905     3.18     24.94     23.14  

Harborside Financial Center Plaza 3

    1990     725,600     99.3     18,132     3.05     25.17     23.36  

Harborside Financial Center Plaza 4-A

    2000     207,670     99.4     6,231     1.05     30.19     26.01  

Harborside Financial Center Plaza 5

    2002     977,225     100.0     35,459     5.96     36.29     30.30  

101 Hudson Street

    1992     1,246,283     100.0     30,148     5.07     24.19     21.19  

Mercer County

                                           

Hamilton Township

                                           

3 AAA Drive

    1981     35,270     62.6     547     0.09     24.77     20.74  

2 South Gold Drive

    1974     33,962     64.5     490     0.08     22.37     20.41  

600 Horizon Drive

    2002     95,000     100.0     1,373     0.23     14.45     14.45  

700 Horizon Drive

    2007     120,000     100.0     2,459     0.41     20.49     19.38  

Princeton

                                           

103 Carnegie Center

    1984     96,000     68.5     1,812     0.31     27.55     22.54  

3 Independence Way

    1983     111,300     91.8     1,343     0.23     13.14     10.39  

100 Overlook Center

    1988     149,600     100.0     5,052     0.85     33.77     28.76  

5 Vaughn Drive

    1987     98,500     100.0     2,555     0.43     25.94     22.93  

Middlesex County

                                           

East Brunswick

                                           

377 Summerhill Road

    1977     40,000     100.0     353     0.06     8.83     8.65  

Edison

                                           

343 Thornall Street (c)

    1991     195,709     100.0     4,178     0.70     21.35     15.75  

Piscataway

                                           

30 Knightsbridge Road, Bldg 3

    1977     160,000     100.0     2,465     0.42     15.41     15.41  

30 Knightsbridge Road, Bldg 4

    1977     115,000     100.0     1,771     0.30     15.40     15.40  

30 Knightsbridge Road, Bldg 5

    1977     332,607     80.8     3,899     0.66     14.51     10.88  

30 Knightsbridge Road, Bldg 6

    1977     72,743     63.8     206     0.03     4.44     2.13  

Plainsboro

                                           

500 College Road East

    1984     158,235     88.1     4,172     0.70     29.93     27.16  

Woodbridge

                                           

581 Main Street

    1991     200,000     100.0     5,286     0.89     26.43     22.93  

Monmouth County

                                           

Freehold

                                           

2 Paragon Way

    1989     44,524     44.4     380     0.06     19.22     13.51  

3 Paragon Way

    1991     66,898     75.8     1,251     0.21     24.67     19.19  

4 Paragon Way

    2002     63,989     100.0     1,221     0.21     19.08     18.11  

100 Willbowbrook Road

    1988     60,557     74.8     923     0.16     20.38     17.79  

Holmdel

                                           

23 Main Street

    1977     350,000     100.0     4,012     0.68     11.46     8.64  

22


Table of Contents

Office Properties
(Continued)

Property Location
  Year
Built
  Net
Rentable Area
(Sq. Ft.)
  Percentage
Leased as of
12/31/08
(%) (a)
  2008
Base Rent
($000's)
(b) (c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($) (c) (d)
  2008
Average
Effective Rent
Per Sq. Ft.
($) (c) (e)
 

Middletown

                                           

One River Center Bldg 1

    1983     122,594     100.0     3,116     0.52     25.42     20.82  

One River Center Bldg 2

    1983     120,360     100.0     2,833     0.48     23.54     21.70  

One River Center Bldg 3

    1984     214,518     93.6     4,628     0.78     23.05     22.56  

Neptune

                                           

3600 Route 66

    1989     180,000     100.0     2,400     0.40     13.33     12.06  

Wall Township

                                           

1305 Campus Parkway

    1988     23,350     83.7     398     0.07     20.36     14.33  

1350 Campus Parkway

    1990     79,747     91.9     1,523     0.26     20.78     18.02  

Morris County

                                           

Florham Park

                                           

325 Columbia Turnpike

    1987     168,144     89.7     3,665     0.62     24.30     20.80  

Morris Plains

                                           

250 Johnson Road

    1977     75,000     100.0     1,579     0.27     21.05     18.47  

201 Littleton Road

    1979     88,369     88.6     1,781     0.30     22.75     20.46  

Morris Township

                                           

412 Mt. Kemble Avenue

    1986     475,100     47.1     3,649     0.61     16.31     12.23  

Parsippany

                                           

4 Campus Drive

    1983     147,475     95.7     3,248     0.55     23.01     19.95  

6 Campus Drive

    1983     148,291     86.2     2,659     0.45     20.80     16.86  

7 Campus Drive

    1982     154,395     54.6     2,180     0.37     25.86     22.59  

8 Campus Drive

    1987     215,265     100.0     6,233     1.04     28.96     25.88  

9 Campus Drive

    1983     156,495     92.7     3,223     0.54     22.22     18.46  

4 Century Drive

    1981     100,036     77.4     1,694     0.29     21.88     19.54  

5 Century Drive

    1981     79,739     83.4     1,378     0.23     20.72     18.84  

6 Century Drive

    1981     100,036     94.7     1,377     0.23     14.54     9.30  

2 Dryden Way

    1990     6,216     100.0     99     0.02     15.93     14.64  

4 Gatehall Drive

    1988     248,480     98.6     6,092     1.03     24.87     21.83  

2 Hilton Court

    1991     181,592     100.0     5,513     0.93     30.36     27.30  

1633 Littleton Road

    1978     57,722     100.0     1,131     0.19     19.59     19.59  

600 Parsippany Road

    1978     96,000     92.4     1,630     0.27     18.38     14.24  

1 Sylvan Way

    1989     150,557     100.0     3,530     0.59     23.45     21.47  

5 Sylvan Way

    1989     151,383     96.5     4,130     0.70     28.27     24.97  

7 Sylvan Way

    1987     145,983     100.0     3,219     0.54     22.05     19.28  

35 Waterview Boulevard

    1990     172,498     82.5     3,979     0.67     27.96     24.57  

5 Wood Hollow Road

    1979     317,040     73.1     5,391     0.91     23.26     19.18  

Passaic County

                                           

Clifton

                                           

777 Passaic Avenue

    1983     75,000     87.4     1,536     0.26     23.43     21.27  

Totowa

                                           

999 Riverview Drive

    1988     56,066     85.1     1,021     0.17     21.40     19.22  

Somerset County

                                           

Basking Ridge

                                           

222 Mt. Airy Road

    1986     49,000     100.0     760     0.13     15.51     11.63  

233 Mt. Airy Road

    1987     66,000     100.0     1,315     0.22     19.92     16.71  

23


Table of Contents

Office Properties
(Continued)

Property Location
  Year
Built
  Net
Rentable
Area
(Sq. Ft.)
  Percentage
Leased
as of
12/31/08
(%)(a)
  2008
Base
Rent
($000's)
(b)(c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($)(c)(d)
  2008
Average
Effective
Rent
Per Sq. Ft.
($)(c)(e)
 

Bernards

                                           

106 Allen Road

    2000     132,010     98.9     3,219     0.54     24.66     18.76  

Bridgewater

                                           

721 Route 202/206

    1989     192,741     81.2     3,685     0.62     23.55     18.11  

Union County

                                           

Clark

                                           

100 Walnut Avenue

    1985     182,555     97.3     4,557     0.77     25.66     22.24  

Cranford

                                           

6 Commerce Drive

    1973     56,000     82.4     998     0.17     21.63     18.96  

11 Commerce Drive

    1981     90,000     93.8     1,834     0.31     21.72     19.27  

12 Commerce Drive

    1967     72,260     95.0     967     0.16     14.09     12.13  

14 Commerce Drive

    1971     67,189     75.9     1,009     0.17     19.79     19.16  

20 Commerce Drive

    1990     176,600     100.0     4,458     0.75     25.24     21.82  

25 Commerce Drive

    1971     67,749     88.7     1,288     0.22     21.43     18.92  

65 Jackson Drive

    1984     82,778     97.5     1,888     0.32     23.39     20.30  

New Providence

                                           

890 Mountain Avenue

    1977     80,000     95.1     1,881     0.32     24.72     22.95  
                                 

Total New Jersey Office

         
17,646,642
   
92.5
   
385,084
   
64.83
   
23.58
   
20.68
 
                                 

NEW YORK

                                           

New York County

                                           

New York

                                           

125 Broad Street

    1970     524,476     100.0     20,611     3.46     39.30     35.65  

Rockland County

                                           

Suffern

                                           

400 Rella Boulevard

    1988     180,000     89.2     3,736     0.63     23.27     21.08  

Westchester County

                                           

Elmsford

                                           

100 Clearbrook Road(c)

    1975     60,000     91.9     1,105     0.19     20.04     18.17  

101 Executive Boulevard

    1971     50,000     43.0     569     0.10     26.47     24.14  

555 Taxter Road

    1986     170,554     80.1     3,731     0.63     27.31     15.93  

565 Taxter Road

    1988     170,554     91.4     4,042     0.68     25.93     21.50  

570 Taxter Road

    1972     75,000     72.7     1,404     0.24     25.75     23.75  

Hawthorne

                                           

1 Skyline Drive

    1980     20,400     99.0     381     0.06     18.87     17.73  

2 Skyline Drive

    1987     30,000     58.6     339     0.06     19.28     15.93  

7 Skyline Drive

    1987     109,000     100.0     2,633     0.44     24.16     22.00  

17 Skyline Drive

    1989     85,000     100.0     1,630     0.27     19.18     16.34  

19 Skyline Drive

    1982     248,400     100.0     4,036     0.68     16.25     16.12  

Tarrytown

                                           

200 White Plains Road

    1982     89,000     97.5     2,067     0.35     23.82     21.57  

220 White Plains Road

    1984     89,000     93.5     2,049     0.35     24.62     22.18  

24


Table of Contents

Office Properties
(Continued)

Property Location
  Year
Built
  Net
Rentable
Area
(Sq. Ft.)
  Percentage
Leased
as of
12/31/08
(%)(a)
  2008
Base
Rent
($000's)
(b)(c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($)(c)(d)
  2008
Average
Effective
Rent
Per Sq. Ft.
($)(c)(e)
 

White Plains

                                           

1 Barker Avenue

    1975     68,000     99.0     1,782     0.30     26.47     24.90  

3 Barker Avenue

    1983     65,300     100.0     1,742     0.29     26.68     24.24  

50 Main Street

    1985     309,000     99.6     9,881     1.66     32.11     29.12  

11 Martine Avenue

    1987     180,000     74.4     4,323     0.73     32.28     28.85  

1 Water Street

    1979     45,700     100.0     1,178     0.20     25.78     22.28  

Yonkers

                                           

1 Executive Boulevard

    1982     112,000     100.0     2,825     0.48     25.22     22.28  

3 Executive Boulevard

    1987     58,000     96.0     1,449     0.24     26.02     22.63  
                                 

Total New York Office

         
2,739,384
   
92.9
   
71,513
   
12.04
   
28.11
   
24.94
 
                                 

PENNSYLVANIA

                                           

Chester County

                                           

Berwyn

                                           

1000 Westlakes Drive

    1989     60,696     95.7     1,591     0.27     27.39     26.37  

1055 Westlakes Drive

    1990     118,487     94.7     3,083     0.52     27.48     22.98  

1205 Westlakes Drive

    1988     130,265     86.9     3,054     0.51     26.98     23.47  

1235 Westlakes Drive

    1986     134,902     100.0     2,988     0.49     22.15     18.11  

Delaware County

                                           

Lester

                                           

100 Stevens Drive

    1986     95,000     100.0     2,551     0.43     26.85     24.85  

200 Stevens Drive

    1987     208,000     100.0     5,604     0.94     26.94     25.27  

300 Stevens Drive

    1992     68,000     91.6     1,439     0.24     23.10     19.31  

Media

                                           

1400 Providence Road—Center I

    1986     100,000     94.2     2,112     0.36     22.42     19.98  

1400 Providence Road—Center II

    1990     160,000     95.0     2,758     0.46     18.14     15.49  

Montgomery County

                                           

Bala Cynwyd

                                           

150 Monument Road

    1981     125,783     95.7     3,071     0.52     25.51     22.51  

Blue Bell

                                           

4 Sentry Parkway

    1982     63,930     58.3     836     0.14     22.43     22.14  

5 Sentry Parkway East

    1984     91,600     39.3     701     0.12     19.47     18.17  

5 Sentry Parkway West

    1984     38,400     31.5     253     0.04     20.92     18.44  

16 Sentry Parkway

    1988     93,093     96.4     2,384     0.40     26.57     24.35  

18 Sentry Parkway

    1988     95,010     85.6     2,019     0.34     24.83     22.50  

King of Prussia

                                           

2200 Renaissance Boulevard

    1985     174,124     65.1     2,598     0.44     22.92     18.41  

Lower Providence

                                           

1000 Madison Avenue

    1990     100,700     66.4     1,322     0.22     19.77     14.63  

Plymouth Meeting

                                           

1150 Plymouth Meeting Mall

    1970     167,748     77.6     3,010     0.51     23.12     18.16  
                                 

Total Pennsylvania Office

         
2,025,738
   
84.8
   
41,374
   
6.95
   
24.10
   
21.04
 
                                 

25


Table of Contents

Office Properties
(Continued)

Property Location
  Year
Built
  Net
Rentable
Area
(Sq. Ft.)
  Percentage
Leased
as of
12/31/08
(%)(a)
  2008
Base
Rent
($000's)
(b)(c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($)(c)(d)
  2008
Average
Effective
Rent
Per Sq. Ft.
($)(c)(e)
 

CONNECTICUT

                                           

Fairfield County

                                           

Norwalk

                                           

40 Richards Avenue

    1985     145,487     76.4     2,591     0.44     23.31     20.69  

Stamford

                                           

1266 East Main Street

    1984     179,260     79.2     3,788     0.63     26.68     23.39  
                                 

Total Connecticut Office

         
324,747
   
77.9
   
6,379
   
1.07
   
25.20
   
22.21
 
                                 

DISTRICT OF COLUMBIA

                                           

Washington

                                           

1201 Connecticut Avenue, NW

    1940     169,549     100.0     6,806     1.14     40.14     36.44  

1400 L Street, NW

    1987     159,000     100.0     5,853     0.99     36.81     31.60  
                                 

Total District of Columbia Office

         
328,549
   
100.0
   
12,659
   
2.13
   
38.53
   
34.10
 
                                 

MARYLAND

                                           

Prince George's County

                                           

Greenbelt

                                           

9200 Edmonston Road

    1973     38,690     100.0     910     0.15     23.52     21.17  

6301 Ivy Lane

    1979     112,003     75.8     2,022     0.34     23.82     20.51  

6303 Ivy Lane

    1980     112,047     57.2     1,723     0.29     26.88     23.67  

6305 Ivy Lane

    1982     112,022     70.1     1,708     0.29     21.75     17.32  

6404 Ivy Lane

    1987     165,234     66.2     2,516     0.42     23.00     18.71  

6406 Ivy Lane

    1991     163,857     0.0     564     0.09     0.00     0.00  

6411 Ivy Lane

    1984     138,405     88.4     2,665     0.44     21.78     18.73  

Lanham

                                           

4200 Parliament Place

    1989     122,000     90.8     2,687     0.45     24.26     22.46  
                                 

Total Maryland Office

         
964,258
   
63.1
   
14,795
   
2.47
   
24.31
   
21.07
 
                                 

TOTAL OFFICE PROPERTIES

         
24,029,318
   
90.7
   
531,804
   
89.49
   
24.41
   
21.44
 
                                 

26


Table of Contents

Office/Flex Properties

Property Location
  Year
Built
  Net
Rentable
Area
(Sq. Ft.)
  Percentage
Leased
as of
12/31/08
(%)(a)
  2008
Base
Rent
($000's)
(b)(c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($)(c)(d)
  2008
Average
Effective
Rent
Per Sq. Ft.
($)(c)(e)
 

NEW JERSEY

                                           

Burlington County

                                           

Burlington

                                           

3 Terri Lane

    1991     64,500     100.0     556     0.09     8.62     5.30  

5 Terri Lane

    1992     74,555     74.1     643     0.11     11.64     9.63  

Moorestown

                                           

2 Commerce Drive

    1986     49,000     74.1     123     0.02     3.39     1.87  

101 Commerce Drive

    1988     64,700     100.0     275     0.05     4.25     3.85  

102 Commerce Drive

    1987     38,400     87.5     224     0.04     6.67     5.24  

201 Commerce Drive

    1986     38,400     100.0     219     0.04     5.70     4.14  

202 Commerce Drive

    1988     51,200     100.0     237     0.04     4.63     2.95  

1 Executive Drive

    1989     20,570     81.1     157     0.03     9.41     6.41  

2 Executive Drive

    1988     60,800     100.0     478     0.08     7.86     5.67  

101 Executive Drive

    1990     29,355     99.7     284     0.05     9.70     7.62  

102 Executive Drive

    1990     64,000     100.0     474     0.08     7.41     6.86  

225 Executive Drive

    1990     50,600     67.6     239     0.04     6.99     5.17  

97 Foster Road

    1982     43,200     75.5     160     0.03     4.91     4.11  

1507 Lancer Drive

    1995     32,700     100.0     134     0.02     4.10     3.79  

1245 North Church Street

    1998     52,810     71.6     243     0.04     6.43     5.69  

1247 North Church Street

    1998     52,790     58.1     221     0.04     7.21     6.13  

1256 North Church Street

    1984     63,495     100.0     457     0.08     7.20     6.21  

840 North Lenola Road

    1995     38,300     100.0     361     0.06     9.43     7.81  

844 North Lenola Road

    1995     28,670     100.0     180     0.03     6.28     4.95  

915 North Lenola Road

    1998     52,488     100.0     273     0.05     5.20     4.36  

2 Twosome Drive

    2000     48,600     100.0     450     0.08     9.26     8.81  

30 Twosome Drive

    1997     39,675     77.8     283     0.05     9.17     7.22  

31 Twosome Drive

    1998     84,200     100.0     470     0.08     5.58     5.48  

40 Twosome Drive

    1996     40,265     100.0     290     0.05     7.20     5.84  

41 Twosome Drive

    1998     43,050     88.9     275     0.05     7.19     6.64  

50 Twosome Drive

    1997     34,075     100.0     257     0.04     7.54     7.13  

Gloucester County

                                           

West Deptford

                                           

1451 Metropolitan Drive

    1996     21,600     100.0     148     0.02     6.85     6.85  

Mercer County

                                           

Hamilton Township

                                           

100 Horizon Center Boulevard

    1989     13,275     100.0     197     0.03     14.84     12.88  

200 Horizon Drive

    1991     45,770     85.3     604     0.10     15.47     14.09  

300 Horizon Drive

    1989     69,780     73.9     1,092     0.18     21.18     16.95  

500 Horizon Drive

    1990     41,205     94.3     616     0.10     15.85     15.13  

27


Table of Contents

Office/Flex Properties
(Continued)

Property Location
  Year
Built
  Net
Rentable
Area
(Sq. Ft.)
  Percentage
Leased
as of
12/31/08
(%)(a)
  2008
Base
Rent
($000's)
(b)(c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($)(c)(d)
  2008
Average
Effective
Rent
Per Sq. Ft.
($)(c)(e)
 

Monmouth County

                                           

Wall Township

                                           

1325 Campus Parkway

    1988     35,000     100.0     655     0.11     18.71     14.06  

1340 Campus Parkway

    1992     72,502     100.0     948     0.16     13.08     10.10  

1345 Campus Parkway

    1995     76,300     95.9     926     0.16     12.66     10.10  

1433 Highway 34

    1985     69,020     78.4     543     0.09     10.03     7.82  

1320 Wyckoff Avenue

    1986     20,336     100.0     178     0.03     8.75     8.26  

1324 Wyckoff Avenue

    1987     21,168     100.0     231     0.04     10.91     9.12  

Passaic County

                                           

Totowa

                                           

1 Center Court

    1999     38,961     100.0     537     0.09     13.78     12.45  

2 Center Court

    1998     30,600     99.3     396     0.07     13.03     11.49  

11 Commerce Way

    1989     47,025     100.0     577     0.10     12.27     11.53  

20 Commerce Way

    1992     42,540     100.0     455     0.08     10.70     9.47  

29 Commerce Way

    1990     48,930     100.0     711     0.12     14.53     11.51  

40 Commerce Way

    1987     50,576     72.1     478     0.08     13.11     11.87  

45 Commerce Way

    1992     51,207     96.4     559     0.09     11.32     8.83  

60 Commerce Way

    1988     50,333     100.0     488     0.08     9.70     8.23  

80 Commerce Way

    1996     22,500     100.0     269     0.05     11.96     10.89  

100 Commerce Way

    1996     24,600     66.9     294     0.05     17.86     16.28  

120 Commerce Way

    1994     9,024     100.0     126     0.02     13.96     12.74  

140 Commerce Way

    1994     26,881     99.5     374     0.06     13.98     12.82  
                                 

Total New Jersey Office/Flex

         
2,189,531
   
91.4
   
19,365
   
3.28
   
9.68
   
8.10
 
                                 

NEW YORK

                                           

Westchester County

                                           

Elmsford

                                           

11 Clearbrook Road

    1974     31,800     100.0     468     0.08     14.72     12.99  

75 Clearbrook Road

    1990     32,720     100.0     648     0.11     19.80     18.70  

125 Clearbrook Road

    2002     33,000     100.0     712     0.12     21.58     17.94  

150 Clearbrook Road

    1975     74,900     100.0     1,043     0.18     13.93     12.64  

175 Clearbrook Road

    1973     98,900     100.0     1,596     0.27     16.14     14.96  

200 Clearbrook Road

    1974     94,000     98.8     1,210     0.20     13.03     11.93  

250 Clearbrook Road

    1973     155,000     97.3     1,491     0.25     9.89     8.96  

50 Executive Boulevard

    1969     45,200     91.8     489     0.08     11.78     10.48  

77 Executive Boulevard

    1977     13,000     100.0     227     0.04     17.46     16.54  

85 Executive Boulevard

    1968     31,000     99.4     561     0.09     18.21     15.58  

300 Executive Boulevard

    1970     60,000     100.0     633     0.11     10.55     9.52  

350 Executive Boulevard

    1970     15,400     98.8     270     0.05     17.75     16.76  

399 Executive Boulevard

    1962     80,000     100.0     78     0.01     0.98     0.54  

400 Executive Boulevard

    1970     42,200     100.0     688     0.12     16.30     14.45  

500 Executive Boulevard

    1970     41,600     94.3     614     0.10     15.65     13.77  

28


Table of Contents

Office/Flex Properties
(Continued)

Property Location
  Year
Built
  Net
Rentable
Area
(Sq. Ft.)
  Percentage
Leased
as of
12/31/08
(%)(a)
  2008
Base
Rent
($000's)
(b)(c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($)(c)(d)
  2008
Average
Effective
Rent
Per Sq. Ft.
($)(c)(e)
 

525 Executive Boulevard

    1972     61,700     100.0     817     0.14     13.24     12.14  

1 Westchester Plaza

    1967     25,000     100.0     339     0.06     13.56     12.88  

2 Westchester Plaza

    1968     25,000     100.0     525     0.09     21.00     19.56  

3 Westchester Plaza

    1969     93,500     50.4     590     0.10     12.52     10.72  

4 Westchester Plaza

    1969     44,700     92.6     653     0.11     15.78     13.72  

5 Westchester Plaza

    1969     20,000     100.0     298     0.05     14.90     13.70  

6 Westchester Plaza

    1968     20,000     100.0     280     0.05     14.00     12.65  

7 Westchester Plaza

    1972     46,200     100.0     748     0.13     16.19     16.00  

8 Westchester Plaza

    1971     67,200     100.0     985     0.17     14.66     12.96  

Hawthorne

                                           

200 Saw Mill River Road

    1965     51,100     92.0     649     0.11     13.80     12.38  

4 Skyline Drive

    1987     80,600     92.2     1,349     0.23     18.15     15.41  

5 Skyline Drive

    1980     124,022     99.3     1,770     0.30     14.37     12.69  

6 Skyline Drive

    1980     44,155     100.0     376     0.06     8.52     8.47  

8 Skyline Drive

    1985     50,000     98.7     877     0.15     17.77     12.64  

10 Skyline Drive

    1985     20,000     84.4     326     0.05     19.31     14.69  

11 Skyline Drive

    1989     45,000     100.0     804     0.14     17.87     17.04  

12 Skyline Drive

    1999     46,850     100.0     796     0.13     16.99     13.19  

15 Skyline Drive

    1989     55,000     100.0     1,075     0.18     19.55     16.49  

Yonkers

                                           

100 Corporate Boulevard

    1987     78,000     98.3     1,485     0.25     19.37     18.18  

200 Corporate Boulevard South

    1990     84,000     99.8     1,343     0.23     16.02     15.44  

4 Executive Plaza

    1986     80,000     100.0     1,385     0.23     17.31     14.28  

6 Executive Plaza

    1987     80,000     100.0     1,374     0.23     17.18     15.75  

1 Odell Plaza

    1980     106,000     99.9     1,435     0.24     13.55     12.76  

3 Odell Plaza

    1984     71,065     100.0     1,597     0.27     22.47     20.84  

5 Odell Plaza

    1983     38,400     89.2     456     0.08     13.31     12.09  

7 Odell Plaza

    1984     42,600     93.3     792     0.13     19.93     18.62  
                                 

Total New York Office/Flex

         
2,348,812
   
96.4
   
33,852
   
5.72
   
14.95
   
13.40
 
                                 

CONNECTICUT

                                           

Fairfield County

                                           

Stamford

                                           

419 West Avenue

    1986     88,000     100.0     1,370     0.23     15.57     13.92  

500 West Avenue

    1988     25,000     100.0     410     0.07     16.40     14.40  

550 West Avenue

    1990     54,000     100.0     855     0.14     15.83     15.72  

600 West Avenue

    1999     66,000     100.0     804     0.14     12.18     11.62  

650 West Avenue

    1998     40,000     100.0     686     0.12     17.15     16.10  
                                 

Total Connecticut Office/Flex

         
273,000
   
100.0
   
4,125
   
0.70
   
15.11
   
14.08
 
                                 

TOTAL OFFICE/FLEX PROPERTIES

         
4,811,343
   
94.3
   
57,342
   
9.70
   
12.64
   
11.10
 
                                 

29


Table of Contents

Industrial/Warehouse, Retail and Land Lease Properties

Property Location
  Year
Built
  Net
Rentable
Area
(Sq. Ft.)
  Percentage
Leased
as of
12/31/08
(%)(a)
  2008
Base
Rent
($000's)
(b)(c)
  Percentage
of Total 2008
Base Rent (%)
  2008
Average
Base Rent
Per Sq. Ft.
($)(c)(d)
  2008
Average
Effective
Rent
Per Sq. Ft.
($)(c)(e)
 

NEW YORK

                                           

Westchester County

                                           

Elmsford

                                           

1 Warehouse Lane

    1957     6,600     100.0     86     0.01     13.03     12.73  

2 Warehouse Lane

    1957     10,900     100.0     164     0.03     15.05     14.59  

3 Warehouse Lane

    1957     77,200     100.0     337     0.06     4.37     4.03  

4 Warehouse Lane

    1957     195,500     96.7     2,010     0.34     10.63     9.67  

5 Warehouse Lane

    1957     75,100     81.4     924     0.16     15.11     13.41  

6 Warehouse Lane

    1982     22,100     100.0     512     0.09     23.17     21.99  
                                 

Total Industrial/Warehouse Properties

          387,400     94.7     4,033     0.69     10.99     10.05  
                                 

Westchester County

                                           

Tarrytown

                                           

230 White Plains Road

    1984     9,300     100.0     195     0.03     20.97     19.68  

Yonkers

                                           

2 Executive Boulevard

    1986     8,000     100.0     225     0.04     28.13     28.13  
                                 

Total Retail Properties

          17,300     100.0     420     0.07     24.28     23.58  
                                 

Westchester County

                                           

Elmsford

                                           

700 Executive Boulevard

                114     0.02          

Yonkers

                                           

1 Enterprise Boulevard

                185     0.03          
                                 

Total Land Leases

                  299     0.05          
                                 

TOTAL PROPERTIES

          29,245,361     91.3     593,898     100.00     22.24     19.54  
                                 

(a)
Percentage leased includes all leases in effect as of the period end date, some of which have commencement dates in the future and leases expiring December 31, 2008 aggregating 67,473 square feet (representing 0.2 percent of the Company's total net rentable square footage) for which no new leases were signed.

(b)
Total base rent for 2008, determined in accordance with generally accepted accounting principles ("GAAP"). Substantially all of the leases provide for annual base rents plus recoveries and escalation charges based upon the tenant's proportionate share of and/or increases in real estate taxes and certain operating costs, as defined, and the pass through of charges for electrical usage.

(c)
Excludes space leased by the Company.

(d)
Base rent for 2008 divided by net rentable square feet leased at December 31, 2008.

(e)
Total base rent for 2008 minus total 2008 amortization of tenant improvements, leasing commissions and other concessions and costs, determined in accordance with GAAP, divided by net rentable square feet leased at December 31, 2008.

30


Table of Contents

PERCENTAGE LEASED

        The following table sets forth the year-end percentages of square feet leased in the Company's stabilized operating Consolidated Properties for the last five years:

December 31,
  Percentage of Square
Feet Leased (%)(a)
 

2008

    91.3  

2007

    92.7  

2006

    92.0  

2005

    91.0  

2004

    91.2  

31


Table of Contents

SIGNIFICANT TENANTS

        The following table sets forth a schedule of the Company's 50 largest tenants for the Consolidated Properties as of December 31, 2008 based upon annualized base rental revenue:

 
  Number of Properties   Annualized Base Rental Revenue($)(a)   Percentage of Company Annualized Base Rental Revenue(%)   Square Feet Leased   Percentage
Total Company
Leased Sq. Ft.(%)
  Year of Lease Expiration  

National Union Fire Insurance

    4     14,331,708     2.4     532,278     2.0     2019 (b)

Citigroup Global Markets, Inc. 

    6     14,170,242     2.4     462,077     1.8     2018 (c)

DB Services New Jersey, Inc. 

    2     10,905,426     1.8     402,068     1.5     2017  

New Cingular Wireless PCS, LLC

    3     8,995,940     1.5     405,530     1.5     2014 (d)

United States Of America-GSA

    11     8,926,642     1.5     283,685     1.1     2017 (e)

Keystone Mercy Health Plan

    2     8,761,006     1.5     303,149     1.2     2020  

Prentice-Hall, Inc. 

    1     7,694,097     1.3     474,801     1.8     2014  

Forest Research Institute, Inc. 

    2     7,463,777     1.3     202,857     0.8     2017 (f)

ICAP Securities USA, LLC

    1     6,236,408     1.0     159,834     0.6     2017  

Toys 'R' Us—NJ, Inc. 

    1     6,152,682     1.0     242,518     0.9     2012  

Lehman Brothers Holdings, Inc. 

    1     5,835,986     1.0     270,063     1.0     2018 (g)

Daiichi Sankyo, Inc. 

    2     5,783,186     1.0     180,807     0.7     2022 (h)

TD Ameritrade Online Holdings

    1     5,766,149     1.0     184,222     0.7     2015  

Morgan Stanley & Co., Inc. 

    4     5,637,926     0.9     370,113     1.4     2016 (i)

Allstate Insurance Company

    10     5,418,363     0.9     226,059     0.9     2017 (j)

KPMG, LLP

    3     5,232,195     0.9     187,994     0.7     2014 (k)

Credit Suisse (USA), Inc. 

    1     5,212,307     0.9     153,464     0.6     2012 (l)

Merrill Lynch Pierce Fenner

    2     5,108,037     0.9     298,640     1.1     2017 (m)

IBM Corporation

    3     5,007,630     0.8     310,263     1.2     2012 (n)

National Financial Services

    1     4,798,621     0.8     112,964     0.4     2012  

Montefiore Medical Center

    5     4,385,180     0.7     211,414     0.8     2019 (o)

Samsung Electronics America

    1     4,184,278     0.7     150,050     0.6     2010  

Vonage America, Inc. 

    1     3,934,000     0.7     350,000     1.3     2017  

Bank Of Tokyo-Mitsubishi, Ltd. 

    1     3,872,785     0.7     137,076     0.5     2019  

AT&T Corp. 

    1     3,805,000     0.6     275,000     1.0     2014  

Wyndham Worldwide Corporation

    1     3,773,775     0.6     150,951     0.6     2009  

Arch Insurance Company

    1     3,685,118     0.6     106,815     0.4     2024  

SSB Realty, LLC

    1     3,492,830     0.6     114,519     0.4     2009  

American Institute of Certified Public Accountants

    1     3,455,040     0.6     142,953     0.5     2012  

Wyndham Worldwide Operations

    1     3,211,626     0.5     145,983     0.6     2011  

E*Trade Financial Corporation

    1     3,124,160     0.5     106,573     0.4     2022  

Dow Jones & Company, Inc. 

    1     3,057,773     0.5     92,312     0.4     2012  

SunAmerica Asset Management

    1     2,958,893     0.5     69,621     0.3     2018  

United States Life Insurance Co. 

    1     2,880,000     0.5     180,000     0.7     2013  

Shaw Facilities, Inc. 

    3     2,828,059     0.5     138,095     0.5     2015 (p)

Oppenheimer & Co., Inc. 

    1     2,808,712     0.5     104,008     0.4     2013  

Tullett Prebon Holdings Corp. 

    1     2,787,758     0.5     113,041     0.4     2023 (q)

High Point Safety & Insurance

    2     2,760,561     0.5     116,889     0.4     2020  

Moody's Advisors, Inc. 

    1     2,671,149     0.4     91,344     0.3     2011 (r)

AAA Mid-Atlantic, Inc. 

    2     2,523,550     0.4     129,784     0.5     2022 (s)

Bunge Management Services, Inc. 

    2     2,499,661     0.4     70,283     0.3     2013 (t)

Regus Business Centre Corp. 

    2     2,488,274     0.4     79,805     0.3     2011  

J.P. Morgan Chase Bank, N.A. 

    4     2,478,137     0.4     94,010     0.4     2014 (u)

New Jersey Turnpike Authority

    1     2,455,463     0.4     100,223     0.4     2017  

Tradeweb Markets, LLC

    1     2,453,235     0.4     64,976     0.2     2017  

Natixis North America, Inc. 

    1     2,408,679     0.4     83,629     0.3     2021  

Movado Group, Inc

    1     2,317,604     0.4     93,907     0.4     2013 (v)

Nextel of New York, Inc. 

    2     2,225,875     0.4     97,435     0.4     2014 (w)

UBS Financial Services, Inc. 

    3     2,207,612     0.4     82,092     0.3     2016 (x)

Barr Laboratories, Inc. 

    1     2,119,597     0.4     89,510     0.3     2015  
                               

Totals

          237,292,712     39.9     9,545,684     36.2        
                               

See footnotes on subsequent page.

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Table of Contents

Significant Tenants Footnotes

(a)
Annualized base rental revenue is based on actual December, 2008 billings times 12. For leases whose rent commences after January 1, 2009, annualized base rental revenue is based on the first full month's billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.

(b)
394,849 square feet expire in 2012; 20,311 square feet expire in 2013; 117,118 square feet expire 2019.

(c)
38,196 square feet expire in 2009; 330,900 square feet expire in 2010; 26,834 square feet expire in 2014; 26,262 square feet expire in 2016; 39,885 square feet expire in 2018.

(d)
333,145 square feet expire in 2013; 72,385 square feet expire in 2014.

(e)
7,008 square feet expire in 2009; 4,950 square feet expire in 2010; 9,901 square feet expire in 2011; 11,216 square feet expire in 2012; 58,392 square feet expire in 2013; 4,879 square feet expire in 2014; 180,729 square feet expire in 2015; 6,610 square feet expire in 2017.

(f)
22,785 square feet expire in 2009; 180,072 square feet expire in 2017.

(g)
198,559 square feet expire in 2010; 71,504 square feet expire in 2018.

(h)
8,907 square feet expire in 2013; 171,900 square feet expire in 2022.

(i)
7,000 square feet expire in 2009; 306,170 square feet expire in 2013; 29,654 square feet expire in 2015; 27,289 square feet expire in 2016.

(j)
12,823 square feet expire in 2009; 46,555 square feet expire in 2010; 83,693 square feet expire in 2011; 29,005 square feet expire in 2013; 53,983 square feet expire in 2017.

(k)
46,440 square feet expire in 2009; 57,204 square feet expire in 2010; 77,381 square feet expire in 2012; 6,969 square feet expire in 2014.

(l)
71,511 square feet expire in 2011; 81,953 square feet expire in 2012.

(m)
4,451 square feet expire in 2009; 294,189 square feet expire in 2017.

(n)
61,864 square feet expire in 2010; 248,399 square feet expire in 2012.

(o)
6,800 square feet expire in 2009; 5,850 square feet expire in 2014; 7,200 square feet expire in 2016; 30,872 square feet expire in 2017; 36,385 square feet expire in 2018; 124,307 square feet expire in 2019.

(p)
39,060 square feet expire in 2013; 99,035 square feet expire in 2015.

(q)
12,282 square feet expire in 2011; 100,759 square feet expire in 2023.

(r)
43,344 square feet expire in 2009; 36,193 square feet expire in 2010; 11,807 square feet expire in 2011.

(s)
9,784 square feet expire in 2017; 120,000 square feet expire in 2022.

(t)
19,500 square feet expire in 2009; 50,783 square feet expire in 2013.

(u)
73,480 square feet expire in 2009; 4,650 square feet expire in 2010; 15,880 square feet expire in 2014.

(v)
3,857 square feet expire in 2009; 90,050 square feet expire in 2013.

(w)
62,435 square feet expire in 2010; 35,000 square feet expire in 2014.

(x)
21,554 square feet expire in 2010; 23,373 square feet expire in 2013; 37,165 square feet expire in 2016.

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Table of Contents

SCHEDULE OF LEASE EXPIRATIONS: ALL CONSOLIDATED PROPERTIES

        The following table sets forth a schedule of lease expirations for the total of the Company's office, office/flex, industrial/warehouse and stand-alone retail properties included in the Consolidated Properties beginning January 1, 2009, assuming that none of the tenants exercise renewal or termination options:

Year Of
Expiration
  Number Of
Leases
Expiring(a)
  Net Rentable
Area Subject
To Expiring
Leases
(Sq. Ft.)
  Percentage Of
Total Leased
Square Feet
Represented
By Expiring
Leases (%)
  Annualized
Base Rental
Revenue Under
Expiring
Leases ($)(b)
  Average
Annual Base
Rent Per Net
Rentable
Square Foot
Represented
By Expiring
Leases ($)
  Percentage Of
Annual Base
Rent Under
Expiring
Leases (%)
 

2009(c)

    269     1,713,681     6.5     40,126,762     23.42     6.8  

2010

    390     2,947,966     11.2     68,767,516     23.33     11.6  

2011

    388     3,435,293     13.1     78,888,087     22.96     13.3  

2012

    286     2,810,697     10.7     65,735,117     23.39     11.1  

2013

    303     3,567,714     13.6     76,215,519     21.36     12.8  

2014

    195     2,201,238     8.4     47,378,305     21.52     8.0  

2015

    116     2,461,226     9.4     53,308,090     21.66     9.0  

2016

    87     1,090,155     4.1     22,521,871     20.66     3.8  

2017

    78     2,322,911     8.9     55,648,059     23.96     9.3  

2018

    56     1,012,568     3.9     24,895,835     24.59     4.2  

2019

    42     932,709     3.6     18,787,008     20.14     3.1  

2020 and thereafter

    41     1,742,871     6.6     41,887,946     24.03     7.0  
                           

Totals/Weighted
Average

    2,251     26,239,029 (d)   100.0     594,160,115     22.64     100.0  
                           

(a)
Includes office, office/flex, industrial/warehouse and stand-alone retail property tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

(b)
Annualized base rental revenue is based on actual December 2008 billings times 12. For leases whose rent commences after January 1, 2009, annualized base rental revenue is based on the first full month's billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.

(c)
Includes leases expiring December 31, 2008 aggregating 58,223 square feet and representing annualized rent of $1,429,664 for which no new leases were signed.

(d)
Reconciliation to Company's total net rentable square footage is as follows:
 
  Square Feet  

Square footage leased to commercial tenants

    26,239,029  
 

Square footage used for corporate offices, management offices, building use, retail tenants, food services, other ancillary service tenants and occupancy adjustments

    466,741  

Square footage unleased

    2,539,591  
       

Total net rentable square footage (does not include land leases)

    29,245,361  
       

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Table of Contents

SCHEDULE OF LEASE EXPIRATIONS: OFFICE PROPERTIES

        The following table sets forth a schedule of lease expirations for the office properties beginning January 1, 2009, assuming that none of the tenants exercise renewal or termination options:

Year Of
Expiration
  Number Of
Leases
Expiring(a)
  Net Rentable
Area Subject
To Expiring
Leases
(Sq. Ft.)
  Percentage Of
Total Leased
Square Feet
Represented
By Expiring
Leases (%)
  Annualized
Base Rental
Revenue Under
Expiring
Leases ($)(b)
  Average
Annual Base
Rent Per Net
Rentable
Square Foot
Represented
By Expiring
Leases ($)
  Percentage Of
Annual Base
Rent Under
Expiring
Leases (%)
 

2009

    213     1,341,499     6.3     34,811,961     25.95     6.6  

2010

    298     2,226,112     10.4     58,715,332     26.38     11.1  

2011

    318     2,876,619     13.5     72,110,314     25.07     13.6  

2012

    212     2,175,585     10.2     57,369,693     26.37     10.9  

2013

    231     2,753,360     12.9     65,280,127     23.71     12.3  

2014

    150     1,764,835     8.3     42,074,527     23.84     8.0  

2015

    101     2,243,331     10.5     51,009,849     22.74     9.6  

2016

    72     759,683     3.6     18,185,916     23.94     3.4  

2017

    64     2,158,505     10.1     52,944,903     24.53     10.0  

2018

    36     754,954     3.5     21,220,087     28.11     4.0  

2019

    27     588,962     2.8     14,040,808     23.84     2.7  

2020 and thereafter

    39     1,686,536     7.9     41,173,661     24.41     7.8  
                           

Totals/Weighted Average

    1,761     21,329,981 (c)   100.0     528,937,178     24.80     100.0  
                           

(a)
Includes office tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

(b)
Annualized base rental revenue is based on actual December 2008 billings times 12. For leases whose rent commences after January 1, 2009, annualized base rental revenue is based on the first full month's billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above.

(c)
Includes leases expiring December 31, 2008 aggregating 41,559 square feet and representing annualized rent of $1,197,188 for which no new leases were signed..

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Table of Contents

SCHEDULE OF LEASE EXPIRATIONS: OFFICE/FLEX PROPERTIES

        The following table sets forth a schedule of lease expirations for the office/flex properties beginning January 1, 2009, assuming that none of the tenants exercise renewal or termination options:

Year Of
Expiration
  Number Of
Leases
Expiring(a)
  Net Rentable
Area Subject
To Expiring
Leases
(Sq. Ft.)
  Percentage Of
Total Leased
Square Feet
Represented By
Expiring
Leases(%)
  Annualized
Base Rental
Revenue Under
Expiring
Leases($)(b)
  Average
Annual Base
Rent Per Net
Rentable
Square Foot
Represented
By Expiring
Leases($)
  Percentage Of
Annual Base
Rent Under
Expiring
Leases(%)
 

2009

   
55
   
362,882
   
8.0
   
5,119,801
   
14.11
   
8.4
 

2010

   
90
   
688,904
   
15.2
   
9,641,084
   
13.99
   
15.9
 

2011

   
69
   
551,074
   
12.2
   
6,682,773
   
12.13
   
11.0
 

2012

   
73
   
628,474
   
13.9
   
8,301,036
   
13.21
   
13.7
 

2013

   
61
   
660,049
   
14.6
   
9,562,808
   
14.49
   
15.7
 

2014

   
42
   
405,858
   
9.0
   
4,691,228
   
11.56
   
7.7
 

2015

   
15
   
217,895
   
4.8
   
2,298,241
   
10.55
   
3.8
 

2016

   
13
   
195,390
   
4.3
   
2,917,594
   
14.93
   
4.8
 

2017

   
14
   
164,406
   
3.6
   
2,703,156
   
16.44
   
4.4
 

2018

   
19
   
249,614
   
5.5
   
3,450,748
   
13.82
   
5.7
 

2019

   
15
   
343,747
   
7.6
   
4,746,200
   
13.81
   
7.8
 

2020 and thereafter

   
2
   
56,335
   
1.3
   
714,285
   
12.68
   
1.1
 
                           

Totals/Weighted
Average

   
468
   
4,524,628

(c)
 
100.0
   
60,828,954
   
13.44
   
100.0
 
                           

(a)
Includes office/flex tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

(b)
Annualized base rental revenue is based on actual December 2008 billings times 12. For leases whose rent commences after January 1, 2009, annualized base rental revenue is based on the first full month's billing times 12. As annualized base rental revenue is not derived from historical GAAP results, historical results may differ from those set forth above. Includes office/flex tenants only. Excludes leases for amenity, retail, parking and month-to-month tenants. Some tenants have multiple leases.

(c)
Includes leases expiring December 31, 2008 aggregating 16,664 square feet and representing annualized rent of $232,476 for which no new leases were signed.

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Table of Contents

SCHEDULE OF LEASE EXPIRATIONS: INDUSTRIAL/WAREHOUSE PROPERTIES

        The following table sets forth a schedule of lease expirations for the industrial/warehouse properties beginning January 1, 2009, assuming that none of the tenants exercise renewal or termination options:

Year Of
Expiration
  Number Of
Leases
Expiring(a)
  Net Rentable
Area Subject
To Expiring
Leases
(Sq. Ft.)
  Percentage Of
Total Leased
Square Feet
Represented By
Expiring
Leases(%)
  Annualized
Base Rental
Revenue Under
Expiring
Leases($)(b)
  Average
Annual Base
Rent Per Net
Rentable
Square Foot
Represented
By Expiring
Leases($)
  Percentage Of
Annual Base
Rent Under
Expiring
Leases(%)
 

2010

    2     32,950     9.0     411,100     12.48     10.3  

2011

    1     7,600     2.1     95,000     12.50     2.4  

2012

    1     6,638     1.8     64,388     9.70     1.6  

2013

    11     154,305     42.0     1,372,584     8.90     34.6  

2014

    3     30,545     8.3     612,550     20.05     15.4  

2016

    2     135,082     36.8     1,418,361     10.50     35.7  
                           

Totals/Weighted
Average

    20     367,120     100.0     3,973,983     10.82     100.0  
                           

(a)
Includes industrial/warehouse tenants only. Excludes leases for amenity, retail, parking and month-to-month industrial/warehouse tenants. Some tenants have multiple leases.

(b)
Annualized base rental revenue is based on actual December 2008 billings times 12. For leases whose rent commences after January 1, 2009, annualized base rental revenue is based on the first full month's billing times 12. As annualized base rental revenue is not derived from historical GAAP results, the historical results may differ from those set forth above.

SCHEDULE OF LEASE EXPIRATIONS: STAND-ALONE RETAIL PROPERTIES

        The following table sets forth a schedule of lease expirations for the stand-alone retail properties beginning January 1, 2009 assuming that none of the tenants exercise renewal or termination options:

Year Of
Expiration
  Number Of
Leases
Expiring(a)
  Net Rentable
Area Subject
To Expiring
Leases
(Sq. Ft.)
  Percentage Of
Total Leased
Square Feet
Represented By
Expiring
Leases(%)
  Annualized
Base Rental
Revenue Under
Expiring
Leases($)(b)
  Average
Annual Base
Rent Per Net
Rentable
Square Foot
Represented
By Expiring
Leases($)
  Percentage Of
Annual Base
Rent Under
Expiring
Leases(%)
 

2009

    1     9,300     53.8     195,000     20.97     46.4  

2018

    1     8,000     46.2     225,000     28.13     53.6  
                           

Totals/Weighted
Average