UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended ~~September 30, 2014~~March 31, 2015



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

For the transition period from to

Commission File Number: 1-9044 (Duke Realty Corporation) 0-20625 (Duke Realty Limited Partnership)

DUKE REALTY CORPORATION

DUKE REALTY LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Its Charter)



Indiana (Duke Realty Corporation)		35-1740409 (Duke Realty Corporation)
Indiana (Duke Realty Limited Partnership)		35-1898425 (Duke Realty Limited Partnership)
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
600 East 96^thStreet, Suite 100 Indianapolis, Indiana		46240
(Address of Principal Executive Offices)		(Zip Code)

Registrant's Telephone Number, Including Area Code: (317) 808-6000

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.



Duke Realty Corporation	Yes x	No o	Duke Realty Limited Partnership	Yes x	No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



Duke Realty Corporation	Yes x	No o	Duke Realty Limited Partnership	Yes x	No o

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.

Duke Realty Corporation:



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o

Duke Realty Limited Partnership:



Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	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):



Duke Realty Corporation	Yes o	No x	Duke Realty Limited Partnership	Yes o	No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:



Class		Outstanding Common Shares of Duke Realty Corporation at ~~October 31, 2014~~May 1, 2015
Common Stock, $.01 par value per share		~~341,714,410~~345,048,546

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended ~~September 30, 2014~~March 31, 2015 of both Duke Realty Corporation and Duke Realty Limited Partnership. Unless stated otherwise or the context otherwise requires, references to "Duke Realty Corporation" or the "General Partner" mean Duke Realty Corporation and its consolidated subsidiaries; and references to the "Partnership" mean Duke Realty Limited Partnership and its consolidated subsidiaries. The terms the "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership.

Duke Realty Corporation is a self-administered and self-managed real estate investment trust ("REIT") and is the sole general partner of the Partnership, owning ~~98.7%~~98.9% of the common partnership interests of the Partnership ("General Partner Units") as of ~~September 30, 2014~~.March 31, 2015. The remaining ~~1.3%~~1.1% of the common partnership interests ("Limited Partner Units" and, together with the General Partner Units, the "Common Units") are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership. The General Partner also owns all of the issued and outstanding preferred partnership interests in the Partnership ("Preferred Units")., to the extent the Partnership has issued Preferred Units.

The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.

We believe combining the quarterly reports on Form 10-Q of the General Partner and the Partnership into this single report results in the following benefits:

enhances investors' understanding of the General Partner and the Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;

eliminates duplicative disclosure and provides a more streamlined and readable presentation of information since a substantial portion of the Company's disclosure applies to both the General Partner and the Partnership; and

creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

We believe it is important to understand the few differences between the General Partner and the Partnership in the context of how we operate as an interrelated consolidated company. The General Partner's only material asset is its ownership of partnership interests in the Partnership. As a result, the General Partner does not conduct business itself, other than acting as the sole general partner of the Partnership and issuing public equity from time to time. The General Partner does not issue any indebtedness, but does guarantee some of the unsecured debt of the Partnership. The Partnership holds substantially all the assets of the business, directly or indirectly, and holds the ownership interests related to certain of the Company's investments. The Partnership conducts the operations of the business and has no publicly traded equity. Except for net proceeds from equity issuances by the General Partner, which are contributed to the Partnership in exchange for General Partner Units or Preferred Units, the Partnership generates the capital required by the business through its operations, its incurrence of indebtedness and the issuance of Limited Partner Units to third parties.

Noncontrolling interests, shareholders' equity and partners' capital are the main areas of difference between the consolidated financial statements of the General Partner and those of the Partnership. The noncontrolling interests in the Partnership's financial statements include the interests in consolidated investees not wholly owned by the Partnership. The noncontrolling interests in the General Partner's financial statements include the same noncontrolling interests at the Partnership level, as well as the common limited partnership interests in the Partnership, which are accounted for as partners' capital by the Partnership.

In order to highlight the differences between the General Partner and the Partnership, there are separate sections in this report, as applicable, that separately discuss the General Partner and the Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the General Partner and the Partnership, this report refers to actions or holdings as being actions or holdings of the collective Company.

DUKE REALTY CORPORATION/DUKE REALTY LIMITED PARTNERSHIP

INDEX




			Page
Part I - Financial Information

Item 1.		Financial Statements

	Duke Realty Corporation:
		Consolidated Balance Sheets - ~~September 30, 2014~~March 31, 2015 (Unaudited) and December 31, ~~2013~~2014	3
		Consolidated Statements of Operations and Comprehensive Income (Unaudited) -Three ~~and~~ ~~Nine~~ Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	4
		Consolidated Statements of Cash Flows (Unaudited) - ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	5
		Consolidated Statement of Changes in Equity (Unaudited) - ~~Nine~~Three Months Ended ~~September 30, 2014~~March 31, 2015	6

	Duke Realty Limited Partnership:
		Consolidated Balance Sheets - ~~September 30, 2014~~March 31, 2015 (Unaudited) and December 31, ~~2013~~2014	7
		Consolidated Statements of Operations and Comprehensive Income (Unaudited) -Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	8
		Consolidated Statements of Cash Flows (Unaudited) - ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2015 and 2014 ~~and 2013~~	9
		Consolidated Statement of Changes in Equity (Unaudited) - ~~Nine~~Three Months Ended ~~September 30, 2014~~March 31, 2015	10

	Duke Realty Corporation and Duke Realty Limited Partnership:
		Notes to Consolidated Financial Statements (Unaudited)	11

Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	2423
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	4942
Item 4.		Controls and Procedures	4943

Part II - Other Information

Item 1.		Legal Proceedings	5045
Item 1A.		Risk Factors	5045
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	5145
Item 3.		Defaults Upon Senior Securities	5145
Item 4.		Mine Safety Disclosures	5145
Item 5.		Other Information	5145
Item 6.		Exhibits	5246

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except per share amounts)


	September 30, 2014			December 31, 2013
	(Unaudited)						March 31, 2015			December 31, 2014
							(Unaudited)
ASSETS
Real estate investments:
Land and improvements	$	1,477,680		$	1,438,007		$	1,383,889		$	1,412,867
Buildings and tenant improvements	5,640,103			5,531,726			4,815,764			4,986,390
Construction in progress	384,807			256,895			194,918			246,062
Investments in and advances to unconsolidated companies	316,015			342,947			341,911			293,650
Undeveloped land	542,490			590,052			473,562			499,960
	8,361,095			8,159,627			7,210,044			7,438,929
Accumulated depreciation	(1,464,968		)	(1,368,406		)	(1,176,719		)	(1,235,337		)
Net real estate investments	6,896,127			6,791,221			6,033,325			6,203,592

Real estate investments and other assets held-for-sale	35,414			57,466			840,018			725,051

Cash and cash equivalents	66,132			19,275			17,806			17,922
Accounts receivable, net of allowance of $2,586 and $1,576	32,416			26,173
Straight-line rent receivable, net of allowance of $7,074 and $9,350	131,209			118,251
Accounts receivable, net of allowance of $2,772 and $2,742							28,961			26,168
Straight-line rent receivable, net of allowance of $7,578 and $8,405							110,635			109,657
Receivables on construction contracts, including retentions	30,446			19,209			44,860			36,224
Deferred financing costs, net of accumulated amortization of $44,370 and $37,016	28,425			36,250
Deferred leasing and other costs, net of accumulated amortization of $266,276 and $394,049	441,338			466,979
Deferred financing costs, net of accumulated amortization of $32,742 and $38,863							36,427			38,734
Deferred leasing and other costs, net of accumulated amortization of $264,027 and $259,883							374,862			387,635
Escrow deposits and other assets	222,688			217,790			243,610			209,856
	$	7,884,195		$	7,752,614		$	7,730,504		$	7,754,839
LIABILITIES AND EQUITY
Indebtedness:
Secured debt	$	1,003,851		$	1,100,124		$	877,751		$	942,478
Unsecured debt	3,064,696			3,066,252			3,113,617			3,364,161
Unsecured line of credit	140,000			88,000			453,000			106,000
	4,208,547			4,254,376			4,444,368			4,412,639

Liabilities related to real estate investments held-for-sale	705			2,075			65,105			59,092

Construction payables and amounts due subcontractors, including retentions	93,080			69,380			46,723			69,470
Accrued real estate taxes	103,573			74,696			70,130			76,308
Accrued interest	34,086			52,824			34,634			55,110
Other accrued expenses	45,353			67,495			38,766			62,632
Other liabilities	121,249			142,589			98,532			95,566
Tenant security deposits and prepaid rents	48,392			44,550			38,063			44,142
Total liabilities	4,654,985			4,707,985			4,836,321			4,874,959
Shareholders' equity:
Preferred shares ($.01 par value); 5,000 shares authorized; 1,331 and 1,791 shares issued and outstanding	332,794			447,683
Common shares ($.01 par value); 600,000 and 400,000 shares authorized; 341,710 and 326,399 shares issued and outstanding	3,417			3,264
Common shares ($.01 par value); 600,000 shares authorized; 345,046 and 344,112 shares issued and outstanding							3,450			3,441
Additional paid-in capital	4,891,763			4,620,964			4,952,319			4,944,800
Accumulated other comprehensive income	3,313			4,119			2,739			3,026
Distributions in excess of net income	(2,029,080		)	(2,062,787		)	(2,084,810		)	(2,090,942		)
Total shareholders' equity	3,202,207			3,013,243			2,873,698			2,860,325
Noncontrolling interests	27,003			31,386			20,485			19,555
Total equity	3,229,210			3,044,629			2,894,183			2,879,880
	$	7,884,195		$	7,752,614		$	7,730,504		$	7,754,839

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

For the three ~~and nine~~ months ended ~~September 30,~~March 31,

(in thousands, except per share amounts)

(Unaudited)


	Three Months Ended						Nine Months Ended
	2014			2013			2014			2013			2015			2014
Revenues:
Rental and related revenue	$	231,322		$	221,655		$	702,190		$	646,842		$	214,615		$	208,646
General contractor and service fee revenue	59,739			62,807			185,072			161,004			52,820			55,820
	291,061			284,462			887,262			807,846			267,435			264,466
Expenses:
Rental expenses	38,317			41,159			128,522			117,450			36,124			42,041
Real estate taxes	32,861			29,433			97,292			88,042			30,779			29,203
General contractor and other services expenses	52,528			59,392			163,657			142,925			47,023			47,271
Depreciation and amortization	95,000			101,191			290,700			289,508			81,903			88,298
	218,706			231,175			680,171			637,925			195,829			206,813
Other operating activities:
Equity in earnings (loss) of unconsolidated companies	19,178			(27		)	82,325			50,442
Equity in earnings of unconsolidated companies													6,246			2,321
Gain on sale of properties	47,143			—			133,617			1,108			23,484			15,853
Gain on land sales	3,167			3,365			7,208			3,365			5,425			152
Undeveloped land carrying costs	(1,773		)	(2,108		)	(5,755		)	(6,837		)
Impairment charges	(6,368		)	—			(8,891		)	(3,777		)
Other operating expenses	(56		)	(47		)	(277		)	(150		)	(1,557		)	(2,216		)
General and administrative expenses	(10,573		)	(10,373		)	(35,632		)	(33,225		)	(17,004		)	(14,694		)
	50,718			(9,190		)	172,595			10,926			16,594			1,416
Operating income	123,073			44,097			379,686			180,847			88,200			59,069
Other income (expenses):
Interest and other income, net	356			145			936			1,219			338			351
Interest expense	(53,343		)	(56,618		)	(163,479		)	(171,365		)	(49,610		)	(49,261		)
Loss on debt extinguishment	—			—			(139		)	—
Acquisition-related activity	(110		)	(726		)	(871		)	(2,506		)	(28		)	(14		)
Income (loss) from continuing operations before income taxes	69,976			(13,102		)	216,133			8,195
Income tax benefit (expense)	442			4,500			(2,595		)	4,500
Income (loss) from continuing operations	70,418			(8,602		)	213,538			12,695
Income from continuing operations before income taxes													38,900			10,145
Income tax expense													(1,484		)	(2,674		)
Income from continuing operations													37,416			7,471
Discontinued operations:
Income before gain on sales	20			1,498			222			1,545			10,178			1,325
Gain on sale of depreciable properties, net of tax	1,119			8,441			19,895			101,052			18,375			16,775
Income from discontinued operations	1,139			9,939			20,117			102,597			28,553			18,100
Net income	71,557			1,337			233,655			115,292			65,969			25,571
Dividends on preferred shares	(6,072		)	(7,356		)	(20,155		)	(24,261		)	—			(7,037		)
Adjustments for redemption/repurchase of preferred shares	(3,196		)	—			(2,713		)	(5,932		)	—			483
Net income attributable to noncontrolling interests	(756		)	(48		)	(2,883		)	(1,629		)	(725		)	(334		)
Net income (loss) attributable to common shareholders	$	61,533		$	(6,067	)	$	207,904		$	83,470
Basic net income (loss) per common share:
Net income attributable to common shareholders													$	65,244		$	18,683
Basic net income per common share:
Continuing operations attributable to common shareholders	$	0.18		$	(0.05	)	$	0.56		$	(0.06	)	$	0.11		$	0.00
Discontinued operations attributable to common shareholders	—			0.03			0.06			0.31			0.08			0.06
Total	$	0.18		$	(0.02	)	$	0.62		$	0.25		$	0.19		$	0.06
Diluted net income (loss) per common share:
Diluted net income per common share:
Continuing operations attributable to common shareholders	$	0.18		$	(0.05	)	$	0.56		$	(0.06	)	$	0.11		$	0.00
Discontinued operations attributable to common shareholders	—			0.03			0.06			0.31			0.08			0.06
Total	$	0.18		$	(0.02	)	$	0.62		$	0.25		$	0.19		$	0.06
Weighted average number of common shares outstanding	341,165			324,895			333,393			320,810			344,597			327,106
Weighted average number of common shares and potential dilutive securities	345,826			324,895			338,057			325,380			348,653			331,716

Comprehensive income:
Net income	$	71,557		$	1,337		$	233,655		$	115,292		$	65,969		$	25,571
Other comprehensive income (loss):
Other comprehensive loss:
Amortization of interest contracts	(287		)	(116		)	(861		)	567			(287		)	(287		)
Other	—			(54		)	55			522
Total other comprehensive income (loss)	(287		)	(170		)	(806		)	1,089
Total other comprehensive loss													(287		)	(287		)
Comprehensive income	$	71,270		$	1,167		$	232,849		$	116,381		$	65,682		$	25,284

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the ~~nine~~three months ended~~September 30,~~ March 31,

(in thousands)

(Unaudited)


	2014			2013			2015			2014
Cash flows from operating activities:
Net income	$	233,655		$	115,292		$	65,969		$	25,571
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements	216,963			214,118			66,835			71,393
Amortization of deferred leasing and other costs	73,942			89,359			18,585			26,871
Amortization of deferred financing costs	7,423			9,913			2,130			2,499
Straight-line rental income and expense, net	(16,419		)	(12,421		)	(8,819		)	(5,974		)
Impairment charges	8,891			3,777
Gain on acquisitions	—			(962		)
Gains on land and depreciated property sales	(163,689		)	(105,525		)	(47,284		)	(30,106		)
Third-party construction contracts, net	(4,397		)	27,117			(1,240		)	411
Other accrued revenues and expenses, net	18,059			11,367			(52,033		)	(33,911		)
Operating distributions received less than equity in earnings from unconsolidated companies	(53,429		)	(34,411		)
Operating distributions received in excess of (less than) equity in earnings from unconsolidated companies							(1,465		)	2,383
Net cash provided by operating activities	320,999			317,624			42,678			59,137
Cash flows from investing activities:
Development of real estate investments	(385,088		)	(320,698		)	(66,754		)	(105,413		)
Acquisition of real estate investments and related intangible assets	(94,032		)	(372,934		)	(890		)	(17,224		)
Acquisition of undeveloped land	(37,579		)	(30,101		)	—			(2,270		)
Second generation tenant improvements, leasing costs and building improvements	(69,475		)	(60,052		)	(17,496		)	(19,631		)
Other deferred leasing costs	(24,948		)	(26,647		)	(13,122		)	(8,706		)
Other assets	514			(14,725		)	13,283			5,539
Proceeds from land and depreciated property sales, net	386,215			330,740			109,892			70,673
Capital distributions from unconsolidated companies	70,054			106,306			2,164			2,546
Capital contributions and advances to unconsolidated companies	(5,874		)	(38,959		)	(49,689		)	(420		)
Net cash used for investing activities	(160,213		)	(427,070		)	(22,612		)	(74,906		)
Cash flows from financing activities:
Proceeds from issuance of common shares, net	255,962			632,531			4,882			23,783
Payments for redemption/repurchase of preferred shares	(113,797		)	(177,955		)	—			(17,656		)
Proceeds from unsecured debt	—			500,000
Payments on unsecured debt	(1,556		)	(426,462		)	(250,544		)	(511		)
Proceeds from secured debt financings	—			1,933
Payments on secured indebtedness including principal amortization	(93,036		)	(112,097		)	(63,151		)	(21,471		)
Borrowings (payments) on line of credit, net	52,000			(75,000		)
Borrowings on line of credit, net							347,000			92,000
Distributions to common shareholders	(169,917		)	(164,811		)	(58,607		)	(55,596		)
Distributions to preferred shareholders	(20,789		)	(24,261		)	—			(7,140		)
Distributions to noncontrolling interests, net	(2,044		)	(2,692		)	(706		)	(770		)
Buyout of noncontrolling interests	(7,803		)	—
Change in book overdrafts	(12,450		)	(44,225		)	1,054			3,629
Deferred financing costs	(499		)	(7,292		)	(110		)	(300		)
Net cash provided by (used for) financing activities	(113,929		)	99,669			(20,182		)	15,968
Net increase (decrease) in cash and cash equivalents	46,857			(9,777		)	(116		)	199
Cash and cash equivalents at beginning of period	19,275			33,889			17,922			19,275
Cash and cash equivalents at end of period	$	66,132		$	24,112		$	17,806		$	19,474

Non-cash investing and financing activities:
Assumption of indebtedness and other liabilities in real estate acquisitions	$	54		$	106,555		$	—		$	76
Carrying amount of pre-existing ownership interest in acquired property	$	—		$	630
Conversion of Limited Partner Units to common shares	$	56		$	338		$	350		$	—

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Equity

For the ~~nine~~three months ended~~September 30, 2014~~ March 31, 2015

(in thousands, except per share data)

(Unaudited)

Common Shareholders

Preferred
Stock

Common
Stock

Additional
Paid-in
Capital

Accumulated
Other
Comprehensive
Income

Distributions
in Excess of
Net Income

Non-
Controlling
Interests
Total
Balance at December 31, 2013 $ 447,683
$ 3,264
$ 4,620,964
$ 4,119
$ (2,062,787 ) $ 31,386
$ 3,044,629
Net income —
—
—
—
230,772
2,883
233,655
Other comprehensive income (loss) —
—
—
(806 ) —
—
(806 )
Issuance of common shares —
146
255,816
—
—
—
255,962
Stock-based compensation plan activity —
7
11,122
—
(1,643 ) —
9,486
Conversion of Limited Partner Units —
—
56
—
—
(56 ) —
Distributions to preferred shareholders —
—
—
—
(20,155 ) —
(20,155 )
Redemption/repurchase of preferred shares (114,889 ) —
3,805
—
(2,713 ) —
(113,797 )
Distributions to common shareholders ($0.51 per share) —
—
—
—
(169,917 ) —
(169,917 )
Distributions to noncontrolling interests, net —
—
—
—
—
(2,044 ) (2,044 )
Buyout of noncontrolling interests —
—
—
—
(2,637 ) (5,166 ) (7,803 )
Balance at September 30, 2014 $ 332,794
$ 3,417
$ 4,891,763
$ 3,313
$ (2,029,080 ) $ 27,003
$ 3,229,210



	Common Shareholders
		Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income			Distributions in Excess of Net Income			Noncontrolling Interests			Total
Balance at December 31, 2014		$	3,441	$	4,944,800	$	3,026		$	(2,090,942	)	$	19,555		$	2,879,880
Net income		—		—		—			65,244			725			65,969
Other comprehensive loss		—		—		(287		)	—			—			(287		)
Issuance of common shares		2		4,880		—			—			—			4,882
Stock-based compensation plan activity		6		2,290		—			(505		)	1,261			3,052
Conversion of Limited Partner Units		1		349		—			—			(350		)	—
Distributions to common shareholders ($0.17 per share)		—		—		—			(58,607		)	—			(58,607		)
Distributions to noncontrolling interests, net		—		—		—			—			(706		)	(706		)
Balance at March 31, 2015		$	3,450	$	4,952,319	$	2,739		$	(2,084,810	)	$	20,485		$	2,894,183

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)


	September 30, 2014			December 31, 2013
	(Unaudited)						March 31, 2015			December 31, 2014
							(Unaudited)
ASSETS
Real estate investments:
Land and improvements	$	1,477,680		$	1,438,007		$	1,383,889		$	1,412,867
Buildings and tenant improvements	5,640,103			5,531,726			4,815,764			4,986,390
Construction in progress	384,807			256,895			194,918			246,062
Investments in and advances to unconsolidated companies	316,015			342,947			341,911			293,650
Undeveloped land	542,490			590,052			473,562			499,960
	8,361,095			8,159,627			7,210,044			7,438,929
Accumulated depreciation	(1,464,968		)	(1,368,406		)	(1,176,719		)	(1,235,337		)
Net real estate investments	6,896,127			6,791,221			6,033,325			6,203,592

Real estate investments and other assets held-for-sale	35,414			57,466			840,018			725,051

Cash and cash equivalents	66,132			19,275			17,806			17,922
Accounts receivable, net of allowance of $2,586 and $1,576	32,416			26,173
Straight-line rent receivable, net of allowance of $7,074 and $9,350	131,209			118,251
Accounts receivable, net of allowance of $2,772 and $2,742							28,961			26,168
Straight-line rent receivable, net of allowance of $7,578 and $8,405							110,635			109,657
Receivables on construction contracts, including retentions	30,446			19,209			44,860			36,224
Deferred financing costs, net of accumulated amortization of $44,370 and $37,016	28,425			36,250
Deferred leasing and other costs, net of accumulated amortization of $266,276 and $394,049	441,338			466,979
Deferred financing costs, net of accumulated amortization of $32,742 and $38,863							36,427			38,734
Deferred leasing and other costs, net of accumulated amortization of $264,027 and $259,883							374,862			387,635
Escrow deposits and other assets	222,688			217,790			243,610			209,856
	$	7,884,195		$	7,752,614		$	7,730,504		$	7,754,839
LIABILITIES AND EQUITY
Indebtedness:
Secured debt	$	1,003,851		$	1,100,124		$	877,751		$	942,478
Unsecured debt	3,064,696			3,066,252			3,113,617			3,364,161
Unsecured line of credit	140,000			88,000			453,000			106,000
	4,208,547			4,254,376			4,444,368			4,412,639

Liabilities related to real estate investments held-for-sale	705			2,075			65,105			59,092

Construction payables and amounts due subcontractors, including retentions	93,080			69,380			46,723			69,470
Accrued real estate taxes	103,573			74,696			70,130			76,308
Accrued interest	34,086			52,824			34,634			55,110
Other accrued expenses	45,597			67,739			38,943			62,812
Other liabilities	121,249			142,589			98,532			95,566
Tenant security deposits and prepaid rents	48,392			44,550			38,063			44,142
Total liabilities	4,655,229			4,708,229			4,836,498			4,875,139
Partners' equity:
General Partner:
Common equity (341,710 and 326,399 General Partner Units issued and outstanding)	2,870,038			2,565,370
Preferred equity (1,331 and 1,791 Preferred Units issued and outstanding)	332,785			447,683
Common equity (345,046 and 344,112 General Partner Units issued and outstanding)							2,870,782			2,857,119
	3,202,823			3,013,053			2,870,782			2,857,119
Limited Partners' common equity (4,377 and 4,387 Limited Partner Units issued and outstanding)	20,625			20,158
Limited Partners' common equity (3,650 and 3,717 Limited Partner Units issued and outstanding)							18,255			17,289
Accumulated other comprehensive income	3,313			4,119			2,739			3,026
Total partners' equity	3,226,761			3,037,330			2,891,776			2,877,434
Noncontrolling interests	2,205			7,055			2,230			2,266
Total equity	3,228,966			3,044,385			2,894,006			2,879,700
	$	7,884,195		$	7,752,614		$	7,730,504		$	7,754,839

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

For the three ~~and nine~~ months ended ~~September 30,~~March 31,

(in thousands, except per unit amounts)

(Unaudited)


	Three Months Ended						Nine Months Ended
	2014			2013			2014			2013			2015			2014
Revenues:
Rental and related revenue	$	231,322		$	221,655		$	702,190		$	646,842		$	214,615		$	208,646
General contractor and service fee revenue	59,739			62,807			185,072			161,004			52,820			55,820
	291,061			284,462			887,262			807,846			267,435			264,466
Expenses:
Rental expenses	38,317			41,159			128,522			117,450			36,124			42,041
Real estate taxes	32,861			29,433			97,292			88,042			30,779			29,203
General contractor and other services expenses	52,528			59,392			163,657			142,925			47,023			47,271
Depreciation and amortization	95,000			101,191			290,700			289,508			81,903			88,298
	218,706			231,175			680,171			637,925			195,829			206,813
Other operating activities:
Equity in earnings (loss) of unconsolidated companies	19,178			(27		)	82,325			50,442
Equity in earnings of unconsolidated companies													6,246			2,321
Gain on sale of properties	47,143			—			133,617			1,108			23,484			15,853
Gain on land sales	3,167			3,365			7,208			3,365			5,425			152
Undeveloped land carrying costs	(1,773		)	(2,108		)	(5,755		)	(6,837		)
Impairment charges	(6,368		)	—			(8,891		)	(3,777		)
Other operating expenses	(56		)	(47		)	(277		)	(150		)	(1,557		)	(2,216		)
General and administrative expenses	(10,573		)	(10,373		)	(35,632		)	(33,225		)	(17,004		)	(14,694		)
	50,718			(9,190		)	172,595			10,926			16,594			1,416
Operating income	123,073			44,097			379,686			180,847			88,200			59,069
Other income (expenses):
Interest and other income, net	356			145			936			1,219			338			351
Interest expense	(53,343		)	(56,618		)	(163,479		)	(171,365		)	(49,610		)	(49,261		)
Loss on debt extinguishment	—			—			(139		)	—
Acquisition-related activity	(110		)	(726		)	(871		)	(2,506		)	(28		)	(14		)
Income (loss) from continuing operations before income taxes	69,976			(13,102		)	216,133			8,195
Income tax benefit (expense)	442			4,500			(2,595		)	4,500
Income (loss) from continuing operations	70,418			(8,602		)	213,538			12,695
Income from continuing operations before income taxes													38,900			10,145
Income tax expense													(1,484		)	(2,674		)
Income from continuing operations													37,416			7,471
Discontinued operations:
Income before gain on sales	20			1,498			222			1,545			10,178			1,325
Gain on sale of depreciable properties, net of tax	1,119			8,441			19,895			101,052			18,375			16,775
Income from discontinued operations	1,139			9,939			20,117			102,597			28,553			18,100
Net income	71,557			1,337			233,655			115,292			65,969			25,571
Distributions on Preferred Units	(6,072		)	(7,356		)	(20,155		)	(24,261		)	—			(7,037		)
Adjustments for redemption/repurchase of Preferred Units	(3,196		)	—			(2,713		)	(5,932		)	—			483
Net (income) loss attributable to noncontrolling interests	39			(140		)	(145		)	(487		)
Net income (loss) attributable to common unitholders	$	62,328		$	(6,159	)	$	210,642		$	84,612
Basic net income (loss) per Common Unit:
Net income attributable to noncontrolling interests													(26		)	(84		)
Net income attributable to common unitholders													$	65,943		$	18,933
Basic net income per Common Unit:
Continuing operations attributable to common unitholders	$	0.18		$	(0.05	)	$	0.56		$	(0.06	)	$	0.11		$	0.00
Discontinued operations attributable to common unitholders	—			0.03			0.06			0.31			0.08			0.06
Total	$	0.18		$	(0.02	)	$	0.62		$	0.25		$	0.19		$	0.06
Diluted net income (loss) per Common Unit:
Diluted net income per Common Unit:
Continuing operations attributable to common unitholders	$	0.18		$	(0.05	)	$	0.56		$	(0.06	)	$	0.11		$	0.00
Discontinued operations attributable to common unitholders	—			0.03			0.06			0.31			0.08			0.06
Total	$	0.18		$	(0.02	)	$	0.62		$	0.25		$	0.19		$	0.06
Weighted average number of Common Units outstanding	345,545			329,283			337,777			325,203			348,292			331,493
Weighted average number of Common Units and potential dilutive securities	345,826			329,283			338,057			325,380			348,653			331,716

Comprehensive income:
Net income	$	71,557		$	1,337		$	233,655		$	115,292		$	65,969		$	25,571
Other comprehensive income (loss):
Other comprehensive loss:
Amortization of interest contracts	(287		)	(116		)	(861		)	567			(287		)	(287		)
Other	—			(54		)	55			522
Total other comprehensive income (loss)	(287		)	(170		)	(806		)	1,089
Total other comprehensive loss													(287		)	(287		)
Comprehensive income	$	71,270		$	1,167		$	232,849		$	116,381		$	65,682		$	25,284

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the ~~nine~~three months ended~~September 30,~~ March 31,

(in thousands)

(Unaudited)


	2014			2013			2015			2014
Cash flows from operating activities:
Net income	$	233,655		$	115,292		$	65,969		$	25,571
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements	216,963			214,118			66,835			71,393
Amortization of deferred leasing and other costs	73,942			89,359			18,585			26,871
Amortization of deferred financing costs	7,423			9,913			2,130			2,499
Straight-line rental income and expense, net	(16,419		)	(12,421		)	(8,819		)	(5,974		)
Impairment charges	8,891			3,777
Gain on acquisitions	—			(962		)
Gains on land and depreciated property sales	(163,689		)	(105,525		)	(47,284		)	(30,106		)
Third-party construction contracts, net	(4,397		)	27,117			(1,240		)	411
Other accrued revenues and expenses, net	18,059			11,405			(52,036		)	(33,911		)
Operating distributions received less than equity in earnings from unconsolidated companies	(53,429		)	(34,411		)
Operating distributions received in excess of (less than) equity in earnings from unconsolidated companies							(1,465		)	2,383
Net cash provided by operating activities	320,999			317,662			42,675			59,137
Cash flows from investing activities:
Development of real estate investments	(385,088		)	(320,698		)	(66,754		)	(105,413		)
Acquisition of real estate investments and related intangible assets	(94,032		)	(372,934		)	(890		)	(17,224		)
Acquisition of undeveloped land	(37,579		)	(30,101		)	—			(2,270		)
Second generation tenant improvements, leasing costs and building improvements	(69,475		)	(60,052		)	(17,496		)	(19,631		)
Other deferred leasing costs	(24,948		)	(26,647		)	(13,122		)	(8,706		)
Other assets	514			(14,725		)	13,283			5,539
Proceeds from land and depreciated property sales, net	386,215			330,740			109,892			70,673
Capital distributions from unconsolidated companies	70,054			106,306			2,164			2,546
Capital contributions and advances to unconsolidated companies	(5,874		)	(38,959		)	(49,689		)	(420		)
Net cash used for investing activities	(160,213		)	(427,070		)	(22,612		)	(74,906		)
Cash flows from financing activities:
Contributions from the General Partner	255,962			632,531			4,885			23,783
Payments for redemption/repurchase of Preferred Units	(113,797		)	(177,955		)	—			(17,656		)
Proceeds from unsecured debt	—			500,000
Payments on unsecured debt	(1,556		)	(426,462		)	(250,544		)	(511		)
Proceeds from secured debt financings	—			1,933
Payments on secured indebtedness including principal amortization	(93,036		)	(112,097		)	(63,151		)	(21,471		)
Borrowings (payments) on line of credit, net	52,000			(75,000		)
Borrowings on line of credit, net							347,000			92,000
Distributions to common unitholders	(172,153		)	(167,092		)	(59,239		)	(56,342		)
Distributions to preferred unitholders	(20,789		)	(24,261		)	—			(7,140		)
Contributions from (distributions to) noncontrolling interests, net	192			(449		)	(74		)	(24		)
Buyout of noncontrolling interests	(7,803		)	—
Change in book overdrafts	(12,450		)	(44,225		)	1,054			3,629
Deferred financing costs	(499		)	(7,292		)	(110		)	(300		)
Net cash provided by (used for) financing activities	(113,929		)	99,631			(20,179		)	15,968
Net increase (decrease) in cash and cash equivalents	46,857			(9,777		)	(116		)	199
Cash and cash equivalents at beginning of period	19,275			33,889			17,922			19,275
Cash and cash equivalents at end of period	$	66,132		$	24,112		$	17,806		$	19,474

Non-cash investing and financing activities:
Assumption of indebtedness and other liabilities in real estate acquisitions	$	54		$	106,555		$	—		$	76
Carrying amount of pre-existing ownership interest in acquired property	$	—		$	630
Conversion of Limited Partner Units to common shares of the General Partner	$	56		$	338		$	350		$	—

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statement of Changes in Equity

For the ~~nine~~three months ended~~September 30, 2014~~ March 31, 2015

(in thousands, except per unit data)

(Unaudited)

Common Unitholders
Limited Accumulated
General Partner Partners' Other Total
Common Equity Preferred Equity Common Equity
Comprehensive
Income
Partners' Equity
Noncontrolling
Interests
Total Equity
Balance at December 31, 2013 $ 2,565,370
$ 447,683
$ 20,158
$ 4,119
$ 3,037,330
$ 7,055
$ 3,044,385
Net income 210,617
20,155
2,738
—
233,510
145
233,655
Other comprehensive income (loss) —
—
—
(806 ) (806 ) —
(806 )
Capital contribution from the General Partner 255,962
—
—
—
255,962
—
255,962
Stock-based compensation plan activity 9,486
—
—
—
9,486
—
9,486
Conversion of Limited Partner Units to common shares of the General Partner 56
—
(56 ) —
—
—
—
Distributions to Preferred Unitholders —
(20,155 ) —
—
(20,155 ) —
(20,155 )
Redemption/repurchase of Preferred Units 1,101
(114,898 ) —
—
(113,797 ) —
(113,797 )
Distributions to Partners ($0.51 per Common Unit) (169,917 ) —
(2,236 ) —
(172,153 ) —
(172,153 )
Contributions from noncontrolling interests, net —
—
—
—
—
192
192
Buyout of noncontrolling interests (2,637 ) —
21
—
(2,616 ) (5,187 ) (7,803 )
Balance at September 30, 2014 $ 2,870,038
$ 332,785
$ 20,625
$ 3,313
$ 3,226,761
$ 2,205
$ 3,228,966



	Common Unitholders
	General			Limited			Accumulated
	Partner's			Partners'			Other			Total
	Common Equity			Common Equity			Comprehensive Income			Partners' Equity			Noncontrolling Interests			Total Equity
Balance at December 31, 2014	$	2,857,119		$	17,289		$	3,026		$	2,877,434		$	2,266		$	2,879,700
Net income	65,244			699			—			65,943			26			65,969
Other comprehensive income loss	—			—			(287		)	(287		)	—			(287		)
Capital contribution from the General Partner	4,885			—			—			4,885			—			4,885
Stock-based compensation plan activity	1,791			1,261			—			3,052			—			3,052
Conversion of Limited Partner Units to common shares of the General Partner	350			(350		)	—			—			—			—
Distributions to Partners ($0.17 per Common Unit)	(58,607		)	(632		)	—			(59,239		)	—			(59,239		)
Distributions to noncontrolling interests, net	—			(12		)	—			(12		)	(62		)	(74		)
Balance at March 31, 2015	$	2,870,782		$	18,255		$	2,739		$	2,891,776		$	2,230		$	2,894,006

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General Basis of Presentation

The interim consolidated financial statements included herein have been prepared by Duke Realty Corporation (the "General Partner") and Duke Realty Limited Partnership (the "Partnership"). In this Report, unless the context indicates otherwise, the terms "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership. The ~~2013~~2014 year-end consolidated balance sheet data included in this Quarterly Report on Form 10-Q (this "Report") was derived from the audited financial statements in the combined Annual Report on Form 10-K of the General Partner and the Partnership for the year ended December 31, ~~2013~~,2014, but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). The financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Rule 10-01 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses during the reporting period. Our actual results could differ from those estimates and assumptions. These financial statements should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations included herein and the consolidated financial statements and notes thereto included in the combined Annual Report on Form 10-K of the General Partner and the Partnership for the year ended December 31, ~~2013~~.2014.

The General Partner was formed in 1985, and we believe that it qualifies as a real estate investment trust ("REIT") under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"). The Partnership was formed on October 4, 1993, when the General Partner contributed all of its properties and related assets and liabilities, together with the net proceeds from an offering of additional shares of its common stock, to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972.

The General Partner is the sole general partner of the Partnership, owning approximately ~~98.7%~~98.9% of the common partnership interests of the Partnership ("General Partner Units") at ~~September 30, 2014~~.March 31, 2015. The remaining ~~1.3%~~1.1% of the common partnership interests ("Limited Partner Units" and, together with the General Partner Units, the "Common Units") are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership. The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.

Limited Partners have the right to redeem their Limited Partner Units, subject to certain restrictions. Pursuant to the Fifth Amended and Restated Agreement of Limited Partnership, as amended (the "Partnership Agreement"), ~~as amended,~~ the General Partner is obligated to redeem the Limited Partner Units in shares of its common stock, unless it determines in its reasonable discretion that the issuance of shares of its common stock could cause it to fail to qualify as a REIT. Each Limited Partner Unit shall be redeemed for one share of the General Partner's common stock, or, in the event that the issuance of shares could cause the General Partner to fail to qualify as a REIT, cash equal to the fair market value of one share of the General Partner's common stock at the time of redemption, in each case, subject to certain adjustments described in the Partnership Agreement. The Limited Partner Units are not required, per the terms of the Partnership Agreement, to be redeemed in registered shares of the General Partner. The General Partner also owns preferred partnership interests in the Partnership ("Preferred Units")., to the extent the Partnership has issued Preferred Units.

~~We own~~As of March 31, 2015, we owned and ~~operate~~operated a portfolio primarily consisting of industrial, office and medical office properties and provide real estate services to third-party owners. Substantially all of our Rental Operations (see Note 10) are conducted through the Partnership. We conduct our Service Operations (see Note 10) through Duke Realty Services, LLC, Duke Realty Services Limited Partnership and Duke Construction Limited Partnership ("DCLP"), which are consolidated entities that are 100% owned by a combination of the General Partner and the Partnership. DCLP is owned through a taxable REIT subsidiary. The consolidated financial statements include our accounts and the accounts of our majority-owned or controlled subsidiaries.

2. New Accounting Pronouncements

Discontinued Operations

In April 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ("ASU 2014-08"). Under ASU 2014-08, only disposals representing a strategic shift in operations (for example, a disposal of a major geographic area or a major line of business) ~~will be~~are presented as discontinued operations, while significant continuing involvement with such dispositions ~~will~~are no longer ~~preclude~~precluded from discontinued operations classification. As ~~current GAAP~~the prior accounting rules generally ~~requires~~required companies that sell a single investment property to report the sale as a discontinued operation, the implementation of ASU 2014-08 ~~will result~~resulted in us reporting only sales that represent strategic shifts in operations as discontinued operations. ASU 2014-08 ~~will~~ also ~~require~~requires additional disclosures for discontinued operations as well as for material property dispositions that do not meet the new criteria for discontinued operation classification.

ASU 2014-08 is effective for fiscal years beginning on or after December 15, 2014, with early adoption permitted only for disposals or classifications as held-for-sale that have not been reported in financial statements previously issued or available for issuance. We adopted ASU 2014-08 early and have applied it with respect to such items since April 1, 2014.

Revenue Recognition

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing GAAP revenue recognition guidance as well as impact the existing GAAP guidance governing the sale of nonfinancial assets. The standard’s core principle is that a company will recognize revenue when it satisfies performance obligations, by transferring promised goods or services to customers, in an amount that reflects the consideration to which the company expects to be entitled in exchange for fulfilling those performance obligations. In doing so, companies will need to exercise more judgment and make more estimates than under existing GAAP guidance.

ASU 2014-09 will be effective for public entities for annual and interim reporting periods beginning after December 15, 2016 and early adoption is not permitted. An exposure draft has been issued by the FASB which proposes delaying the effective date for one year. In addition to the deferral of the effective date, early adoption would be permitted under the exposure draft in periods ending after December 15, 2016. The changes to the effective date and early adoption are still subject to final approval. ASU 2014-09 allows for either recognizing the cumulative effect of application (i) at the start of the earliest comparative period presented (with the option to use any or all of three practical expedients) or (ii) at the date of initial application, with no restatement of comparative periods presented.

We have not yet selected a transition method nor have we determined the effect of ASU 2014-09 on our ongoing financial reporting.

Consolidation

In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis ("ASU 2015-02"). ASU 2015-02 makes targeted amendments to the current consolidation guidance and ends the deferral granted to investment companies from applying the existing variable interest entity guidance. ASU 2015-02 will be effective for public entities for annual and interim reporting periods beginning after December 15, 2015 with early adoption

allowed in any interim period. We have not yet selected a transition method nor have we determined the effect of ASU 2015-02 on our ongoing financial reporting.

Debt Issuance Costs

In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs ("ASU 2015-03"). ASU 2015-03 will require that debt issuance costs related to a recognized debt liability, which are currently presented as deferred charges (assets), be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability. ASU 2015-03 will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and for interim periods within those fiscal years.

3. Reclassifications

Certain amounts in the accompanying consolidated financial statements for ~~2013~~2014 have been reclassified to conform to the ~~2014~~2015 consolidated financial statement presentation.

4. Variable Interest Entities

~~In June 2014, one of our~~We have equity interests in unconsolidated joint ventures ~~which~~that primarily own and operate rental properties or hold land for development. We consolidate those joint ventures that are considered to be variable interest entities ("VIE"s) where we ~~had previously~~are the primary beneficiary. We analyze our investments in joint ventures to determine if the joint venture is considered a VIE and would require consolidation. We (i) evaluate the sufficiency of the total equity investment at risk, (ii) review the voting rights and decision-making authority of the equity investment holders as a group and whether there are any guaranteed returns, protection against losses, or capping of residual returns within the group and (iii) establish whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination.

To the extent that we own interests in a VIE and we (i) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent we own interest in a ~~variable interest entity ("VIE"), sold its sole property and repaid all of its third-party debt. The sale of this property caused~~VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the ~~joint venture to~~VIE is considered the primary beneficiary.

There were no ~~longer meet the criteria to be considered a VIE. As such, at~~ ~~September 30, 2014, there was~~

~~one~~ ~~remaining~~consolidated or unconsolidated joint ~~venture~~ventures at March 31, 2015 that met the criteria to be considered a VIE. This unconsolidated joint venture was formed with the sole purpose of developing, constructing, leasing, marketing and selling or operating properties. The business activities of this unconsolidated joint venture have been financed through a combination of equity contributions, partner/member loans, and third-party debt that we have guaranteed. All significant decisions for this unconsolidated joint venture, including those decisions that most significantly impact its economic performance, require unanimous approval of the joint venture's partners or members. In certain cases, these decisions also require lender approval. Unanimous approval requirements for this unconsolidated joint venture include entering into new leases, setting annual operating budgets, selling underlying properties, and incurring additional indebtedness. Because no single entity exercises control over the decisions that most significantly affect this joint venture's economic performance, we determined there to be no individual primary beneficiary and that the equity method of accounting is appropriate.VIEs.

~~The following table provides a summary of the carrying value in our consolidated balance sheet, as well as our maximum loss exposure under the guarantee of debt, for the~~ ~~one~~ ~~unconsolidated subsidiary that we have determined to be a VIE at~~ ~~September 30, 2014~~ ~~(in millions):~~

Carrying Value Maximum Loss Exposure
Investment in unconsolidated companies $ 6.0
$ 6.0
Guarantee obligations (1) $ (5.0 ) $ (99.4 )


~~(1)~~	We are party to a guarantee of the third-party debt of the joint venture that we have determined is a VIE, and our maximum loss exposure is equal to the outstanding borrowings on the joint venture's debt. The carrying value of our recorded guarantee obligation is included in other liabilities in our Consolidated Balance Sheets.

Our maximum loss exposure for guarantees of joint venture indebtedness, ~~including~~for guarantees of the debt of joint ventures that are not VIEs, totaled ~~$235.1~~$71.7 million at ~~September 30, 2014~~.March 31, 2015.

5. ~~Acquisitions and~~ Dispositions

~~2014 Acquisitions~~

~~We acquired~~ ~~three~~ ~~industrial properties, a building in Atlanta, Georgia, a building in the Lehigh Valley region~~Dispositions of ~~Pennsylvania, and a building in Phoenix, Arizona during the~~ ~~nine months ended September 30, 2014. The following table summarizes the fair value of amounts recognized for each major class of asset and liability (in thousands) for these acquisitions:~~

Real estate assets $ 86,988
Lease related intangible assets 12,450
Total acquired assets 99,438
Other liabilities 54
Total assumed liabilities 54
Fair value of acquired net assets $ 99,384

~~The leases in the acquired properties had an average remaining life at acquisition of approximately~~ ~~8.7 years~~.

~~We have included~~ ~~$3.2 million~~ ~~in rental revenues and $45,000 in earnings from continuing operations during 2014 for these properties since their respective dates of acquisition.~~

~~Fair Value Measurements~~

The fair value estimates used in allocating the aggregate purchase price of each acquisition among the individual components of real estate assets and liabilities were determined primarily through calculating the "as-if vacant" value of each building, using the income approach, and relied significantly upon internally determined assumptions.

We have determined these estimates to have been primarily based upon Level 3 inputs, which are unobservable inputs based on our own assumptions. The range of most significant assumptions utilized in making the lease-up and future disposition estimates used in calculating the "as-if vacant" value of each building acquired during the nine months ended September 30, 2014 were as follows:

Low
High
Discount rate 7.38 % 9.96 %
Exit capitalization rate 5.98 % 8.36 %
Lease-up period (months) 12
12
Net rental rate per square foot – Industrial $2.75 $9.36

~~Acquisition-Related Activity~~

~~The acquisition-related activity in our Consolidated Statements of Operations and Comprehensive Income~~buildings (see Note 11 for the ~~nine months ended September 30, 2014~~ ~~and~~ ~~2013~~ ~~consisted~~number of ~~transaction costs related to completed acquisitions, which are expensed as incurred,~~buildings sold as well as ~~gains or losses related to acquisitions where we had a pre-existing non-controlling ownership interest. We expensed~~ ~~$871,000~~for their classification between continuing and ~~$3.5 million, respectively, for acquisition-related transaction costs incurred in the~~ ~~nine months ended September 30, 2014~~discontinued operations) and ~~2013. During the nine months ended September 30, 2013, we also recognized a gain of $962,000 on the pre-existing ownership interest that we held in an industrial property we acquired in that period.~~

~~Dispositions~~

~~We disposed of 23 consolidated income-producing real estate assets and 159 acres of~~ undeveloped land ~~during the~~ ~~nine months ended September 30, 2014. We received~~generated net cash proceeds ~~from property~~of $109.9 million and ~~land dispositions of~~ ~~$386.2~~$70.7 million ~~and~~ ~~$330.7 million~~ during the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively.

Income tax expense from continuing operations of $2.6 million was the result of the sale of a property, prior to the adoption of ASU 2014-08, which was partially owned by our taxable REIT subsidiary. Due to continuing involvement in managing the property, it was not classified as a discontinued operation. Income tax expense included in discontinued operations of ~~$3.0 million~~ ~~was also the result of the sale of a property, also prior to the adoption of ASU 2014-08, that was partially owned by our taxable REIT subsidiary where we have no continuing involvement.~~

~~During the~~ ~~nine months ended September 30, 2014, five office properties and 11 industrial properties were sold by four of our unconsolidated joint ventures, for which our capital distributions totaled~~ ~~$70.1 million~~ ~~and our share of gains, which are included in equity in earnings, totaled~~ ~~$75.5 million~~. These five office properties included a 436,000 square foot office tower in Atlanta, Georgia and a three-building portfolio sale in central Florida totaling 415,000 square feet. The industrial disposition activity related to a sale from an unconsolidated joint venture, in which we did not hold a significant ownership interest, totaling 2.1 million square feet.

6. Indebtedness

All debt is held directly or indirectly by the Partnership. The General Partner does not have any indebtedness, but does guarantee some of the unsecured debt of the Partnership. The following table summarizes the book value and changes in the fair value, of our debt for the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 (in thousands):

1413


	Book Value at 12/31/13		Book Value at 9/30/14		Fair Value at 12/31/13		Issuances and Assumptions		Payments/Payoffs			Adjustments to Fair Value		Fair Value at 9/30/14		Book Value at 12/31/2014		Book Value at 3/31/2015		Fair Value at 12/31/2014		Issuances and Assumptions		Payments/Payoffs			Adjustments to Fair Value			Fair Value at 3/31/2015
Fixed rate secured debt	$	1,081,035	$	1,000,451	$	1,145,717	$	—	$	(77,347	)	$	22,044	$	1,090,414	$	979,842	$	916,048	$	1,065,301	$	—	$	(63,151	)	$	(2,206	)	$	999,944
Variable rate secured debt	19,089		3,400		19,089		—		(15,689		)	—		3,400		3,400		3,400		3,400		—		—			—			3,400
Unsecured debt	3,066,252		3,064,696		3,250,518		—		(1,556		)	57,476		3,306,438		3,364,161		3,113,617		3,603,475		—		(250,544		)	25,551			3,378,482
Unsecured line of credit	88,000		140,000		88,383		52,000		—			96		140,479		106,000		453,000		106,000		347,000		—			—			453,000
Total	$	4,254,376	$	4,208,547	$	4,503,707	$	52,000	$	(94,592	)	$	79,616	$	4,540,731	$	4,453,403	$	4,486,065	$	4,778,176	$	347,000	$	(313,695	)	$	23,345		$	4,834,826
Less secured debt related to real estate assets held-for-sale																40,764		41,697
Total indebtedness as reported on consolidated balance sheets																$	4,412,639	$	4,444,368

Secured Debt

Because our fixed rate secured debt is not actively traded in any marketplace, we utilized a discounted cash flow methodology to determine its fair value. Accordingly, we calculated fair value by applying an estimate of the current market rate to discount the debt's remaining contractual cash flows. Our estimate of a current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. The estimated rates ranged from 2.20% to ~~4.40%~~3.20%, depending on the attributes of the specific loans. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value for our fixed rate secured debt was primarily based upon Level 3 inputs.

During the ~~nine~~three months ended~~September 30, 2014~~, March 31, 2015, we repaid ~~seven~~eight secured loans, totaling ~~$82.8 million~~.$60.2 million. These loans had a weighted average stated interest rate of ~~5.55%~~5.30%.

Unsecured Debt

At ~~September 30, 2014~~,March 31, 2015, with the exception of one variable rate term note, all of our unsecured debt bore interest at fixed rates and primarily consisted of unsecured notes that are publicly traded. We utilized broker estimates in estimating the fair value of our fixed rate unsecured debt. Our unsecured notes are thinly traded and, in certain cases, the broker estimates were not based upon comparable transactions. The broker estimates took into account any recent trades within the same series of our fixed rate unsecured debt, comparisons to recent trades of other series of our fixed rate unsecured debt, trades of fixed rate unsecured debt from companies with profiles similar to ours, as well as overall economic conditions. We reviewed these broker estimates for reasonableness and accuracy, considering whether the estimates were based upon market participant assumptions within the principal and most advantageous market and whether any other observable inputs would be more accurate indicators of fair value than the broker estimates. We concluded that the broker estimates were representative of fair value. We have determined that our estimation of the fair value of our fixed rate unsecured debt was primarily based upon Level 3 inputs. The estimated trading values of our fixed rate unsecured debt, depending on the maturity and coupon rates, ranged from ~~99.00%~~102.00% to ~~125.00%~~131.00% of face value.

In February 2015, we repaid a $250.0 million senior unsecured note at its maturity date. This loan had a stated interest rate of 7.38% and an effective rate of 7.50%.

We utilize a discounted cash flow methodology in order to estimate the fair value of our $250.0 million variable rate term loan. The net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate represents the difference between the book value and the fair value. Our estimate of a current market rate was based on estimated market spreads and the quoted yields on federal government treasury securities with similar maturity dates. Our estimate of the current market rate for our variable rate term loan was ~~1.31%~~1.33% and was based primarily upon Level 3 inputs.

The indentures (and related supplemental indentures) governing our outstanding series of notes also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such covenants at ~~September 30, 2014~~.March 31, 2015.

Unsecured Line of Credit

Our unsecured line of credit at ~~September 30, 2014~~March 31, 2015 is described as follows (in thousands):


Description	Maximum Capacity		Maturity Date	Outstanding Balance at September 30, 2014		Maximum Capacity		Maturity Date	Outstanding Balance at March 31, 2015
Unsecured Line of Credit - Partnership	$	850,000	December 2015	$	140,000	$	1,200,000	January 2019	$	453,000

The Partnership's unsecured line of credit has an interest rate on borrowings of LIBOR plus ~~1.25%~~1.05% (equal to ~~1.41%~~1.23% for outstanding borrowings at ~~September 30, 2014~~)March 31, 2015) and a maturity date of ~~December 2015~~.January 2019. Subject to certain conditions, the terms also include an option to increase the facility by up to an additional ~~$400.0~~$400.0 million,, for a total of up to ~~$1.25 billion~~.$1.6 billion. This line of credit provides us with an option to obtain borrowings from financial institutions that participate in the line at rates that may be lower than the stated interest rate, subject to certain restrictions.

This line of credit contains financial covenants that require us to meet certain financial ratios and defined levels of performance, including those related to fixed charge coverage, unsecured interest expense coverage and debt-to-asset value (with asset value being defined in the Partnership's unsecured line of credit agreement). At ~~September 30, 2014~~, March 31, 2015, we were in compliance with all covenants under this line of credit.

To the extent that there are outstanding borrowings, we utilize a discounted cash flow methodology in order to estimate the fair value of our unsecured line of credit. The net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate represents the difference between the book value and the fair value. Our estimate of a current market rate is based upon the rate, considering current market conditions and our specific credit profile, at which we estimate we could obtain similar borrowings. The current market rate of ~~1.41%~~1.43% that we utilized was internally estimated; therefore, we have concluded that our determination of fair value for our unsecured line of credit was primarily based upon a Level 3 input.

7. Shareholders' Equity of the General Partner and Partners' Capital of the Partnership

General Partner

~~In the first~~ ~~nine~~ ~~months of~~ ~~2014~~, pursuant to the share repurchase plan approved by our board of directors, the General Partner repurchased 750,243 preferred shares from among our three outstanding series. The preferred shares repurchased had a total redemption value of approximately $18.8 million and were repurchased for $17.7 million. In conjunction with the repurchases, approximately $618,000 of initial issuance costs, the ratable portion of such costs associated with the repurchased shares, were charged against income attributable to common shareholders. As the result of these repurchases, an adjustment of approximately $483,000 was included as an increase to net income attributable to common shareholders.

In August 2014, the General Partner redeemed all 384,530 shares of its outstanding 6.625% Series J Cumulative Redeemable Preferred Shares ("Series J Shares"). The cash redemption price for the Series J Shares was $96.1 million, or $250.00 per share, plus dividends accrued through the date of redemption. Original offering costs of $3.2 million were included as a reduction to net income attributable to common shareholders in conjunction with the redemption of these shares.

During the ~~nine~~three months ended ~~September 30, 2014,~~March 31, 2015, the General Partner issued ~~14.6 million~~233,000 common shares pursuant to its at the market equity program, generating gross proceeds of approximately ~~$258.6~~$5.0 million and, after deducting commissions and other costs, net proceeds of approximately ~~$256.0~~$4.9 million. The proceeds from these offerings were used for general corporate ~~purposes, which include the funding of development costs.~~

~~In April 2014, the General Partner's shareholders approved an increase in the number of authorized shares of the General Partner's common stock from 400 million to 600 million.~~purposes.

Partnership

For each common share or preferred share that the General Partner issues, the Partnership issues a corresponding General Partner Unit or Preferred Unit, as applicable, to the General Partner in exchange for the contribution of the proceeds from the stock issuance. Similarly, when the General Partner redeems or repurchases common shares or preferred shares, the Partnership redeems the corresponding Common Units or Preferred Units held by the General Partner at the same price.

8. Related Party Transactions

We provide property management, asset management, leasing, construction and other tenant-related services to unconsolidated companies in which we have equity interests. We recorded the corresponding fees based on contractual terms that approximate market rates for these types of services and have eliminated our ownership percentage of these fees in the consolidated financial statements. The following table summarizes the fees earned from these companies, prior to the elimination of our ownership percentage, for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (in thousands):


	Three Months Ended				Nine Months Ended				Three Months Ended
	September 30,				September 30,				March 31,
	2014		2013		2014		2013		2015		2014
Management fees	$	2,233	$	2,246	$	6,569	$	6,872	$	1,801	$	2,219
Leasing fees	572		310		3,085		1,432		633		344
Construction and development fees	1,529		681		4,911		3,258		405		965

9. Net Income (Loss) Per Common Share or Common Unit

Basic net income (loss) per common share or Common Unit is computed by dividing net income (loss) attributable to common shareholders or common unitholders, less dividends or distributions on share-based awards expected to

vest (referred to as "participating securities" and primarily composed of unvested restricted stock units), by the weighted average number of common shares or Common Units outstanding for the period.

Diluted net income (loss) per common share is computed by dividing the sum of basic net income (loss) attributable to common shareholders and the noncontrolling interest in earnings allocable to Limited Partner Units (to the extent the Limited Partner Units are dilutive) by the sum of the weighted average number of common shares outstanding and, to the extent they are dilutive, Units outstanding and any potential dilutive securities for the period. Diluted net income (loss) per Common Unit is computed by dividing the basic net income (loss) attributable to common unitholders by the sum of the weighted average number of Common Units outstanding and any potential dilutive securities for the period. The following table reconciles the components of basic and diluted net income per common share or Common Unit for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2014 2013 2014 2013
General Partner
Net income (loss) attributable to common shareholders $ 61,533
$ (6,067 ) $ 207,904
$ 83,470
Less: Dividends on participating securities (651 ) (650 ) (1,941 ) (2,024 )
Basic net income (loss) attributable to common shareholders 60,882
(6,717 ) 205,963
81,446
Noncontrolling interest in earnings of common unitholders 795
—
2,738
1,142
Diluted net income (loss) attributable to common shareholders $ 61,677
$ (6,717 ) $ 208,701
$ 82,588
Weighted average number of common shares outstanding 341,165
324,895
333,393
320,810
Weighted average Limited Partner Units outstanding 4,380
—
4,384
4,393
Other potential dilutive shares 281
—
280
177
Weighted average number of common shares and potential dilutive securities 345,826
324,895
338,057
325,380

Partnership
Net income (loss) attributable to common unitholders $ 62,328
$ (6,159 ) $ 210,642
$ 84,612
Less: Distributions on participating securities (651 ) (650 ) (1,941 ) (2,024 )
Basic and diluted net income (loss) attributable to common unitholders $ 61,677
$ (6,809 ) $ 208,701
$ 82,588
Weighted average number of Common Units outstanding 345,545
329,283
337,777
325,203
Other potential dilutive units 281
—
280
177
Weighted average number of Common Units and potential dilutive securities 345,826
329,283
338,057
325,380



	Three Months Ended March 31,
	2015			2014
General Partner
Net income attributable to common shareholders	$	65,244		$	18,683
Less: Dividends on participating securities	(620		)	(645		)
Basic net income attributable to common shareholders	64,624			18,038
Noncontrolling interest in earnings of common unitholders	699			250
Diluted net income attributable to common shareholders	$	65,323		$	18,288
Weighted average number of common shares outstanding	344,597			327,106
Weighted average Limited Partner Units outstanding	3,695			4,387
Other potential dilutive shares	361			223
Weighted average number of common shares and potential dilutive securities	348,653			331,716

Partnership
Net income attributable to common unitholders	$	65,943		$	18,933
Less: Distributions on participating securities	(620		)	(645		)
Basic and diluted net income attributable to common unitholders	$	65,323		$	18,288
Weighted average number of Common Units outstanding	348,292			331,493
Other potential dilutive units	361			223
Weighted average number of Common Units and potential dilutive securities	348,653			331,716

Substantially all potential shares related to our stock-based compensation plans are anti-dilutive for all periods presented. The following table summarizes the data that is excluded from the computation of net income per common share or Common Unit as a result of being anti-dilutive (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
	2014	2013	2014	2013	2015	2014
General Partner and Partnership
Potential dilutive shares or units:
Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans	1,215	1,373	1,215	1,373	1,030	1,215
Outstanding participating securities	3,867	3,866	3,867	3,866	3,593	3,841

10. Segment Reporting

Reportable Segments

management, maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise.

Revenues by Reportable Segment

The following table shows the revenues for each of the reportable segments, as well as a reconciliation to consolidated revenues, for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (in thousands):


	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended March 31,
	2014		2013		2014		2013		2015		2014
Revenues
Rental Operations:
Industrial	$	131,212	$	122,643	$	394,209	$	354,468	$	147,227	$	133,291
Office	60,672		63,120		194,236		187,973		25,135		38,978
Medical Office	36,715		32,542		104,979		94,571		40,028		33,310
Non-reportable Rental Operations	1,698		1,765		5,414		5,807		401		2,088
Service Operations	59,739		62,807		185,072		161,004		52,820		55,820
Total segment revenues	290,036		282,877		883,910		803,823		265,611		263,487
Other revenue	1,025		1,585		3,352		4,023		1,824		979
Consolidated revenue from continuing operations	291,061		284,462		887,262		807,846		267,435		264,466
Discontinued operations	454		11,140		2,415		39,807		32,115		30,072
Consolidated revenue	$	291,515	$	295,602	$	889,677	$	847,653	$	299,550	$	294,538

Supplemental Performance Measure

Prior to 2014, we evaluated the profitability of our reportable segments using net earnings excluding depreciation and other items that were not allocated to our operating segments. As the result of a shift in the focus of our executive management team on the metrics used to evaluate the performance of, and to allocate resources among, our reportable segments, we elected to change our segment measurement of profitability beginning with the period

~~ended March 31, 2014. We have also revised prior period information in order to provide period-over-period comparability.~~

Property level net operating income on a cash basis ("PNOI") is the non-GAAP supplemental performance measure that we ~~now~~ use to evaluate the performance of, and to allocate resources among, the real estate investments in the reportable and operating segments that comprise our Rental Operations. PNOI for our Rental Operations segments is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items (collectively referred to as "Rental Operations revenues and expenses excluded from PNOI," as shown in the ~~table below)~~following table). Additionally, we do not allocate interest expense, depreciation expense and certain other non-property specific revenues and expenses (collectively referred to as "Non-Segment Items," as shown in the ~~table below)~~following table) to our individual operating segments.

We evaluate the performance of our Service Operations reportable segment using net income or loss, as allocated to that segment ("Earnings from Service Operations").

The following table shows a reconciliation of our segment-level measures of profitability to consolidated income from continuing operations before income taxes for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (in thousands and excluding discontinued operations):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2014			2013			2014			2013			2015			2014
PNOI
Industrial	$	97,324		$	88,968		$	284,191		$	254,849		$	96,684		$	85,691
Office	34,894			30,982			100,237			94,959			14,842			15,206
Medical Office	23,228			18,239			65,592			51,764			25,232			20,805
Non-reportable Rental Operations	929			1,087			3,234			3,138			—			253
Total PNOI	156,375			139,276			453,254			404,710
PNOI, excluding all sold/held for sale properties													136,758			121,955
PNOI from sold/held-for-sale properties included in continuing operations													6,239			12,423
PNOI, continuing operations													142,997			134,378

Earnings from Service Operations	7,211			3,415			21,415			18,079			5,797			8,549

Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net	5,527			2,942			16,929			11,040			6,697			4,769
Revenues related to lease buyouts	145			2,936			4,365			9,615			864			2,695
Amortization of lease concessions and above and below market rents	(1,220		)	(2,267		)	(5,376		)	(6,485		)	(1,713		)	(2,211		)
Intercompany rents and other adjusting items	(1,221		)	(1,125		)	(3,323		)	(3,470		)	(731		)	(1,537		)
PNOI from sold/held-for-sale properties included in continuing operations	807			9,332			11,568			25,449
Non-Segment Items:
Equity in earnings (loss) of unconsolidated companies	19,178			(27		)	82,325			50,442
Equity in earnings of unconsolidated companies													6,246			2,321
Interest expense	(53,343		)	(56,618		)	(163,479		)	(171,365		)	(49,610		)	(49,261		)
Depreciation expense	(95,000		)	(101,191		)	(290,700		)	(289,508		)	(81,903		)	(88,298		)
Gain on sale of properties	47,143			—			133,617			1,108			23,484			15,853
Impairment charges on non-depreciable properties	(6,368		)	—			(8,891		)	(3,777		)
Interest and other income, net	356			145			936			1,219			338			351
Other operating expenses	(56		)	(47		)	(277		)	(150		)
General and administrative expenses	(10,573		)	(10,373		)	(35,632		)	(33,225		)	(17,004		)	(14,694		)
Gain on land sales	3,167			3,365			7,208			3,365			5,425			152
Undeveloped land carrying costs	(1,773		)	(2,108		)	(5,755		)	(6,837		)
Loss on extinguishment of debt	—			—			(139		)	—
Other operating expenses													(1,557		)	(2,216		)
Acquisition-related activity	(110		)	(726		)	(871		)	(2,506		)	(28		)	(14		)
Other non-segment revenues and expenses, net	(269		)	(31		)	(1,041		)	491			(402		)	(692		)
Income (loss) from continuing operations before income taxes	$	69,976		$	(13,102	)	$	216,133		$	8,195
Income from continuing operations before income taxes													$	38,900		$	10,145

The most comparable GAAP measure to PNOI is income from continuing operations before income taxes. PNOI excludes expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for income from continuing operations before income taxes or any other measures derived in accordance with GAAP. Furthermore, PNOI may not be comparable to other similarly titled measures of other companies.

Assets by Reportable Segment

The assets for each of the reportable segments at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~2014 were as follows (in thousands):


	September 30, 2014		December 31, 2013		March 31, 2015		December 31, 2014
Assets
Rental Operations:
Industrial	$	4,673,507	$	4,414,740	$	4,672,992	$	4,677,047
Office	1,378,083		1,524,501		1,212,796		1,252,627
Medical Office	1,172,615		1,170,420		1,210,170		1,229,632
Non-reportable Rental Operations	76,736		81,056		22,909		71,741
Service Operations	157,815		145,222		155,370		158,762
Total segment assets	7,458,756		7,335,939		7,274,237		7,389,809
Non-segment assets	425,439		416,675		456,267		365,030
Consolidated assets	$	7,884,195	$	7,752,614	$	7,730,504	$	7,754,839

The assets shown above include the amounts designated as held for sale, as of March 31, 2015, in connection with the Suburban Office Portfolio and Midwest Industrial Portfolio sales described in Note 12.

11. Discontinued Operations and Assets Held-for-Sale

Discontinued Operations

Beginning with our adoption of ASU 2014-08 on April 1, 2014, discontinued operations presentation applies only to disposals representing a strategic shift that has (or will have) a major effect on an entity’s operations and ~~Impairments~~financial results (e.g., a disposal of a major geographical area, a major line of business, a major equity method investment or other major parts of an entity).

On April 1, 2015, we completed the sale of a portfolio of primarily suburban office properties and undeveloped land (the "Suburban Office Portfolio Sale", as defined in Note 12) that had been under agreement for sale since late January 2015. This portfolio was classified as held-for-sale at March 31, 2015. Because of the size of this disposition, and the fact that it represented our exit from the office product type in four geographic markets, we determined that the disposition represented a strategic shift that will have a major effect on our operations and financial results. As such, the in-service properties in this portfolio met the criteria to be classified within discontinued operations. As the result of its classification within discontinued operations, the in-service assets and liabilities of this portfolio are required to be presented as held-for-sale for all prior periods presented in our Consolidated Balance Sheets.

The following table illustrates the number of sold or held-for-sale properties included in, or excluded from, discontinued operations:


	Held-for-Sale at September 30, 2014	Sold in 2014		Sold in 2013		Total	Held-for-Sale at March 31, 2015	Sold through March 31, 2015		Sold in 2014		Total


Industrial	0		11		6			17	5		0		11	16
Office	0		0		12			12	56		0		0	56
Medical Office	1	1		6		8	0	1		1		2
Retail	0	0		1		1
Total properties included in discontinued operations	1	12		25		38	61	1		12		74
Properties excluded from discontinued operations	2	11		13		26	52	11		17		80
Total properties sold or classified as held-for-sale	3	23		38		64	113	12		29		154

As described in Note 2, we adopted ASU 2014-08 beginning April 1, 2014. Three properties were designated as held-for-sale at March 31, 2014, and met the criteria for discontinued operations that were applicable prior to the adoption of ASU 2014-08. Two of these properties were sold during the three months ended June 30, 2014, while one of these properties continues to be designated as held-for-sale at September 30, 2014. No new properties, whether having been disposed of or designated as held-for-sale, have met the criteria for classification as discontinued operations since the adoption of ASU 2014-08.

For the properties that were classified in discontinued operations, ~~prior to the adoption of ASU 2014-08,~~ we allocated interest expense to discontinued operations and have included such interest expense in computing income from discontinued operations. Interest expense allocable to discontinued operations includes interest on any secured debt for properties included in discontinued operations and an allocable share of our consolidated unsecured interest expense for unencumbered properties. The allocation of unsecured interest expense to discontinued operations was

based upon the gross book value of the unencumbered real estate assets included in discontinued operations as it related to the total gross book value of our unencumbered real estate assets.

The following table illustrates the operational results of the buildings reflected in discontinued operations for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2014			2013			2014			2013			2015			2014
Revenues	$	454		$	11,140		$	2,415		$	39,807		$	32,115		$	30,072
Operating expenses	(297		)	(4,144		)	(1,282		)	(14,983		)	(12,386		)	(12,403		)
Depreciation and amortization	—			(3,247		)	(205		)	(13,969		)	(3,517		)	(9,966		)
Operating income	157			3,749			928			10,855			16,212			7,703
Interest expense	(137		)	(2,251		)	(706		)	(9,310		)	(6,034		)	(6,378		)
Income before gain on sales	20			1,498			222			1,545			10,178			1,325
Gain on sale of depreciable properties	564			8,441			22,864			101,052			18,375			19,752
Income from discontinued operations before income taxes	584			9,939			23,086			102,597			28,553			21,077
Income tax benefit (expense)	555			—			(2,969		)	—
Income tax expense													—			(2,977		)
Income from discontinued operations	$	1,139		$	9,939		$	20,117		$	102,597		$	28,553		$	18,100

There was one medical office property that sold during the three months ended March 31, 2015, which had been classified as held for sale and included in discontinued operations prior to the adoption of ASU 2014-08, for which we recognized a gain on sale of $1.3 million. The ~~income tax expense or benefit included~~majority of the remaining amount of gains on sale of depreciable properties recognized in discontinued operations during the period was the result of recognizing previously deferred gains on prior period sales, which had met the criteria for classification within discontinued operations prior to the adoption of ASU 2014-08, due to either receiving additional cash or resolving post-sale obligations.

Capital expenditures on a cash basis for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and 2014 ~~was triggered by the sale of a property that was partially owned by our taxable REIT subsidiary.~~

~~The income tax benefit of $442,000~~were $8.6 million and ~~income tax expense of $2.6~~$3.8 million, ~~from continuing operations for the~~ ~~three and nine months ended September 30,2014~~, respectively, ~~as presented in the Consolidated Statements of Operations and Comprehensive Income, was~~ related to ~~the sale of another property that was partially owned by our taxable REIT subsidiary but, due to continuing involvement in managing the property, was not~~properties classified ~~as a~~within discontinued ~~operation.~~

Dividends or distributions on preferred shares or Preferred Units and adjustments for the redemption or repurchase of preferred shares or Preferred Units are allocated entirely to continuing operations for both the General Partner and the Partnership.operations.

Allocation of Noncontrolling Interests - General Partner

The following table illustrates the General Partner's share of the income ~~(loss)~~ attributable to common shareholders from continuing operations and discontinued operations, reduced by the allocation of income ~~or loss~~ between continuing and discontinued operations to the Limited Partner Units, for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2014 2013 2014 2013
Income (loss) from continuing operations attributable to common shareholders $ 60,408
$ (15,874 ) $ 188,048
$ (17,741 )
Income from discontinued operations attributable to common shareholders 1,125
9,807
19,856
101,211
Net income (loss) attributable to common shareholders $ 61,533
$ (6,067 ) $ 207,904
$ 83,470



	Three Months Ended March 31,
	2015		2014
Income from continuing operations attributable to common shareholders	$	36,994	$	823
Income from discontinued operations attributable to common shareholders	28,250		17,860
Net income attributable to common shareholders	$	65,244	$	18,683

Allocation of Noncontrolling Interests - Partnership

Substantially all of the income from discontinued operations for all periods presented in the Partnership's Consolidated Statements of Operations and Comprehensive Income is attributable to the common unitholders.

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Properties Held-for-Sale

At ~~September 30, 2014~~, ~~one~~March 31, 2015, the 61 in-service ~~property, which was~~properties included in the Suburban Office Portfolio Sale were classified as held-for-sale and included in discontinued operations ~~prior to the adoption of ASU 2014-08, met the criteria for designation as held-for-sale. Additionally,~~ ~~two~~and 52 in-service properties ~~met the criteria for designation~~were classified as held-for-sale ~~subsequent to the adoption of ASU 2014-08,~~ but did not meet the criteria to be classified within discontinued ~~operations.~~operations (including the "Midwest Industrial Portfolio Sale", as defined in Note 12). The following table illustrates aggregate balance sheet information ~~of these properties~~ at ~~September 30,~~March 31, 2015 and December 31, 2014 (in thousands):

September 30, 2014
Properties Included in Continuing Operations Properties Included in Discontinued Operations Total Held-For-Sale Properties
Real estate investment, net $ 14,940
$ 14,643
$ 29,583
Other assets 473
5,358
5,831
Total assets held-for-sale $ 15,413
$ 20,001
$ 35,414

Accrued expenses $ 356
$ 262
$ 618
Other liabilities 87
—
87
Total liabilities held-for-sale $ 443
$ 262
$ 705

~~Impairment Charges~~

~~The following table illustrates impairment charges recognized during the three and nine months ended September 30, 2014 and 2013, respectively (in thousands):~~

Three Months Ended September 30, Nine Months Ended September 30,
2014 2013 2014 2013
Impairment charges - land $ 5,915
$ —
$ 8,438
$ 3,777
Impairment charges - building 453
—
453
—
Impairment charges $ 6,368
$ —
$ 8,891
$ 3,777

During 2014, we refined our strategy for selected parcels of land, whereby we decided that we would dispose of such parcels in the near future as opposed to holding them for development. The change in strategy for this land triggered the requirement to conduct an impairment analysis, which resulted in a determination that these parcels were impaired. We recognized impairment charges of $8.4 million in the nine months ended September 30, 2014, primarily as the result of writing down this land to its fair value. As part of determining the fair value of the non-strategic land in connection with the impairment analysis, we considered comparable transactions and, in certain cases, estimates made by national and local independent real estate brokers who were familiar both with the land parcels subject to evaluation as well as with conditions in the specific markets where the land is located. In all cases, members of our senior management who were responsible for the individual markets where the land is located and members of the Company’s accounting and financial management team reviewed the broker’s estimates for factual accuracy and reasonableness. In all cases, we were ultimately responsible for all valuation estimates made in determining the extent of the impairment. Our valuation estimates primarily relied upon Level 3 inputs, as defined in our Annual Report on Form 10-K for the year ended December 31, 2013.



	March 31, 2015									December 31, 2014
	Properties Included in Continuing Operations			Properties Included in Discontinued Operations			Total Held-For-Sale Properties			Properties Included in Continuing Operations			Properties Included in Discontinued Operations			Total Held-For-Sale Properties
Land and improvements	$	36,236		$	121,149		$	157,385		$	21,347		$	126,921		$	148,268
Buildings and tenant improvements	168,893			702,820			871,713			36,925			721,398			758,323
Undeveloped land	13,736			—			13,736			12,443			—			12,443
Accumulated depreciation	(51,217		)	(234,132		)	(285,349		)	(23,071		)	(247,269		)	(270,340		)
Deferred leasing and other costs, net	6,626			42,152			48,778			3,480			44,840			48,320
Other assets	5,896			27,859			33,755			562			27,475			28,037
Total assets held-for-sale	$	180,170		$	659,848		$	840,018		$	51,686		$	673,365		$	725,051

Secured debt	$	1,097		$	40,600		$	41,697		$	—		$	40,764		$	40,764
Accrued expenses	4,685			6,934			11,619			233			5,180			5,413
Other liabilities	2,228			9,561			11,789			434			12,481			12,915
Total liabilities held-for-sale	$	8,010		$	57,095		$	65,105		$	667		$	58,425		$	59,092

12. Subsequent Events

Declaration of Dividends/Distributions

The General Partner's board of directors declared the following dividends/distributions at its regularly scheduled board meeting held on ~~October~~April 29, ~~2014~~:2015:



Class of stock/units	Quarterly Amount per Share or Unit	Record Date	Payment Date
Common	$0.17	~~November~~May 14, ~~2014~~2015	~~November 28, 2014~~
~~Preferred (per depositary share or unit):~~
~~Series K~~	~~$0.406250~~	~~November 14, 2014~~	~~November 28, 2014~~
~~Series L~~	~~$0.412500~~	~~November 14, 2014~~	~~November 28, 2014~~May 29, 2015

~~Amended~~Suburban Office Portfolio Sale

On April 1, 2015, we completed the previously announced suburban office portfolio sale (the "Suburban Office Portfolio Sale") to a joint venture with affiliates of Starwood Capital Group, Vanderbilt Partners and ~~Restated Unsecured Line~~Trinity Capital Advisors for approximately $1.1 billion.

The Suburban Office Portfolio Sale includes all of ~~Credit Agreement~~the company’s wholly-owned, in-service suburban office properties located in Nashville, Raleigh, South Florida and St. Louis. The portfolio includes approximately 6.7 million square feet across 61 buildings and 57 acres of undeveloped land. One additional office asset currently under construction in Raleigh is expected to be sold upon completion in late 2015.

Midwest Industrial Portfolio Sale

On April 8, 2015, we completed the sale of 51 non-strategic industrial properties for $270.0 million. These properties totaled 5.2 million square feet and were located in primarily Midwest markets.

Tender Offer

In ~~October 2014, we extended~~March 2015, the ~~Partnership's line~~Partnership commenced a tender offer (the "Tender Offer") to purchase for a combined aggregate purchase price (exclusive of credit through January 2019 (with two six-month extension options) while increasing its borrowing capacity from $850.0 million to $1.2 billion, with the accordion feature remaining at $400.0 million for an aggregate total possible commitmentaccrued and unpaid interest) of up to ~~$1.6 billion, and reducing the interest rate on~~$500.0 million among certain of its outstanding ~~borrowings from LIBOR plus 1.25% to LIBOR plus 1.05%. Additionally, the amendment extended the term~~

series of unsecured notes. A portion of the ~~Partnership's existing variable rate term loan until January 2019 (with~~proceeds from the Suburban Office Portfolio Sale were used to fund this Tender Offer, which resulted in the repurchase of notes having a ~~one-year extension option), and such variable rate term loan now bears interest at~~face value of $424.9 million, for a ~~rate equal to LIBOR plus 1.15% based~~cash payment of $500.0 million. The repurchase was completed on ~~the Partnership's current credit ratings.~~April 3, 2015.

2322

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand our operations and our present business environment. Management's Discussion and Analysis is provided as a supplement to and should be read in conjunction with our consolidated financial statements and the notes thereto, contained in Part I, Item I of this Quarterly Report on Form 10-Q (this "Report") and the consolidated financial statements and notes thereto, contained in Part IV, Item 15 of our combined Annual Report on Form 10-K for the year ended December 31, ~~2013~~,2014, as filed with the Securities and Exchange Commission (the "SEC") on February ~~21, 2014~~20, 2015 for Duke Realty Corporation (the "General Partner") and Duke Realty Limited Partnership (the "Partnership"). As used herein, the terms the "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership.

Cautionary Notice Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this Report, including, without limitation, those related to our future operations, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe," "estimate," "expect," "anticipate," "intend," "plan," "seek," "may," "could" and similar expressions or statements regarding future periods are intended to identify forward-looking statements, although not all forward-looking statements contain such words.

These forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause our actual results, performance or achievements, or industry results, to differ materially from any predictions of future results, performance or achievements that we express or imply in this Report. Some of the risks, uncertainties and other important factors that may affect future results include, among others:

Changes in general economic and business conditions, including the financial condition of our tenants and the value of our real estate assets;

The General Partner's continued qualification as a real estate investment trust ("REIT") for U.S. federal income tax purposes;

Heightened competition for tenants and potential decreases in property occupancy;

Potential changes in the financial markets and interest rates;

Volatility in the General Partner's stock price and trading volume;

Our continuing ability to raise funds on favorable terms;

Our ability to successfully identify, acquire, develop and/or manage properties on terms that are favorable to us;

Potential increases in real estate construction costs;

Our ability to successfully dispose of properties on terms that are favorable to us, including, without limitation, through one or more transactions that are consistent with our previously disclosed strategic plans;

Our ability to retain our current credit ratings;

Inherent risks in the real estate business, including, but not limited to, tenant defaults, potential liability relating to environmental matters and liquidity of real estate investments; and

Other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the SEC.

Although we presently believe that the plans, expectations and results expressed in or suggested by the forward-looking statements are reasonable, all forward-looking statements are inherently subjective, uncertain and subject to change, as they involve substantial risks and uncertainties, including those beyond our control. New factors emerge from time to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any of our forward-looking statements for events or circumstances that arise after the statement is made, except as otherwise may be required by law.

2423

The above list of risks and uncertainties is only a summary of some of the most important factors and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included in our combined Annual Report on Form 10-K for the fiscal year ended December 31, ~~2013~~,2014, which we filed with the SEC on February ~~21, 2014~~ ~~for the General Partner and the Partnership.~~20, 2015. The risk factors contained in our Annual Report are updated by us from time to time in Quarterly Reports on Form 10-Q and other public filings.

Business Overview

The General Partner is a self-administered and self-managed REIT that began operations in 1986 and is the sole general partner of the Partnership. The Partnership is a limited partnership formed in 1993, at which time all of the properties and related assets and liabilities of the General Partner, as well as proceeds from a secondary offering of the General Partner's common shares, were contributed to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972. We operate the General Partner and the Partnership as one enterprise, and therefore, our discussion and analysis refers to the General Partner and its consolidated subsidiaries, including the Partnership, collectively. A more complete description of our business, and of management's philosophy and priorities, is included in our ~~2013~~2014 Annual Report on Form 10-K.

At ~~September 30, 2014~~,March 31, 2015, we:

Owned or jointly controlled ~~733~~720 industrial, office and medical office ~~and other~~ properties, of which ~~709~~700 properties with ~~more than 146.2~~approximately 147.5 million square feet were in service and 2420 properties with ~~more than~~approximately ~~8.3~~5.4 million square feet were under development. The ~~709~~700 in-service properties were comprised of ~~617~~615 consolidated properties with ~~more than~~ ~~125.2~~approximately 127.5 million square feet and 9285 jointly controlled unconsolidated properties with more than ~~21.0~~20.0 million square feet. The 2420 properties under development consisted of 2217 consolidated properties with approximately ~~7.1~~3.9 million square feet and ~~two~~three jointly controlled unconsolidated properties with ~~more than~~ ~~1.2~~approximately 1.5 million square feet.

Owned ~~including~~directly, or through ownership interests in unconsolidated joint ventures ~~more than 3,700~~(with acreage not adjusted for our percentage ownership interest), approximately 3,600 acres of land and controlled more than ~~1,650~~1,500 acres through purchase options.

A key component of our overall strategy is to increase our investment in quality industrial and medical office properties in both existing and select new markets and to reduce our investment in suburban office properties and other non-strategic assets.

We have four reportable operating segments at ~~September 30, 2014~~,March 31, 2015, the first three of which consist of the ownership and rental of (i) industrial, (ii) office and (iii) medical office real estate investments. The operations of our industrial, office and medical office properties, along with our retail properties, are collectively referred to as "Rental Operations." ~~Our retail properties, as well as any other properties not included in our reportable segments, do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment.~~ The fourth reportable segment consists of various real estate services such as property management, asset management, maintenance, leasing, development, general contractor and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise. Our Service Operations segment also includes our taxable REIT subsidiary, a legal entity through which certain of the segment's operations are conducted.

Key Performance Indicators

Our operating results depend primarily upon rental income from our Rental Operations. The following discussion highlights the areas of Rental Operations that we consider critical drivers of future revenues.

Occupancy Analysis

Our ability to maintain high occupancy rates is a principal driver of maintaining and increasing rental revenue. The following table sets forth percent leased and average net effective rent information regarding our in-service portfolio

of rental properties, including properties classified within both continuing and discontinued operations, at ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013, respectively (in thousands, except percentage data):~~ respectively:


	Total Square Feet		Percent of Total Square Feet				Percent Leased*				Average Annual Net Effective Rent**		Total Square Feet (in thousands)		Percent of Total Square Feet				Percent Leased*				Average Annual Net Effective Rent**
Type	2014	2013	2014		2013		2014		2013		2014	2013	2015	2014	2015		2014		2015		2014		2015	2014
Industrial	106,503	103,310	85.1	%	82.8	%	96.4	%	94.7	%	$3.99	$3.91	110,110	104,590	86.4	%	84.2	%	96.4	%	94.9	%	$4.05	$3.93
Office	13,572	15,950	10.8	%	12.8	%	87.7	%	87.2	%	$13.25	$13.40	12,181	14,428	9.5	%	11.6	%	89.2	%	87.8	%	$10.81	$13.38
Medical Office	4,778	5,172	3.8	%	4.1	%	93.4	%	93.4	%	$23.58	$21.93	5,170	4,780	4.1	%	3.9	%	93.8	%	93.4	%	$23.10	$22.70
Other	348	348	0.3	%	0.3	%	85.2	%	83.7	%	$19.85	$19.80	—	348	—	%	0.3	%	—	%	85.7	%	$0.00	$19.75
Total Consolidated	125,201	124,780	100.0	%	100.0	%	95.3	%	93.7	%	$5.69	$5.82	127,461	124,146	100.0	%	100.0	%	95.6	%	94.0	%	$5.41	$5.72

Unconsolidated Joint Ventures	21,039	22,224					96.1	%	92.7	%	$7.09	$7.39	20,023	22,413					96.0	%	94.1	%	$5.84	$8.15
Total Including Unconsolidated Joint Ventures	146,240	147,004					95.4	%	93.5	%	$5.77	$5.91	147,484	146,559					95.7	%	94.0	%	$5.43	$5.85
*Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced.																									**Represents average annual base rental payments per leased square foot, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. This amount excludes additional amounts paid by tenants as reimbursement for operating expenses.

The total percent leased of our in-service properties, including unconsolidated joint ventures, would have been 96.0% if the Suburban Office Portfolio and Midwest Industrial Portfolio sales (as defined in Note 12 to the Consolidated Financial Statements) that took place in early April 2015 had closed on March 31, 2015.

Vacancy Activity

The following table sets forth vacancy activity, shown in square feet, regarding our in-service rental properties, including properties classified within both continuing and discontinued operations, at ~~September 30, 2014~~,March 31, 2015, (in thousands):


	Consolidated Properties		Unconsolidated Joint Venture Properties		Total Including Unconsolidated Joint Venture Properties		Consolidated Properties		Unconsolidated Joint Venture Properties		Total Including Unconsolidated Joint Venture Properties
Vacant square feet at December 31, 2013	7,368		1,165		8,533
Vacant square feet at December 31, 2014							6,041		797		6,838
Completed Development	70		—		70		147		—		147
Dispositions	(130	)	(178	)	(308	)	(181	)	—		(181	)
Expirations	6,331		877		7,208		1,707		86		1,793
Early lease terminations	1,764		128		1,892		152		103		255
Property structural changes/other	(17	)	—		(17	)	2		—		2
Leasing of previously vacant space	(9,489	)	(1,163	)	(10,652	)	(2,292	)	(195	)	(2,487	)
Vacant square feet at September 30, 2014	5,897		829		6,726
Vacant square feet at March 31, 2015							5,576		791		6,367

Of the vacant square footage shown in the table above, approximately 833,000 square feet was in the properties that were sold in the Suburban Office Portfolio and Midwest Industrial Portfolio sales (see Note 12 to the Consolidated Financial Statements).

Total Leasing Activity

The initial leasing of development projects or vacant space in acquired properties is referred to as first generation lease activity. The leasing of such space that we have previously held under lease is referred to as second generation lease activity. The total leasing activity for our consolidated rental properties, expressed in square feet of leases signed during the period, is as follows for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,		Three Months Ended March 31,
	2014	2013	2014	2013	2015	2014
New Leasing Activity - First Generation	690	1,461	4,619	3,307	1,745	1,439
New Leasing Activity - Second Generation	3,236	1,759	7,424	6,088	914	2,544
Renewal Leasing Activity	1,608	2,143	5,658	7,015	3,582	1,677
Total Consolidated Leasing Activity	5,534	5,363	17,701	16,410	6,241	5,660
Unconsolidated Joint Venture Leasing Activity	379	863	2,719	2,174	897	370
Total Including Unconsolidated Joint Venture Leasing Activity	5,913	6,226	20,420	18,584	7,138	6,030

~~New~~The decrease in new second generation leasing activity ~~for first generation leases increased for the nine months ended September 30, 2014,~~was largely due to strong renewal leasing volume and higher occupancy levels resulting in less vacant space to lease up.

The increase in renewal leasing activity, when compared to the ~~same period~~three months ended March 31, 2014, was driven by an increase in ~~2013, due to new build-to-suit development starts~~the total square feet of leases up for renewal and ~~the lease-up of speculative developments. New leasing activity~~an increased tenant retention rate for ~~second generation leases increased~~such leases. Our tenant retention rate for the three ~~and nine~~ month ~~periods~~period ended ~~September 30, 2014 due~~March 31, 2015 for consolidated properties increased to ~~backfilling a significant portion of expiring leases that were not renewed. The increase in the leasing volume within unconsolidated joint ventures~~77.6% from 65.1% for the ~~nine months ended September 30, 2014 was also mainly the result of build-to-suit development activity.~~corresponding period in 2014.

New Second Generation Leases

The following table sets forth the estimated costs of tenant improvements and leasing commissions, on a per square foot basis, that we are obligated to fulfill under the new second generation leases signed for our rental properties during the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (square feet data in thousands):


	Square Feet of New Second Generation Leases Signed		Average Term in Years		Estimated Tenant Improvement Cost per Square Foot		Leasing Commissions per Square Foot		Square Feet of New Second Generation Leases Signed		Average Term in Years		Estimated Tenant Improvement Cost per Square Foot		Leasing Commissions per Square Foot
	2014	2013	2014	2013	2014	2013	2014	2013	2015	2014	2015	2014	2015	2014	2015	2014
Three Months
Industrial	2,885	1,462	7.1	4.6	$1.87	$1.72	$1.52	$1.28	798	2,382	6.5	7.5	$2.58	$2.84	$1.64	$1.94
Office	345	293	6.9	6.0	$21.04	$14.21	$7.59	$6.80	105	148	5.3	5.7	$11.55	$19.25	$6.15	$5.16
Medical Office	6	4	7.7	4.2	$28.10	$10.00	$10.95	$2.80	11	14	5.3	6.0	$15.23	$20.68	$7.61	$8.68
Total Consolidated	3,236	1,759	7.0	4.9	$3.96	$3.82	$2.18	$2.20	914	2,544	6.3	7.4	$3.76	$3.89	$2.23	$2.16
Unconsolidated Joint Ventures	134	157	5.2	7.2	$0.71	$5.19	$1.21	$2.66	169	73	4.2	2.3	$8.44	$4.45	$7.30	$3.82
Total Including Unconsolidated Joint Ventures	3,370	1,916	7.0	5.0	$3.83	$3.93	$2.14	$2.24	1,083	2,617	6.0	7.2	$4.49	$3.91	$3.02	$2.21

Nine Months
Industrial	6,627	5,125	7.2	5.0	$2.45	$2.18	$1.78	$1.42
Office	765	931	6.2	6.7	$18.35	$16.97	$6.78	$7.34
Medical Office	32	32	6.9	4.6	$29.08	$10.05	$8.30	$1.43
Total Consolidated	7,424	6,088	7.1	5.2	$4.21	$4.48	$2.33	$2.32
Unconsolidated Joint Ventures	631	650	4.7	5.6	$1.96	$3.95	$1.62	$1.99
Total Including Unconsolidated Joint Ventures	8,055	6,738	6.9	5.3	$4.03	$4.43	$2.27	$2.29

Of the new second generation leases executed during the three months ended March 31, 2015, approximately 70,000 square feet were in properties sold as part of the Suburban Office Portfolio and Midwest Industrial Portfolio sales (see Note 12 to the Consolidated Financial Statements) in early April.

Lease Renewals

The following table summarizes our lease renewal activity within our rental properties for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (square feet data in thousands):

2726


	Square Feet of Leases Renewed		Percent of Expiring Leases Renewed				Average Term in Years		Growth (Decline) in Net Effective Rents*				Estimated Tenant Improvement Cost per Square Foot		Leasing Commissions per Square Foot		Square Feet of Leases Renewed		Percent of Expiring Leases Renewed				Average Term in Years		Growth (Decline) in Net Effective Rents*				Estimated Tenant Improvement Cost per Square Foot		Leasing Commissions per Square Foot
	2014	2013	2014		2013		2014	2013	2014		2013		2014	2013	2014	2013	2015	2014	2015		2014		2015	2014	2015		2014		2015	2014	2015	2014
Three Months
Industrial	1,387	1,459	54.5	%	51.8	%	4.9	4.2	7.1	%	8.8	%	$1.12	$0.92	$1.17	$1.18	3,480	1,511	78.5	%	66.1	%	7.4	4.1	10.0	%	8.1	%	$1.84	$0.26	$1.44	$0.65
Office	173	669	75.0	%	78.5	%	4.6	5.0	6.7	%	(2.7	)%	$8.70	$7.21	$4.70	$5.28	80	148	53.7	%	57.8	%	5.3	4.0	8.4	%	6.3	%	$5.79	$4.46	$5.00	$3.35
Medical Office	48	15	82.2	%	61.2	%	4.9	4.0	15.3	%	2.5	%	$4.19	$4.25	$5.26	$2.04	22	18	63.7	%	55.4	%	3.7	5.0	7.0	%	20.8	%	$4.06	$0.00	$1.68	$4.00
Total Consolidated	1,608	2,143	56.7	%	58.0	%	4.9	4.4	7.8	%	1.9	%	$2.03	$2.91	$1.67	$2.47	3,582	1,677	77.6	%	65.1	%	7.3	4.1	9.8	%	8.2	%	$1.95	$0.62	$1.52	$0.93
Unconsolidated Joint Ventures	242	670	63.9	%	99.0	%	5.5	4.9	22.1	%	7.1	%	$1.25	$1.07	$1.59	$1.27	277	284	88.8	%	63.5	%	2.0	2.3	(1.6	)%	6.9	%	$0.35	$0.27	$0.56	$0.68
Total Including Unconsolidated Joint Ventures	1,850	2,813	57.6	%	64.4	%	5.0	4.5	9.0	%	2.7	%	$1.92	$2.47	$1.66	$2.18	3,859	1,961	78.3	%	64.9	%	6.9	3.8	8.8	%	7.9	%	$1.83	$0.57	$1.46	$0.89

Nine Months
Industrial	5,042	5,461	62.0	%	54.7	%	4.5	4.3	7.0	%	3.5	%	$0.69	$0.68	$1.08	$0.85
Office	539	1,524	66.3	%	81.7	%	4.7	4.8	8.1	%	(1.2	)%	$6.10	$5.53	$3.76	$4.70
Medical Office	77	30	66.8	%	27.3	%	4.8	4.0	14.7	%	1.7	%	$2.63	$4.96	$4.60	$3.74
Total Consolidated	5,658	7,015	62.4	%	58.7	%	4.6	4.4	7.6	%	1.1	%	$1.23	$1.75	$1.39	$1.70
Unconsolidated Joint Ventures	1,456	1,386	76.5	%	83.3	%	5.7	4.4	9.4	%	8.1	%	$5.11	$1.80	$4.20	$1.47
Total Including Unconsolidated Joint Ventures	7,114	8,401	64.9	%	61.7	%	4.8	4.4	8.0	%	2.1	%	$2.03	$1.76	$1.96	$1.66
* Represents the percentage change in net effective rent between the original leases and the renewal leases. Net effective rents represent average annual base rental payments, on a straight-line basis for the term of each lease, excluding operating expense reimbursements.

Of the renewal leases executed during the three months ended March 31, 2015, approximately 524,000 square feet were in properties that were sold in early April as part of the Suburban Office Portfolio and Midwest Industrial Portfolio sales (see Note 12 to the Consolidated Financial Statements). Growth in net effective rents ~~on renewal~~for the period ended March 31, 2015, for consolidated and joint venture properties combined, would have been 8.4% if those leases ~~improved when compared to activity during the comparable periods in 2013, and reflects what we believe to be increased asking rents across many of our markets.~~would have been excluded.

Lease Expirations

Our ability to maintain and improve occupancy rates and net effective rents primarily depends upon our continuing ability to re-lease expiring space. The table below reflects our consolidated in-service portfolio lease expiration schedule, ~~including~~excluding the ~~number of expiring~~ leases ~~as well as~~in properties that were sold in the ~~square footage~~Suburban Office Portfolio and ~~annualized net effective rent for expiring leases by property type,~~Midwest Industrial Portfolio sales in early April, at ~~September 30, 2014~~March 31, 2015 (in thousands, except percentage data and number of leases):


	Total Consolidated Portfolio					Industrial				Office				Medical Office				Other				Total Consolidated Portfolio					Industrial				Office				Medical Office
Year of Expiration	Square Feet		Ann. Rent Revenue*		No. of Leases	Square Feet		Ann. Rent Revenue*		Square Feet		Ann. Rent Revenue*		Square Feet		Ann. Rent Revenue*		Square Feet		Ann. Rent Revenue*		Square Feet		Ann. Rent Revenue*		Number of Leases	Square Feet		Ann. Rent Revenue*		Square Feet		Ann. Rent Revenue*		Square Feet		Ann. Rent Revenue*
Remainder of 2014	1,412		$	7,848	120	1,127		$	4,630	237		$	2,546	48		$	672	—		$	—
2015	10,701		53,701		307	9,197		34,900		1,458		17,949		38		676		8		176
Remainder of 2015																						5,488		$	26,617	372	4,956		$	19,946	490		$	6,014	42		$	657
2016	14,264		68,746		334	12,659		46,282		1,383		17,928		201		4,119		21		417		11,892		52,634		374	11,004		40,011		688		8,552		200		4,071
2017	15,425		74,812		325	13,916		53,248		1,258		16,061		181		3,811		70		1,692		13,724		58,068		359	13,121		49,700		417		4,495		186		3,873
2018	11,808		69,699		292	9,768		38,262		1,584		20,314		380		9,678		76		1,445		11,175		54,937		320	10,211		38,845		579		6,360		385		9,732
2019	13,497		74,322		286	11,637		46,388		1,542		20,218		306		7,432		12		284		12,590		63,227		311	11,507		45,814		767		9,767		316		7,646
2020	12,438		71,488		164	10,672		43,736		1,264		17,745		491		9,731		11		276		12,609		63,383		208	11,813		50,248		372		4,186		424		8,949
2021	8,882		47,694		136	7,739		30,785		901		11,256		229		5,381		13		272		8,130		40,742		153	7,386		29,292		496		5,789		248		5,661
2022	6,950		34,584		81	6,386		23,818		223		3,603		319		6,717		22		446		6,862		31,940		95	6,476		24,445		65		731		321		6,764
2023	2,783		22,597		55	2,093		10,531		368		5,371		316		6,546		6		149		2,480		19,752		66	1,879		9,208		194		2,992		407		7,552
2024 and Thereafter	21,143		152,760		142	17,445		76,807		1,687		24,698		1,955		50,518		56		737
2024																						7,327		38,430		55	6,843		29,912		358		5,256		126		3,262
2025 and Thereafter																						18,547		129,043		110	15,870		69,010		482		6,161		2,195		53,872
Total Leased	119,303		$	678,251	2,242	102,639		$	409,387	11,905		$	157,689	4,464		$	105,281	295		$	5,894	110,824		$	578,773	2,423	101,066		$	406,431	4,908		$	60,303	4,850		$	112,039

Total Portfolio Square Feet	125,201					106,503				13,572				4,778				348				115,462					104,595				5,697				5,170
Percent Leased	95.3	%				96.4	%			87.7	%			93.4	%			85.2	%			96.0	%				96.6	%			86.2	%			93.8	%
* Annualized rental revenue represents average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. Annualized rental revenue excludes additional amounts paid by tenants as reimbursement for operating expenses.

Information on current market rents can be difficult to obtain, is highly subjective, and is often not directly comparable between properties. As a result, we believe the increase or decrease in net effective rent on lease renewals, as previously defined, is the most objective and meaningful relationship between rents on leases expiring in the near-term and current market rents.

Acquisition Activity

Our decision process in determining whether or not to acquire a target property or portfolio of properties involves several factors, including expected rent growth, multiple yield metrics, property locations and expected demographic growth in each location, current occupancy of the target properties, tenant profile and remaining terms of the in-place leases in the target properties. We pursue both brokered and non-brokered acquisitions, and it is difficult to predict which markets and product types may present acquisition opportunities that align with our strategy. Because of the numerous factors considered in our acquisition decisions, we do not establish specific target yields for future acquisitions.

We acquired ~~three~~ ~~properties during the~~ ~~nine months ended September 30, 2014~~ ~~and 17~~five properties during the year ended December 31, ~~2013~~.2014. We have not completed any significant acquisitions during the three months ended March 31, 2015. The following table summarizes the acquisition price, percent leased at time of acquisition and in-place yields, by product type, for these acquisitions (in thousands, except percentage data):


	Year-to-Date 2014 Acquisitions						Full Year 2013 Acquisitions						Full Year 2014 Acquisitions
Type	Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***		Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***		Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***
Industrial	$	99,438	6.2	%	100.0	%	$	532,808	6.1	%	100.0	%	$	118,488	6.2	%	100.0	%
Medical Office	—		—	%	—	%	20,500		6.9	%	82.3	%	12,523		7.2	%	100.0	%
Total	$	99,438	6.2	%	100.0	%	$	553,308	6.2	%	99.8	%	$	131,011	6.3	%	100.0	%

* Includes real estate assets and net acquired lease-related intangible assets, including above or below market leases, but excludes other acquired working capital assets and liabilities.																			** In-place yields of completed acquisitions are calculated as the current annualized net rental payments from space leased to tenants at the date of acquisition, divided by the acquisition price of the acquired real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.	*** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of acquisition.

Disposition Activity

We regularly work to identify, consider and pursue opportunities to dispose of properties on an opportunistic basis and on a basis that is generally consistent with our strategic plans.

We sold 2312 buildings during the ~~nine~~three months ended ~~September 30, 2014~~March 31, 2015 and 3829 buildings during the year ended December 31, ~~2013~~.2014. The following table summarizes the sales prices, in-place yields and percent leased, by product type, of these buildings (in thousands, except percentage data):


	Year-to-Date 2014 Dispositions						Full Year 2013 Dispositions						Dispositions for the three months ended March 31, 2015						Full Year 2014 Dispositions
Type	Sales Price		In-Place Yield*		Percent Leased**		Sales Price		In-Place Yield*		Percent Leased**		Sales Price		In-Place Yield*		Percent Leased**		Sales Price		In-Place Yield*		Percent Leased**
Industrial	$	46,000	9.0	%	96.3	%	$	16,499	6.3	%	50.1	%	$	41,500	6.5	%	100.0	%	$	70,807	4.9	%	60.7	%
Office	278,450		7.8	%	91.6	%	219,254		8.3	%	91.6	%	19,378		10.2	%	66.7	%	348,990		7.5	%	89.3	%
Medical Office	57,400		6.4	%	100.0	%	285,850		6.4	%	89.1	%	20,400		6.8	%	100.0	%	57,400		6.5	%	100.0	%
Other	—		—	%	—	%	188,000		5.0	%	89.8	%	40,250		9.0	%	83.4	%	—		—	%	—	%
Total	$	381,850	7.7	%	94.1	%	$	709,603	6.6	%	86.5	%	$	121,528	8.0	%	87.1	%	$	477,197	7.0	%	76.8	%

* In-place yields of completed dispositions are calculated as current annualized net rental payments from space leased to tenants at the date of sale, divided by the sales price of the real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.																									** Represents percentage of total square feet leased based on executed leases where the leases have commenced.

~~The majority~~On April 1, 2015, we completed the Suburban Office Portfolio Sale, which includes all of the ~~industrial disposition activity during~~company’s wholly-owned, in-service suburban office properties located in Nashville, Raleigh, South Florida and St. Louis. One additional office asset currently under construction in Raleigh is expected to be sold upon completion in late 2015.

On April 8, 2015, we completed the nine months ended September 30, 2014 related to the sale of light industrial, also known as flex industrial, properties. The higher in-place yield on these property sales was in large part the result of the pricing for a nine-building portfolio of lightMidwest Industrial Portfolio Sale which includes 51 non-strategic industrial properties, ~~in Indianapolis, Indiana that had a significant amount of its leases expiring in the near future.~~

~~During the nine months ended September 30, 2014, dispositions of office properties were comprised of a portfolio of six office properties, totaling more than 1.0 million square feet,~~ located in ~~Cincinnati, Ohio. The higher in-place yield on this portfolio sale was driven by a significant amount of the properties' leases expiring before the end of 2016.~~primarily Midwest markets.

Development

At ~~September 30, 2014~~,March 31, 2015, we had ~~8.3~~5.4 million square feet of property under development with total estimated costs upon completion of ~~$650.2~~$468.7 million compared to ~~2.3~~7.5 million square feet with total estimated costs upon completion

of ~~$435.5~~$645.5 million at ~~September 30, 2013~~.March 31, 2014. The square footage and estimated costs include both consolidated properties and unconsolidated joint venture development activity at 100%.

The following table summarizes our properties under development at ~~September 30, 2014~~March 31, 2015 (in thousands, except percentage data):


Ownership Type	Square Feet	Percent Leased	Total Estimated Project Costs		Total Incurred to Date		Amount Remaining to be Spent		Square Feet	Percent Leased	Total Estimated Project Costs		Total Incurred to Date		Amount Remaining to be Spent
Consolidated properties	7,075	66%	$	602,920	$	367,384	$	235,536	3,895	63%	$	407,290	$	181,438	$	225,852
Unconsolidated joint venture properties	1,241	25%	47,310		14,480		32,830		1,480	37%	61,452		28,999		32,453
Total	8,316	59%	$	650,230	$	381,864	$	268,366	5,375	55%	$	468,742	$	210,437	$	258,305

The development pipeline under construction, for consolidated properties, at March 31, 2015 includes one suburban office property that is under contract to sell upon completion to the same buyer as the Suburban Office Portfolio Sale.

Supplemental Performance Measures

In addition to net income (loss) computed in accordance with GAAP, we assess and measure the overall operating results of the General Partner and the Partnership using certain non-GAAP supplemental performance measures, which include (i) Funds From Operations ("FFO"), (ii) Property Level Net Operating Income - Cash Basis ("PNOI") and (iii) Same Property Net Operating Income - Cash Basis ("SPNOI").

These non-GAAP metrics are commonly used by industry analysts and investors as supplemental operating performance measures of REITs and are viewed by management to be useful indicators of operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the

use of FFO, PNOI and SPNOI, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful.

The most comparable GAAP measure to FFO is net income (loss) attributable to common shareholders or common unitholders, while the most comparable GAAP measure to PNOI and SPNOI is income from continuing operations before income taxes.

FFO, PNOI and SPNOI each exclude expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders, income from continuing operations before income taxes, or any other measures derived in accordance with GAAP. Furthermore, these metrics may not be comparable to other similarly titled measures of other companies.

Funds From Operations

The National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. We calculate FFO in accordance with the definition that was adopted by the Board of Governors of NAREIT.

Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assists them in comparing these operating results between periods or between different companies that use the NAREIT definition of FFO.

The following table shows a reconciliation of net income attributable to common shareholders or common unitholders to the calculation of FFO attributable to common shareholders or common unitholders for the three ~~and~~

~~nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively (in thousands):

Three Months Ended September 30, Nine Months Ended September 30,
2014 2013 2014 2013
Net income (loss) attributable to common shareholders of the General Partner $ 61,533
$ (6,067 ) $ 207,904
$ 83,470
Add back: Net income (loss) attributable to noncontrolling interests - common limited partnership interests in the Partnership 795
(92 ) 2,738
1,142
Net income (loss) attributable to common unitholders of the Partnership 62,328
(6,159 ) 210,642
84,612
Adjustments:
Depreciation and amortization 95,000
104,438
290,905
303,477
Company share of joint venture depreciation and amortization 7,827
7,127
21,004
20,730
Impairment charges - depreciable property 453
—
453
—
Gains on depreciable property sales—wholly owned (47,707 ) (8,441 ) (156,481 ) (102,160 )
Income tax (benefit) expense triggered by depreciable property sales (997 ) —
5,564
—
Gains on depreciable property sales—share of joint venture (17,370 ) (155 ) (75,652 ) (48,960 )
Funds From Operations attributable to common unitholders of the Partnership $ 99,534
$ 96,810
$ 296,435
$ 257,699
Additional General Partner Adjustments:
Net (income) loss attributable to noncontrolling interests - common limited partnership interests in the Partnership (795 ) 92
(2,738 ) (1,142 )
Noncontrolling interest share of adjustments (475 ) (1,384 ) (1,114 ) (2,339 )
Funds From Operations attributable to common shareholders of the General Partner $ 98,264
$ 95,518
$ 292,583
$ 254,218

Income tax expense or benefit, from both continuing and discontinued operations, for the three and nine months ended September 30, 2014, was the result of the sales of properties that were partially owned by our taxable REIT subsidiary. As such, the income tax expense for the period is excluded from FFO.



	Three Months Ended March 31,
	2015			2014
Net income attributable to common shareholders of the General Partner	$	65,244		$	18,683
Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	699			250
Net income attributable to common unitholders of the Partnership	65,943			18,933
Adjustments:
Depreciation and amortization	85,420			98,264
Company share of joint venture depreciation and amortization	4,928			6,396
Gains on depreciable property sales—wholly owned	(41,859		)	(35,605		)
Income tax expense triggered by depreciable property sales	1,484			5,651
Gains/losses on depreciable property sales—share of joint venture	(1,544		)	165
Funds From Operations attributable to common unitholders of the Partnership	$	114,372		$	93,804
Additional General Partner Adjustments:
Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	(699		)	(250		)
Noncontrolling interest share of adjustments	(514		)	(991		)
Funds From Operations attributable to common shareholders of the General Partner	$	113,159		$	92,563

Property Level Net Operating Income - Cash Basis

PNOI is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items that are detailed in the table below. As a performance metric that consists of only the cash-based revenues and expenses directly related to ongoing real estate rental operations, PNOI is narrower in scope than FFO.

PNOI, as we calculate it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs. We believe that PNOI is another useful supplemental performance measure, as it is an input in many REIT valuation models and it provides a means by which to evaluate the performance of the properties within our Rental Operations segments.

The major factors influencing PNOI are occupancy levels, acquisitions and sales, development properties that achieve stabilized operations, rental rate increases or decreases, and the recoverability of operating expenses. PNOI was calculated as follows for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2015 and 2014 ~~and~~ ~~2013~~ (in thousands):


	Three Months Ended September 30,						Nine Months Ended September 30,						Three Months Ended March 31,
	2014			2013			2014			2013			2015			2014
Rental and related revenue from continuing operations - Rental Operations segments	$	230,297		$	220,070		$	698,838		$	642,819		$	212,791		$	207,667
Rental and real estate tax expenses from continuing operations - Rental Operations segments	(69,884		)	(68,976		)	(221,421		)	(201,960		)	(64,677		)	(69,573		)
Less adjusting items, continuing operations:
PNOI from sold/held-for-sale properties included in continuing operations	(807		)	(9,332		)	(11,568		)	(25,449		)
Straight-line rental income and expense, net	(5,527		)	(2,942		)	(16,929		)	(11,040		)	(6,697		)	(4,769		)
Revenues related to lease buyouts	(145		)	(2,936		)	(4,365		)	(9,615		)	(864		)	(2,695		)
Amortization of lease concessions and above and below market rents	1,220			2,267			5,376			6,485			1,713			2,211
Intercompany rents and other adjusting items	1,221			1,125			3,323			3,470			731			1,537
PNOI, Continuing Operations	$	156,375		$	139,276		$	453,254		$	404,710		$	142,997		$	134,378

A reconciliation of PNOI for our Rental Operations segments to income (loss) from continuing operations before income taxes is provided in Note 10 to the consolidated financial statements included in Part I, Item 1 of this Report. PNOI from continuing operations increased largely as the result of acquisitions and developments placed in service and improved occupancy, partially offset by the impact of property dispositions, as is described further in the Comparison of Three Months Ended ~~September 30, 2014~~March 31, 2015 to Three Months Ended ~~September 30, 2013~~ ~~and in the Comparison of Nine Months Ended~~ ~~September 30,~~March 31, 2014, ~~to Nine Months Ended~~ ~~September 30, 2013~~, below.

Same Property Net Operating Income - Cash Basis

We also evaluate the performance of our properties, including our share of properties we jointly control, on a "same property" basis, using a metric referred to as SPNOI. We view SPNOI as a useful supplemental performance measure because it improves comparability between periods by eliminating the effects of changes in the composition of our portfolio.

On an individual property basis, with the exception that SPNOI includes revenues from lease buyouts that are individually less than $250,000, SPNOI is computed in a consistent manner as PNOI.

We have defined our same property portfolio, for the three months ended ~~September 30, 2014,~~March 31, 2015, as those properties that have been owned and in operation throughout the twenty-four months ended ~~September 30, 2014.~~March 31, 2015. In addition to excluding properties that have not been owned and in operation for the twenty-four months ended ~~September 30, 2014,~~March 31, 2015, we have also excluded properties from our same property portfolio where revenues from individual lease buyouts in excess of $250,000 have been recognized. A reconciliation of SPNOI to PNOI and income or loss from continuing operations before income taxes is presented as follows (in thousands):


	Three Months Ended September 30,						Percent	Three Months Ended March 31,						Percent
	2014			2013			Change	2015			2014			Change
SPNOI	$	127,202		$	119,959		6.0%	$	109,040		$	102,120		6.8%
Less share of SPNOI from unconsolidated joint ventures	(9,757		)	(9,226		)		(7,839		)	(7,627		)
Less lease buyouts (same property) individually less than $250	(149		)	(94		)
Lease buyouts (same property population) excluded from computation of SPNOI								365			409
PNOI excluded from the same property population	39,079			28,637				35,192			27,053
PNOI	$	156,375		$	139,276
Earnings from Service Operations	7,211			3,415				5,797			8,549
Rental Operations revenues and expenses excluded from PNOI	4,038			11,818				11,356			16,139
Non-Segment Items	(97,648		)	(167,611		)		(115,011		)	(136,498		)
Income (loss) from continuing operations before income taxes	$	69,976		$	(13,102	)		$	38,900		$	10,145
Note - SPNOI for the nine month period ended September 30, 2014 is not presented above, as it is not calculated by the Company and is not utilized by the Company's management to evaluate the performance of its properties.

The composition of the line items titled "Rental Operations revenues and expenses excluded from PNOI" and "Non-Segment Items" from the table above are shown in greater detail in Note 10 to the consolidated financial statements included in Part I, Item 1 of this Report.

We believe that the factors that impact SPNOI are generally the same as those that impact PNOI. The following table details the number of properties, square feet, average occupancy and cash rental rates for the properties included in SPNOI for the respective periods:


	Three Months Ended September 30,			Three Months Ended March 31,
	2014	2013		2015	2014
Number of properties	617	617		507	507
Square feet (in thousands) (1)	104,908	104,908		96,107	96,107
Average commencement occupancy percentage (2)	93.9%	92.4%		95.7%	93.0%
Average rental rate - cash basis (3)	$5.52	$5.44		$5.08	$5.00
(1) Includes the total square feet of the consolidated properties that are in the same property population as well as 6.2 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 17.8 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the same property population.
(1) Includes the total square feet of the consolidated properties that are in the same property population as well as 5.6 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 16.6 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the same property population.			(1) Includes the total square feet of the consolidated properties that are in the same property population as well as 5.6 million square feet of space for unconsolidated joint ventures, which represents our ratable share of the 16.6 million total square feet of space for buildings owned by unconsolidated joint ventures that are in the same property population.
(2) Commencement occupancy represents the percentage of total square feet where the leases have commenced.
(3) Represents the average annualized contractual rent per square foot for the three-month periods ended September 30, 2014 and 2013 for tenants in occupancy in properties in the same property population. Cash rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period at September 30, 2014 or 2013 its rent would equal zero for purposes of this metric.
(3) Represents the average annualized contractual rent per square foot for the three-month periods ended March 31, 2015 and 2014 for tenants in occupancy in properties in the same property population. Cash rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period at March 31, 2015 or 2014 its rent would equal zero for purposes of this metric.			(3) Represents the average annualized contractual rent per square foot for the three-month periods ended March 31, 2015 and 2014 for tenants in occupancy in properties in the same property population. Cash rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period at March 31, 2015 or 2014 its rent would equal zero for purposes of this metric.

Results of Operations

A summary of our operating results and property statistics for the three ~~and nine~~ months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively, is as follows (in thousands, except number of properties and per share or Common Unit data):

3432


	Three Months Ended September 30,					Nine Months Ended September 30,					Three Months Ended March 31,
	2014		2013			2014		2013			2015		2014
Rental and related revenue from continuing operations	$	231,322	$	221,655		$	702,190	$	646,842		$	214,615	$	208,646
General contractor and service fee revenue	59,739		62,807			185,072		161,004			52,820		55,820
Operating income	123,073		44,097			379,686		180,847			88,200		59,069
General Partner
Net income (loss) attributable to common shareholders	$	61,533	$	(6,067	)	$	207,904	$	83,470
Net income attributable to common shareholders											$	65,244	$	18,683
Weighted average common shares outstanding	341,165		324,895			333,393		320,810			344,597		327,106
Weighted average common shares and potential dilutive securities	345,826		324,895			338,057		325,380			348,653		331,716
Partnership
Net income (loss) attributable to common unitholders	$	62,328	$	(6,159	)	$	210,642	$	84,612
Net income attributable to common unitholders											$	65,943	$	18,933
Weighted average Common Units outstanding	345,545		329,283			337,777		325,203			348,292		331,493
Weighted average Common Units and potential dilutive securities	345,826		329,283			338,057		325,380			348,653		331,716
General Partner and Partnership
Basic income (loss) per common share or Common Unit:
Basic income per common share or Common Unit:
Continuing operations	$	0.18	$	(0.05	)	$	0.56	$	(0.06	)	$	0.11	$	0.00
Discontinued operations	$	—	$	0.03		$	0.06	$	0.31		$	0.08	$	0.06
Diluted income (loss) per common share or Common Unit:
Diluted income per common share or Common Unit:
Continuing operations	$	0.18	$	(0.05	)	$	0.56	$	(0.06	)	$	0.11	$	0.00
Discontinued operations	$	—	$	0.03		$	0.06	$	0.31		$	0.08	$	0.06
Number of in-service consolidated properties at end of period	617		645			617		645			615		616
In-service consolidated square footage at end of period	125,201		124,780			125,201		124,780			127,461		124,146
Number of in-service joint venture properties at end of period	92		108			92		108			85		106
In-service joint venture square footage at end of period	21,039		22,224			21,039		22,224			20,023		22,413

Comparison of Three Months Ended ~~September 30, 2014~~March 31, 2015 to Three Months Ended ~~September 30, 2013~~March 31, 2014

Rental and Related Revenue

The following table sets forth rental and related revenue from continuing operations by reportable segment for the three months ended ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively (in thousands):


	Three Months Ended September 30,				Three Months Ended March 31,
	2014		2013		2015		2014
Rental and related revenue:
Industrial	$	131,212	$	122,643	$	147,227	$	133,291
Office	60,672		63,120		25,135		38,978
Medical Office	36,715		32,542		40,028		33,310
Other	2,723		3,350		2,225		3,067
Total rental and related revenue from continuing operations	$	231,322	$	221,655	$	214,615	$	208,646
Rental and Related Revenue from Discontinued Operations					32,115		30,072
Total Rental and Related Revenue from Continuing and Discontinued Operations					$	246,730	$	238,718

The following factors contributed to the increase in rental and related revenue from continuing operations:

We acquired ~~seven industrial~~five properties and placed 2229 developments in service from ~~July~~January 1, ~~2013~~2014 to ~~September 30, 2014~~,March 31, 2015, which provided incremental revenues of ~~$13.5~~$15.0 million in the ~~third~~first quarter of ~~2014~~,2015, as compared to the same period in ~~2013~~.2014.

Increased occupancy and rental rates within our same property portfolio also contributed to the overall increase in rental and related revenues from continuing operations.

The sale of ~~13 medical office properties and eleven office~~28 properties since ~~July~~January 1, ~~2013,~~2014, which did not meet the criteria to be classified within discontinued operations, partially offset the overall increase in rental and related revenue from continuing operations. The sale of these properties resulted in a ~~$12.0~~$13.4 million decrease

in rental and related revenue from continuing operations in the three months ended ~~September 30, 2014,~~March 31, 2015, as compared to the same period in ~~2013.~~2014.

~~Increased recoverable~~Rental Expenses and Real Estate Taxes

The following table sets forth rental expenses and real estate ~~tax expense~~taxes from continuing operations by reportable segment for ~~properties we have owned~~the three months ended March 31, 2015 and 2014, respectively (in thousands):



	Three Months Ended March 31,
	2015		2014
Rental expenses:
Industrial	$	17,085	$	18,372
Office	8,885		12,898
Medical Office	8,173		8,978
Other	1,981		1,793
Total rental expenses from continuing operations	$	36,124	$	42,041
Rental Expenses from Discontinued Operations	8,790		8,933
Total Rental Expenses from Continuing and Discontinued Operations	$	44,914	$	50,974
Real estate taxes:
Industrial	$	23,048	$	19,672
Office	2,980		4,868
Medical Office	4,498		3,938
Other	253		725
Total real estate tax expense from continuing operations	$	30,779	$	29,203
Real Estate Tax Expense from Discontinued Operations	3,596		3,470
Total Real Estate Tax Expense from Continuing and Discontinued Operations	$	34,375	$	32,673

Rental expenses from continuing operations decreased by $5.9 million in three months ended March 31, 2015, compared to the same period in 2014. The decreased rental expenses were primarily the result of lower snow removal and utility costs that resulted from the milder winter conditions in most of our markets during the three months ended March 31, 2015 compared to the same period in 2014. The incremental impact of acquisitions, developments and disposals since ~~prior to July 2013, totaling $5.0 million,~~January 1, 2014, also contributed to the ~~increase~~overall decrease in rental ~~and related revenue~~expenses from continuing operations.

Real estate taxes from continuing operations increased by $1.6 million in the first quarter of 2015, compared to the same period in 2014. The increased real estate tax expense was largely the result of increased tax rates and assessments across certain of our markets.

Rental and related revenue includes lease termination fees, which relate to specific tenants who pay a fee to terminate their lease obligation before the end of the contractual lease term. The overall increase in rental and related revenue from continuing operations was also partially offset by a decrease in lease termination fees of $1.7 million in the ~~third~~ ~~quarter of~~ ~~2014, compared to the same period in 2013.~~

~~The remaining increase in rental and related revenue from continuing operations was primarily due to increased occupancy and rental rates within our same property portfolio.~~

~~Rental Expenses and Real Estate Taxes~~

~~The following table sets forth rental expenses and real estate taxes from continuing operations by reportable segment for the three months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, respectively (in thousands):~~

Three Months Ended September 30,
2014 2013
Rental expenses:
Industrial $ 11,397
$ 12,684
Office 18,232
18,830
Medical Office 7,467
8,123
Other 1,221
1,522
Total rental expenses from continuing operations $ 38,317
$ 41,159
Real estate taxes:
Industrial $ 21,125
$ 18,770
Office 7,120
7,416
Medical Office 3,897
2,537
Other 719
710
Total real estate tax expense from continuing operations $ 32,861
$ 29,433

~~Rental expenses from continuing operations~~ ~~decreased~~ by ~~$2.8 million~~ ~~in the~~ ~~third~~ ~~quarter of~~ ~~2014~~, compared to the same period in 2013. Dispositions of properties since July 1, 2013, which did not meet the criteria for classification in discontinued operations, resulted in a $2.4 million decrease to rental expenses from continuing operations. The impact of dispositions was partially offset by $872,000 of incremental rental expenses related to acquisitions or development properties placed in service since July 1, 2013.

~~Real estate taxes from continuing operations~~ ~~increased~~ by ~~$3.4 million~~ ~~in the~~ ~~third~~ ~~quarter of~~ ~~2014~~, compared to the same period in 2013. The increased real estate tax expense was largely the result of increased tax rates and assessments across certain of our markets. The impact of acquisitions and developments placed in service since July 1, 2013 was largely offset by the sales of properties since July 1, 2013 that did not meet the criteria to be classified within discontinued operations.

Service Operations

The following table sets forth the components of net earnings from the Service Operations reportable segment for the three months ended ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively (in thousands):

3634


	Three Months Ended September 30,						Three Months Ended March 31,
	2014			2013			2015			2014
Service Operations:
General contractor and service fee revenue	$	59,739		$	62,807		$	52,820		$	55,820
General contractor and other services expenses	(52,528		)	(59,392		)	(47,023		)	(47,271		)
Net earnings from Service Operations	$	7,211		$	3,415		$	5,797		$	8,549

Service Operations primarily consist of the leasing, property management, asset management, development, construction management and general contractor services for joint venture properties and properties owned by third parties. Service Operations are heavily influenced by the current state of the economy, as leasing and property management fees are dependent upon occupancy, while construction and development services rely on the expansion of business operations of third-party property owners and joint venture partners. ~~Although our construction volume was slightly lower~~General contractor and service fee revenues decreased during the three months ended ~~September 30, 2014, our third party construction projects were generally performed at higher margins than during~~March 31, 2015 because the three months ended ~~September 30, 2013.~~March 31, 2014 included two higher-margin third-party construction projects in the Chicago area that have since been substantially completed.

Depreciation and Amortization

Depreciation and amortization expense from continuing operations decreased from ~~$101.2~~$88.3 million during the ~~third~~first quarter of ~~2013~~2014 to ~~$95.0~~$81.9 million for the same period in ~~2014~~,2015, primarily due to shorter-lived assets from previous periods' acquisitions becoming fully depreciated.

~~Equity in Earnings~~

Equity in earnings represents our ownership share of net income or loss from investments in unconsolidated companies that generally own and operate rental properties. Equity in earnings increased from a loss of ~~$27,000~~ ~~in the three months ended September 30, 2013 to earnings of~~ ~~$19.2 million~~ ~~for the same period in~~ ~~2014~~. During the third quarter of 2014, we sold all of the properties in two unconsolidated joint ventures, and as a result, we recorded $17.4 million to equity in earnings for our share of the net gains on sale. There were no property sales within our unconsolidated joint ventures in the three months ended September 30, 2013.

Gain on Sale of Properties - Continuing Operations

Effective April 1, 2014, we early adopted Accounting Standards Update ("ASU") No. 2014-08, Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity ("ASU ~~2014-08,~~2014-08"), which ~~will result~~resulted in fewer real estate sales being classified within discontinued operations. The ~~$47.1~~$23.5 million recognized as gain on sale of properties in continuing operations for the three months ended~~September 30, 2014~~ March 31, 2015 is comprised of the ~~gain~~gains from the sale of a ~~portfolio of two~~retail property in Pennsylvania, four industrial properties in Minneapolis, MN and six office properties in ~~South Florida.~~Cleveland, OH. These properties did not meet the criteria for inclusion in discontinued operations under ASU 2014-08.

~~Impairment Charges~~

~~Impairment charges include the impairment~~The $15.9 million recognized as gain on sale of ~~undeveloped land and buildings. Impairment charges of $5.9 million and $453,000 were recognized on one parcel of land and one office building, respectively, during~~properties in continuing operations for the three months ended ~~September 30, 2014. During~~March 31, 2014 is primarily comprised of the ~~three months ended September 30, 2014, we refined~~gain from the sale of one medical office property, prior to the adoption of ASU 2014-08. This property did not meet the criteria for inclusion in discontinued operations because of our ~~strategy for~~continued involvement through a ~~parcel of land, whereby we determined we would dispose of it in~~retained management agreement after the near future as opposed to holding it for development. The change in strategy for this land triggered the requirement to conduct an impairment analysis, which resulted in a determination that this parcel was impaired. There were no impairment charges recognized during the three months ended September 30, 2013.sale.

General and Administrative Expenses

General and administrative expenses consist of two components. The first component includes general corporate expenses, and the second component includes the indirect operating costs not allocated to, or absorbed by, the development or Rental Operations of our wholly-owned properties or our Service Operations. The indirect operating

costs that are either allocated to, or absorbed by, the development or Rental Operations of our wholly owned properties, or our Service Operations, are primarily comprised of employee compensation, including related costs such as benefits and wage-related taxes, but also include other ancillary costs such as travel and information technology support. Total indirect operation costs, prior to any allocation or absorption, and general corporate expenses are collectively referred to as our overall pool of overhead costs.

Those indirect costs not allocated to or absorbed by these operations are charged to general and administrative expenses. We regularly review our total overhead cost structure relative to our leasing, development and construction volume and adjust the level of total overhead, generally through changes in our level of staffing in various functional departments, as necessary in order to control overall general and administrative expense.

General and administrative expenses increased from ~~$10.4~~$14.7 million for the ~~third~~first quarter of ~~2013~~2014 to ~~$10.6~~$17.0 million for the same period in ~~2014~~.2015. The following table sets forth the factors that led to the increase in general and administrative expenses (in millions):

General and administrative expenses - three-month period ended September 30, 2013 $ 10.4
Increase to overall pool of overhead costs 2.3
Increased absorption of costs by wholly owned leasing and development activities (1) (1.0 )
Increased allocation of costs to Service Operations and Rental Operations (1.1 )
General and administrative expenses - three-month period ended September 30, 2014 $ 10.6



General and administrative expenses - three-month period ended March 31, 2014	$	14.7
Increase to overall pool of overhead costs	0.4
Decreased absorption of costs by wholly owned leasing and development activities (1)	2.1
Increased allocation of costs to Service Operations and Rental Operations	(0.2		)
General and administrative expenses - three-month period ended March 31, 2015	$	17.0

(1) ~~An increase~~A decrease in our pipeline of properties under construction during the three months ended ~~September 30, 2014~~March 31, 2015 resulted in a ~~higher~~lower level of absorption of overhead costs than during the three months ended ~~September 30, 2013.~~March 31, 2014. We capitalized ~~$5.9~~$9.0 million and ~~$8.8~~$3.6 million of our total overhead costs to leasing and development, respectively, for consolidated properties during the three months ended ~~September 30, 2014~~,March 31, 2015, compared to capitalizing ~~$7.3~~$8.3 million and ~~$6.4~~$6.4 million of such costs, respectively, for the three months ended ~~September 30, 2013~~.March 31, 2014. Combined overhead costs capitalized to leasing and development totaled ~~35.9%~~28.4% and ~~35.8%~~33.2% of our overall pool of overhead costs for the three months ended ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively.

Interest Expense

Interest expense allocable to continuing operations ~~decreased~~increased from ~~$56.6~~$49.3 million in the ~~third~~first quarter of ~~2013~~2014 to ~~$53.3~~$49.6 million in the ~~third~~first quarter of 2015. Although our overall average borrowings increased, in large part due to redeeming all of our outstanding preferred stock during 2014,~~. The reduction in~~ interest expense ~~is the result of using the proceeds from property dispositions and common equity issuances~~was relatively consistent between periods due to ~~reduce outstanding debt since the third quarter of 2013.~~a lower weighted average interest rate on our borrowings. We capitalized ~~$5.4~~$3.1 million of interest costs during the three months ended ~~September 30, 2014~~March 31, 2015 compared to ~~$3.5~~$4.2 million during the three months ended ~~September 30, 2013~~.March 31, 2014.

Discontinued Operations

The property-specific components of earnings that are classified as discontinued operations include rental revenues, rental expenses, real estate taxes, allocated interest expense and depreciation expense, as well as the net gain or loss on the disposition of the properties. ~~All~~The financial results for 61 real estate properties, which were classified as held-for-sale at March 31, 2015, were included in discontinued operations and were classified as such subsequent to the adoption of ASU 2014-08. We sold one property during the three months ended March 31, 2015, which was classified as held-for-sale and included in discontinued operations prior to the adoption of ASU ~~2014-08 and no properties that have been sold, or designated as held-for-sale, since the adoption of ASU 2014-08 have met the revised criteria for classification within discontinued operations.~~2014-08.

The operations of 3874 buildings were classified as discontinued operations for both the three months ended ~~September 30, 2014~~March 31, 2015 and ~~September 30, 2013~~.March 31, 2014. These 3874 buildings consist of 1716 industrial, 1256 office, ~~eight~~and two medical office ~~and~~ ~~one~~ ~~retail property.~~properties. As a result, we classified operating income, before gain on sales, of ~~$20,000~~$10.2 million and ~~$1.5~~$1.3 million in discontinued operations for the three months ended ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively.

Of the properties included in discontinued operations, ~~none~~one was sold during the first quarter of 2015 and 10 were sold during the ~~third~~first quarter of 2014 ~~and two~~ (all of these properties were ~~sold during~~classified within discontinued operations prior to the ~~third~~ ~~quarter~~April 1, 2014 adoption of ~~2013~~ASU 2014-08). The gains on disposal of these properties, and related income tax impact, are also reported in discontinued operations, as presented in Note 11 to the consolidated financial ~~statements.~~

~~Comparison of Nine Months Ended~~ ~~September 30, 2014~~ ~~to Nine Months Ended~~ ~~September 30, 2013~~

~~Rental and Related Revenue~~

~~The following table sets forth rental and related revenue from continuing operations by reportable segment for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, respectively (in thousands):~~

Nine Months Ended September 30,
2014 2013
Rental and related revenue:
Industrial $ 394,209
$ 354,468
Office 194,236
187,973
Medical Office 104,979
94,571
Other 8,766
9,830
Total rental and related revenue from continuing operations $ 702,190
$ 646,842

~~The following factors contributed to the~~ ~~increase~~ ~~in rental and related revenue from continuing operations:~~

~~We acquired 20 properties, of which 19 were industrial and one was medical office, and placed 30 developments in service from January 1, 2013 to~~ ~~September 30, 2014, which provided incremental revenues of $52.1 million in the~~ ~~nine months endedSeptember 30, 2014, as compared to the same period in~~ ~~2013~~.

The overall increase in rental and related revenue from continuing operations was partially offset by the sale of 24 properties that did not meet the criteria for inclusion within discontinued operations, since January 1, 2014, which resulted in a $17.9 million decrease in rental and related revenue from continuing operations in the nine months ended September 30, 2014, as compared to the same period in 2013.

~~Recoveries of rental expenses and real estate taxes within properties outside of the acquisitions, developments and dispositions described above, increased by $13.7 million in the~~ ~~nine months endedSeptember 30, 2014, as compared to the same period in~~ ~~2013~~. These increased recoveries were driven by increased recoverable rental expenses attributable to a significant increase in recoverable snow removal and utility costs resulting from the extreme winter conditions in the first quarter of ~~2014~~ ~~as well as increased recoverable real estate tax expense that was largely the result of increased tax rates and assessments across certain of our markets.~~

~~The overall increase in rental and related revenue from continuing operations was also partially offset by a decrease in lease termination fees~~statements included in ~~continuing operations of $4.2 million in the~~ ~~nine months endedSeptember 30, 2014, as compared to the same period in~~ ~~2013~~.

~~Increased occupancy and rental rates within our same property portfolio was the primary reason for the remaining increase in rental and related revenue from continuing operations.~~

~~Rental Expenses and Real Estate Taxes~~

~~The following table sets forth rental expenses and real estate taxes from continuing operations by reportable segment for the nine months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, respectively (in thousands):~~

Nine Months Ended September 30,
2014 2013
Rental expenses:
Industrial $ 42,268
$ 36,293
Office 58,112
55,055
Medical Office 23,608
22,445
Other 4,534
3,657
Total rental expenses from continuing operations $ 128,522
$ 117,450
Real estate taxes:
Industrial $ 60,284
$ 54,620
Office 23,294
22,693
Medical Office 11,745
8,899
Other 1,969
1,830
Total real estate tax expense from continuing operations $ 97,292
$ 88,042

~~Overall, rental expenses from continuing operations~~ ~~increased~~ by ~~$11.1 million~~ ~~in the~~ ~~nine months ended September 30, 2014, compared to the same period in~~ ~~2013~~. The increase was primarily the result of an increase in snow removal and utility costs due to the extreme winter conditions experienced in the first quarter of 2014. Incremental rental expenses associated with the 20 properties acquired and the 30 developments placed in service since January 1, 2013, were mostly offset by the impact of the 24 properties that were sold since January 1, 2013 but did not meet the criteria to be included in discontinued operations.

~~Overall, real estate taxes from continuing operations~~ ~~increased~~ by ~~$9.3 million~~ ~~in the~~ ~~nine months ended September 30, 2014, compared to the same period in~~ ~~2013~~. This increase was primarily due to the 20 properties acquired and the 30 developments placed in service since January 1, 2013, which resulted in incremental real estate tax expense of $7.8 million. Sales of properties not included in discontinued operations resulted in a $1.5 million decrease to real estate tax expense, which partially offset the impact of acquisitions and developments. Higher real estate tax expense, which was largely the result of increased tax rates and assessments across certain of our markets, additionally contributed to the overall increase in real estate taxes from continuing operations.

~~Service Operations~~

~~The following table sets forth the components of net earnings from the Service Operations reportable segment for the nine months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, respectively (in thousands):~~

Nine Months Ended September 30,
2014 2013
Service Operations:
General contractor and service fee revenue $ 185,072
$ 161,004
General contractor and other services expenses (163,657 ) (142,925 )
Net earnings from Service Operations $ 21,415
$ 18,079

General contractor and service fee revenues increased due to higher third-party construction volume and margins, which was driven in part by two third-party construction projects in the Chicago area that were ongoing during the nine months ended ~~September 30, 2014~~.

~~Depreciation and Amortization~~

~~Depreciation and amortization expense increased from~~ ~~$289.5 million~~ ~~during the first nine months of~~ ~~2013~~ to ~~$290.7 million~~ ~~for the same period in~~ ~~2014~~, primarily due to depreciation related to additions to our continuing operations asset base from properties acquired, which have shorter depreciable lives relative to developed properties, and developments placed in service in ~~2013~~ ~~and the first nine months of~~ ~~2014. The impact of acquisitions and developments was partially offset by shorter-lived assets from previous periods' acquisitions becoming fully depreciated.~~

~~Equity in Earnings~~

~~Equity in earnings increased from~~ ~~$50.4 million~~ ~~in the first nine months of~~ ~~2013~~ to ~~$82.3 million~~ ~~for the same period in~~ ~~2014~~. The increase is the result of property sale activity within our unconsolidated joint ventures. In January 2013, we sold the sole property within one of our unconsolidated joint ventures and recorded $12.2 million to equity in earnings for our share of the net gain, while in March 2013 we sold our interest in 17 properties within another of our unconsolidated joint ventures to our partner in that venture, resulting in $36.6 million recorded to equity in earnings for our share of the net gain on sale. In June 2014, one of our unconsolidated joint ventures sold its sole property, an office tower in Atlanta, Georgia, and we recorded $58.4 million to equity in earnings for our share of the net gain. During the third quarter of 2014, we sold all of the properties in two unconsolidated joint ventures, and as a result, we recorded $17.4 million to equity in earnings for our share of the net gains on sale.

~~Gain on Sale of Properties - Continuing Operations~~

~~The~~ ~~$133.6 million~~ ~~recognized as gain on sale of properties in continuing operations for the nine months ended~~ ~~September 30, 2014~~ is primarily comprised of the gain from the sale of one medical office property, two industrial properties and eight office properties. The medical office property, which was sold prior to our early adoption of ASU 2014-08, did not meet the criteria for inclusion in discontinued operations because of our continued involvement through a retained management agreement after the sale. The two industrial and eight office properties that were sold in the first nine months of 2014 did not meet the criteria for inclusion in discontinued operations under ASU 2014-08.

~~Impairment Charges~~

Impairment charges include the impairment of undeveloped land and buildings. Impairment charges, related to undeveloped land, of $8.4 million and $3.8 million were recognized during the nine months ended September 30, 2014 and 2013, respectively. During 2014, we refined our strategy for selected parcels of land, whereby we would dispose of them in the near future as opposed to holding them for development. The change in strategy for this land triggered the requirement to conduct an impairment analysis, which resulted in a determination that these parcels were impaired. An impairment charge of $453,000 was also recognized on one office building during the nine months ended September 30, 2014. There were no impairment charges recognized on buildings during the nine months ended September 30, 2013.

~~General and Administrative Expense~~

~~General and administrative expenses~~ ~~increased~~ ~~from~~ ~~$33.2 million~~ ~~for the first~~ ~~nine~~ ~~months of~~ ~~2013~~ to ~~$35.6 million~~ ~~for the same period in~~ ~~2014. The following table sets forth the factors that led to the increase in general and administrative expenses from the~~ ~~nine months endedSeptember 30, 2013~~ ~~to the~~ ~~nine months endedSeptember 30, 2014~~ ~~(in millions):~~

General and administrative expenses - nine-month period ended September 30, 2013 $ 33.2
Increase to overall pool of overhead costs 5.5
Decreased absorption of costs by wholly owned leasing and development activities (1) 2.3
Increased allocation of costs to Service Operations and Rental Operations (2) (5.4 )
General and administrative expenses - nine-month period ended September 30, 2014 $ 35.6

~~(1) The timing of efforts expended for wholly owned leasing activity during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~resulted in a lower level of absorption of overhead costs than during the~~ ~~nine~~ ~~months ended September 30, 2013. We capitalized~~ ~~$18.5 million~~ ~~and~~ ~~$23.3 million~~ ~~of our total overhead costs to leasing and development, respectively, for consolidated properties during the~~ ~~nine months ended September 30, 2014, compared to capitalizing~~ ~~$23.9 million~~ ~~and~~ ~~$20.3 million~~ ~~of such costs, respectively, for the~~ ~~nine months endedSeptember 30, 2013. Combined overhead costs capitalized to leasing and development totaled~~ ~~34.3%~~ ~~and~~ ~~36.2%~~ ~~of our overall pool of overhead costs for~~ ~~2014~~ ~~and~~ ~~2013, respectively.~~

~~(2) The increase in the allocation of overhead costs to Service Operations and Rental Operations resulted from higher volumes of third-party construction projects compared to the nine months ended~~ ~~September 30, 2013. See discussion of leasing/capital costs within the Uses of Liquidity section of this Item 2 for further discussion of our wholly owned development expenditures.~~

~~Interest Expense~~

~~Interest expense allocable to continuing operations decreased from~~ ~~$171.4 million~~ ~~in the first~~ ~~nine~~ ~~months of~~ ~~2013~~ to ~~$163.5 million~~ ~~in the first~~ ~~nine~~ ~~months of~~ ~~2014~~. The reduction in interest expense is primarily the result of our refinancing $675.0 million of unsecured debt during 2013, which had a weighted average effective interest rate of 6.4%, with new lower-rate fixed and variable rate issuances, as well as due to reducing our overall borrowings since September 30, 2013.

~~We capitalized $13.9 million of interest costs during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~compared to $13.2 million during the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2013~~.

~~Discontinued Operations~~

~~The operations of~~ 38 ~~buildings were classified as discontinued operations for both the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~and~~ ~~September 30, 2013. These~~ 38 ~~buildings consist of~~ 17 ~~industrial,~~ 12 ~~office,~~ ~~eight~~ ~~medical office and~~ ~~one~~ ~~retail property. As a result, we classified operating income, before gain on sales, of~~ ~~$222,000~~ ~~and~~ ~~$1.5 million~~ ~~in discontinued operations for the~~ ~~nine~~ ~~months ended~~ ~~September 30, 2014~~ ~~and~~ ~~2013, respectively.~~

~~Of the properties included in discontinued operations,~~ 12 ~~were sold during the first~~ ~~nine~~ ~~months of~~ ~~2014~~ ~~and 11 were sold during the first~~ ~~nine~~ ~~months of~~ ~~2013. The gains on disposal of these properties, and related income tax impact, are also reported in discontinued operations, as presented in Note 11 to the consolidated financial statements.~~Report.

Liquidity and Capital Resources

Sources of Liquidity

We expect to meet our short-term liquidity requirements over the next 12 months primarily through working capital, net cash provided by operating activities and proceeds received from real estate dispositions. Our short-term liquidity requirements include payments of dividends and distributions as well as the capital expenditures needed to maintain our current real estate assets. We had ~~$66.1 million in cash and $140.0~~$453.0 million of outstanding borrowings on the Partnership's ~~$850.0 million~~$1.2 billion unsecured line of credit at September 30, 2014. In October 2014, we extended the Partnership's line of credit through January 2019 while increasing its borrowing capacity from $850.0 million to $1.2 billion, with a $400.0 million accordion feature, and reducing the interest rate on outstanding borrowings from LIBOR plus 1.25% to LIBOR plus 1.05%.March 31, 2015.

In addition to our existing sources of liquidity, we expect to meet long-term liquidity requirements, such as scheduled mortgage and unsecured debt maturities, property acquisitions, financing of development activities and other capital improvements, through multiple sources of capital including operating cash flow, proceeds from property dispositions, term loans and through accessing the public debt and equity markets.

Rental Operations

Cash flows from Rental Operations is our primary source of liquidity and provides a stable source of cash flow to fund operational expenses. We believe that this cash-based revenue stream is substantially aligned with revenue recognition (except for items such as periodic straight-line rental income accruals and amortization of above or below market rents) as cash receipts from the leasing of rental properties are generally received in advance of, or a short time following, the actual revenue recognition.

Although overall economic conditions have improved since the last economic recession, we remain subject to a number of risks related to general economic conditions, including reduced occupancy, tenant defaults and bankruptcies and potential reduction in rental rates upon renewal or re-letting of properties, any of which would result in reduced cash flow from operations.

Unsecured Debt and Equity Securities

We use the Partnership's unsecured line of credit (which is guaranteed by the General Partner) as a temporary source of capital to fund development activities, acquire additional rental properties and provide working capital.

At ~~September 30, 2014~~,March 31, 2015, we had on file with the SEC an automatic shelf registration statement on Form S-3 relating to the offer and sale, from time to time, of an indeterminate amount of debt and equity securities. Equity securities are offered and sold by the General Partner, and the net proceeds of such offerings are contributed to the Partnership in exchange for additional General Partner Units or Preferred Units. From time to time, we expect to issue additional securities under this automatic shelf registration statement to fund the repayment of long-term debt upon maturity and for other general corporate purposes.

The General ~~Partner's previous~~Partner currently has an at the market equity program ~~which allowed~~that allows it to issue new common shares from time to time, ~~was fully utilized in July 2014. On August 29, 2014, the General Partner entered into a new at the market equity program~~ with an aggregate offering price of up to $175.0 million. ~~Year~~During the three months ended March 31, 2015, the General Partner issued 233,000 common shares pursuant to ~~date issuances under both of these plans totaled 14.6 million common shares,~~its at the market offering program, generating gross proceeds of approximately ~~$258.6~~$5.0 million and, after deducting commissions and other costs, net proceeds of approximately ~~$256.0~~$4.9 million. The General Partner has a capacity of $126.3 million remaining under its current at the market equity program.

The Partnership has issued debt securities pursuant to certain indentures ~~(and~~and related supplemental ~~indentures) governing our outstanding debt securities~~indentures, which also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such covenants, as well as applicable covenants under our unsecured line of credit, at ~~September 30, 2014~~.March 31, 2015.

Sale of Real Estate Assets

We regularly work to identify, consider and pursue opportunities to dispose of non-strategic properties on an opportunistic basis and on a basis that is generally consistent with our strategic plans. Our ability to dispose of such properties on favorable terms, or at all, is dependent upon a number of factors including the availability of credit to potential buyers to purchase properties at prices that we consider acceptable. Although we believe that we have demonstrated our ability to generate significant liquidity through the disposition of non-strategic properties, potential future adverse changes to general market and economic conditions could negatively impact our further ability to dispose of such properties.

We completed the disposition of two real estate portfolios in early April 2015, as described in Note 12 to the Consolidated Financial Statements.

Transactions with Unconsolidated Joint Ventures

Transactions with unconsolidated joint ventures also provide a source of liquidity. From time to time we will sell properties to unconsolidated joint ventures, while retaining a continuing interest in that entity, and receive proceeds commensurate to those interests that we do not own. Additionally, unconsolidated joint ventures will from time to time obtain debt financing or sell properties and will then distribute to us, and our joint venture partners, all or a portion of the proceeds from such transactions. During the ~~nine~~three months ended ~~September 30, 2014~~,March 31, 2015, we received a sale ~~distributions~~distribution from ~~two~~an unconsolidated joint ~~ventures~~venture totaling ~~$70.1 million~~.$2.2 million.

Uses of Liquidity

Our principal uses of liquidity include the following:

property investment;

leasing/capital costs;

dividends and distributions to shareholders and unitholders;

long-term debt maturities;

opportunistic repurchases of outstanding debt and preferred stock; and

other contractual obligations.

Property Investment

It is our strategy, through new developments and, to a lesser extent, acquisitions to continue to increase our investment concentration in industrial properties while, through selective dispositions, reducing our investment concentration in suburban office properties in certain markets. Pursuant to this strategy, we evaluate development and acquisition opportunities based upon our market outlook, including general economic conditions, supply and long-term growth potential. Our ability to make future property investments, along with being dependent upon identifying suitable development and acquisition opportunities, is also dependent upon our continued access to our longer-term sources of liquidity, including issuances of debt or equity securities as well as generating cash flow by disposing of selected properties.

Leasing/Capital Costs

Tenant improvements and lease-related costs pertaining to our initial leasing of newly completed space, or vacant space in acquired properties, are referred to as first generation expenditures. Such first generation expenditures for tenant improvements are included within "development of real estate investments" in our Consolidated Statements of Cash Flows, while such expenditures for lease-related costs are included within "other deferred leasing costs."

Cash expenditures related to the construction of a building's shell, as well as the associated site improvements, are also included within "development of real estate investments" in our Consolidated Statements of Cash Flows.

Tenant improvements and leasing costs to re-let rental space that we previously leased to tenants are referred to as second generation expenditures. Building improvements that are not specific to any tenant but serve to improve integral components of our real estate properties are also second generation expenditures. One of the principal uses of our liquidity is to fund the second generation leasing/capital expenditures of our real estate investments.

The following table summarizes our second generation capital expenditures by type of expenditure, as well as capital expenditures for the development of real estate investments and for other deferred leasing costs (in thousands):


	Nine Months Ended September 30,				Three Months Ended March 31,
	2014		2013		2015		2014
Second generation tenant improvements	$	36,331	$	28,524	$	8,281	$	10,445
Second generation leasing costs	28,607		28,284		9,080		8,942
Building improvements	4,537		3,244		135		244
Total second generation capital expenditures	$	69,475	$	60,052	$	17,496	$	19,631
Development of real estate investments	$	385,088	$	320,698	$	66,754	$	105,413
Other deferred leasing costs	$	24,948	$	26,647	$	13,122	$	8,706

We capitalized ~~$18.5~~$9.0 million and ~~$23.9~~$8.3 million of overhead costs related to leasing activities, including both first and second generation leases, during the ~~nine~~three months ended~~September 30,2014~~ March 31, 2015 and ~~2013~~,2014, respectively. We capitalized ~~$23.3~~$3.6 million and ~~$20.3~~$6.4 million of overhead costs related to development activities, including both development and tenant improvement projects on first and second generation space, during the ~~nine~~three months ended ~~September 30,2014~~March 31, 2015 and ~~2013~~,2014, respectively. Combined overhead costs capitalized to leasing and development totaled ~~34.3%~~28.4% and ~~36.2%~~33.2% of our overall pool of overhead costs for the ~~nine~~three months ended~~September 30,2014~~ March 31, 2015 and ~~2013~~,2014, respectively. Further discussion of the capitalization of overhead costs can be found herein, in the discussion

of general and administrative expenses in the Comparison of ~~Nine~~Three Months Ended ~~September 30, 2014~~March 31, 2015 to ~~Nine~~Three Months Ended ~~September 30,~~ ~~2013~~March 31, 2014 section of Management's Discussion and Analysis of Financial Condition and Results of Operations as well as in the Critical Accounting Policies section of Management's Discussion and Analysis of Financial Condition and Results of Operations in our combined Annual Report on Form 10-K for the year ended December 31, ~~2013~~2014 as filed with the SEC on February ~~21,~~ ~~2014~~.20, 2015.

In addition to the capitalization of overhead costs discussed above, we also capitalized ~~$13.9~~$3.1 million and ~~$13.2~~$4.2 million of interest costs in the ~~nine~~three months ended~~September 30,2014~~ March 31, 2015 and ~~2013~~,2014, respectively.

The following table summarizes our second generation capital expenditures by reportable operating segment (in thousands):


	Nine Months Ended September 30,				Three Months Ended March 31,
	2014		2013		2015		2014
Industrial	$	37,730	$	25,077	$	9,553	$	9,855
Office	29,249		33,585		7,475		9,070
Medical Office	1,964		1,251		438		213
Non-reportable segments	532		139		30		493
Total	$	69,475	$	60,052	$	17,496	$	19,631

Both our first and second generation expenditures vary significantly between leases on a per square foot basis, dependent upon several factors including the product type, the nature of a tenant's operations, the specific physical characteristics of each individual property and the market in which the property is located.

Dividend and Distribution Requirements

The General Partner is required to meet the distribution requirements of the Internal Revenue Code of 1986, as amended (the "Code"), in order to maintain its REIT status. We paid dividends or distributions of $0.17 per common share or Common Unit in the first ~~second and third quarters~~quarter of ~~2014~~,2015, and the General Partner's board of directors declared dividends or distributions of $0.17 per common share or Common Unit for the ~~fourth~~second quarter of ~~2014~~.2015. Our future dividends or distributions will be declared at the discretion of the General Partner's board of directors and will be subject to our future capital needs and availability.

At ~~September 30, 2014, the General Partner had two series of preferred stock outstanding. The annual dividend rates on the General Partner's preferred shares range between 6.5% and 6.6% and are paid quarterly in arrears.~~

Debt Maturities

Debt outstanding at ~~September 30, 2014~~March 31, 2015 had a face value totaling ~~$4.2~~$4.5 billion with a weighted average interest rate of ~~5.44%~~4.91% and maturities at various dates through 2028. Of this total amount, we had ~~$3.1~~$3.1 billion of unsecured debt, ~~$1.0 billion~~$919.4 million of secured debt and ~~$140.0~~$453.0 million outstanding on our unsecured line of credit at ~~September 30, 2014~~.March 31, 2015. Scheduled principal amortization and maturities of such debt totaled ~~$94.6~~$313.7 million for the ~~nine~~three months ended ~~September 30, 2014~~.March 31, 2015.

The following table is a summary of the scheduled future amortization and maturities of our indebtedness at ~~September 30, 2014~~March 31, 2015 (in thousands, except percentage ~~data)~~data, and including debt related to real estate assets that are classified as held-for-sale on the Consolidated Balance Sheets):


	Future Repayments									Future Repayments
Year	Scheduled Amortization		Maturities			Total		Weighted Average Interest Rate of Future Repayments		Scheduled Amortization		Maturities		Total		Weighted Average Interest Rate of Future Repayments
Remainder of 2014	$	3,803	$	—		$	3,803	6.16	%
2015	14,217		583,335		*	597,552		5.31	%
Remainder of 2015										$	10,205	$	117,162	$	127,367	5.25	%
2016	11,852		518,132			529,984		6.14	%	11,852		518,132		529,984		6.14	%
2017	9,908		544,932			554,840		5.95	%	9,908		544,932		554,840		5.95	%
2018	7,937		550,000		*	557,937		4.03	%	7,855		300,000		307,855		6.08	%
2019	6,936		518,438			525,374		7.97	%	6,936		1,221,438		1,228,374		4.13	%
2020	5,381		250,000			255,381		6.73	%	5,381		250,000		255,381		6.73	%
2021	3,416		259,047			262,463		3.99	%	3,416		259,047		262,463		3.99	%
2022	3,611		600,000			603,611		4.20	%	3,611		600,000		603,611		4.20	%
2023	3,817		250,000			253,817		3.75	%	3,817		250,000		253,817		3.75	%
2024	4,036		—			4,036		5.62	%	4,036		300,000		304,036		3.92	%
2025										3,938		—		3,938		5.44	%
Thereafter	6,325		50,000			56,325		7.11	%	2,387		50,000		52,387		7.24	%
	$	81,239	$	4,123,884		$	4,205,123	5.44	%	$	73,342	$	4,410,711	$	4,484,053	4.91	%
* The $140.0 million balance on the Partnership's unsecured line of credit and its $250.0 million term loan have been extended to 2019 as the result of an amendment that took place in October 2014.

We anticipate generating capital to fund our debt maturities by using undistributed cash generated from our Rental Operations and property dispositions and by raising additional capital from future debt or equity transactions.

Repurchases of Outstanding Debt and Preferred Stock

To the extent that it supports our overall capital strategy, we may purchase certain of our outstanding unsecured debt prior to its stated ~~maturity or~~maturity.

In March 2015, the ~~General Partner may redeem or repurchase~~Partnership commenced a tender offer (the "Tender Offer") to purchase for a combined aggregate purchase price (exclusive of accrued and unpaid interest) of up to $500.0 million among certain of its outstanding series of ~~preferred stock.~~

Inunsecured notes. A portion of the ~~first nine months~~proceeds from the Suburban Office Portfolio Sale were used to fund this Tender Offer, which resulted in the repurchase of ~~2014, pursuant to~~notes having a share repurchase plan approved by the General Partner's board of directors, the General Partner repurchased 750,243 preferred shares from among its three outstanding series. The preferred shares repurchased had a total redemptionface value of ~~approximately $18.8~~$424.9 million, ~~and were repurchased~~ for ~~$17.7~~a cash payment of $500.0 million.

~~In August 2014, the General Partner redeemed all 384,530 shares of its outstanding 6.625% Series J Cumulative Redeemable Preferred Shares ("Series J Shares").~~ The ~~cash redemption price for the Series J Shares~~repurchase was ~~$96.1 million, or $250 per share, plus dividends accrued through the date of redemption.~~completed on April 3, 2015.

Historical Cash Flows

Cash and cash equivalents were ~~$66.1~~$17.8 million and ~~$24.1~~$19.5 million at ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively. The following table highlights significant changes in net cash associated with our operating, investing and financing activities (in millions):

4640


	Nine Months Ended September 30,						Three Months Ended March 31,
	2014			2013			2015			2014
General Partner
Net Cash Provided by Operating Activities	$	321.0		$	317.6		$	42.7		$	59.1
Net Cash Used for Investing Activities	$	(160.2	)	$	(427.1	)	$	(22.6	)	$	(74.9	)
Net Cash Provided by (Used for) Financing Activities	$	(113.9	)	$	99.7		$	(20.2	)	$	16.0

Partnership
Net Cash Provided by Operating Activities	$	321.0		$	317.7		$	42.7		$	59.1
Net Cash Used for Investing Activities	$	(160.2	)	$	(427.1	)	$	(22.6	)	$	(74.9	)
Net Cash Provided by (Used for) Financing Activities	$	(113.9	)	$	99.6		$	(20.2	)	$	16.0

Operating Activities

The receipt of rental income from Rental Operations continues to be our primary source of operating cash flows. The ~~slight increase~~decrease in cash flows from operations noted in the table above was ~~primarily~~ due to ~~the increase in rental revenues from continuing operations, the impact of which was partially offset by~~ the timing of cash ~~payments and~~ receipts ~~on third-party construction contracts.~~from our Rental Operations.

Investing Activities

Investing activities are one of the primary uses of our liquidity. Development and acquisition activities typically generate additional rental revenues and provide cash flows for operational requirements. Highlights of significant cash sources and uses are as follows:

During the ~~nine~~three months ended ~~September 30, 2014~~,March 31, 2015, we paid cash of ~~$94.0 million~~approximately $890,000 for real estate acquisitions, ~~and~~ ~~$37.6 million~~ ~~for undeveloped land acquisitions,~~ compared to ~~$372.9~~$17.2 million and ~~$30.1~~$2.3 million,, respectively, for real estate and undeveloped land acquisitions in the same period in ~~2013~~.

2014.

Real estate development costs were ~~$385.1~~$66.8 million during the ~~nine~~three months ended ~~September 30, 2014~~,March 31, 2015, compared to ~~$320.7~~$105.4 million for the same period in ~~2013~~.

2014.

Sales of land and depreciated property provided ~~$386.2~~$109.9 million in net proceeds for the ~~nine~~three months ended ~~September 30, 2014~~,March 31, 2015, compared to ~~$330.7~~$70.7 million for the same period in ~~2013~~.

2014.

For the ~~nine~~three months ended ~~September 30, 2014~~,March 31, 2015, we received ~~$70.1~~$2.2 million in capital distributions ~~which represented our share of the net proceeds~~ from ~~the sales of five office properties and 11 industrial properties within four of our~~ unconsolidated joint ventures, compared to ~~$106.3~~$2.5 million during the same period in 2013. The activity during the nine months ended September 30, 2013 included our share of the net proceeds from the sales of 17 office properties and one industrial property within two of our unconsolidated joint ventures totaling $89.5 million and $16.8 million of net proceeds from a secured loan originated by another of our unconsolidated joint ventures.

2014.

Financing Activities

The following items highlight some of the factors that account for the difference in net cash flow related to financing activities in the first ~~nine~~three months of ~~2014~~,2015, compared to the same period in ~~2013~~:2014:

For the three months ended March 31, 2015, we increased net borrowings on the Partnership's unsecured line of credit by $347.0 million, compared to a $92.0 million increase in net borrowings for the same period in 2014.

During the ~~nine~~three months ended ~~September 30, 2014~~,March 31, 2015, the General Partner ~~issued 14.6~~repaid eight secured loans totaling $60.2 million ~~common shares for net proceeds~~that had a weighted average stated interest rate of ~~$256.0 million,~~5.30%, compared to ~~45.1~~repaying one secured loan totaling $18.1 million ~~common shares for net proceeds~~that had a stated interest rate of ~~$632.5 million~~5.14% during the ~~nine~~three months ended ~~September 30, 2013~~.

March 31, 2014.

Changes in book overdrafts are classified as financing activities within our Consolidated Statements of Cash Flows. There were book overdrafts of $8.8 million at March 31, 2015, compared to $16.1 million at March 31, 2014.

~~For~~During the ~~nine~~three months ended ~~September 30,~~March 31, 2014, the General Partner opportunistically repurchased preferred shares from all outstanding series in the open market in order to take advantage of the significant discounts

at which they were trading. In total, the General Partner repurchased preferred shares having a redemption value of approximately ~~$18.8~~$18.8 million for ~~$17.7 million. The General Partner did not conduct any repurchases in the nine months ended September 30, 2013.~~

~~In August 2014, the General Partner redeemed all of its outstanding Series J Shares for a total payment of $96.1~~$17.7 million. ~~In February 2013, the General Partner redeemed all of the outstanding shares of its 8.375% Series O Cumulative Redeemable Preferred Shares for a total payment of~~ ~~$178.0 million~~.

~~During the~~ ~~nine months endedSeptember 30, 2014~~, we repaid seven secured loans totaling $82.8 million that had a weighted average stated interest rate of 5.55%, compared to repaying secured loans totaling $100.1 million during the same period in 2013.

~~For the~~ ~~nine months ended September 30, 2014, we increased net borrowings on the Partnership's unsecured line of credit by $52.0 million, compared to a $75.0 million decrease in net borrowings for the same period in 2013.~~

Changes in book overdrafts are classified as financing activities within our Consolidated Statements of Cash Flows. There were no book overdrafts at September 30, 2014, compared to $1.0 million at September 30, 2013.

In March 2013, we issued $250.0 million of senior unsecured notes that bear interest at 3.625%, have an effective interest rate of 3.72%, and mature on April 15, 2023. Additionally, in May 2013 we issued and fully drew down on a term loan with an aggregate commitment of $250.0 million that bears interest at a variable rate of LIBOR plus 1.35% and matures May 14, 2018. We had no new unsecured debt issuances in the nine months ended September 30, 2014.

During the nine months ended September 30, 2013, we repaid two unsecured notes with a weighted average stated interest rate of 5.68% at their maturity dates totaling $425.0 million. We did not repay any unsecured notes in the nine months ended September 30, 2014.

Contractual Obligations

Aside from changes in long-term debt, there have not been material changes in our outstanding commitments since December 31, ~~2013~~,2014, as previously discussed in our ~~2013~~2014 Annual Report on Form 10-K.

Off Balance Sheet Arrangements - Investments in Unconsolidated Companies

We analyze our investments in unconsolidated joint ventures to determine if they meet the criteria for classification as a variable interest entity (a "VIE") and would require consolidation. We (i) evaluate the sufficiency of the total equity at risk, (ii) review the voting rights and decision-making authority of the equity investment holders as a group and whether there are any guaranteed returns, protection against losses, or capping of residual returns within the group and (iii) establish whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination. To the extent that we (i) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary of the VIE and would consolidate it. At the end of each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary. To the extent that our joint ventures do not qualify as VIEs, we further assess each joint venture partner's substantive participating rights to determine if the venture should be consolidated.

We have equity interests in unconsolidated partnerships and limited liability companies that primarily own and operate rental properties and hold land for development. These unconsolidated joint ventures are primarily engaged in the operations and development of industrial, office and medical office real estate properties. These investments provide us with increased market share and tenant and property diversification. The equity method of accounting is used for these investments in which we have the ability to exercise significant influence, but not control, over operating and financial policies. As a result, the assets and liabilities of these entities are not included on our balance sheet. Our investments in and advances to unconsolidated subsidiaries represented approximately 4% of our total assets at both ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~.2014. Total assets of our unconsolidated subsidiaries were ~~$1.8~~$1.5 billion and ~~$2.0~~$1.6 billion at ~~September 30, 2014~~March 31, 2015 and December 31, ~~2013~~,2014, respectively. The combined revenues of our unconsolidated subsidiaries totaled ~~$176.7~~$49.9 million and ~~$181.4~~$61.3 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2015 and 2014, ~~and~~ ~~2013~~, respectively.

We have guaranteed the repayment of certain secured and unsecured loans of our unconsolidated subsidiaries. The outstanding balances on the guaranteed portion of these loans totaled ~~$235.1~~$71.7 million at ~~September 30, 2014~~.March 31, 2015.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to interest rate changes primarily as a result of our line of credit and our long-term borrowings. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we borrow primarily at fixed rates. We do not enter into derivative or interest rate transactions for speculative purposes. We have one outstanding swap, which fixes the rate on one of our variable rate loans and is not significant to our financial statements at ~~September 30, 2014~~.March 31, 2015.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts (in ~~thousands)~~thousands and including debt related to real estate assets that are classified as held-for-sale on the Consolidated Balance Sheets) of the expected annual maturities, weighted average interest rates for the average debt outstanding in the specified period, fair values (in thousands) and other terms required to evaluate the expected cash flows and sensitivity to interest rate changes.

Remainder
of 2014
2015 2016 2017 2018 Thereafter Face Value Fair Value
Fixed rate secured debt $ 3,268
$ 205,026
$ 377,314
$ 102,017
$ 4,952
$ 304,450
$ 997,027
$ 1,090,414
Weighted average interest rate 6.14 % 5.30 % 5.91 % 5.96 % 6.49 % 7.45 % 6.26 %
Variable rate secured debt $ —
$ 300
$ 300
$ 300
$ 300
$ 2,200
$ 3,400
$ 3,400
Weighted average interest rate N/A
0.11 % 0.11 % 0.11 % 0.11 % 0.11 % 0.11 %
Fixed rate unsecured debt $ 535
$ 252,226
$ 152,370
$ 452,523
$ 302,685
$ 1,654,357
$ 2,814,696
$ 3,054,455
Weighted average interest rate 6.26 % 7.49 % 6.71 % 5.95 % 6.08 % 5.20 % 5.70 %
Variable rate unsecured notes $ —
$ —
$ —
$ —
$ 250,000
$ —
$ 250,000
$ 251,983
Rate at September 30, 2014 N/A
N/A
N/A
N/A
1.51%
N/A
1.51 %
Variable rate unsecured line of credit $ —
$ 140,000
$ —
$ —
$ —
$ —
$ 140,000
$ 140,479
Rate at September 30, 2014 N/A
1.41 % N/A
N/A
N/A
N/A
1.41 %



	Remainder of 2015			2016			2017			2018			2019			Thereafter			Face Value			Fair Value
Fixed rate secured debt	$	125,384		$	377,314		$	102,017		$	4,870		$	272,215		$	32,235		$	914,035		$	999,944
Weighted average interest rate	5.24		%	5.91		%	5.96		%	6.47		%	7.63		%	5.93		%	6.34		%
Variable rate secured debt	$	300		$	300		$	300		$	300		$	300		$	1,900		$	3,400		$	3,400
Weighted average interest rate	0.10		%	0.10		%	0.10		%	0.10		%	0.10		%	0.10		%	0.10		%
Fixed rate unsecured debt	$	1,683		$	152,370		$	452,523		$	302,685		$	252,859		$	1,701,498		$	2,863,618		$	3,128,482
Weighted average interest rate	6.26		%	6.71		%	5.95		%	6.08		%	8.35		%	4.50		%	5.36		%
Variable rate unsecured notes	$	—		$	—		$	—		$	—		$	250,000		$	—		$	250,000		$	250,000
Rate at March 31, 2015	N/A			N/A			N/A			N/A			1.33%			N/A			1.33		%
Variable rate unsecured line of credit	$	—		$	—		$	—		$	—		$	453,000		$	—		$	453,000		$	453,000
Rate at March 31, 2015	N/A			N/A			N/A			N/A			1.23		%	N/A			1.23		%

As the above table incorporates only those exposures that existed at ~~September 30, 2014~~,March 31, 2015, it does not consider those exposures or positions that could arise after that date. As a result, the ultimate impact of interest rate fluctuations will depend on future exposures that arise, our hedging strategies at that time to the extent we are party to interest rate derivatives and interest rates. Interest expense on our unsecured line of credit and our variable rate unsecured notes will be affected by fluctuations in the LIBOR indices as well as changes in our credit rating. The interest rate at such point in the future as we may renew, extend or replace our unsecured line of credit will be heavily dependent upon the state of the credit environment.

Item 4. Controls and Procedures

Control and Procedures (General Partner)

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. These disclosure controls and procedures are further designed to ensure that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon the foregoing, the Chief Executive Officer and the Chief Financial Officer concluded that, as of the end of the period covered by this Report, our disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the period covered by this Report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Controls and Procedures (Partnership)

(a) Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms. These disclosure controls and procedures are further designed to ensure that such information is accumulated and communicated to management, including the General Partner's Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of management, including the General Partner's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rules 13a-15 and 15d-15. Based upon the foregoing, the General Partner's Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Report, our disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting

Part II - Other Information

Item 1. Legal Proceedings

From time to time, we are parties to a variety of legal proceedings and claims arising in the ordinary course of our businesses. While these matters generally are covered by insurance, there is no assurance that our insurance will cover any particular proceeding or claim. We are not subject to any material pending legal proceedings other than routine litigation arising in the ordinary course of business. We presently believe that all of these proceedings to which we were subject as of ~~September 30, 2014,~~March 31, 2015, taken as a whole, will not have a material adverse effect on our liquidity, business, financial condition or results of operations.

Item 1A. Risk Factors

In addition to the information set forth in this Report, you also should carefully review and consider the information contained in our other reports and periodic filings that we make with the SEC, including, without limitation the information contained under the caption "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, ~~2013~~.2014. The risks and uncertainties described in our ~~2013~~2014 Annual Report on Form 10-K are not the only risks that we face. Additional risks and uncertainties not currently known to us, or that we presently deem to be immaterial, also may materially adversely affect our business, financial condition and results of operations.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) Unregistered Sales of Equity Securities

None

(b) Use of Proceeds

None

From time to time, we repurchase our securities under a repurchase program that initially was approved by the General Partner's board of directors and publicly announced in October 2001 (the "Repurchase Program").

On January ~~29, 2014,~~28, 2015, the General Partner's board of directors adopted a resolution that amended and restated the Repurchase Program and delegated authority to management to repurchase a maximum of $100.0 million of the General Partner's common shares, $500.0 million of the Partnership's debt securities and $500.0 million of the General Partner's preferred shares, subject to the prior notification of the Chairman of the Finance Committee of the board of directors of planned repurchases within these limits (the "January ~~2014~~2015 Resolutions"). We did not repurchase any securities through the Repurchase Program during the quarter ended ~~September 30, 2014~~March 31, 2015 and the maximum amounts set forth under the January ~~2014~~2015 Resolutions for the repurchase of common shares, ~~and~~ debt securities and preferred shares are remaining in the Repurchase ~~Program, while $494.6 million is remaining for the repurchase of preferred shares.~~

~~The following table summarizes the share repurchase activity for the three months ended September 30, 2014:~~

Repurchase Date of 6.625% Series J Cumulative Redeemable Preferred Shares Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Maximum Dollar Value of Preferred Shares That May Yet Be Repurchased Under the Plan

July 1 - 31, 2014 —
$ —
—
$ 494,568,500
August 1 - 31, 2014 384,530
(1) 250
(2) —
$ 494,568,500
September 1 -30, 2014 —
—
—
$ 494,568,500
Total 384,530
$ 250
—
$ 494,568,500

(1) Represents the redemption of all of the outstanding Series J Shares, which were called for redemption in July 2014 with a redemption date of August 4, 2014, and were not repurchased as part of our Repurchase Program.

~~(2) The Series J Shares were redeemed at a price of $250 per share, plus accrued dividends, for an aggregate redemption price of $96.1 million.~~

Item 3. Defaults upon Senior Securities

During the period covered by this Report, we did not default under the terms of any of our material ~~indebtedness, nor has there been any material arrearage of dividends or other material uncured delinquency with respect to any class of the General Partner's preferred shares.~~indebtedness.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

During the period covered by this Report, there was no information required to be disclosed by us in a Current Report on Form 8-K that was not so reported, nor were there any material changes to the procedures by which our security holders may recommend nominees to the General Partner's board of directors.

5145

Item 6. Exhibits

(a) Exhibits




3.1 ~~(i)~~			~~Fifth~~Sixth Amended and Restated Articles of Incorporation of the General Partner (filed as Exhibit 3.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on ~~May~~January 5, ~~2014, and incorporated herein by this reference).~~

~~3.1 (ii)~~			Amendment to the Fifth Amended and Restated Articles of Incorporation of the General Partner (filed as Exhibit 3.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on August 6, 2014,2015, and incorporated herein by this reference).

3.2			Fourth Amended and Restated Bylaws of the General Partner (filed as Exhibit 3.2 to the General Partner's Current Report on Form 8-K as filed with the SEC on July 30, 2009, and incorporated herein by this reference).

3.3			Certificate of Limited Partnership of the Partnership, dated September 17, 1993 (filed as Exhibit 3.1(i) to the Partnership's Annual Report on Form 10-K for the year ended December 31, 2006 as filed with the SEC on March 13, 2007, and incorporated herein by this reference) (File No. 000-20625).

3.4 (i)			Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on May 5, 2014, and incorporated herein by this reference).
			��
3.4 (ii)			First Amendment to Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on August 6, 2014, and incorporated herein by this reference).

~~10.1~~3.4 (iii)			~~Equity Distribution~~Second Amendment to Fifth Amended and Restated Agreement ~~dated August 22, 2014, by and among~~of Limited Partnership of the ~~General Partner, the~~ Partnership ~~Jeffries LLC, Morgan Stanley & Co. LLC, SunTrust Robinson Humphrey, Inc., and UBS Securities LLC~~ (filed as Exhibit ~~1.1~~3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on ~~August 22,~~December 16, 2014, and incorporated herein by this reference).

3.4 (iv)			Third Amendment to Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 5, 2015, and incorporated herein by this reference).

3.4 (v)			Fourth Amendment to Fifth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 29, 2015, and incorporated herein by this reference).

10.1			Agreement of Purchase and Sale (Pool I) by and among the Partnership, the other entities controlled or affiliated with the Partnership and SOF-X U.S. Acquisitions, L.L.C., dated as of January 16, 2015.*

10.2			~~Letter~~ Agreement of Purchase and Sale (Pool II) by and among the Partnership, the other entities controlled or affiliated with ~~James B. Connor~~the Partnership and SOF-X U.S. Acquisitions, L.L.C., dated as of January 16, 2015.*

10.3			Agreement of Purchase and Sale (Pool III) by and among the Partnership, the other entities controlled or affiliated with the Partnership and SOF-X U.S. Acquisitions, L.L.C., dated as of January 16, 2015.*

10.4			Agreement of Purchase and Sale (Pool IV) by and among the Partnership, the other entities controlled or affiliated with the Partnership and SOF-X U.S. Acquisitions, L.L.C., dated as of January 16, 2015.*

10.5			The Company's 2015 Non-Employee Directors Compensation Plan.*#

10.6			Form of Long Term Incentive Plan Restricted Stock Unit Award Certificate for Non-Employee Directors.*#

10.7			Form of Long Term Incentive Plan Restricted Stock Unit Award Certificate for new Non-Employee Directors.*#

10.8			First Amendment to Duke Realty Corporation 2010 Performance Share Plan, a subplan of the 2005 Long-Term Incentive Plan (filed as Exhibit 10.1 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on ~~September 18, 2014,~~January 29, 2015, and incorporated herein by this reference).#

10.9			Form of 2010 Performance Share Plan LTIP Unit Award Agreement (filed as Exhibit 10.3 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 29, 2015, and incorporated herein by this reference).#

10.10			Form of LTIP Unit Award Agreement (filed as Exhibit 10.2 to the combined Current Report on Form 8-K of the General Partner and the Partnership as filed with the SEC on January 29, 2015, and incorporated herein by this reference).#



11.1			Statement Regarding Computation of Earnings.***

12.1			Statement of Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Dividends of the General Partner.*

12.2			Statement of Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Distributions of the Partnership.*

31.1			Rule 13a-14(a) Certification of the Chief Executive Officer of the General Partner.*

31.2			Rule 13a-14(a) Certification of the Chief Financial Officer of the General Partner.*

31.3			Rule 13a-14(a) Certification of the Chief Executive Officer for the Partnership.*

31.4			Rule 13a-14(a) Certification of the Chief Financial Officer for the Partnership.*

32.1			Section 1350 Certification of the Chief Executive Officer of the General Partner.**

32.2			Section 1350 Certification of the Chief Financial Officer of the General Partner.**

32.3			Section 1350 Certification of the Chief Executive Officer for the Partnership.**



32.4			Section 1350 Certification of the Chief Financial Officer for the Partnership.**

101			The following materials from the General Partner's and the Partnership's Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2014~~March 31, 2015 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations and Comprehensive Income, (iii) the Consolidated Statements of Cash Flows, (iv) the Consolidated Statements of Changes in Equity, and (v) the Notes to Consolidated Financial Statements.



*	Filed herewith.



#	Represents management contract or compensatory plan or arrangement.



**	The certifications attached as Exhibits 32.1, 32.2, 32.3 and 32.4 accompany this Quarterly Report on Form 10-Q and are "furnished" to the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed "filed" by the General Partner or the Partnership, respectively, for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.



***	Data required by Financial Accounting Standards Board Auditing Standards Codification No. 260 is provided in Note 9 to the Consolidated Financial Statements included in this report.

5347

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.




		DUKE REALTY CORPORATION

		/s/ Dennis D. Oklak
		Dennis D. Oklak
		Chairman and Chief Executive Officer

		/s/ Mark A. Denien
		Mark A. Denien
		Executive Vice President and Chief Financial Officer




		DUKE REALTY LIMITED PARTNERSHIP
		By: DUKE REALTY CORPORATION, its general partner

		/s/ Dennis D. Oklak
		Dennis D. Oklak
		Chairman and Chief Executive Officer of the General Partner

		/s/ Mark A. Denien
		Mark A. Denien
		Executive Vice President and Chief Financial Officer of the General Partner


Date:	~~October 31, 2014~~May 1, 2015

5448



	Common Shareholders
	Preferred Stock			Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income			Distributions in Excess of Net Income			Non- Controlling Interests			Total
Balance at December 31, 2013	$	447,683		$	3,264	$	4,620,964	$	4,119		$	(2,062,787	)	$	31,386		$	3,044,629
Net income	—			—		—		—			230,772			2,883			233,655
Other comprehensive income (loss)	—			—		—		(806		)	—			—			(806		)
Issuance of common shares	—			146		255,816		—			—			—			255,962
Stock-based compensation plan activity	—			7		11,122		—			(1,643		)	—			9,486
Conversion of Limited Partner Units	—			—		56		—			—			(56		)	—
Distributions to preferred shareholders	—			—		—		—			(20,155		)	—			(20,155		)
Redemption/repurchase of preferred shares	(114,889		)	—		3,805		—			(2,713		)	—			(113,797		)
Distributions to common shareholders ($0.51 per share)	—			—		—		—			(169,917		)	—			(169,917		)
Distributions to noncontrolling interests, net	—			—		—		—			—			(2,044		)	(2,044		)
Buyout of noncontrolling interests	—			—		—		—			(2,637		)	(5,166		)	(7,803		)
Balance at September 30, 2014	$	332,794		$	3,417	$	4,891,763	$	3,313		$	(2,029,080	)	$	27,003		$	3,229,210



	Carrying Value			Maximum Loss Exposure
Investment in unconsolidated companies	$	6.0		$	6.0
Guarantee obligations (1)	$	(5.0	)	$	(99.4	)



Real estate assets	$	86,988
Lease related intangible assets	12,450
Total acquired assets	99,438
Other liabilities	54
Total assumed liabilities	54
Fair value of acquired net assets	$	99,384



	Low		High
Discount rate	7.38	%	9.96	%
Exit capitalization rate	5.98	%	8.36	%
Lease-up period (months)	12		12
Net rental rate per square foot – Industrial	$2.75		$9.36



General and administrative expenses - nine-month period ended September 30, 2013	$	33.2
Increase to overall pool of overhead costs	5.5
Decreased absorption of costs by wholly owned leasing and development activities (1)	2.3
Increased allocation of costs to Service Operations and Rental Operations (2)	(5.4		)
General and administrative expenses - nine-month period ended September 30, 2014	$	35.6



	Remainder of 2014			2015			2016			2017			2018			Thereafter			Face Value			Fair Value
Fixed rate secured debt	$	3,268		$	205,026		$	377,314		$	102,017		$	4,952		$	304,450		$	997,027		$	1,090,414
Weighted average interest rate	6.14		%	5.30		%	5.91		%	5.96		%	6.49		%	7.45		%	6.26		%
Variable rate secured debt	$	—		$	300		$	300		$	300		$	300		$	2,200		$	3,400		$	3,400
Weighted average interest rate	N/A			0.11		%	0.11		%	0.11		%	0.11		%	0.11		%	0.11		%
Fixed rate unsecured debt	$	535		$	252,226		$	152,370		$	452,523		$	302,685		$	1,654,357		$	2,814,696		$	3,054,455
Weighted average interest rate	6.26		%	7.49		%	6.71		%	5.95		%	6.08		%	5.20		%	5.70		%
Variable rate unsecured notes	$	—		$	—		$	—		$	—		$	250,000		$	—		$	250,000		$	251,983
Rate at September 30, 2014	N/A			N/A			N/A			N/A			1.51%			N/A			1.51		%
Variable rate unsecured line of credit	$	—		$	140,000		$	—		$	—		$	—		$	—		$	140,000		$	140,479
Rate at September 30, 2014	N/A			1.41		%	N/A			N/A			N/A			N/A			1.41		%



Repurchase Date of 6.625% Series J Cumulative Redeemable Preferred Shares	Total Number of Shares Purchased		Average Price Paid per Share			Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Dollar Value of Preferred Shares That May Yet Be Repurchased Under the Plan

July 1 - 31, 2014	—		$	—		—	$	494,568,500
August 1 - 31, 2014	384,530	(1)	250		(2)	—	$	494,568,500
September 1 -30, 2014	—		—			—	$	494,568,500
Total	384,530		$	250		—	$	494,568,500