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 ~~June~~September 30, 2017



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 001-36113

COLUMBIA PROPERTY TRUST, INC.

(Exact name of registrant as specified in its charter)



Maryland		20-0068852
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

One Glenlake Parkway, Suite 1200

Atlanta, GA 30328

(Address of principal executive offices)

(Zip Code)

(404) 465-2200

(Registrant's telephone number, including area code)

(Former name, former address, and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes 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).

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 definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one).



Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o (Do not check if a smaller reporting company)	Smaller reporting company	o
		Emerging Growth Company	o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

Number of shares outstanding of the registrant's

only class of common stock, as of ~~July 24,~~October 23, 2017: ~~121,235,494~~119,803,608 shares

Table of Contents

FORM 10-Q

COLUMBIA PROPERTY TRUST, INC.

TABLE OF CONTENTS



PART I. FINANCIAL INFORMATION		Page No.

Item 1.	Condensed Consolidated Financial Statements	Page 4

	Consolidated Balance Sheets as of ~~June~~September 30, 2017 (unaudited) and December 31, 2016 (unaudited)	Page 5

	Consolidated Statements of Operations for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2017 (unaudited) and 2016 (unaudited)	Page 6

	Consolidated Statements of Comprehensive Income for the Three and ~~Six~~Nine Months Ended ~~June~~September 30, 2017 (unaudited) and 2016 (unaudited)	Page 7

	Consolidated Statements of Equity for the ~~Six~~Nine Months Ended ~~June~~September 30, 2017 (unaudited) and 2016 (unaudited)	Page 8

	Consolidated Statements of Cash Flows for the ~~Six~~Nine Months Ended ~~June~~September 30, 2017 (unaudited) and 2016 (unaudited)	Page 9

	Condensed Notes to Consolidated Financial Statements (unaudited)	Page 10

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	Page 3539

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	Page 4651

Item 4.	Controls and Procedures	Page 4752

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	Page 4853

Item 1A.	Risk Factors	Page 4853

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	Page 4853

Item 3.	Defaults Upon Senior Securities	Page 4853

Item 4.	Mine Safety Disclosures	Page 4853

Item 5.	Other Information	Page 4853

Item 6.	Exhibits	Page 4854

Page 2

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained in this Quarterly Report on Form 10-Q of Columbia Property Trust, Inc. ("Columbia Property Trust," "the Company," "we," "our," or "us") other than historical facts may be considered forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. We intend for all such forward-looking statements to be covered by the applicable safe harbor provisions for forward-looking statements contained in those acts. Such statements include, in particular, statements about our plans, strategies, and prospects and are subject to certain risks and uncertainties, including known and unknown risks, which could cause actual results to differ materially from those projected or anticipated. Therefore, such statements are not intended to be a guarantee of our performance in future periods. Such forward-looking statements can generally be identified by our use of forward-looking terminology such as "may," "will," "expect," "intend," "anticipate," "estimate," "believe," "continue," or other similar words. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date this report is filed with the U.S. Securities and Exchange Commission ("SEC"). We make no representations or warranties (express or implied) about the accuracy of any such forward-looking statements contained in this Form 10-Q, and we do not intend to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Any such forward-looking statements are subject to risks, uncertainties, and other factors and are based on a number of assumptions involving judgments with respect to, among other things, future economic, competitive, and market conditions, all of which are difficult or impossible to predict accurately. To the extent that our assumptions differ from actual conditions, our ability to accurately anticipate results expressed in such forward-looking statements, including our ability to generate positive cash flow from operations, make distributions to stockholders, and maintain the value of our real estate properties, may be significantly hindered. See Item 1A in Columbia Property Trust's Annual Report on Form 10-K for the year ended December 31, 2016 for a discussion of some of the risks and uncertainties that could cause actual results to differ materially from those presented in our forward-looking statements. The risk factors described in our Annual Report are not the only ones we face, but do represent those risks and uncertainties that we believe are material to us. Additional risks and uncertainties not currently known to us or that we currently deem immaterial may also harm our business.

Page 3

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PART I.	FINANCIAL INFORMATION


ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The information furnished in the accompanying consolidated balance sheets and related consolidated statements of operations, comprehensive income, equity, and cash flows, reflects all normal and recurring adjustments that are, in management's opinion, necessary for a fair and consistent presentation of the aforementioned financial statements. The accompanying consolidated financial statements should be read in conjunction with the condensed notes to Columbia Property Trust's financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this Quarterly Report on Form 10-Q, and with audited consolidated financial statements and the related notes for the year ended December 31, 2016. Columbia Property Trust's results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2017 are not necessarily indicative of the operating results expected for the full year.

Page 4

Table of Contents

COLUMBIA PROPERTY TRUST, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per-share amounts)


	(Unaudited)						(Unaudited)
	June 30, 2017			December 31, 2016			September 30, 2017			December 31, 2016
Assets:
Real estate assets, at cost:
Land	$	751,351		$	751,351		$	609,110		$	751,351
Buildings and improvements, less accumulated depreciation of $471,029 and $435,457, as of June 30, 2017 and December 31, 2016, respectively	2,117,880			2,121,150
Intangible lease assets, less accumulated amortization of $99,910 and $112,777, as of June 30, 2017 and December 31, 2016, respectively	182,428			193,311
Buildings and improvements, less accumulated depreciation of $377,794 and $435,457, as of September 30, 2017 and December 31, 2016, respectively							1,704,630			2,121,150
Intangible lease assets, less accumulated amortization of $89,950 and $112,777, as of September 30, 2017 and December 31, 2016, respectively							164,699			193,311
Construction in progress	49,069			36,188			49,255			36,188
Real estate assets held for sale, less accumulated depreciation and amortization of $180,791, as of December 31, 2016	—			412,506			—			412,506
Total real estate assets	3,100,728			3,514,506			2,527,694			3,514,506
Investment in unconsolidated joint venture	125,584			127,346
Investment in unconsolidated joint ventures							698,105			127,346
Cash and cash equivalents	506,538			216,085			382,730			216,085
Tenant receivables, net of allowance for doubtful accounts of $31 as of December 31, 2016	4,002			7,163
Tenant receivables, net of allowance for doubtful accounts of $7 and $31, as of September 30, 2017 and December 31, 2016, respectively							2,814			7,163
Straight-line rent receivable	77,875			64,811			80,128			64,811
Prepaid expenses and other assets	39,815			24,275			75,802			24,275
Intangible lease origination costs, less accumulated amortization of $68,771 and $74,578, as of June 30, 2017 and December 31, 2016, respectively	48,586			54,279
Deferred lease costs, less accumulated amortization of $25,838 and $22,753, as of June 30, 2017 and December 31, 2016, respectively	129,849			125,799
Intangible lease origination costs, less accumulated amortization of $55,532 and $74,578, as of September 30, 2017 and December 31, 2016, respectively							28,067			54,279
Deferred lease costs, less accumulated amortization of $24,716 and $22,753, as of September 30, 2017 and December 31, 2016, respectively							127,940			125,799
Investment in development authority bonds	120,000			120,000			120,000			120,000
Other assets held for sale, less accumulated amortization of $34,152, as of December 31, 2016	—			45,529			—			45,529
Total assets	$	4,152,977		$	4,299,793		$	4,043,280		$	4,299,793
Liabilities:
Line of credit and notes payable, net of unamortized deferred financing costs of $2,614 and $3,136, as of June 30, 2017 and December 31, 2016, respectively	$	646,160		$	721,466
Bonds payable, net of discounts of $1,574 and $1,664 and unamortized deferred financing costs of $5,062 and $5,364, as of June 30, 2017 and December 31, 2016, respectively	693,364			692,972
Line of credit and notes payable, net of unamortized deferred financing costs of $2,611 and $3,136, as of September 30, 2017 and December 31, 2016, respectively							$	520,367		$	721,466
Bonds payable, net of discounts of $1,529 and $1,664 and unamortized deferred financing costs of $4,909 and $5,364, as of September 30, 2017 and December 31, 2016, respectively							693,562			692,972
Accounts payable, accrued expenses, and accrued capital expenditures	140,151			131,028			129,802			131,028
Dividends payable	—			36,727			—			36,727
Deferred income	19,392			19,694			15,756			19,694
Intangible lease liabilities, less accumulated amortization of $39,939 and $44,564, as of June 30, 2017 and December 31, 2016, respectively	29,067			33,375
Intangible lease liabilities, less accumulated amortization of $19,437 and $44,564, as of September 30, 2017 and December 31, 2016, respectively							9,891			33,375
Obligations under capital lease	120,000			120,000			120,000			120,000
Liabilities held for sale, less accumulated amortization of $1,239, as of December 31, 2016	—			41,763			—			41,763
Total liabilities	1,648,134			1,797,025			1,489,378			1,797,025
Commitments and Contingencies (Note 7)	—			—			—			—
Equity:
Common stock, $0.01 par value, 225,000,000 shares authorized, 121,235,494 and 122,184,193 shares issued and outstanding, as of June 30, 2017 and December 31, 2016, respectively	1,211			1,221
Common stock, $0.01 par value, 225,000,000 shares authorized, 119,803,608 and 122,184,193 shares issued and outstanding, as of September 30, 2017 and December 31, 2016, respectively							1,198			1,221
Additional paid-in capital	4,513,922			4,538,912			4,485,368			4,538,912
Cumulative distributions in excess of earnings	(2,009,405		)	(2,036,482		)	(1,931,927		)	(2,036,482		)
Cumulative other comprehensive loss	(885		)	(883		)	(737		)	(883		)
Total equity	2,504,843			2,502,768			2,553,902			2,502,768
Total liabilities and equity	$	4,152,977		$	4,299,793		$	4,043,280		$	4,299,793

See accompanying notes.

Page 5

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COLUMBIA PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per-share amounts)


	(Unaudited)						(Unaudited)						(Unaudited)						(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2017			2016			2017			2016
Revenues:
Rental income	$	67,121		$	93,567		$	138,294		$	193,153		$	55,015		$	87,561		$	193,309		$	280,714
Tenant reimbursements	6,972			18,708			15,556			38,461			3,053			17,090			18,609			55,551
Hotel income	—			6,551			1,339			11,214			—			6,270			1,339			17,484
Asset and property management fee income													1,154			511			2,126			1,655
Other property income	764			9,104			1,824			11,681			1,140			1,834			1,992			12,371
	74,857			127,930			157,013			254,509			60,362			113,266			217,375			367,775
Expenses:
Property operating costs	21,831			40,242			45,936			81,578			18,567			39,101			64,503			120,679
Hotel operating costs	9			5,038			2,085			9,369			—			4,946			2,085			14,315
Asset and property management fees	260			341			529			671
Asset and property management fee expenses													188			387			717			1,058
Depreciation	20,423			28,450			42,028			57,739			18,501			26,778			60,529			84,517
Amortization	8,191			14,932			17,648			31,007			6,870			11,895			24,518			42,902
General and administrative	9,201			7,761			17,969			18,251
General and administrative - corporate													7,034			7,467			25,003			25,718
General and administrative - unconsolidated joint ventures													713			—			713			—
	59,915			96,764			126,195			198,615			51,873			90,574			178,068			289,189
Real estate operating income	14,942			31,166			30,818			55,894			8,489			22,692			39,307			78,586
Other income (expense):
Interest expense	(14,462		)	(17,380		)	(29,577		)	(35,277		)	(14,731		)	(17,138		)	(44,308		)	(52,415		)
Interest and other income	2,477			1,808			4,827			3,613			2,841			1,839			7,668			5,452
Loss on early extinguishment of debt	—			(92		)	(45		)	(92		)	(280		)	(18,905		)	(325		)	(18,997		)
	(11,985		)	(15,664		)	(24,795		)	(31,756		)	(12,170		)	(34,204		)	(36,965		)	(65,960		)
Income before income taxes, unconsolidated joint ventures, and sales of real estate:	2,957			15,502			6,023			24,138
Income (loss) before income taxes, unconsolidated joint ventures, and sales of real estate:													(3,681		)	(11,512		)	2,342			12,626
Income tax benefit (expense)	(7		)	(245		)	381			(322		)	(3		)	(65		)	378			(387		)
Loss from unconsolidated joint venture	(1,817		)	(1,952		)	(3,702		)	(3,504		)
Income before sales of real estate:	1,133			13,305			2,702			20,312
Gain (loss) on sales of real estate assets	—			(19		)	73,153			(329		)
Income (loss) from unconsolidated joint ventures													2,853			(1,937		)	(849		)	(5,441		)
Income (loss) before sales of real estate:													(831		)	(13,514		)	1,871			6,798
Gain on sales of real estate assets													102,365			50,412			175,518			50,083
Net income	$	1,133		$	13,286		$	75,855		$	19,983		$	101,534		$	36,898		$	177,389		$	56,881
Per-share information – basic:
Net income	$	0.01		$	0.11		$	0.62		$	0.16		$	0.84		$	0.30		$	1.46		$	0.46
Weighted-average common shares outstanding – basic	121,534			123,206			121,768			123,299			120,293			123,215			121,270			123,271
Per-share information – diluted:
Net income	$	0.01		$	0.11		$	0.62		$	0.16		$	0.84		$	0.30		$	1.46		$	0.46
Weighted-average common shares outstanding – diluted	121,909			123,294			122,115			123,357			120,529			123,350			121,458			123,348
Dividends per share	$	0.20		$	0.30		$	0.40		$	0.60		$	0.20		$	0.30		$	0.60		$	0.90

See accompanying notes.

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COLUMBIA PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)


	(Unaudited)						(Unaudited)						(Unaudited)				(Unaudited)
	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,				Nine Months Ended September 30,
	2017			2016			2017			2016			2017		2016		2017		2016
Net income	$	1,133		$	13,286		$	75,855		$	19,983		$	101,534	$	36,898	$	177,389	$	56,881
Market value adjustments to interest rate swap	(636		)	(2,022		)	(2		)	(6,879		)	148		1,250		146		(5,629		)
Comprehensive income	$	497		$	11,264		$	75,853		$	13,104		$	101,682	$	38,148	$	177,535	$	51,252

See accompanying notes.

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COLUMBIA PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF EQUITY

FOR THE ~~SIX~~NINE MONTHS ENDED ~~JUNE~~SEPTEMBER 30, 2017 AND 2016 (UNAUDITED)

(in thousands, except per-share amounts)


	Common Stock					Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings			Cumulative Other Comprehensive Loss				Total Equity			Common Stock						Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings				Cumulative Other Comprehensive Income (Loss)				Total Equity
	Shares		Amount						Shares				Cumulative Other Comprehensive Loss			Amount										Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings				Cumulative Other Comprehensive Income (Loss)				Total Equity
Balance, December 31, 2016	122,184		$	1,221		Additional Paid-In Capital			$	Cumulative Distributions in Excess of Earnings	4,538,912		$	(2,036,482	)		Total Equity		$	(883	)	$	2,502,768		122,184			$	1,221			$	4,538,912			$	(2,036,482	)		$	(883	)	$	2,502,768
Repurchases of common stock	(1,252	)	(13		)	(27,488		)		—			—				(27,501		)	(2,682	)	(26		)		(57,602		)		—				—				(57,628		)
Common stock issued to employees and directors, and amortized (net of income tax withholdings)	303		3			2,498				—			—				2,501			302		3				4,058				—				—				4,061
Distributions to common stockholders ($0.40 per share)	—		—			—				(48,778		)	—				(48,778		)
Distributions to common stockholders ($0.60 per share)																				—		—				—				(72,834		)		—				(72,834		)
Net income	—		—			—				75,855			—				75,855			—		—				—				177,389				—				177,389
Market value adjustment to interest rate swap	—		—			—				—			(2		)		(2		)	—		—				—				—				146				146
Balance, June 30, 2017	121,235		$	1,211		$	4,513,922			$	(2,009,405	)	$	(885	)		$	2,504,843
Balance, September 30, 2017																				119,804		$	1,198			$	4,485,368			$	(1,931,927	)		$	(737	)		$	2,553,902


	Common Stock					Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings			Cumulative Other Comprehensive Loss				Total Equity			Common Stock						Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings				Cumulative Other Comprehensive Loss				Total Equity
	Shares		Amount						Shares				Cumulative Other Comprehensive Loss			Amount										Additional Paid-In Capital				Cumulative Distributions in Excess of Earnings				Cumulative Other Comprehensive Loss				Total Equity
Balance, December 31, 2015	124,363		$	1,243		Additional Paid-In Capital			$	Cumulative Distributions in Excess of Earnings	4,588,303		$	(1,972,916	)		Total Equity		$	(2,436	)	$	2,614,194		124,363			$	1,243			$	4,588,303			$	(1,972,916	)		$	(2,436	)	$	2,614,194
Repurchases of common stock	(1,105	)	(11		)	(24,989		)		—			—				(25,000		)	(1,105	)	(11		)		(24,989		)		—				—				(25,000		)
Common stock issued to employees and directors, and amortized (net of income tax withholdings)	206		2			1,415				—			—				1,417			213		2				2,337				—				—				2,339
Distributions to common stockholders ($0.60 per share)	—		—			—				(74,079		)	—				(74,079		)
Distributions to common stockholders ($0.90 per share)																				—		—				—				(111,120		)		—				(111,120		)
Net income	—		—			—				19,983			—				19,983			—		—				—				56,881				—				56,881
Market value adjustment to interest rate swap	—		—			—				—			(6,879		)		(6,879		)	—		—				—				—				(5,629		)		(5,629		)
Balance, June 30, 2016	123,464		$	1,234		$	4,564,729			$	(2,027,012	)	$	(9,315	)		$	2,529,636
Balance, September 30, 2016																				123,471		$	1,234			$	4,565,651			$	(2,027,155	)		$	(8,065	)		$	2,531,665

See accompanying notes.

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COLUMBIA PROPERTY TRUST, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)


	(Unaudited)						(Unaudited)
	Six Months Ended June 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Cash Flows from Operating Activities:
Net income	$	75,855		$	19,983		$	177,389		$	56,881
Adjustments to reconcile net income to net cash provided by operating activities:
Straight-line rental income	(12,463		)	(16,622		)	(20,964		)	(15,470		)
Depreciation	42,028			57,739			60,529			84,517
Amortization	16,789			28,057			24,115			39,271
Noncash interest expense	1,491			1,927			2,239			2,765
Loss on early extinguishment of debt	45			92			325			18,997
Loss from unconsolidated joint venture	3,702			3,504
(Gain) loss on sales of real estate assets	(73,153		)	329
Loss from unconsolidated joint ventures							849			5,441
Gain on sales of real estate assets							(175,518		)	(50,083		)
Stock-based compensation expense	3,953			2,595			5,509			3,512
Changes in assets and liabilities, net of acquisitions and dispositions:
Decrease in tenant receivables, net	3,712			2,035			3,957			4,646
Increase in prepaid expenses and other assets	(1,024		)	(27		)
Decrease in prepaid expenses and other assets							1,340			5,776
Decrease in accounts payable and accrued expenses	(20,456		)	(9,191		)	(25,488		)	(3,799		)
Decrease in deferred income	(4,516		)	(983		)	(7,167		)	(2,750		)
Net cash provided by operating activities	35,963			89,438
Net cash provided by operating activities							47,115			149,704
Cash Flows from Investing Activities:
Net proceeds from the sales of real estate	504,660			159,387			737,631			482,089
Prepaid earnest money and transaction costs	(12,341		)	—
Capital improvements	(35,090		)	(22,792		)
Prepaid earnest money							(52,000		)	—
Capital improvement and development costs							(59,022		)	(34,447		)
Deferred lease costs paid	(10,432		)	(13,692		)	(14,437		)	(19,713		)
Investments in unconsolidated joint venture	(1,940		)	(8,728		)
Investments in unconsolidated joint ventures							(123,149		)	(12,351		)
Distributions from unconsolidated joint ventures							1,411			—
Net cash provided by investing activities	444,857			114,175			490,434			415,578
Cash Flows from Financing Activities:
Financing costs paid	(70		)	(139		)	(628		)	(3,111		)
Prepayments to settle debt							—			(17,921		)
Proceeds from lines of credit and notes payable	—			215,000			—			435,000
Repayments of lines of credit and notes payable	(75,830		)	(289,697		)	(201,625		)	(745,070		)
Proceeds from issuance of bonds payable							—			348,691
Repayment of bonds payable							—			(250,000		)
Distributions paid to stockholders	(85,505		)	(111,433		)	(109,561		)	(148,474		)
Redemptions of common stock	(28,962		)	(26,186		)	(59,090		)	(26,186		)
Net cash used in financing activities	(190,367		)	(212,455		)	(370,904		)	(407,071		)
Net increase (decrease) in cash and cash equivalents	290,453			(8,842		)
Net increase in cash and cash equivalents							166,645			158,211
Cash and cash equivalents, beginning of period	216,085			32,645			216,085			32,645
Cash and cash equivalents, end of period	$	506,538		$	23,803		$	382,730		$	190,856

See accompanying notes.

Page 9

Table of Contents

COLUMBIA PROPERTY TRUST, INC.

CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~JUNE~~SEPTEMBER 30, 2017

(unaudited)


1.	Organization

Columbia Property Trust, Inc. ("Columbia Property Trust") (NYSE: CXP) is a Maryland corporation that operates as a real estate investment trust ("REIT") for federal income tax purposes and owns and operates commercial real estate properties. Columbia Property Trust was incorporated in 2003, commenced operations in 2004, and conducts business primarily through Columbia Property Trust Operating Partnership, L.P. ("Columbia Property Trust OP"), a Delaware limited partnership. Columbia Property Trust is the general partner and sole owner of Columbia Property Trust OP and possesses full legal control and authority over its operations. Columbia Property Trust OP acquires, develops, owns, leases, and operates real properties directly, through wholly owned subsidiaries, or through unconsolidated joint ventures. Unless otherwise noted, references to Columbia Property Trust, "we," "us," or "our" herein shall include Columbia Property Trust and all subsidiaries of Columbia Property Trust, direct and indirect.

Columbia Property Trust typically invests in high-quality, income-generating office properties. As of ~~June~~September 30, 2017, Columbia Property Trust owned 1516 operating properties, ~~containing approximately 7.8 million square feet~~ of ~~commercial space,~~which 12 were wholly owned and four were owned through unconsolidated joint ventures. These properties are located primarily in New York, San Francisco, Washington, D.C., and ~~Atlanta. All~~Atlanta, contain a total of ~~the properties are wholly owned, except for one property, which is owned through an unconsolidated joint venture, as described in Note 4,~~ ~~Unconsolidated Joint Venture. As of June 30, 2017, the properties, including 51% of the Market Square buildings, which Columbia Property Trust owns through an unconsolidated joint venture,~~8.2 million rentable square feet, and were approximately ~~95.3% leased. On July 6,~~95.1% leased as of September 30, 2017. In October 2017, Columbia Property Trust ~~contributed~~acquired two ~~of its San Francisco~~wholly owned properties ~~to joint ventures~~in New York and ~~sold~~ a ~~22.5%~~55.0% interest in ~~each joint venture, and acquired a 49.5% interest in a~~an additional property in ~~Manhattan through another joint venture.~~Washington, D.C. See Note 3, Real Estate Transactions, for additional information.


2.	Summary of Significant Accounting Policies

Basis of Presentation

The consolidated financial statements of Columbia Property Trust have been prepared in accordance with the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"), including the instructions to Form 10-Q and Article 10 of Regulation S-X, and do not include all of the information and footnotes required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. In the opinion of management, the statements for the unaudited interim periods presented include all adjustments, which are of a normal and recurring nature, necessary for a fair and consistent presentation of the results for such periods. Results for these interim periods are not necessarily indicative of a full year's results. For additional information on our unconsolidated joint ventures, which are accounted for using the equity method of accounting, see Note 4, Unconsolidated Joint Ventures. Columbia Property Trust's consolidated financial statements include the accounts of Columbia Property Trust, Columbia Property Trust OP, and any ~~variable interest~~variable-interest entity in which Columbia Property Trust or Columbia Property Trust OP was deemed the primary beneficiary. With respect to entities that are not variable interest entities, Columbia Property Trust's consolidated financial statements also include the accounts of any entity in which Columbia Property Trust, Columbia Property Trust OP, or their subsidiaries own a controlling financial interest and any limited partnership in which Columbia Property Trust, Columbia Property Trust OP, or their subsidiaries own a controlling general partnership interest. All intercompany balances and transactions have been eliminated in consolidation. For further information, refer to the financial statements and footnotes included in Columbia Property Trust's Annual Report on Form 10-K for the year ended December 31, 2016 (the "2016 Form 10-K").

Fair Value Measurements

Columbia Property Trust estimates the fair value of its assets and liabilities (where currently required under GAAP) consistent with the provisions of Accounting Standard Codification 820, Fair Value Measurements ("ASC 820"). Under this standard, fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date, under current market conditions. While various techniques and assumptions can be used to estimate fair value depending on the nature of the asset or liability, the accounting standard for fair value measurements and disclosures provides the following fair value technique parameters and hierarchy, depending upon availability:

Level 1 – Assets or liabilities for which the identical term is traded on an active exchange, such as publicly traded instruments or futures contracts.

Level 2 – Assets or liabilities valued based on observable market data for similar instruments.

Level 3 – Assets or liabilities for which significant valuation assumptions are not readily observable in the market. Such assets or liabilities are valued based on the best available data, some of which may be internally developed. Significant assumptions may include risk premiums that a market participant would consider.

Page 10

Real Estate Assets

Columbia Property Trust is required to make subjective assessments as to the useful lives of its depreciable assets. To determine the appropriate useful life of an asset, Columbia Property Trust considers the period of future benefit of the ~~asset to determine the appropriate useful lives.~~asset. These assessments have a direct impact on net income. The estimated useful lives of its assets by class are as follows:



Buildings		40-45 years
Building and site improvements		5-25 years
Tenant improvements		Shorter of economic life or lease term
Intangible lease assets		Lease term

Evaluating the Recoverability of Real Estate Assets

Columbia Property Trust continually monitors events and changes in circumstances that could indicate that the carrying amounts of its real estate and related intangible assets, of both operating properties and properties under construction, may not be recoverable. When indicators of potential impairment are present that suggest that the carrying amounts of real estate assets and related intangible assets and liabilities may not be recoverable, Columbia Property Trust assesses the recoverability of these assets and liabilities by determining whether the respective carrying values will be recovered through the estimated undiscounted future cash flows expected from the use of the assets and their eventual disposition. In the event that such expected undiscounted future cash flows do not exceed the carrying values, Columbia Property Trust adjusts the carrying value of the real estate assets and related intangible assets and liabilities to the estimated fair values, pursuant to the property, plant, and equipment accounting standard for the impairment or disposal of long-lived assets, and recognizes an impairment loss. Estimated fair values are calculated based on the following hierarchy of information, depending upon availability: (i) recently quoted market prices, (ii) market prices for comparable properties, or (iii) the present value of future cash flows, including estimated residual value. Certain of Columbia Property Trust's assets may be carried at ~~more than~~ an amount that exceeds that which could be realized in a current disposition transaction. Based on the assessment as described above, Columbia Property Trust has determined that the carrying values of all its real estate assets and related intangible assets are recoverable as of ~~June~~September 30, 2017.

Projections of expected future operating cash flows require that Columbia Property Trust estimate future market rental income amounts subsequent to the expiration of current lease agreements, property operating expenses, the number of months it takes to re-lease the property, and the number of years the property is held for investment, among other factors. Due to the inherent subjectivity of the assumptions used to project future cash flows, estimated fair values may differ from the values that would be realized in market transactions.

Assets Held for Sale

Columbia Property Trust classifies properties as held for sale according to Accounting Standard Codification 360, Accounting for the Impairment or Disposal of Long-Lived Assets ("ASC 360"). According to ASC 360, properties, having separately identifiable operations and cash flows, are considered held for sale when the following criteria are met:

Management, having the authority to approve the action, commits to a plan to sell the property.

The property is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such property.

An active program to locate a buyer and other actions required to complete the plan to sell the property have been initiated.

The property is being actively marketed for sale at a price that is reasonable in relation to its current fair value.

Actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn.

The sale of the property is probable (i.e., typically subject to a binding sale contract with a non-refundable deposit), and transfer of the property is expected to qualify for recognition as a completed sale within one year.

At such time that a property is determined to be held for sale, its carrying amount is adjusted to the lower of its depreciated book value or its estimated fair value, less costs to sell, and depreciation is no longer recognized; and assets and liabilities are required to be classified as held for sale on the accompanying consolidated balance sheet. As of ~~June~~September 30, 2017, none of Columbia Property Trust's properties met the criteria to be classified as held for sale in the accompanying balance sheet. As of December 31, 2016, Key Center Tower, Key Center Marriott, 5 Houston Center, Energy Center I, and 515 Post Oak were subject to binding sale contracts and met the other aforementioned criteria; thus, these properties are classified as held for sale in the accompanying

Page 11

consolidated balance sheet as of that date. The sale of 5 Houston Center, Energy Center I, and 515 Post Oak closed on January 6, 2017, and the sale of Key Center Tower and Key Center Marriott closed on January 31, 2017 (see Note 3, Real Estate Transactions).

The major classes of assets and liabilities classified as held for sale as of December 31, 2016, are provided below (in thousands):



	December 31, 2016
Real estate assets held for sale:
Real estate assets, at cost:
Land	$	30,243
Buildings and improvements, less accumulated depreciation of $152,246	366,126
Intangible lease assets, less accumulated amortization of $28,545	13,365
Construction in progress	2,772
Total real estate assets held for sale, net	$	412,506
Other assets held for sale:
Tenant receivables, net of allowance for doubtful accounts	$	1,722
Straight-line rent receivable	20,221
Prepaid expenses and other assets	3,184
Intangible lease origination costs, less accumulated amortization of $22,949	1,815
Deferred lease costs, less accumulated amortization of $11,203	18,587
Total other assets held for sale, net	$	45,529
Liabilities held for sale:
Accounts payable, accrued expenses, and accrued capital expenditures	$	34,812
Deferred income	4,214
Intangible lease liabilities, less accumulated amortization of $1,239	2,737
Total liabilities held for sale, net	$	41,763

Intangible Assets and Liabilities Arising from In-Place Leases Where Columbia Property Trust Is the Lessor

Upon the acquisition of real properties, Columbia Property Trust allocates the purchase price of the properties to tangible assets, consisting of land, building, site improvements, and identified intangible assets and liabilities, including the value of in-place leases, based in each case on Columbia Property Trust's estimate of their fair values in accordance with ASC 820 (see Fair Value Measurements section above for additional detail). As of ~~June~~September 30, 2017 and December 31, 2016, Columbia Property Trust had the following intangible in-place lease assets and liabilities, excluding amounts held for sale (in thousands):


		Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities				Intangible Lease Assets						Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
		Above-Market In-Place Lease Assets			Absorption Period Costs			Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities				Above-Market In-Place Lease Assets			Absorption Period Costs			Intangible Lease Origination Costs			Intangible Below-Market In-Place Lease Liabilities
June 30, 2017	Gross	$	1,689		$	139,732		$	117,357		$	69,006
September 30, 2017														Gross	$	1,588		$	112,145		$	83,599		$	29,328
	Accumulated Amortization	(796		)	(77,622		)	(68,771		)	(39,939		)	Accumulated Amortization	(784		)	(67,035		)	(55,532		)	(19,437		)
	Net	$	893		$	62,110		$	48,586		$	29,067		Net	$	804		$	45,110		$	28,067		$	9,891
December 31, 2016	Gross	$	10,589		$	154,582		$	128,857		$	77,939		Gross	$	10,589		$	154,582		$	128,857		$	77,939
	Accumulated Amortization	(9,305		)	(83,254		)	(74,578		)	(44,564		)	Accumulated Amortization	(9,305		)	(83,254		)	(74,578		)	(44,564		)
	Net	$	1,284		$	71,328		$	54,279		$	33,375		Net	$	1,284		$	71,328		$	54,279		$	33,375

Page 12

For the three and ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, Columbia Property Trust recognized the following amortization of intangible lease assets and liabilities (in thousands):

Intangible Lease Assets
Intangible
Lease
Origination
Costs

Intangible
Below-Market
In-Place Lease
Liabilities
Above-Market
In-Place
Lease Assets

Absorption
Period Costs

For the three months ended June 30, 2017 $ 161
$ 4,189
$ 2,740
$ 1,911
For the three months ended June 30, 2016 $ 626
$ 7,918
$ 4,772
$ 3,745
For the six months ended June 30, 2017 $ 449
$ 9,257
$ 5,829
$ 4,316
For the six months ended June 30, 2016 $ 1,420
$ 16,447
$ 10,041
$ 7,426



	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets		Absorption Period Costs		Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
For the three months ended September 30, 2017	$	22	$	3,268	$	1,957	$	1,006
For the three months ended September 30, 2016	$	594	$	6,133	$	3,757	$	2,768
For the nine months ended September 30, 2017	$	471	$	12,525	$	7,786	$	5,322
For the nine months ended September 30, 2016	$	2,014	$	22,602	$	13,811	$	10,206

The net intangible assets and liabilities remaining as of ~~June~~September 30, 2017 will be amortized as follows (in thousands):


	Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities		Intangible Lease Assets				Intangible Lease Origination Costs		Intangible Below-Market In-Place Lease Liabilities
	Above-Market In-Place Lease Assets		Absorption Period Costs						Above-Market In-Place Lease Assets		Absorption Period Costs
For the remainder of 2017	$	47	$	7,232	$	5,053	$	3,312	$	22	$	2,936	$	1,875	$	898
For the years ending December 31:
2018	97		12,834		9,540		5,649		89		11,083		7,315		3,278
2019	97		11,247		8,974		4,972		89		9,800		7,024		3,128
2020	97		9,318		7,925		3,836		89		7,880		5,979		1,992
2021	97		5,432		3,984		2,171		89		4,043		2,057		327
2022	97		4,054		3,006		1,938		89		2,664		1,079		94
Thereafter	361		11,993		10,104		7,189		337		6,704		2,738		174
	$	893	$	62,110	$	48,586	$	29,067	$	804	$	45,110	$	28,067	$	9,891

Intangible Assets and Liabilities Arising from In-Place Leases Where Columbia Property Trust Is the Lessee

Columbia Property Trust is the lessee on certain in-place ground leases. Intangible above-market and below-market in-place lease values are recorded as intangible lease liabilities and assets, respectively, and are amortized as an adjustment to property operating cost over the remaining term of the respective leases. Columbia Property Trust had gross below-market lease assets of approximately

$140.9 million as of ~~June~~September 30, 2017 and December 31, 2016, and recognized amortization of these assets of approximately $0.6 million for the three months ended ~~June~~September 30, 2017 and 2016, and approximately ~~$1.3~~$1.9 million for the ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, respectively.

As of ~~June~~September 30, 2017, the remaining net below-market intangible lease assets will be amortized as follows (in thousands):


For the remainder of 2017	$	1,274	$	637
For the years ending December 31:
2018	2,549		2,549
2019	2,549		2,549
2020	2,549		2,549
2021	2,549		2,549
2022	2,549		2,549
Thereafter	105,406		105,403
	$	119,425	$	118,785

Page 13

Interest Rate Swap Agreements

Columbia Property Trust enters into interest rate swap contracts to mitigate its interest rate risk on the related financial instruments. Columbia Property Trust does not enter into derivative or interest rate swap transactions for speculative purposes; however, certain of its derivatives may not qualify for hedge accounting treatment. Columbia Property Trust records the fair value of its interest rate swaps either as prepaid expenses and other assets or as accounts payable, accrued expenses, and accrued capital expenditures. Changes in the fair value of the effective portion of interest rate swaps that are designated as cash flow hedges are recorded as other comprehensive income, while changes in the fair value of the ineffective portion of a cash flow hedge, if any, are recognized currently in earnings. All changes in the fair value of interest rate swaps that do not qualify for hedge accounting treatment are recorded as gain or loss on interest rate swaps. Amounts received or paid under interest rate swap agreements are recorded as interest expense for contracts that qualify for hedge accounting treatment and as gain or loss on interest rate swaps for contracts that do not qualify for hedge accounting treatment. The following tables provide additional information related to Columbia Property Trust's interest rate swaps (in thousands):


		Estimated Fair Value as of							Estimated Fair Value as of
Instrument Type	Balance Sheet Classification	June 30, 2017			December 31, 2016			Balance Sheet Classification	September 30, 2017			December 31, 2016
Derivatives designated as hedging instruments:
Interest rate contracts	Accounts payable	$	(885	)	$	(882	)	Accounts payable	$	(737	)	$	(882	)

Columbia Property Trust applied the provisions of ASC 820 in recording its interest rate swaps at fair value. The fair values of the interest rate swaps, classified under Level 2, were determined using a third-party proprietary model that is based on prevailing market data for contracts with matching durations, current and anticipated London Interbank Offered Rate ("LIBOR") information, and reasonable estimates about relevant future market conditions. Columbia Property Trust has determined that the fair value, as determined by the third party, is reasonable.

Three Months Ended
June 30, Six Months Ended
June 30,
2017 2016 2017 2016
Market value adjustment to interest rate swaps designated as hedging instruments and included in other comprehensive income $ (636 ) $ (2,022 ) $ (2 ) $ (6,879 )



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Market value adjustment to interest rate swaps designated as hedging instruments and included in other comprehensive income	$	148	$	1,250	$	146	$	(5,629	)

During the periods presented, there was no hedge ineffectiveness required to be recognized into earnings on the interest rate swaps that qualified for hedge accounting treatment.

Prepaid Expenses and Other Assets

Prepaid expenses are recognized over the period to which the good or service relates. Other assets are written off when the asset no longer has future value, or when the company is no longer obligated for the corresponding liability. As of September 30, 2017, prepaid expenses and other assets included $52.0 million of earnest money deposits for acquisitions, of which $40.0 million was applied to the purchase prices for transactions that closed in October 2017. See Note 3, Real Estate Transactions, for additional detail.

Income Taxes

Columbia Property Trust has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code") and has operated as such beginning with its taxable year ended December 31, 2003. To qualify as a REIT, Columbia Property Trust must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of its REIT taxable income, as defined by the Code, to its stockholders. As a REIT, Columbia Property Trust generally is not subject to income tax on income it distributes to stockholders. Columbia Property Trust's stockholder distributions typically exceed its taxable income due to the inclusion of noncash expenses, such as depreciation, in taxable income. As a result, Columbia Property Trust typically does not incur federal income taxes other than as described in the following paragraph. Columbia Property Trust is, however, subject to certain state and local taxes related to the operations of properties in certain locations, which have been provided for in the accompanying consolidated financial statements.

Columbia Property Trust TRS, LLC, Columbia KCP TRS, LLC, and Columbia Energy TRS, LLC (collectively, the "TRS Entities") are wholly owned subsidiaries of Columbia Property Trust and are organized as Delaware ~~limited liability~~limited-liability companies. The TRS

Page 14

Entities, among other things, provide tenant services that Columbia Property Trust, as a REIT, cannot otherwise provide. Columbia Property Trust has elected to treat the TRS Entities as taxable REIT subsidiaries. Columbia Property Trust may perform certain additional, noncustomary services for tenants of its buildings through the TRS Entities; however, any earnings related to such services are subject to federal and state income taxes. In addition, for Columbia Property Trust to continue to qualify as a REIT, Columbia Property Trust must limit its investments in taxable REIT subsidiaries to 25% of the value of the total assets. The TRS Entities' deferred tax assets and liabilities represent temporary differences between the financial reporting basis and the tax basis of assets and liabilities based on the enacted rates expected to be in effect when the temporary differences reverse. If applicable,

~~Page 14~~

Columbia Property Trust records interest and penalties related to uncertain tax positions as general and administrative expense in the accompanying consolidated statements of operations.

Reclassification

Certain prior period amounts may be reclassified to conform to the current-period financial statement presentation. Within revenues on the accompanying consolidated statements of operations, management fees earned from unconsolidated joint ventures have been reclassified from other property income to a dedicated line item, asset and property management fee income, for all periods presented.

Recent Accounting Pronouncements

In ~~February~~August 2017, the Financial Accounting Standards Board (the "FASB") issued Accounting Standard Update 2017-12, Targeted Improvements to Accounting for Hedging Activities ("ASU 2017-12"). ASU 2017-12 aligns reporting requirements for hedging relationships with risk management activities and simplifies the application of hedge accounting. ASU 2017-12 eliminates the concept of recognizing periodic hedge ineffectiveness for cash flow hedges and allows for ongoing qualitative, rather than quantitative, testing of hedge effectiveness. ASU 2017-12 will be effective for Columbia Property Trust on January 1, 2019, with early adoption permitted. Columbia Property Trust anticipates that the adoption of ASU 2017-12 will result in a simplified process to determine the ongoing effectiveness of its cash flow hedge with no material impact on its consolidated financial statements or other disclosures.

In February 2017, the FASB issued Accounting Standard Update 2017-05, Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Non-Financial Assets ("ASU 2017-05"), which will apply to the partial sale of non-financial assets, including real estate assets, to unconsolidated joint ventures. ASU 2017-05 will require that 100% of the gain be recognized for non-financial assets transferred to an unconsolidated joint venture and any non-controlling interest received in such non-financial assets be measured at fair value. ASU 2017-05 is to be implemented at the same time as Accounting Standards Update 2014-09, ~~Revenue from Contracts with Customers~~ ~~(as described below), and is effective for~~ Columbia Property Trust ~~on January 1, 2018, with early adoption permitted. Columbia Property Trust anticipates adopting ASU 2017-05 retrospectively with a cumulative-effect adjustment booked~~ to ~~retained earnings at adoption. This adjustment will (1) mark investments~~measure its residual joint venture interest in the properties transferred to unconsolidated joint ventures toat fair value as of the transaction date ~~of contribution to the unconsolidated joint ventures, and (2) recognize the remainder~~by recognizing a gain or loss on 100% of the ~~gain associated with transferring~~asset transferred (i.e. to fully step-up the ~~assets~~basis of our residual investment in the joint venture). This ASU will apply to ~~the unconsolidated joint venture.~~ Columbia Property ~~Trust is evaluating~~Trust's partial sales of the ~~impact of~~following real estate assets: Market Square, 333 Market Street, and University Circle. We expect to implement ASU 2017-05 ~~and anticipates applying~~effective January 1, 2018 using the modified-retrospective approach ~~of implementation~~ by recording a cumulative-effect adjustment to equity, ~~for investments~~and are in ~~unconsolidated joint ventures in which Columbia Property Trust had previously contributed property and recognized a gain on a partial property sale (see Note 4,~~ ~~Unconsolidated Joint Venture~~).the process of evaluating the impact to the financial statements.

In January 2017, the FASB issued Accounting Standards Update 2017-01, Clarifying the Definition of a Business ("ASU 2017-01"), which provides a more narrow definition of a business to be used in determining the accounting treatment of ~~an acquisition, and, as~~acquisitions. As a result, under the new standard, many acquisitions that previously qualified as business combinations will be treated as asset acquisitions. For asset acquisitions, ~~acquisition~~unlike business combinations, transaction costs may be capitalized, and purchase price may be allocated on a relative fair-value basis. Columbia Property Trust expects the adoption of ASU 2017-01 to simplify purchase price allocations for future acquisitions. ASU 2017-01 is effective ~~prospectively~~ for Columbia Property Trust prospectively on January 1, 2018, with early adoption permitted. ~~For real estate acquisitions completed subsequent to its adoption,~~ Columbia Property Trust ~~anticipates that~~plans to adopt ASU 2017-01 ~~will result~~ in ~~simplified purchase price allocations~~the fourth quarter of 2017, in connection with the acquisition of 245-249 West 17th Street and ~~the capitalization of associated acquisition costs.~~218 West 18th Street.

In February 2016, the FASB issued Accounting Standards Update 2016-02, Leases ("ASU 2016-02"), which amends the existing standards for lease accounting by requiring lessees to recognize most leases on their balance sheets and by making targeted changes to lessor accounting and reporting, including the classification of lease components and nonlease components, such as services provided to tenants. The new standard will require lessees to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months, and classify such leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee, or not. This classification will determine whether the lease expense is recognized based on an effective interest method (finance leases) or on a straight-line basis over the term of the lease (operating leases). Leases with a term of 12 months or less will be accounted for using an approach that is similar to existing guidance for operating leases today. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance as applies to sales-type leases, direct financing leases, and operating leases. ASU 2016-02 will be effective for Columbia Property Trust on January 1, 2019 and supersedes previous leasing standards. Once effective,

Page 15

Columbia Property Trust anticipates separating lease components from nonlease components, which will be evaluated under ASU 2014-09, as described below.

In May 2014, the FASB issued Accounting Standards Update 2014-09,Revenue from Contracts with Customers ("ASU 2014-09"), which establishes a comprehensive model to account for ~~revenue~~revenues arising from contracts with customers. ASU 2014-09 applies to all contracts with customers, except those that are within the scope of other topics in the FASB's Accounting Standards Codification, ~~including~~such as real estate leases. ASU 2014-09 will require companies to perform a five-step analysis of transactions to determine when and how revenue is recognized. Columbia Property Trust expects that the new standard to apply primarily to fees earned from managing properties owned by its unconsolidated joint ventures. Given the structure of the asset and property management agreements currently in place with our unconsolidated joint ventures, we do not expect the ASU to materially impact the timing or amount of our revenues; however, we will be required to provide more extensive disclosures about our revenue streams and contracts with customers. ASU 2014-09 ~~will be~~is effective ~~retrospectively~~ for Columbia Property Trust ~~beginning~~ on January 1, 2018, ~~and~~with early adoption is permitted. Columbia Property Trust is continuing to evaluate the impact that ASU 2014-09 will have on its financial statements and disclosures; however, Columbia Property Trust primarily derives revenue from real estate leases, which are excluded from ASU 2014-09. Columbia Property Trust is in the process of evaluating the criteria of ASU 2014-09 and determining what impact the new standard will have on revenue streams generated from activities other than leasing, including asset management fees. At adoption, Columbia Property Trust anticipates applying the modified-retrospective approach of implementation as of the effective date and providing more extensive disclosures around our revised revenue recognition policy. Columbia Property Trust also anticipates that, upon the adoption of ASU 2016-02, as described above, nonlease components of revenue will also be evaluated under ASU 2014-09.

~~Page 15~~


3.	Real Estate Transactions

~~Dispositions~~Acquisitions

During 2016 and ~~the first six months of~~ 2017, Columbia Property Trust ~~closed~~acquired the following ~~transactions:~~properties and partial interests in properties:

Property Location Date
Purchase Price⁽¹⁾
(in thousands)
Gain (Loss) on Sale (in thousands)
2017
Key Center Tower & Marriott⁽²⁾
Cleveland, OH January 31, 2017 $ 267,500
$ 9,500

Houston Properties Sale⁽³⁾
Houston, TX January 6, 2017 $ 272,000
$ 63,700

2016
SanTan Corporate Center Phoenix, AZ December 15, 2016 $ 58,500
$ 9,800

Sterling Commerce Dallas, TX November 30, 2016 $ 51,000
$ 12,500

9127 South Jamaica Street Denver, CO October 12, 2016 $ 19,500
$ —
⁽⁴⁾
80 Park Plaza Newark, NJ September 30, 2016 $ 174,500
$ 21,600

9189, 9191 & 9193 South Jamaica Street Denver, CO September 22, 2016 $ 122,000
$ 27,200

800 North Frederick Suburban, MD July 8, 2016 $ 48,000
$ 2,100

100 East Pratt Baltimore, MD March 31, 2016 $ 187,000
$ (300 )



Property	Location	Date	Percent Acquired		Purchase Price (in thousands)⁽¹⁾
1800 M Street⁽²⁾	Washington, D.C.	October 11, 2017	55.0	%	$	231,550
245-249 West 17th Street & 218 West 18th Street⁽³⁾	New York, NY	October 11, 2017	100.0	%	$	514,100
114 Fifth Avenue⁽⁴⁾	New York, NY	July 6, 2017	49.5	%	$	108,900


⁽¹⁾	~~Purchase price, as shown, is before purchase~~Exclusive of transaction costs and price adjustments.

⁽²⁾

On October 11, 2017, Columbia Property Trust entered a new joint venture partnership with Allianz Real Estate ("Allianz"), which simultaneously acquired 1800 M Street, a 10-story, 581,000-square-foot office building in Washington, D.C., that is 94% leased, for a total of $421.0 million (the “1800 M Street Joint Venture”). Columbia Property Trust owns a 55% interest in the 1800 M Street Joint Venture, and Allianz owns the remaining 45%. As of September 30, 2017, Columbia Property Trust had deposited $15.0 million in earnest money related to 1800 M Street, which is included in prepaid expenses and other assets on the accompanying consolidated balance sheet.

⁽³⁾

245-249 West 17th Street is made up of two interconnected 12- and 6-story towers, totaling 281,000 square feet of office and retail space; and 218 West 18th Street is a 12-story, 166,000-square-foot office building. The buildings are located in New York, 100% leased, and unencumbered by debt. As of September 30, 2017, Columbia Property Trust had deposited $25.0 million in earnest money related to this transaction, which is included in prepaid expenses and other assets on the accompanying consolidated balance sheet.

⁽⁴⁾

Columbia Property Trust acquired a 49.5% equity interest in a joint venture that owns the 114 Fifth Avenue property from Allianz (the "114 Fifth Avenue Joint Venture"). 114 Fifth Avenue is a 19-story, 352,000-square-foot building located in Manhattan’s Flatiron District that is 100% leased, and is unencumbered by debt. The 114 Fifth Avenue Joint Venture is owned by Columbia Property Trust (49.5%), Allianz (49.5%), and L&L Holding Company (1.0%). L&L Holding Company is the general partner and will continue to perform asset and property management services for the property.

149 Madison Avenue Contract

In February 2017, Columbia Property Trust deposited $12.0 million of earnest money upon entering a firm contract to purchase 149 Madison Avenue, a 12-story, 127,000-square-foot office building in New York. Closing is expected to occur later this year.

Page 16

Dispositions

During 2016 and 2017, Columbia Property Trust sold the following properties:



Property	Location	Date	Sales Price⁽¹⁾ (in thousands)		Gain (Loss) on Sale (in thousands)
2017
University Circle & 333 Market Street⁽²⁾	San Francisco, CA	July 6, 2017	$	234,000	$	102,365
Key Center Tower & Marriott⁽³⁾	Cleveland, OH	January 31, 2017	$	267,500	$	9,500
Houston Properties⁽⁴⁾	Houston, TX	January 6, 2017	$	272,000	$	63,700
2016
SanTan Corporate Center	Phoenix, AZ	December 15, 2016	$	58,500	$	9,800
Sterling Commerce	Dallas, TX	November 30, 2016	$	51,000	$	12,500
9127 South Jamaica Street	Denver, CO	October 12, 2016	$	19,500	$	—		⁽⁵⁾
80 Park Plaza	Newark, NJ	September 30, 2016	$	174,500	$	21,600
9189, 9191 & 9193 South Jamaica Street	Denver, CO	September 22, 2016	$	122,000	$	27,200
800 North Frederick	Suburban, MD	July 8, 2016	$	48,000	$	2,100
100 East Pratt	Baltimore, MD	March 31, 2016	$	187,000	$	(300	)


⁽¹⁾	Exclusive of transaction costs and price adjustments.


⁽²⁾	Columbia Property Trust contributed the 333 Market Street building and the University Circle property to joint ventures, and simultaneously sold a 22.5% interest in those joint ventures for $234.0 million to Allianz Real Estate ("Allianz"), an unrelated third party (collectively, the "San Francisco Joint Ventures").

Upon the earlier of July 6, 2018, or when Columbia Property Trust and Allianz jointly invest $600.0 million in additional assets acquisitions (excluding the 114 Fifth Avenue building described above), Allianz will acquire another 22.5% interest in each of the San Francisco Joint Ventures at the same aggregate price, $234.0 million, adjusted for any capital expenditures made during the intervening period at the properties. The $600.0 million investment hurdle has been reduced by the aggregate adjusted purchase price for the 1800 M Street acquisition described above.

⁽³⁾

Key Center Tower & Marriott were sold in one transaction ~~on January 31, 2017. At closing, Columbia Property Trust received~~for $254.5 million of gross proceeds and a $13.0 million, 10-year accruing note receivable from the principal of the buyer. As a result, Columbia Property Trust has applied the installment method to account for this transaction, and deferred $13.0 million of the total $22.5 million gain on sale. The Key Center Tower and Key Center Marriott generated net income of ~~$5.4~~$9.6 million for the first ~~six~~nine months of 2016, and a net loss of $1.9 million for the first 31 days of 2017, excluding the gain on sale.


⁽³⁾⁽⁴⁾	5 Houston Center, Energy Center I, and 515 Post Oak were sold in one ~~transaction on January 6, 2017 (the "Houston Properties Sale"). The~~transaction. These properties ~~included in the Houston Properties Sale~~ generated net income of ~~$7.1~~$10.8 million for the first ~~six~~nine months of 2016, and a net loss of $14.9 thousand for the first six days of 2017, excluding the gain on sale.


⁽⁴⁾⁽⁵⁾	Columbia Property Trust recorded a de minimus loss on the sale of 9127 South Jamaica Street.

~~Acquisitions~~

~~Columbia Property Trust did not acquire any properties during 2016 or the six months ended June~~

Page 17

4. Unconsolidated Joint Ventures

As of September 30, ~~2017. In February~~ 2017, Columbia Property Trust ~~deposited $12.0 million~~owns interests in ~~earnest money, upon entering a firm contract to purchase 149 Madison Avenue, a 12-story, 127,000-square-foot office building in New York. Closing is expected to occur later this year.~~

~~Allianz Joint Ventures~~

~~On July 6, 2017, Columbia Property Trust contributed~~ the ~~333 Market Street Building and the University Circle Property to~~following properties through joint ventures, ~~and simultaneously sold a 22.5% interest in those joint ventures to Allianz Real Estate ("Allianz"), an unrelated third party,~~which are accounted for ~~a total~~using the equity method of ~~$234.0 million (the "San Francisco Joint Ventures").~~ accounting:



						Carrying Value of Investment
Joint Venture	Property Name	Geographic Market	Ownership Interest			September 30, 2017		December 31, 2016
Market Square Joint Venture	Market Square	Washington, D.C.	51.0	%		$	126,638	$	127,346
University Circle Joint Venture⁽¹⁾	University Circle	San Francisco	77.5	%	⁽²⁾	170,712		—
333 Market Street Joint Venture⁽¹⁾	333 Market Street	San Francisco	77.5	%	⁽²⁾	288,405		—
114 Fifth Avenue Joint Venture⁽¹⁾	114 Fifth Avenue	New York	49.5	%		112,350		—
						$	698,105	$	127,346


⁽¹⁾	See Note 3, Real Estate Transactions, for a description of the formation of these joint ventures in the current period.

⁽²⁾

Upon the earlier of July 6, 2018, or when Columbia Property Trust and Allianz jointly invest $600.0 million in additional assets acquisitions (excluding 114 Fifth Avenue), Allianz will acquire from Columbia Property Trust an additional 22.5% interest in each of the University Circle Joint Venture and the 333 Market Street Joint Venture, thereby reducing Columbia Property Trust's equity interest in each joint venture to 55.0%. The $600.0 million investment hurdle has been reduced by the aggregate adjusted purchase price for the 1800 M Street acquisition described in Note 3, Real Estate Transactions.

Columbia Property Trust and Allianz jointly invest $600.0 million in additional assets acquisitions (excluding 114 Fifth Ave described below), Allianz will acquire another 22.5% interest in each of the San Francisco Joint Ventures at the same aggregate price, $234.0 million, adjusted for any capital expenditures at the properties made during the intervening period. At that point, Columbia Property Trust will hold a 55.0% equity interest in each of the San Francisco Joint Ventures.

On July 6, 2017, Columbia Property Trust acquired a 49.5% equity interest in a joint venture that owns the 114 Fifth Avenue property for $108.9 million from Allianz (the "114 Fifth Avenue Joint Venture"). 114 Fifth Avenue is a 19-story, 352,000-square-foot building located in Manhattan’s Flatiron District which is currently 100% leased and is unencumbered by debt. The 114 Fifth Avenue Joint Venture is owned by Columbia Property Trust (49.5%), Allianz (49.5%) and L&L Holding Company (1.0%). L&L Holding Company is the general partner, and will continue to perform asset and property management services for the property.

~~4. Unconsolidated Joint Venture~~

Columbia Property Trust owns 51% of an unconsolidated joint venture that owns the Market Square buildings (the "Market Square Joint Venture"), and Blackstone Property Partners ("Blackstone") owns the remaining 49% interest. The Market Square Joint Venture owns and operates the Market Square buildings through Market Square REIT East & West, LLC, which operates as a

~~Page 16~~

~~REIT. The Market Square buildings are two, 13-story office buildings containing 698,000 square feet of office space in Washington, D.C. (the "Market Square Buildings"). Columbia Property Trust shares~~its partners have substantive participation rights ~~with Blackstone,~~in the joint ventures, including management selection and termination, and the approval of ~~material~~ operating and capital decisions. As such, Columbia Property Trust uses the equity method of accounting to record its investment in ~~the Market Square Joint Venture.~~these joint ventures. Under the equity method, the investment in the joint venture is recorded at cost and adjusted for cash contributions and distributions, and allocations of income or loss. ~~Cash distributions and earnings are allocated according to the provisions of the joint venture agreement, which are consistent with the ownership percentages for the Market Square Joint Venture.~~

Columbia Property Trust evaluates the recoverability of its investment in unconsolidated joint ~~venture~~ventures in accordance with accounting standards for equity investments by first reviewing the investment for any indicators of impairment. If indicators are present, Columbia Property Trust estimates the fair value of the investment. If the carrying value of the investment is greater than the estimated fair value, management makes an assessment of whether the impairment is "temporary" or "other-than-temporary." In making this assessment, management considers the following: (1) the length of time and the extent to which fair value has been less than cost, and (2) Columbia Property Trust's intent and ability to retain its interest long enough for a recovery in market value. Based on the assessment as described above, Columbia Property Trust has determined that ~~the carrying value~~none of its ~~investment~~investments in ~~unconsolidated~~joint ventures are other than temporarily impaired as of September 30, 2017.

Mortgage Debt and Related Guaranty

The Market Square joint venture is ~~recoverable as of June 30, 2017.~~

the only joint venture with mortgage debt. As of ~~June~~September 30, 2017 and December 31, 2016, the outstanding balance on the interest-only Market Square mortgage note is $325.0 million, bearing interest at 5.07%. The Market Square mortgage note matures on July 1, 2023. Columbia Property Trust guarantees a portion of the Market Square mortgage note, the amount of which has been reduced to ~~$12.6~~$11.2 million as of ~~June~~September 30, 2017 from $16.1 million as of December 31, 2016, as a result of leasing at the Market Square Buildings. The amount of the guaranty will continue to be reduced as space is leased.

Page 18

Condensed Combined Financial Information

Summarized balance sheet information for each of the ~~Market Square Joint Venture~~unconsolidated joint ventures is as follows (in thousands):

June 30, 2017 December 31, 2016
Total assets $ 582,664
$ 587,344
Total debt $ 324,682
$ 324,656
Total equity $ 239,207
$ 242,802
Columbia Property Trust's investment $ 125,584
$ 127,346



	Total Assets				Total Debt				Total Equity
	September 30, 2017		December 31, 2016		September 30, 2017		December 31, 2016		September 30, 2017			December 31, 2016
Market Square Joint Venture	$	582,664	$	587,344	$	324,682	$	324,656	$	239,207		$	242,802
University Circle Joint Venture	225,434		—		—		—		217,138		⁽¹⁾	—
333 Market Street Joint Venture	385,930		—		—		—		369,177		⁽¹⁾	—
114 Fifth Avenue Joint Venture	388,786		—		—		—		174,246		⁽¹⁾	—
	$	1,582,814	$	587,344	$	324,682	$	324,656	$	999,768		$	242,802

⁽¹⁾

There is an aggregate basis difference of $30.8 million related to the University Circle Joint Venture, the 333 Market Street Joint Venture and the 114 Fifth Avenue Joint Venture. Such difference represents the differences between the historical costs reflected at the joint venture level, and Columbia Property Trust's investment in the joint ventures. The basis differences result from the timing of each partner's acquisition of an interest in the joint venture and formation costs incurred by Columbia Property Trust, and will be amortized to income (loss) from unconsolidated joint ventures over the life of the related assets.

~~Condensed~~Summarized income statement information for the ~~Market Square Joint Venture~~unconsolidated joint ventures for the three months ended September 30, 2017 and September 30, 2016 is as follows (in thousands):

For the Three Months Ended
June 30, 2017 For the Six Months Ended
June 30, 2017
2017 2016 2017 2016
Total revenues $ 10,428
$ 9,776
$ 20,562
$ 21,439
Net loss $ (3,563 ) $ (3,827 ) $ (7,259 ) $ (6,870 )
Columbia Property Trust's share of net loss
$ (1,817 ) $ (1,952 ) $ (3,702 ) $ (3,504 )



	Total Revenues				Net Income (Loss)						Columbia Property Trust's Share of Net Income (Loss)
	2017		2016		2017			2016			2017			2016
Market Square Joint Venture	$	10,474	$	9,787	$	(4,089	)	$	(3,799	)	$	(2,086	)	$	(1,937	)
University Circle Joint Venture	9,448		—		4,810			—			3,701			—
333 Market Street Joint Venture	6,306		—		3,381			—			2,593			—
114 Fifth Avenue Joint Venture	9,832		—		(2,332		)	—			(1,355		)	—
	$	36,060	$	9,787	$	1,770		$	(3,799	)	$	2,853		$	(1,937	)

Summarized income statement information for the unconsolidated joint ventures for the nine months ended September 30, 2017 and September 30, 2016 is as follows (in thousands):

~~Page 17~~



	Total Revenues				Net Income (Loss)						Columbia Property Trust's Share of Net Income (Loss)
	2017		2016		2017			2016			2017			2016
Market Square Joint Venture	$	31,036	$	31,226	$	(11,348	)	$	(10,669	)	$	(5,788	)	$	(5,441	)
University Circle Joint Venture	9,448		—		4,810			—			3,701			—
333 Market Street Joint Venture	6,306		—		3,381			—			2,593			—
114 Fifth Avenue Joint Venture	9,832		—		(2,332		)	—			(1,355		)	—
	$	56,622	$	31,226	$	(5,489	)	$	(10,669	)	$	(849	)	$	(5,441	)

Property and Asset Management Fees

Columbia Property Trust provides property and asset management services to the Market Square Joint Venture, the University Circle Joint Venture, and the 333 Market Street Joint Venture. Under these agreements, Columbia Property Trust oversees the day-to-day operations of ~~the Market Square Joint Venture~~these joint ventures and ~~the Market Square Buildings,~~their properties, including property management, property accounting, and other ~~property~~administrative services. During the three and nine months ended September 30, 2017 and 2016, Columbia Property Trust ~~receives property management~~earned the following fees ~~equal to 3.0% of the gross revenue of the Market Square Buildings and~~from these unconsolidated joint ventures:



	For the three months ended September 30,				For the nine months ended September 30,
	2017		2016		2017		2016
Market Square Joint Venture	$	496	$	511	$	1,468	$	1,655
University Circle Joint Venture	480		—		480		—
333 Market Street Joint Venture	178		—		178		—
	$	1,154	$	511	$	2,126	$	1,655

Page 19

Columbia Property Trust also received reimbursements of property operating costs ~~payable monthly, and receives asset management fees~~ of ~~$1.0 million annually, payable in equal quarterly installments. Columbia Property Trust earned fees related to these asset and property management services of $0.7~~$0.9 million and ~~$0.6~~$0.1 million for the three months ended ~~June~~September 30, 2017 and 2016, respectively, and ~~$1.3~~$1.2 million and $0.4 million for ~~each of~~ the ~~six month periods~~nine months ended ~~June~~September 30, 2017 and ~~2016. Such fees~~2016, respectively, which are included in other property income onrevenues in the accompanying consolidated statements of operations.

~~As of June 30, 2017 and December 31, 2016, property~~ Property management fees of $0.3 million and $0.1 million, respectively, were due to Columbia Property Trust from the ~~Market Square Joint Venture~~joint ventures and are included in prepaid expenses and other assets on the accompanying consolidated balance ~~sheets.~~sheets as of September 30, 2017 and December 31, 2016, respectively.

5. Line of Credit and Notes Payable

As of ~~June~~September 30, 2017 and December 31, 2016, Columbia Property Trust had the following line of credit and notes payable indebtedness (excluding bonds payable; see Note 6, Bonds Payable) in thousands:


Facility	June 30, 2017			December 31, 2016			September 30, 2017			December 31, 2016
$300 Million Term Loan	$	300,000		$	300,000		$	300,000		$	300,000
$150 Million Term Loan	150,000			150,000			150,000			150,000
650 California Street building mortgage note	125,005			126,287
263 Shuman Boulevard building mortgage note⁽¹⁾	49,000			49,000			49,000			49,000
One Glenlake building mortgage note	24,769			26,315			23,978			26,315
650 California Street building mortgage note							—			126,287
221 Main Street building mortgage note	—			73,000			—			73,000
Revolving Credit Facility	—			—			—			—
Less: Deferred financing costs related to term loans and notes payable, net of accumulated amortization	(2,614		)	(3,136		)	(2,611		)	(3,136		)
	$	646,160		$	721,466		$	520,367		$	721,466

⁽¹⁾

~~In January 2017, the lender put this loan into default because the full-building lease with~~The OfficeMax ~~was not renewed, as required by the loan agreement. OfficeMax vacated the property in 2015, and the~~ lease expired in May 2017, and the mortgage note matured in July 2017. Columbia Property Trust is inworking with the ~~process~~special-servicer to effect the transfer of ~~working to transfer this~~the property to the ~~lender.~~lender in settlement of the loan principal, accrued interest expense and accrued property operating expenses. In the third quarter of 2017, Columbia Property Trust accrued related interest expense of $1.3 million at the default rate of 10.55%, and property operating expenses of $0.2 million, primarily related to property taxes.

Fair Value of Debt

The estimated fair value of Columbia Property Trust's line of credit and notes payable as of ~~June~~September 30, 2017 and December 31, 2016, was approximately ~~$651.7~~$524.2 million and $728.5 million, respectively. The related carrying value of the line of credit and notes payable as of ~~June~~September 30, 2017 and December 31, 2016, was ~~$648.8~~$523.0 million and $724.6 million, respectively. Columbia Property Trust estimated the fair value of the $300 Million Term Loan (the "$300 Million Term Loan") and the Revolving Credit Facility (the "Revolving Credit Facility") by obtaining estimates for similar facilities from multiple market participants as of the respective reporting dates. Therefore, the fair values determined are considered to be based on observable market data for similar instruments (Level 2). The fair values of all other debt instruments were estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowing arrangements as of the respective reporting dates. The discounted cash flow method of assessing fair value results in a general approximation of value, and such value may never actually be realized.

Interest Paid and Capitalized and Debt Covenants

During the ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, Columbia Property Trust made interest payments totaling approximately ~~$11.2~~$15.6 million and ~~$15.2~~$21.7 million, respectively, of which approximately ~~$0.3~~$0.4 million and ~~$0.1~~$0.2 million, respectively, was capitalized. As of ~~June~~September 30, 2017, Columbia Property Trust believes it is in compliance with the restrictive financial covenants on its term loans, the Revolving Credit Facility, and notes payable obligations.

Debt Repayments

On August 17, 2017, Columbia Property Trust repaid the $124.8 million balance of the 650 California Street building mortgage note, which was originally scheduled to mature on July 1, 2019. Columbia Property Trust recognized a loss on early extinguishment of debt of $0.3 million related to unamortized deferred financing costs.

On March 10, 2017, Columbia Property Trust repaid the $73.0 million balance of the 221 Main Street building mortgage note, which was originally scheduled to mature on May 10, 2017. Columbia Property Trust recognized a loss on early extinguishment of debt of $45,000 related to unamortized deferred financing costs.

Page 1820

Table of Contents

Term Loan Amendment

On July 25, 2017, Columbia Property Trust amended the terms of itits $150 Million Term Loan, to reduce the current interest rate from 3.52% to 3.07% per annum. The amendment reduced the interest rate from LIBOR, plus an applicable margin ranging from 1.40% to 2.35%, to LIBOR, plus an applicable margin ranging from 0.90% to 1.75%. The maturity date, debt covenants, and other terms of the $150 Million Term Loan are unchanged. The interest rate is effectively fixed with an interest rate swap agreement, which is designated as a cash flow hedge.

6. Bonds Payable

On August 12, 2016, Columbia Property Trust OP issued $350.0 million of 10-year, unsecured 3.650% senior notes at 99.626% of their face value (the "2026 Bonds Payable"), which are guaranteed by Columbia Property Trust. Columbia Property Trust OP received net proceeds from the 2026 Bonds Payable of $346.4 million, which were used to redeem $250.0 million of seven-year, unsecured 5.875% senior notes (the "2018 Bonds Payable"). The 2026 Bonds Payable require semi-annual interest payments in February and August based on a contractual annual interest rate of 3.650%. In the accompanying consolidated balance sheets, the 2026 Bonds Payable are shown net of the initial issuance discount of approximately $1.3 million, which is being amortized to interest expense over the term of the 2026 Bonds Payable using the effective interest method. The principal amount of the 2026 Bonds Payable is due and payable on the maturity date, August 15, 2026.

In March 2015, Columbia Property Trust OP issued $350.0 million of 10-year, unsecured 4.150% senior notes at 99.859% of their face value (the "2025 Bonds Payable"), which are guaranteed by Columbia Property Trust. Columbia Property Trust OP received proceeds from the 2025 Bonds Payable, net of fees, of $347.2 million. The 2025 Bonds Payable require semi-annual interest payments in April and October based on a contractual annual interest rate of 4.150%. In the accompanying consolidated balance sheets, the 2025 Bonds Payable are shown net of the initial issuance discount of approximately $0.5 million, which is being amortized to interest expense over the term of the 2025 Bonds Payable using the effective interest method. The principal amount of the 2025 Bonds Payable is due and payable on the maturity date, April 1, 2025.

Interest payments of ~~$13.8~~$20.1 million were made on the 2026 Bonds Payable and 2025 Bonds Payable during the ~~six~~nine months ended ~~June~~September 30, 2017, and ~~$14.6~~$20.8 million in interest payments were made on the 2025 Bonds Payable or the 2018 Bonds Payable during the ~~six~~nine months ended ~~June~~September 30, 2016. Columbia Property Trust is subject to substantially similar covenants under the 2026 Bonds Payable and the 2025 Bonds Payable. As of ~~June~~September 30, 2017, Columbia Property Trust believes it was in compliance with the restrictive financial covenants on the 2026 Bonds Payable and the 2025 Bonds Payable.

As of ~~June~~September 30, 2017 and December 31, 2016, the estimated fair value of the 2026 Bonds Payable and the 2025 Bonds Payable was approximately ~~$703.0~~$702.9 million and $703.1 million, respectively. The related carrying value of the bonds payable, net of discounts, as of ~~June~~September 30, 2017 and December 31, 2016, was ~~$698.4~~$698.5 million and $698.3 million, respectively. The fair value of the bonds payable was estimated based on discounted cash flow analyses using the current incremental borrowing rates for similar types of borrowings as the bonds as of the respective reporting dates (Level 2). The discounted cash flow method of assessing fair value results in a general approximation of value, which may differ from the price that could be achieved in a market transaction.


7.	Commitments and Contingencies

Commitments Under Existing Lease Agreements

Certain lease agreements include provisions that, at the option of the tenant, may obligate Columbia Property Trust to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant. As of ~~June~~September 30, 2017, no tenants have exercised such options that have not been materially satisfied or recorded as a liability on the accompanying consolidated balance sheet.

Guaranty of Debt of Unconsolidated Joint Venture

Upon entering into the Market Square Joint Venture in October 2015, Columbia Property Trust entered into a guaranty of a $25.0 million portion of the Market Square mortgage note, the amount of which is reduced as space is leased. As a result of leasing, the guaranty has been reduced to ~~$12.6~~$11.2 million as of ~~June~~September 30, 2017. Columbia Property Trust believes that the likelihood of making a payment under this guaranty is remote; therefore, no liability has been recorded related to this guaranty as of ~~June~~September 30, 2017.

Page 21

Table of Contents

Litigation

Columbia Property Trust is subject to various legal proceedings, claims, and administrative proceedings arising in the ordinary course of business, some of which are expected to be covered by liability insurance. Management makes assumptions and estimates concerning the likelihood and amount of any reasonably possible loss relating to these matters using the latest information available.

~~Page 19~~

~~Table of Contents~~

Columbia Property Trust records a liability for litigation if an unfavorable outcome is probable and the amount of loss or range of loss can be reasonably estimated. If an unfavorable outcome is probable and a reasonable estimate of the loss is a range, Columbia Property Trust accrues the best estimate within the range. If no amount within the range is a better estimate than any other amount, Columbia Property Trust accrues the minimum amount within the range. If an unfavorable outcome is probable but the amount of the loss cannot be reasonably estimated, Columbia Property Trust discloses the nature of the litigation and indicates that an estimate of the loss or range of loss cannot be made. If an unfavorable outcome is reasonably possible and the estimated loss is material, Columbia Property Trust discloses the nature and estimate of the possible loss of the litigation. Columbia Property Trust does not disclose information with respect to litigation where the possibility of an unfavorable outcome is considered to be remote. Based on current expectations, such matters, both individually and in the aggregate, are not expected to have a material adverse effect on the liquidity, results of operations, business, or financial condition of Columbia Property Trust. Columbia Property Trust is not currently involved in any legal proceedings of which management would consider the outcome to be reasonably likely to have a material adverse effect on the results of operations, liquidity, or financial condition of Columbia Property Trust.


8.	Stockholders' Equity

Common Stock Repurchase Program

Columbia Property Trust's board of directors ~~has~~ authorized the repurchase of up to an aggregate of $200 million of its common stock, par value $0.01 per share, from September 4, 2015 through September 4, 2017 (the ~~"Stock~~"2015 Stock Repurchase Program"). ~~Since this program commenced on September 4,~~Under the 2015 Stock Repurchase Program, Columbia Property Trust ~~has~~ acquired ~~4.4~~5.6 million shares at an average price of ~~$22.08,~~$21.85 per share, for aggregate purchases of ~~$96.5~~$121.4 million. Columbia Property Trust's board of directors authorized a second stock repurchase program to purchase up to an aggregate of $200.0 million of its common stock, par value $0.01 per share, from September 4, 2017 through September 4, 2019 (the "2017 Stock Repurchase Program"). During the three months ended ~~June~~September 30, 2017, Columbia Property Trust repurchased ~~1.3~~an additional 1.4 million shares at an average price of ~~$21.95,~~$21.02 per share, for aggregate purchases of ~~$27.5 million.~~$30.1 million under the 2015 Stock Repurchase Program and 2017 Stock Repurchase Program. As of ~~June~~September 30, 2017, ~~$103.5~~$194.8 million remains available for repurchases under the 2017 Stock Repurchase Program. Common stock repurchases are charged against equity as incurred, and the repurchased shares are retired. Columbia Property Trust will continue to evaluate the purchase of shares, primarily through open market transactions, which are subject to market conditions and other factors.

Long-Term Incentive Plan

Columbia Property Trust maintains a shareholder-approved, long-term incentive plan (the "LTIP") that provides for grants of up to 4.8 million shares of stock to be made to certain employees and independent directors of Columbia Property ~~Trust (the "LTIP").~~Trust.

In 2017, Columbia Property Trust has granted ~~138,938~~139,825 shares of common stock to employees under the LTIP for 2017. Such awards are time-based and will vest ratably on each anniversary of the grant over the next four years. Performance-based stock unit awards representing ~~330,541~~330,880 shares were also made in 2017. The payout of these performance-based awards can range from 0% to 150%, depending on total shareholder return relative to the FTSE NAREIT Equity Office Index, over a three-year performance period. At the conclusion of the three-year performance period, 75% of the shares earned will vest, and the remaining 25% vest one year later. The performance-based awards also include one- and two-year transitional awards, which will vest at the end of the respective performance periods. The awards will be expensed over the vesting period, using the estimated fair value for each award. Time-based awards will be expensed using the grant-date fair value or closing price of the award on the grant date. Performance-based awards will be expensed over the vesting period at the estimated fair value of the grant date, as determined by the Monte Carlo valuation method.

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Additionally, on January 20, 2017, Columbia Property Trust granted 193,535 shares of common stock to employees, net of 17,938 shares withheld to settle the related tax liability, under the LTIP for 2016 performance, of which 25% vested upon grant; the remaining shares will vest ratably, with the passage of time, on January 31, 2018, 2019, and 2020. Employees ~~will~~ receive quarterly dividends related to their entire grant, including the unvested shares, on each dividend payment date. A summary of the activity for the employee stock grants under the LTIP for the ~~six~~nine months ended ~~June~~September 30, 2017 follows:


	For the Six Months Ended June 30, 2017				For the Nine Months Ended September 30, 2017
	Shares (in thousands)		Weighted-Average Grant-Date Fair Value⁽¹⁾		Shares (in thousands)		Weighted-Average Grant-Date Fair Value⁽¹⁾
Unvested shares – beginning of period	256		$	22.62	256		$	22.62
Granted	663		$	20.20	664		$	20.20
Vested	(161	)	$	22.67	(161	)	$	22.67
Forfeited	(7	)	$	21.21	(9	)	$	21.12
Unvested shares – end of period⁽²⁾	751		$	20.48	750		$	20.48


⁽¹⁾	Columbia Property Trust determined the weighted-average, grant-date fair value using the market closing price on the date of the respective grants.


⁽²⁾	As of ~~June~~September 30, 2017, we expect approximately ~~713,000~~694,928 of the ~~751,000~~750,000 unvested shares to ultimately vest, assuming a weighted average forfeiture rate of ~~5.0%~~4.7%, which was determined based on peer company data, adjusted for the specifics of the LTIP.

During the ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, Columbia Property Trust paid equity retainers to its independent directors under the LTIP by granting the following shares, all of which vested immediately:


Date of Grant	Shares		Grant-Date Fair Value		Shares		Grant-Date Fair Value
2017 Director Grants:
January 3, 2017	8,279		$	21.58	8,279		$	21.58
May 2, 2017	33,581	⁽¹⁾	$	22.57	33,581	⁽¹⁾	$	22.57
2016 Director Grants:
January 4, 2016	7,439		$	23.00	7,439		$	23.00
April 1, 2016	8,120		$	21.89	8,120		$	21.89
July 1, 2016					8,158		$	21.52


⁽¹⁾	On May 2, 2017, the independent directors’ equity retainers were paid for the ensuing annual period. Prior to this time, the independent directors’ equity retainers were paid quarterly.

For the three and ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, Columbia Property Trust incurred the stock-based compensation expense related to the following events (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,				Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016		2017		2016		2017		2016
Amortization of LTIP awards	$	887	$	689	$	1,804	$	1,540	$	917	$	650	$	2,721	$	2,190
Amortization of future LTIP awards⁽¹⁾	617		346		1,212		706		639		91		1,851		797
Issuance of shares to independent directors	758		178		937		349		—		176		937		525
Total stock-based compensation expense	$	2,262	$	1,213	$	3,953	$	2,595	$	1,556	$	917	$	5,509	$	3,512


⁽¹⁾	Reflects amortization of LTIP awards for service during the current period, for which shares will be issued in future periods.

These expenses are included in general and administrative expenses in the accompanying consolidated statements of operations. As of ~~June~~September 30, 2017 and December 31, 2016, there was ~~$11.3~~$9.9 million and $3.2 million, respectively, of unrecognized compensation costs related to unvested awards under the LTIP, which will be amortized over the respective vesting period, ranging from one to four years at the time of grant. Effective in 2017, Columbia Property Trust changed from an LTIP measured over a one-year performance period to an LTIP measured over a three-year performance period and, as a result, has issued additional unvested shares this year.

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9. Supplemental Disclosures of Noncash Investing and Financing Activities

Outlined below are significant noncash investing and financing activities for the ~~six~~nine months ended ~~June~~September 30, 2017 and 2016 (in thousands):


	Six Months Ended June 30,						Nine Months Ended September 30,
	2017			2016			2017		2016
Investments in real estate funded with other assets	$	311		$	—		$	311	$	1,442
Real estate assets transferred to unconsolidated joint ventures							$	558,122	$	—
Other assets transferred to unconsolidated joint ventures							$	43,670	$	—
Other liabilities transferred to unconsolidated joint ventures							$	21,347	$	—
Discount on issuance of bonds payable							$	—	$	1,309
Deposits applied to sales of real estate	$	10,000		$	—		$	10,000	$	—
Amortization of net discounts on debt	$	90		$	151		$	135	$	222
Market value adjustments to interest rate swaps that qualify for hedge accounting treatment	$	(2	)	$	(6,879	)	$	146	$	(5,629	)
Accrued capital expenditures and deferred lease costs	$	28,547		$	7,505		$	25,866	$	16,074
Accrued deferred financing costs							$	—	$	12
Common stock issued to employees and directors, and amortized (net of income tax withholdings)	$	2,501		$	1,417		$	4,061	$	2,339

10. Earnings Per Share

For the three and ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, in computing the basic and diluted earnings per share, net income has been reduced for the dividends paid on unvested shares related to unvested awards under the LTIP. The following table reconciles the numerator for the basic and diluted earnings-per-share computations shown on the consolidated statements of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2017 and 2016 (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2017			2016			2017			2016
Net income	$	1,133		$	13,286		$	75,855		$	19,983		$	101,534		$	36,898		$	177,389		$	56,881
Distributions paid on unvested shares	(85		)	(77		)	(168		)	(159		)	(84		)	(77		)	(253		)	(237		)
Net income used to calculate basic and diluted earnings per share	$	1,048		$	13,209		$	75,687		$	19,824		$	101,450		$	36,821		$	177,136		$	56,644

The following table reconciles the denominator for the basic and diluted earnings-per-share computations shown on the consolidated statements of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, respectively (in thousands):


	Three Months Ended June 30,		Six Months Ended June 30,		Three Months Ended September 30,		Nine Months Ended September 30,
	2017	2016	2017	2016	2017	2016	2017	2016
Weighted-average common shares – basic	121,534	123,206	121,768	123,299	120,293	123,215	121,270	123,271
Plus incremental weighted-average shares from time-vested conversions, less assumed share repurchases:
Previously granted LTIP awards, unvested	90	43	75	26	116	82	89	46
Future LTIP awards	285	45	272	32	120	53	99	31
Weighted-average common shares – diluted	121,909	123,294	122,115	123,357	120,529	123,350	121,458	123,348

11. Segment Information

Columbia Property Trust establishes operating segments at the property level and aggregates individual properties into reportable segments for geographic locations in which Columbia Property Trust has significant investments. Columbia Property Trust considers geographic location when evaluating its portfolio composition and in assessing the ongoing operations and performance

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of its properties. As of ~~June~~September 30, 2017, Columbia Property Trust had the following reportable segments: New York, San Francisco, Atlanta, Washington, D.C., Boston, Los Angeles, and all other office markets. The all other office markets reportable segment consists of properties in similar, low-barrier-to-entry geographic locations in which Columbia Property Trust does not plan to make further investments. During the periods presented, there have been no material inter-segment transactions.

Net operating income ("NOI") is a non-GAAP financial measure. NOI is the primary performance measure reviewed by management to assess operating performance of properties and is calculated by deducting operating expenses from operating

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revenues. Operating revenues include rental income, tenant reimbursements, hotel income, and other property income; and operating expenses include property and hotel operating costs. The NOI performance metric consists of only revenues and expenses directly related to real estate rental operations. NOI reflects property acquisitions and dispositions, occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses. NOI, as Columbia Property Trust calculates it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs.

When assessing ongoing performance of our reportable segments, management does not evaluate assets or capital expenditures by reportable segment. Additionally, expenses, such as depreciation and amortization and others included in the reconciliation of GAAP net income to NOI, are reviewed by management on a consolidated basis, rather than by reportable segment.

The following table presents operating revenues included in NOI by geographic reportable segment (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,					Nine Months Ended September 30,
	2017			2016			2017			2016			2017			2016		2017		2016
New York(1)	$	25,524		$	36,239		$	53,110		$	65,687		$	30,488		$	23,996	$	83,598	$	89,683
San Francisco(2)	27,593			27,815			54,775			55,903			25,337			26,407		80,112		82,310
Atlanta	9,510			9,230			18,838			18,433			9,401			9,192		28,239		27,625
Washington, D.C.⁽¹⁾⁽³⁾	7,745			8,428			15,128			17,913			8,494			7,689		23,622		25,602
Boston	2,720			3,105			5,624			5,903			2,734			2,879		8,358		8,782
Los Angeles	1,857			1,920			3,635			3,891			1,899			1,635		5,534		5,526
All other office markets	4,856			38,841			14,447			84,825			2,772			39,558		17,219		124,383
Total office segments	79,805			125,578			165,557			252,555			81,125			111,356		246,682		363,911
Hotel	5			6,630			1,223			11,362			(24		)	6,343		1,199		17,705
Corporate	365			708			719			1,526			526			48		273		430
Total	80,175			132,916			167,499			265,443
Operating revenues included in loss from unconsolidated joint venture⁽¹⁾	(5,318		)	(4,986		)	(10,486		)	(10,934		)
Total operating revenues	$	74,857		$	127,930		$	157,013		$	254,509		$	81,627		$	117,747	$	248,154	$	382,046


⁽¹⁾	Includes operating revenues for 49.5% of 114 Fifth Avenue based on our ownership interest, from July 6, 2017 through September 30, 2017, which are included in equity in income (loss) of unconsolidated joint ventures in the accompanying consolidated statements of operations.

⁽²⁾

Includes operating revenues for 100.0% of 333 Market Street and University Circle through July 5, 2017. Includes operating revenues for 77.5% of 333 Market Street and University Circle based on our ownership interest, from July 6, 2017 through September 30, 2017, which are included in equity in income (loss) of unconsolidated joint ventures in the accompanying consolidated statements of operations.


⁽³⁾	Includes operating revenues for 51.0% of the Market Square ~~Buildings~~buildings based on our ownership interest, for all periods presented.

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The following table presents NOI by geographic reportable segment (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
New York⁽¹⁾	$	16,536		$	11,380		$	50,411		$	52,515
San Francisco⁽²⁾	18,166			20,095			57,733			60,547
Atlanta	8,500			8,249			25,078			24,756
Washington, D.C.⁽³⁾	4,209			3,632			11,052			13,303
Boston	1,196			1,425			3,797			4,111
Los Angeles	1,155			894			3,439			3,336
All other office markets	4,071			23,723			15,598			76,111
Total office segments	53,833			69,398			167,108			234,679
Hotel	(24		)	1,301			(914		)	3,171
Corporate	(364		)	(59		)	(489		)	(137		)
Total	$	53,445		$	70,640		$	165,705		$	237,713


⁽¹⁾	Includes NOI for 49.5% of 114 Fifth Avenue based on our ownership interest, from July 6, 2017 through September 30, 2017, which is included in equity in income (loss) of unconsolidated joint ventures in the accompanying consolidated statements of income.


⁽²⁾	Includes NOI for 100.0% of 333 Market Street and University Circle through July 5, 2017. Includes NOI for 77.5% of 333 Market Street and University Circle based on our ownership interest, from July 6, 2017 through September 30, 2017, which is included in equity in income (loss) of unconsolidated joint ventures in the accompanying consolidated statements of income.


⁽³⁾	Includes NOI for 51.0% of the Market Square buildings based on our ownership interest, for all periods presented.

A reconciliation of GAAP revenues to operating revenues is presented below (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Total revenues	$	60,362		$	113,266		$	217,375		$	367,775
Operating revenues included in income (loss) from unconsolidated joint ventures⁽¹⁾	22,419			4,992			32,905			15,926
Asset and property management fee income⁽²⁾	(1,154		)	(511		)	(2,126		)	(1,655		)
Total operating revenues	$	81,627		$	117,747		$	248,154		$	382,046

⁽¹⁾

Columbia Property Trust records its ~~51%~~ interest in ~~the Market Square Joint Venture~~properties held through unconsolidated joint ventures using the equity method of accounting, and reflects its interest in the operating revenues of ~~the Market Square Buildings~~these properties in ~~loss~~income (loss) from unconsolidated joint ~~venture~~ventures in the accompanying consolidated statements of operations.

~~The following table presents NOI by geographic reportable segment (in thousands):~~

Three Months Ended June 30, Six Months Ended June 30,
2017 2016 2017 2016
New York $ 16,259
$ 24,086
$ 33,875
$ 41,135
San Francisco 19,701
19,381
39,567
40,452
Atlanta 8,285
8,226
16,578
16,507
Washington, D.C.⁽¹⁾
3,565
4,555
6,843
9,671
Boston 1,192
1,463
2,601
2,686
Los Angeles 1,202
1,192
2,284
2,442
All other office markets 4,597
23,605
11,527
52,388
Total office segments 54,801
82,508
113,275
165,281
Hotel (14 ) 1,523
(890 ) 1,870
Corporate 395
517
847
1,066
Total $ 55,182
$ 84,548
$ 113,232
$ 168,217

⁽¹⁾⁽²⁾

~~Includes NOI for our interest in the Market Square Buildings for all periods presented. Columbia Property Trust records its 51% interest in the Market Square~~

See Note 4, Unconsolidated Joint ~~Venture using the equity method~~Ventures, of ~~accounting, and reflects its interest in the NOI of the Market Square Buildings in loss from unconsolidated joint venture in~~ the accompanying consolidated ~~statements of operations.~~financial statements.

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A reconciliation of GAAP net income to NOI is presented below (in thousands):


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2017			2016			2017			2016
Net income	$	1,133		$	13,286		$	75,855		$	19,983		$	101,534		$	36,898		$	177,389		$	56,881
Depreciation	20,423			28,450			42,028			57,739			18,501			26,778			60,529			84,517
Amortization	8,191			14,932			17,648			31,007			6,870			11,895			24,518			42,902
General and administrative	9,201			7,761			17,969			18,251
General and administrative - corporate													7,034			7,467			25,003			25,718
General and administrative - joint ventures													713			—			713			—
Net interest expense	13,785			17,372			28,350			35,264			13,690			17,116			42,040			52,380
Interest income from development authority bonds	(1,800		)	(1,800		)	(3,600		)	(3,600		)	(1,800		)	(1,800		)	(5,400		)	(5,400		)
Loss on early extinguishment of debt	—			92			45			92			280			18,905			325			18,997
Income tax expense (benefit)	7			245			(381		)	322			3			65			(378		)	387
Adjustments included in loss from unconsolidated joint venture	4,242			4,191			8,471			8,830
Loss (gains) on sales of real estate assets	—			19			(73,153		)	329
Asset and property management fee income													(1,154		)	(511		)	(2,126		)	(1,655		)
Adjustments included in income (loss) from unconsolidated joint ventures													10,139			4,239			18,610			13,069
Gain on sales of real estate assets													(102,365		)	(50,412		)	(175,518		)	(50,083		)
NOI	$	55,182		$	84,548		$	113,232		$	168,217		$	53,445		$	70,640		$	165,705		$	237,713

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12. Financial Information for Parent Guarantor, Issuer Subsidiary, and Non-Guarantor Subsidiaries

The 2026 Bonds Payable and the 2025 Bonds Payable (see Note 6, Bonds Payable) were issued by Columbia Property Trust OP, and are guaranteed by Columbia Property Trust. In accordance with SEC Rule 3-10(c), Columbia Property Trust includes herein condensed consolidating financial information in lieu of separate financial statements of the subsidiary issuer (Columbia Property Trust OP), as defined in the bond indentures, because all of the following criteria are met:


(1)	The subsidiary issuer (Columbia Property Trust OP) is 100% owned by the parent company guarantor (Columbia Property Trust);


(2)	The guarantee is full and unconditional; and


(3)	No other subsidiary of the parent company guarantor (Columbia Property Trust) guarantees the 2026 Bonds Payable or the 2025 Bonds Payable.

Columbia Property Trust uses the equity method with respect to its investment in subsidiaries included in its condensed consolidating financial statements. We have corrected the presentation of intercompany cash transfers between the REIT Parent and its subsidiaries in the consolidating statements of cash flow. Instead of showing one amount for intercompany transfers between each entity group, intercompany transfers are broken out by cash flow type (i.e. operating, investing, and financing) for all periods presented, consistent with the equity method of accounting. All such changes are eliminated in consolidation, and therefore do not impact ~~the Company’s~~Columbia Property Trust's consolidated financial statement totals. Management has concluded that the effect of this correction is not material to the consolidated financial statements. This change had the following impact to the condensed consolidating statement of cash flows for the ~~six~~nine months ended ~~June~~September 30, 2016: increase to operating cash flows for the parent and issuer of ~~$3.6~~$33.2 million and ~~$37.5~~$102.4 million, respectively; and increase (decrease) in investing cash flows for the parent, issuer, and non-guarantors of ~~$(25.5)~~$(172.8) million, ~~$151.5~~$464.2 million and ~~$159.4~~$482.1 million, respectively; and increase (decrease) in financing cash flows ~~of $21.9 million, $(189.0) million and $(159.4) million~~ for the parent, issuer, and non-guarantors of $139.6 million, $(566.6) million and $(482.1) million, respectively. The impact to individual financial statement captions within the condensed consolidating statement of cash flows is footnoted below.

Set forth below are Columbia Property Trust's condensed consolidating balance sheets as of ~~June~~September 30, 2017 and December 31, 2016, as well as its condensed consolidating statements of operations and its condensed consolidating statements of comprehensive income for the three and ~~six~~nine months ended ~~June~~September 30, 2017 and 2016; and its condensed consolidating statements of cash flows for the ~~six~~nine months ended ~~June~~September 30, 2017 and 2016.

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Condensed Consolidating Balance Sheets (in thousands)


	As of June 30, 2017											As of September 30, 2017
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)		Non- Guarantors		Consolidating Adjustments			Columbia Property Trust (Consolidated)		Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)		Non- Guarantors		Consolidating Adjustments			Columbia Property Trust (Consolidated)
Assets:
Real estate assets, at cost:
Land	$	—	$	—	$	751,351	$	—		$	751,351	$	—	$	—	$	609,110	$	—		$	609,110
Buildings and improvements, net	—		144		2,117,736		—			2,117,880		—		58		1,704,572		—			1,704,630
Intangible lease assets, net	—		—		182,428		—			182,428		—		—		164,699		—			164,699
Construction in progress	—		—		49,069		—			49,069		—		—		49,255		—			49,255
Total real estate assets	—		144		3,100,584		—			3,100,728		—		58		2,527,636		—			2,527,694
Investment in unconsolidated joint venture	—		125,584		—		—			125,584
Investment in unconsolidated joint ventures												—		698,105		—		—			698,105
Cash and cash equivalents	492,259		6,581		7,698		—			506,538		359,813		16,800		6,117		—			382,730
Investment in subsidiaries	1,683,352		1,465,906		—		(3,149,258		)	—		1,824,737		1,007,852		—		(2,832,589		)	—
Tenant receivables, net of allowance	—		33		3,969		—			4,002		—		31		2,783		—			2,814
Straight-line rent receivable	—		—		77,875		—			77,875		—		—		80,128		—			80,128
Prepaid expenses and other assets	329,234		124,139		18,797		(432,355		)	39,815		369,358		123,064		15,735		(432,355		)	75,802
Intangible lease origination costs, net	—		—		48,586		—			48,586		—		—		28,067		—			28,067
Deferred lease costs, net	—		—		129,849		—			129,849		—		—		127,940		—			127,940
Investment in development authority bonds	—		—		120,000		—			120,000		—		—		120,000		—			120,000
Total assets	$	2,504,845	$	1,722,387	$	3,507,358	$	(3,581,613	)	$	4,152,977	$	2,553,908	$	1,845,910	$	2,908,406	$	(3,264,944	)	$	4,043,280
Liabilities:
Line of credit and notes payable	$	—	$	447,920	$	629,003	$	(430,763	)	$	646,160
Line of credit and notes payable, net												$	—	$	447,588	$	503,542	$	(430,763	)	$	520,367
Bonds payable, net	—		693,364		—		—			693,364		—		693,562		—		—			693,562
Accounts payable, accrued expenses, and accrued capital expenditures	2		11,588		128,561		—			140,151		2		11,049		118,751		—			129,802
Due to affiliates	—		—		1,592		(1,592		)	—		—		—		1,592		(1,592		)	—
Deferred income	—		87		19,305		—			19,392		4		81		15,671		—			15,756
Intangible lease liabilities, net	—		—		29,067		—			29,067		—		—		9,891		—			9,891
Obligations under capital lease	—		—		120,000		—			120,000		—		—		120,000		—			120,000
Total liabilities	2		1,152,959		927,528		(432,355		)	1,648,134		6		1,152,280		769,447		(432,355		)	1,489,378
Equity:
Total equity	2,504,843		569,428		2,579,830		(3,149,258		)	2,504,843		2,553,902		693,630		2,138,959		(2,832,589		)	2,553,902
Total liabilities and equity	$	2,504,845	$	1,722,387	$	3,507,358	$	(3,581,613	)	$	4,152,977	$	2,553,908	$	1,845,910	$	2,908,406	$	(3,264,944	)	$	4,043,280

Page 2529

Table of Contents

Condensed Consolidating Balance Sheets (in thousands)

As of December 31, 2016

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Assets:
Real estate assets, at cost:
Land $ —
$ —
$ 751,351
$ —
$ 751,351
Building and improvements, net —
219
2,120,931
—
2,121,150
Intangible lease assets, net —
—
193,311
—
193,311
Construction in progress —
—
36,188
—
36,188
Real estate assets held for sale, net —
34,956
377,550
—
412,506
Total real estate assets —
35,175
3,479,331
—
3,514,506
Investment in unconsolidated joint venture —
127,346
—
—
127,346
Cash and cash equivalents 174,420
16,509
25,156
—
216,085
Investment in subsidiaries 2,047,922
1,782,752
—
(3,830,674 ) —
Tenant receivables, net of allowance —
—
7,163
—
7,163
Straight-line rent receivable —
—
64,811
—
64,811
Prepaid expenses and other assets 317,153
262,216
15,593
(570,687 ) 24,275
Intangible lease origination costs, net —
—
54,279
—
54,279
Deferred lease costs, net —
—
125,799
—
125,799
Investment in development authority bonds —
—
120,000
—
120,000
Other assets held for sale, net —
3,767
41,814
(52 ) 45,529
Total assets $ 2,539,495
$ 2,227,765
$ 3,933,946
$ (4,401,413 ) $ 4,299,793
Liabilities:
Lines of credit and notes payable, net $ —
$ 447,643
$ 704,585
$ (430,762 ) $ 721,466
Bonds payable, net —
692,972
—
—
692,972
Accounts payable, accrued expenses, and accrued capital expenditures —
10,395
120,633
—
131,028
Dividends payable 36,727
—
—
—
36,727
Due to affiliates —
58
1,534
(1,592 ) —
Deferred income —
—
19,694
—
19,694
Intangible lease liabilities, net —
—
33,375
—
33,375
Obligations under capital leases —
—
120,000
—
120,000
Liabilities held for sale —
2,651
177,497
(138,385 ) 41,763
Total liabilities 36,727
1,153,719
1,177,318
(570,739 ) 1,797,025
Equity:
Total equity 2,502,768
1,074,046
2,756,628
(3,830,674 ) 2,502,768
Total liabilities and equity $ 2,539,495
$ 2,227,765
$ 3,933,946
$ (4,401,413 ) $ 4,299,793

~~Page 26~~

~~Table of Contents~~

~~Consolidating Statements of Operations~~ ~~(in thousands)~~

For the Three Months Ended June 30, 2017

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Revenues:
Rental income $ —
$ —
$ 67,216
$ (95 ) $ 67,121
Tenant reimbursements —
(100 ) 7,072
—
6,972
Other property income 245
—
519
—
764
245
(100 ) 74,807
(95 ) 74,857
Expenses:
Property operating costs —
(45 ) 21,971
(95 ) 21,831
Hotel operating costs —
—
9
—
9
Asset and property management fees —
—
260
—
260
Depreciation —
152
20,271
—
20,423
Amortization —
—
8,191
—
8,191
General and administrative 56
2,739
6,406
—
9,201
56
2,846
57,108
(95 ) 59,915
Real estate operating income (loss) 189
(2,946 ) 17,699
—
14,942
Other income (expense):
Interest expense —
(10,568 ) (8,668 ) 4,774
(14,462 )
Interest and other income 4,228
1,220
1,803
(4,774 ) 2,477
4,228
(9,348 ) (6,865 ) —
(11,985 )
Income (loss) before income taxes and unconsolidated entities: 4,417
(12,294 ) 10,834
—
2,957
Income tax expense —
—
(7 ) —
(7 )
Income (loss) from unconsolidated entities (3,284 ) 6,187
—
(4,720 ) (1,817 )
Net income (loss) $ 1,133

$ (6,107 )
$ 10,827

$ (4,720 )
$ 1,133

~~Page 27~~

~~Table of Contents~~

~~Consolidating Statements of Operations~~ ~~(in thousands)~~

For the Three Months Ended June 30, 2016

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Revenues:
Rental income $ —
$ 863
$ 92,796
$ (92 ) $ 93,567
Tenant reimbursements —
455
18,253
—
18,708
Hotel income —
—
6,551
—
6,551
Other property income 245
—
8,955
(96 ) 9,104
245
1,318
126,555
(188 ) 127,930
Expenses:
Property operating costs —
731
39,603
(92 ) 40,242
Hotel operating costs —
—
5,038
—
5,038
Asset and property management fees:
Related-party —
42
—
(42 ) —
Other —
—
341
—
341
Depreciation —
723
27,727
—
28,450
Amortization —
77
14,855
—
14,932
General and administrative 38
2,087
5,690
(54 ) 7,761
38
3,660
93,254
(188 ) 96,764
Real estate operating income (loss) 207
(2,342 ) 33,301
—
31,166
Other income (expense):
Interest expense —
(11,825 ) (12,933 ) 7,378
(17,380 )
Interest and other income 3,555
3,824
1,807
(7,378 ) 1,808
Loss on early extinguishment of debt —
(82 ) (10 ) —
(92 )
3,555
(8,083 ) (11,136 ) —
(15,664 )
Income (loss) before income taxes and unconsolidated entities: 3,762
(10,425 ) 22,165
—
15,502
Income tax expense —
(5 ) (240 ) —
(245 )
Income from subsidiaries 9,524
17,804
—
(27,328 ) —
Loss from unconsolidated joint venture —
(1,952 ) —
—
(1,952 )
Income before sale of real estate assets: 13,286
5,422
21,925
(27,328 ) 13,305
Loss on sale of real estate assets —
—
(19 ) —
(19 )
Net income $ 13,286
$ 5,422
$ 21,906
$ (27,328 ) $ 13,286

~~Page 28~~

~~Table of Contents~~

~~Consolidating Statements of Operations~~ ~~(in thousands)~~

For the Six Months Ended June 30, 2017

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Revenues:
Rental income $ —
$ 51
$ 138,438
$ (195 ) $ 138,294
Tenant reimbursements —
(66 ) 15,622
—
15,556
Hotel income —
—
1,339
—
1,339
Other property income 490
—
1,352
(18 ) 1,824
490
(15 ) 156,751
(213 ) 157,013
Expenses:
Property operating costs —
128
46,003
(195 ) 45,936
Hotel operating costs —
—
2,085
—
2,085
Asset and property management fees:
Related-party —
3
—
(3 ) —
Other —
—
529
—
529
Depreciation —
234
41,794
—
42,028
Amortization —
5
17,643
—
17,648
General and administrative 96
5,256
12,632
(15 ) 17,969
96
5,626
120,686
(213 ) 126,195
Real estate operating income (loss) 394
(5,641 ) 36,065
—
30,818
Other income (expense):
Interest expense —
(20,851 ) (19,133 ) 10,407
(29,577 )
Interest and other income 8,330
3,297
3,607
(10,407 ) 4,827
Loss on early extinguishment of debt —
—
(45 ) —
(45 )
8,330
(17,554 ) (15,571 ) —
(24,795 )
Income (loss) before income taxes, unconsolidated entities, and sales of
real estate: 8,724
(23,195 ) 20,494
—
6,023
Income tax benefit —
—
381
—
381
Income (loss) from unconsolidated entities 67,131
69,283
—
(140,116 ) (3,702 )
Income before sales of real estate assets: 75,855
46,088
20,875
(140,116 ) 2,702
Gains on sales of real estate assets —
11,050
62,103
—
73,153
Net income $ 75,855
$ 57,138
$ 82,978
$ (140,116 ) $ 75,855

~~Page 29~~

~~Table of Contents~~

For the Six Months Ended June 30, 2016

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Revenues:
Rental income $ —
$ 1,713
$ 191,628
$ (188 ) $ 193,153
Tenant reimbursements —
857
37,604
—
38,461
Hotel income —
—
11,214
—
11,214
Other property income 490
—
11,376
(185 ) 11,681
490
2,570
251,822
(373 ) 254,509
Expenses:
Property operating costs —
1,501
80,265
(188 ) 81,578
Hotel operating costs —
—
9,369
—
9,369
Asset and property management fees:
Related-party —
72
—
(72 ) —
Other —
—
671
—
671
Depreciation —
1,421
56,318
—
57,739
Amortization —
153
30,854
—
31,007
General and administrative 77
4,281
14,006
(113 ) 18,251
77
7,428
191,483
(373 ) 198,615
Real estate operating income (loss) 413
(4,858 ) 60,339
—
55,894
Other income (expense):
Interest expense —
(24,230 ) (25,814 ) 14,767
(35,277 )
Interest and other income 7,109
7,658
3,613
(14,767 ) 3,613
Loss on early extinguishment of debt —
(82 ) (10 ) —
(92 )
7,109
(16,654 ) (22,211 ) —
(31,756 )
Income (loss) before income taxes, unconsolidated entities, and sales of
real estate: 7,522
(21,512 ) 38,128
—
24,138
Income tax expense —
(12 ) (310 ) —
(322 )
Income from unconsolidated entities 12,461
28,625
—
(41,086 ) —
Loss from unconsolidated joint venture —
(3,504 ) —
—
(3,504 )
Income before sales of real estate assets: 19,983
3,597
37,818
(41,086 ) 20,312
Loss on sales of real estate assets —
—
(329 ) —
(329 )
Net income $ 19,983
$ 3,597
$ 37,489
$ (41,086 ) $ 19,983



	As of December 31, 2016
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)		Non- Guarantors		Consolidating Adjustments			Columbia Property Trust (Consolidated)
Assets:
Real estate assets, at cost:
Land	$	—	$	—	$	751,351	$	—		$	751,351
Building and improvements, net	—		219		2,120,931		—			2,121,150
Intangible lease assets, net	—		—		193,311		—			193,311
Construction in progress	—		—		36,188		—			36,188
Real estate assets held for sale, net	—		34,956		377,550		—			412,506
Total real estate assets	—		35,175		3,479,331		—			3,514,506
Investment in unconsolidated joint ventures	—		127,346		—		—			127,346
Cash and cash equivalents	174,420		16,509		25,156		—			216,085
Investment in subsidiaries	2,047,922		1,782,752		—		(3,830,674		)	—
Tenant receivables, net of allowance	—		—		7,163		—			7,163
Straight-line rent receivable	—		—		64,811		—			64,811
Prepaid expenses and other assets	317,153		262,216		15,593		(570,687		)	24,275
Intangible lease origination costs, net	—		—		54,279		—			54,279
Deferred lease costs, net	—		—		125,799		—			125,799
Investment in development authority bonds	—		—		120,000		—			120,000
Other assets held for sale, net	—		3,767		41,814		(52		)	45,529
Total assets	$	2,539,495	$	2,227,765	$	3,933,946	$	(4,401,413	)	$	4,299,793
Liabilities:
Lines of credit and notes payable, net	$	—	$	447,643	$	704,585	$	(430,762	)	$	721,466
Bonds payable, net	—		692,972		—		—			692,972
Accounts payable, accrued expenses, and accrued capital expenditures	—		10,395		120,633		—			131,028
Dividends payable	36,727		—		—		—			36,727
Due to affiliates	—		58		1,534		(1,592		)	—
Deferred income	—		—		19,694		—			19,694
Intangible lease liabilities, net	—		—		33,375		—			33,375
Obligations under capital leases	—		—		120,000		—			120,000
Liabilities held for sale	—		2,651		177,497		(138,385		)	41,763
Total liabilities	36,727		1,153,719		1,177,318		(570,739		)	1,797,025
Equity:
Total equity	2,502,768		1,074,046		2,756,628		(3,830,674		)	2,502,768
Total liabilities and equity	$	2,539,495	$	2,227,765	$	3,933,946	$	(4,401,413	)	$	4,299,793

Page 30

Table of Contents

Consolidating Statements of ~~Comprehensive Income~~Operations (in thousands)

For the Three Months Ended June 30, 2017

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Net income (loss) $ 1,133
$ (6,107 ) $ 10,827
$ (4,720 ) $ 1,133
Market value adjustments to interest
rate swaps
(636 ) (636 ) —
636
(636 )
Comprehensive income (loss) $ 497
$ (6,743 ) $ 10,827
$ (4,084 ) $ 497



	For the Three Months Ended September 30, 2017
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)			Non- Guarantors			Consolidating Adjustments			Columbia Property Trust (Consolidated)
Revenues:
Rental income	$	—	$	—		$	55,113		$	(98	)	$	55,015
Tenant reimbursements	—		7			3,046			—			3,053
Asset and property management fee income	569		—			585			—			1,154
Other property income	—		—			1,140			—			1,140
	569		7			59,884			(98		)	60,362
Expenses:
Property operating costs	—		113			18,552			(98		)	18,567
Asset and property management fees	—		—			188			—			188
Depreciation	—		310			18,191			—			18,501
Amortization	—		—			6,870			—			6,870
General and administrative - corporate	39		1,758			5,237			—			7,034
General and administrative - unconsolidated joint ventures	—		—			713			—			713
	39		2,181			49,751			(98		)	51,873
Real estate operating income (loss)	530		(2,174		)	10,133			—			8,489
Other income (expense):
Interest expense	—		(10,702		)	(8,803		)	4,774			(14,731		)
Interest and other income	4,593		1,220			1,802			(4,774		)	2,841
Loss on early extinguishment of debt	—		—			(280		)	—			(280		)
	4,593		(9,482		)	(7,281		)	—			(12,170		)
Income (loss) before income taxes and unconsolidated entities:	5,123		(11,656		)	2,852			—			(3,681		)
Income tax expense	—		(1		)	(2		)	—			(3		)
Income (loss) from unconsolidated entities	96,411		109,630			(1		)	(203,187		)	2,853
Income (loss) before sales of real estate assets:	101,534		97,973			2,849			(203,187		)	(831		)
Gain on sales of real estate assets	—		—			102,365			—			102,365
Net income	$	101,534	$	97,973		$	105,214		$	(203,187	)	$	101,534

Page 31

Table of Contents

Consolidating Statements of Operations (in thousands)

For the Three Months Ended June 30, 2016

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Net income $ 13,286
$ 5,422
$ 21,906
$ (27,328 ) $ 13,286
Market value adjustments to interest
rate swaps
(2,022 ) (2,022 ) —
2,022
(2,022 )
Comprehensive income $ 11,264
$ 3,400
$ 21,906
$ (25,306 ) $ 11,264



	For the Three Months Ended September 30, 2016
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)			Non- Guarantors			Consolidating Adjustments			Columbia Property Trust (Consolidated)
Revenues:
Rental income	$	—	$	956		$	86,702		$	(97	)	$	87,561
Tenant reimbursements	—		564			16,526			—			17,090
Hotel income	—		—			6,270			—			6,270
Asset and property management fee income	245		—			266			—			511
Other property income	—		—			1,930			(96		)	1,834
	245		1,520			111,694			(193		)	113,266
Expenses:
Property operating costs	—		860			38,338			(97		)	39,101
Hotel operating costs	—		—			4,946			—			4,946
Asset and property management fee expenses:
Related-party	—		40			—			(40		)	—
Other	—		—			387			—			387
Depreciation	—		745			26,033			—			26,778
Amortization	—		86			11,809			—			11,895
General and administrative - corporate	38		2,297			5,188			(56		)	7,467
	38		4,028			86,701			(193		)	90,574
Real estate operating income (loss)	207		(2,508		)	24,993			—			22,692
Other income (expense):
Interest expense	—		(12,249		)	(12,256		)	7,367			(17,138		)
Interest and other income	3,571		3,813			1,822			(7,367		)	1,839
Loss on early extinguishment of debt	—		(18,905		)	—			—			(18,905		)
	3,571		(27,341		)	(10,434		)	—			(34,204		)
Income (loss) before income taxes and unconsolidated entities:	3,778		(29,849		)	14,559			—			(11,512		)
Income tax expense	—		—			(65		)	—			(65		)
Income from subsidiaries	33,120		61,442			—			(94,562		)	—
Loss from unconsolidated joint venture	—		(1,937		)	—			—			(1,937		)
Income (loss) before sale of real estate assets:	36,898		29,656			14,494			(94,562		)	(13,514		)
Gain on sale of real estate assets	—		—			50,412			—			50,412
Net income	$	36,898	$	29,656		$	64,906		$	(94,562	)	$	36,898

Page 32

Table of Contents

Consolidating Statements of Operations (in thousands)

For the Six Months Ended June 30, 2017

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Net income $ 75,855
$ 57,138
$ 82,978
$ (140,116 ) $ 75,855
Market value adjustments to interest
rate swaps
(2 ) (2 ) —
2
(2 )
Comprehensive income $ 75,853
$ 57,136
$ 82,978
$ (140,114 ) $ 75,853



	For the Nine Months Ended September 30, 2017
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)			Non- Guarantors			Consolidating Adjustments			Columbia Property Trust (Consolidated)
Revenues:
Rental income	$	—	$	51		$	193,551		$	(293	)	$	193,309
Tenant reimbursements	—		(59		)	18,668			—			18,609
Hotel income	—		—			1,339			—			1,339
Asset and property management fee income	1,059		—			1,067			—			2,126
Other property income	—		—			2,010			(18		)	1,992
	1,059		(8		)	216,635			(311		)	217,375
Expenses:
Property operating costs	—		241			64,555			(293		)	64,503
Hotel operating costs	—		—			2,085			—			2,085
Asset and property management fee expenses:
Related-party	—		3			—			(3		)	—
Other	—		—			717			—			717
Depreciation	—		544			59,985			—			60,529
Amortization	—		5			24,513			—			24,518
General and administrative - corporate	135		7,013			17,870			(15		)	25,003
General and administrative - unconsolidated joint ventures	—		—			713			—			713
	135		7,806			170,438			(311		)	178,068
Real estate operating income (loss)	924		(7,814		)	46,197			—			39,307
Other income (expense):
Interest expense	—		(31,554		)	(27,935		)	15,181			(44,308		)
Interest and other income	12,923		4,517			5,409			(15,181		)	7,668
Loss on early extinguishment of debt	—		—			(325		)	—			(325		)
	12,923		(27,037		)	(22,851		)	—			(36,965		)
Income (loss) before income taxes, unconsolidated entities, and sales of real estate:	13,847		(34,851		)	23,346			—			2,342
Income tax benefit (expense)	—		(1		)	379			—			378
Income (loss) from unconsolidated entities	163,542		188,832			—			(353,223		)	(849		)
Income before sales of real estate assets:	177,389		153,980			23,725			(353,223		)	1,871
Gains on sales of real estate assets	—		11,050			164,468			—			175,518
Net income	$	177,389	$	165,030		$	188,193		$	(353,223	)	$	177,389

Page 33

Table of Contents

For the Six Months Ended June 30, 2016

Columbia Property Trust
(Parent)
(Guarantor)

Columbia
Property
Trust OP
(the Issuer)

Non-
Guarantors

Consolidating
Adjustments
Columbia Property Trust
(Consolidated)
Net income $ 19,983
$ 3,597
$ 37,489
$ (41,086 ) $ 19,983
Market value adjustments to interest
rate swaps
(6,879 ) (6,879 ) —
6,879
(6,879 )
Comprehensive income (loss) $ 13,104
$ (3,282 ) $ 37,489
$ (34,207 ) $ 13,104



	For the Nine Months Ended September 30, 2016
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)			Non- Guarantors			Consolidating Adjustments			Columbia Property Trust (Consolidated)
Revenues:
Rental income	$	—	$	2,669		$	278,330		$	(285	)	$	280,714
Tenant reimbursements	—		1,421			54,130			—			55,551
Hotel income	—		—			17,484			—			17,484
Asset and property management fee income	735		—			920			—			1,655
Other property income	—		—			12,651			(280		)	12,371
	735		4,090			363,515			(565		)	367,775
Expenses:
Property operating costs	—		2,360			118,604			(285		)	120,679
Hotel operating costs	—		—			14,315			—			14,315
Asset and property management fee expenses:
Related-party	—		112			—			(112		)	—
Other	—		—			1,058			—			1,058
Depreciation	—		2,166			82,351			—			84,517
Amortization	—		239			42,663			—			42,902
General and administrative - corporate	116		6,575			19,195			(168		)	25,718
	116		11,452			278,186			(565		)	289,189
Real estate operating income (loss)	619		(7,362		)	85,329			—			78,586
Other income (expense):
Interest expense	—		(36,479		)	(38,071		)	22,135			(52,415		)
Interest and other income	10,680		11,471			5,436			(22,135		)	5,452
Loss on early extinguishment of debt	—		(18,987		)	(10		)	—			(18,997		)
	10,680		(43,995		)	(32,645		)	—			(65,960		)
Income (loss) before income taxes, unconsolidated entities, and sales of real estate:	11,299		(51,357		)	52,684			—			12,626
Income tax expense	—		(12		)	(375		)	—			(387		)
Income from unconsolidated entities	45,582		89,972			—			(135,554		)	—
Loss from unconsolidated joint venture	—		(5,441		)	—			—			(5,441		)
Income before sales of real estate assets:	56,881		33,162			52,309			(135,554		)	6,798
Gain on sales of real estate assets	—		—			50,083			—			50,083
Net income	$	56,881	$	33,162		$	102,392		$	(135,554	)	$	56,881

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Consolidating Statements of Comprehensive Income (in thousands)



	For the Three Months Ended September 30, 2017
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)		Non- Guarantors		Consolidating Adjustments			Columbia Property Trust (Consolidated)
Net income	$	101,534	$	97,973	$	105,214	$	(203,187	)	$	101,534
Market value adjustments to interest rate swaps	148		148		—		(148		)	148
Comprehensive income	$	101,682	$	98,121	$	105,214	$	(203,335	)	$	101,682



	For the Three Months Ended September 30, 2016
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)		Non- Guarantors		Consolidating Adjustments			Columbia Property Trust (Consolidated)
Net income	$	36,898	$	29,656	$	64,906	$	(94,562	)	$	36,898
Market value adjustments to interest rate swaps	1,250		1,250		—		(1,250		)	1,250
Comprehensive income	$	38,148	$	30,906	$	64,906	$	(95,812	)	$	38,148



	For the Nine Months Ended September 30, 2017
	Columbia Property Trust (Parent) (Guarantor)		Columbia Property Trust OP (the Issuer)		Non- Guarantors		Consolidating Adjustments			Columbia Property Trust (Consolidated)
Net income	$	177,389	$	165,030	$	188,193	$	(353,223	)	$	177,389
Market value adjustments to interest rate swaps	146		146		—		(146		)	146
Comprehensive income	$	177,535	$	165,176	$	188,193	$	(353,369	)	$	177,535



	For the Nine Months Ended September 30, 2016
	Columbia Property Trust (Parent) (Guarantor)			Columbia Property Trust OP (the Issuer)			Non- Guarantors		Consolidating Adjustments			Columbia Property Trust (Consolidated)
Net income	$	56,881		$	33,162		$	102,392	$	(135,554	)	$	56,881
Market value adjustments to interest rate swaps	(5,629		)	(5,629		)	—		5,629			(5,629		)
Comprehensive income (loss)	$	51,252		$	27,533		$	102,392	$	(129,925	)	$	51,252

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Consolidating Statements of Cash Flows (in thousands)


	For the Six Months Ended June 30, 2017															For the Nine Months Ended September 30, 2017
	Columbia Property Trust (Parent) (Guarantor)			Columbia Property Trust OP (the Issuer)			Non- Guarantors			Eliminations			Columbia Property Trust (Consolidated)			Columbia Property Trust (Parent) (Guarantor)			Columbia Property Trust OP (the Issuer)			Non- Guarantors			Eliminations			Columbia Property Trust (Consolidated)
Cash flows from operating activities	$	58,752		$	58,688		$	58,639		$	(140,116	)	$	35,963		$	168,209		$	151,932		$	80,195		$	(353,221	)	$	47,115
Cash flows from investing activities:
Net proceeds from sale of real estate	—			49,531			455,129			—			504,660			—			49,531			688,100			—			737,631
Investment in real estate and related assets	(12,000		)	(400		)	(45,463		)	—			(57,863		)	(52,000		)	(630		)	(72,829		)	—			(125,459		)
Investment in unconsolidated joint venture	—			(1,940		)	—			—			(1,940		)
Investment in unconsolidated joint ventures																—			(123,149		)	—			—			(123,149		)
Distributions from unconsolidated joint ventures																—			1,411			—			—			1,411
Distributions from subsidiaries	385,554			331,630			—			(717,184		)	—			237,835			330,939			—			(568,774		)	—
Net cash provided by investing activities	373,554			378,821			409,666			(717,184		)	444,857			185,835			258,102			615,271			(568,774		)	490,434
Cash flows from financing activities:
Borrowings, net of fees	—			(70		)	—			—			(70		)	—			(628		)	—			—			(628		)
Repayments	—			—			(75,830		)	—			(75,830		)	—			—			(201,625		)	—			(201,625		)
Distributions	(85,505		)	(447,367		)	(409,933		)	857,300			(85,505		)	(109,561		)	(409,115		)	(512,880		)	921,995			(109,561		)
Repurchases of common stock	(28,962		)	—			—			—			(28,962		)	(59,090		)	—			—			—			(59,090		)
Net cash provided by (used in) financing activities	(114,467		)	(447,437		)	(485,763		)	857,300			(190,367		)
Net cash used in financing activities																(168,651		)	(409,743		)	(714,505		)	921,995			(370,904		)
Net increase (decrease) in cash and cash equivalents	317,839			(9,928		)	(17,458		)	—			290,453			185,393			291			(19,039		)	—			166,645
Cash and cash equivalents, beginning of period	174,420			16,509			25,156			—			216,085			174,420			16,509			25,156			—			216,085
Cash and cash equivalents, end of period	$	492,259		$	6,581		$	7,698		$	—		$	506,538		$	359,813		$	16,800		$	6,117		$	—		$	382,730

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	For the Six Months Ended June 30, 2016															For the Nine Months Ended September 30, 2016
	Columbia Property Trust (Parent) (Guarantor)			Columbia Property Trust OP (the Issuer)			Non- Guarantors			Eliminations			Columbia Property Trust (Consolidated)			Columbia Property Trust (Parent) (Guarantor)			Columbia Property Trust OP (the Issuer)			Non- Guarantors			Eliminations			Columbia Property Trust (Consolidated)
Cash flows from operating activities	$	4,009		$	11,635		$	114,880		$	(41,086	)	$	89,438		$	33,797		$	63,440		$	188,021		$	(135,554	)	$	149,704
Cash flows from investing activities:
Net proceeds from sales of real estate⁽¹⁾	—			—			159,387			—			159,387			—			—			482,089			—			482,089
Investment in real estate and related assets	—			(755		)	(35,729		)	—			(36,484		)	—			(1,552		)	(52,608		)	—			(54,160		)
Investment in unconsolidated joint venture	—			(8,728		)	—			—			(8,728		)
Investment in unconsolidated joint ventures																—			(12,351		)	—			—			(12,351		)
Distributions from subsidiaries⁽²⁾	133,891			151,470			—			(285,361		)	—			309,308			464,171			—			(773,479		)	—
Net cash provided by investing activities	133,891			141,987			123,658			(285,361		)	114,175			309,308			450,268			429,481			(773,479		)	415,578
Cash flows from financing activities:
Borrowings, net of fees	—			214,861			—			—			214,861
Repayments of line of credit and notes payable	—			(248,000		)	(41,697		)	—			(289,697		)
Distributions⁽³⁾	(111,433		)	(125,011		)	(201,436		)	326,447			(111,433		)
Debt prepayment and interest rate swap settlement costs paid⁽³⁾																—			(17,921		)	—			—			(17,921		)
Borrowings, net of fees⁽⁴⁾																—			780,580			—			—			780,580
Repayments⁽⁵⁾																—			(952,000		)	(43,070		)	—			(995,070		)
Distributions⁽⁶⁾																(148,474		)	(329,993		)	(579,040		)	909,033			(148,474		)
Repurchases of common stock	(26,186		)	—			—			—			(26,186		)	(26,186		)	—			—			—			(26,186		)
Net cash used in financing activities	(137,619		)	(158,150		)	(243,133		)	326,447			(212,455		)	(174,660		)	(519,334		)	(622,110		)	909,033			(407,071		)
Net increase (decrease) in cash and cash equivalents	281			(4,528		)	(4,595		)	—			(8,842		)	168,445			(5,626		)	(4,608		)	—			158,211
Cash and cash equivalents, beginning of period	989			14,969			16,687			—			32,645			989			14,969			16,687			—			32,645
Cash and cash equivalents, end of period	$	1,270		$	10,441		$	12,092		$	—		$	23,803		$	169,434		$	9,343		$	12,079		$	—		$	190,856


⁽¹⁾	Net proceeds from sales of real estate increased (decreased) by ~~$(159.4)~~$(482.1) million and ~~$159.4~~$482.1 million for the parent and non-guarantors, respectively.


⁽²⁾	Distributions from subsidiaries increased (decreased) by ~~$133.9~~$309.3 million, ~~$151.5~~$464.2 million, and ~~$(285.4)~~$(773.5) million for the parent, issuer, and eliminations, respectively.


⁽³⁾	Debt prepayments and interest rate swap settlement costs paid increased (decreased) by $17.9 million and $(17.9) million for the parent and issuer, respectively.


⁽⁴⁾	Borrowings, net of fees increased (decreased) by $(348.7) million and $348.7 million for the parent and issuer, respectively.


⁽⁵⁾	Repayments increased (decreased) by $250.0 million and $(250.0) million for the parent and issuer, respectively.


⁽⁶⁾	Distributions (increased) decreased by ~~$(125.0)~~$(330.0) million, ~~$(201.4)~~$(579.0) million, and ~~$326.4~~$909.0 million, for the issuer, non-guarantors, and eliminations, respectively. The intercompany transfers, net line item is no longer presented based on the changes to the other line items described herein.

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13. Subsequent ~~Event~~Events

Columbia Property Trust has evaluated subsequent events in connection with the preparation of the consolidated financial statements and notes thereto included in this report on Form 10-Q and noted the following in addition to those disclosed elsewhere in this report:

~~Allianz Joint Ventures~~Acquisition of 245-249 West 17th Street & 218 West 18th Street, as described in Note 3, Real Estate Transactions; and

~~Amendment~~Acquisition of ~~$150 Million Term Loan,~~investment in 1800 M Street through a joint venture, as described in Note 5,3, ~~Line of Credit and Notes Payable~~Real Estate Transactions.

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ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements (and notes thereto) and the "Cautionary Note Regarding Forward-Looking Statements" preceding Part I of this report, as well as our consolidated financial statements (and the notes thereto) and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2016 Form 10-K.

Executive Summary

OurOur primary strategic objective is to generate long-term shareholder returns from a combination of growing cash flows and appreciation in the values of our properties, ~~through the acquisition~~by owning and ~~ownership of~~operating high-quality office properties principally located in high-barrier-to-entry markets. We ~~typically pursue~~concentrate on office ~~building acquisitions~~buildings that are competitive within the top tier of their markets or that will be repositioned as such through value-add initiatives. In addition, our investment objectives include optimizing our portfolio allocation between stabilized investments and more growth-oriented, value-add investments, with an emphasis on central business districts and multi-tenant buildings.

~~At the beginning of the year, we~~We recently completed ~~our near-term disposition~~a multi-year capital recycling program ~~with the sale of the Houston and Cleveland assets for $539.5 million. Since 2011, we have sold~~that involved selling more than 50 properties in geographically dispersed markets for ~~over $3.3~~aggregate proceeds of $3.6 billion, and reinvested ~~$2.3 billion of those proceeds in acquisitions~~ in New York, San Francisco, ~~Boston,~~Washington, D.C., and ~~in targeted capital improvements for our existing portfolio. We are currently focused on reinvesting~~Boston. During the ~~remaining proceeds into additional opportunities within our target markets:~~second half of 2017, we executed the following transactions:

~~We recently established~~On July 6, 2017, we formed a strategic partnership with Allianz ~~which will enable us~~ to increase our scale in key markets on a leverage-neutral basis. ~~On July 6, 2017, we~~We consummated the partnership by simultaneously selling partial interests in two of our San Francisco properties, 333 Market Street and University Circle, to Allianz for $234.0 million, and by acquiring a partial interest in 114 Fifth Avenue in Manhattan from Allianz for $108.9 million. ~~We expect to make additional~~

On October 11, 2017, we acquired a 55% interest in 1800 M Street, a 10-story office building in Washington, D.C., for $231.6 million through a joint ~~investments~~venture with Allianz.

On October 11, 2017, we acquired 245-249 West 17th Street, two interconnected 12- and 6-story towers totaling 281,000 square feet of office and retail space, and 218 West 18th Street, a 12-story, 166,000-square-foot office building, in New York for $514.1 million.

We are also under contract to purchase 149 Madison Avenue in New York, a 12-story, 127,000-square-foot office building, with closing expected later this ~~year. We~~year, and plan to fully redevelop this property as modern boutique office space.

~~Transitioning the portfolio from primarily suburban single tenant buildings~~ We will continue to ~~primarily multi-tenant CBD buildings has caused some dilution~~pursue strategic investment opportunities in ~~earnings; however, we believe that this transition will improve~~ our ~~growth potential over the long term.~~target markets, including additional joint investments with Allianz, as well as selective property dispositions.

Leasing continues to be a key area of focus for both vacant space and upcoming expirations. Through the first ~~six~~nine months of 2017, we have leased ~~605,000~~783,000 square feet of space and addressed some of our most significant near-term expirations and vacancies:

~~In San Francisco, at~~At University Circle, we executed a 5-year, 119,000-square-foot lease renewal with DLA Piper in September to extend the lease to June 2023 and address our most significant 2018 expiration. At 650 California Street, we executed ~~a 12-year, 61,000-square-foot lease with WeWork in February;~~ an eight-year, 86,000-square-foot lease with Affirm in April; ~~and~~ a 22,000-square-foot renewal and expansion with an existing tenant in ~~April.~~April; and a 12-year, 61,000-square-foot lease with WeWork in February.

In New York, at 229 West 43rd Street, we amended Snap Inc.'s lease in February to expand its space by 26,000 square feet to a total of 121,000 square feet, and to extend the lease to ~~2027.~~2027; and at 315 Park Avenue South, executed a 17,000-square-foot lease expansion with Bustle Media Group.

In Atlanta, at One Glenlake, we executed a 10-year, 66,000-square-foot lease in April, and an 11-year, 40,000-square-foot lease renewal and expansion in June along with several smaller leases during the second quarter to bring the building to 100% leased at quarter end.

We continue to maintain a flexible balance sheet with ~~low leverage and~~ an emphasis on unsecured borrowings, with ~~weighted average~~weighted-average maturities of ~~5.9~~6.2 years⁽¹⁾, weighted-average cost of borrowing of ~~3.70%~~3.63%⁽¹⁾ per annum, and an unencumbered pool of assets as a percentage of gross real estate assets of ~~82%~~91%⁽¹⁾. Our stock repurchase program allows us to take advantage of market opportunities from time to time when we believe our stock is ~~undervalued from time to time.~~undervalued. In the ~~second~~third quarter of 2017, we repurchased ~~$27.5~~$30.1 million of our common stock ~~(1.3~~(1.4 million shares at an average price of ~~$21.95~~$21.02 per share). To date, under our ~~current~~stock repurchase ~~program,~~programs, we have repurchased an aggregate of ~~$96.5~~$121.4 million of common stock at an average price of ~~$22.08.~~$21.85 per share.

⁽¹⁾

Statistics include ~~51%~~our ownership interest in the gross real estate assets and debt at properties held through unconsolidated joint ventures as described in Note 4, Unconsolidated Joint Ventures, of the ~~debt held by~~accompanying financial statements; and exclude the ~~Market Square Joint Venture~~263 Shuman mortgage note, which expired in ~~which we own an interest through an unconsolidated joint venture.~~July 2017. We are in the process of transferring the property to the lender.

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Key Performance Indicators

Our operating results depend primarily upon the level of income generated by the leases at our properties. Occupancy and rental rates are critical drivers of our lease income. Over the last year, our quarter-end average portfolio percentage leased ranged from 90.6% at December 31, 2016 to ~~95.3%~~95.1% at ~~June~~September 30, 2017. The following table sets forth details related to recent leasing activities, which drive changes in our rental revenues:


	Three Months Ended June 30,						Six Months Ended June 30,						Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016			2017			2016			2017			2016
Total number of leases	19			12			35			21			11			11			46			32
Square feet of leasing – renewal⁽¹⁾	69,580			148,489			204,936			160,474			109,979			92,625			314,915			253,099
Square feet of leasing – new⁽²⁾⁽¹⁾	248,771			447,026			389,329			496,265			41,236			34,388			430,565			530,653
Total square feet of leasing	318,351			595,515			594,265			656,739			151,215			127,013			745,480			783,752
Lease term (months)	108			361			114			352			74			82			98			341
Tenant improvements, per square foot – renewal	$	81.23		$	25.29		$	51.11		$	24.72		$	32.31		$	50.85		$	40.58		$	38.66
Tenant improvements, per square foot – new	$	97.29		$	174.94		$	83.70		$	170.08		$	73.62		$	31.36		$	82.62		$	168.18
Tenant improvements, per square foot – all leases	$	94.23		$	171.14		$	77.33		$	166.44		$	43.84		$	44.59		$	68.73		$	161.51
Leasing commissions, per square foot – renewal	$	19.45		$	10.39		$	15.50		$	10.34		$	12.49		$	16.98		$	13.81		$	13.88
Leasing commissions, per square foot – new	$	23.00		$	44.73		$	20.61		$	43.97		$	31.77		$	24.07		$	21.80		$	43.70
Leasing commissions, per square foot – all leases	$	22.32		$	43.86		$	19.61		$	43.13		$	17.87		$	19.25		$	19.16		$	42.16

Rent leasing spread – renewal⁽³⁾⁽²⁾	74.8		%	25.9		%	44.0		%	25.3		%	117.3		%	26.3		%	85.1		%	25.8		%
Rent leasing spread – new⁽⁴⁾⁽³⁾	96.9		%	15.4		%	133.1		%	18.9		%	79.3		%	n/a			121.9		%	18.9		%
Rent leasing spread – all leases⁽⁴⁾⁽³⁾	85.1		%	15.4		%	101.3		%	19.0		%	106.9		%	26.3		%	103.5		%	19.2		%

⁽¹⁾

Includes ~~51%~~our proportionate share of renewal and new leasing at ~~the Market Square buildings, which we own~~properties owned through an unconsolidated joint venture. There was 11,000 square feet and 14,000 square feet of renewal leasing for the second quarter of 2017 and 2016, respectively, and 18,000 and 16,000 square feet of renewal leasing for the first six months of 2017 and 2016, respectively, at the Market Square Buildings.ventures.


⁽²⁾	Includes 51% of new leasing at the Market Square buildings, which we own through an unconsolidated joint venture. There was 4,000 square feet of new leasing for the second quarter of 2016, and 5,000 and 9,000 square feet of new leasing for the first six months of 2017 and 2016, respectively, at the Market Square Buildings.


⁽³⁾	Rent leasing spreads for renewal leases are calculated based on the change in base rental income measured on a straight-line basis.


⁽⁴⁾⁽³⁾	Rent leasing spreads for new leases are calculated only for ~~properties~~space that ~~have~~has been vacant less than one year, and are measured on a straight-line basis.

In 2017, rent leasing spreads ~~are~~have been significantly positive ~~(85.1%~~(106.9% and ~~101.3%~~103.5% for the ~~quarter~~three- and ~~six-month~~nine-month period ended ~~June~~September 30, 2017, respectively) due to extending the 119,000-square-foot lease with DLA Piper at University Circle in San Francisco and leasing ~~188,000~~205,000 square feet at 650 California Street in San ~~Francisco. This~~Francisco to several tenants. The leasing at 650 California Street has required significant tenant improvements; however, the net economic impact of leasing at 650 California Street is favorable. In 2016, rent leasing spreads were positive (26.3% and 19.2% for the three- and nine- month period ended September 30, 2016) and tenant improvements per square foot were higher due to a 390,000-square-foot, 30-year lease at our 222 East 41st Street Property and a 130,000-square-foot lease renewal at our SanTan Corporate Center property in Phoenix, Arizona. Over the next 12 months, approximately ~~168,000~~95,000 square feet of leases at our operating properties (approximately ~~3.1%~~1.9% of our portfolio based on revenues) are scheduled to expire. These near-term expirations primarily relate to our properties in New York and San Francisco, with 62,000 square feet of this space pre-leased. We currently expect to replace the remaining leases with starting rates above those currently in place at the properties.

Liquidity and Capital Resources

Overview

Cash flows generated from the operation of our properties are primarily used to fund recurring expenditures and stockholder dividends. The amount of distributions to common stockholders is determined by our board of directors and is dependent upon a number of factors, including funds deemed available for distribution based principally on our current and future projected operating cash flows, reduced by capital requirements necessary to maintain our existing portfolio. In determining the amount of distributions to common stockholders, we also consider our future capital needs and future sources of liquidity, as well as the annual distribution requirements necessary to maintain our status as a REIT under the Code. Investments in new property acquisitions and first-generation capital improvements are generally funded with capital proceeds from property sales, debt, or cash on hand. In order to adjust to a payout level consistent with our current investment objectives, beginning with the first quarter of 2017, our board of directors elected to reduce the quarterly stockholder distribution rate from $0.30 per share to $0.20 per share, and maintained

~~Page 36~~

this rate for the second ~~quarter~~and third quarters of 2017. We have transformed the composition of our portfolio by selling suburban assets and reinvesting in assets in high-barrier-to-entry markets, which offer lower initial yields and higher potential for growth over time. We believe this dividend rate is sustainable over the near and medium term and offers the potential for growth over the long term.

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Short-term Liquidity and Capital Resources

During the ~~six~~nine months ended ~~June~~September 30, 2017, we generated net cash flows from operating activities of ~~$36.0~~$47.1 million, which consisted primarily of receipts from tenants for rent and reimbursements, reduced by payments for operating costs, administrative expenses, and interest expense. During the same period, we paid total distributions to stockholders of ~~$85.5~~$109.6 million, which included dividend payments for three quarters ($36.7 million for the fourth quarter of 2016 and an aggregate of ~~$48.8~~$72.9 million for the first ~~and second~~three quarters of 2017).

During the ~~six~~nine months ended ~~June~~September 30, 2017, we sold five wholly owned properties and partial interests in two additional properties for net proceeds of ~~$504.7 million and~~$737.6 million. We used ~~the~~these proceeds to fund the early repayment of mortgage notes of $201.6 million, the ~~221 Main Street building mortgage note~~purchase of an interest in 114 Fifth Avenue for ~~$73.0~~$112.5 million, deposits of $52.0 million for acquisitions, leasing and capital projects of ~~$47.5~~$84.1 million, and share repurchases of ~~$27.5~~$59.1 million. ~~We intend to reinvest~~In October 2017, we reinvested the remaining proceeds in ~~strategic acquisition opportunities within our target markets.~~245-249 West 17th Street and 218 West 18th Street in New York and an interest in 1800 M Street in Washington, D.C., as described in Note 3, Real Estate Transactions, of the accompanying consolidated financial statements.

Over the short-term, we expect our primary sources of capital to be operating cash flows, additional proceeds from our joint ventures with Allianz, and future debt financings. We expect that our principal demands for funds will be property acquisitions, capital improvements to our existing portfolio, stock repurchases, stockholder distributions, operating expenses, and interest and principal payments on current and maturing debt. As of October 23, 2017, after closing on the acquisitions of 245-249 West 17th Street and 218 West 18th Street in New York and an interest in 1800 M Street in Washington, D.C., we have access to $140.0 million under our Revolving Credit Facility. We believe that we have adequate liquidity and capital resources to meet our current obligations as they come due. AsWe are in the process of ~~July 24, 2017, we have access to the full $500.0 million capacity~~evaluating various options for refinancing our line of ~~the Revolving Credit Facility as well as $610.0 million of cash on hand.~~credit borrowings.

Long-term Liquidity and Capital Resources

Over the long term, we expect that our primary sources of capital will include operating cash flows, borrowing proceeds, and select property dispositions. We expect that our primary uses of capital will continue to include stockholder distributions; acquisitions; capital expenditures, such as building improvements, tenant improvements, and leasing costs; and repaying or refinancing debt.

Consistent with our financing objectives and strategy, we continue to maintain net debt levels historically less than 40% of the undepreciated cost of our assets over the long term. As of ~~June~~September 30, 2017, our net-debt-to-real-estate-asset ratio was approximately ~~25.2%~~25.5%, which includes our 51% interest in the debt and real estate of the Market Square Joint Venture. Our net-debt-to-real-estate-asset ratio is calculated using our debt balance, net of cash on hand, and real estate at cost.

Revolving Credit Facility

The Revolving Credit Facility has a capacity of $500.0 million and matures in July 2019, with two, six-month extension options. As of ~~June~~September 30, 2017, we had no outstanding borrowings on the Revolving Credit Facility. After acquisitions that have closed since September 30, 2017, as described in Note 3, Real Estate Transactions, to the accompanying consolidated financial statements, we have outstanding borrowings of $360.0 million on our Revolving Credit Facility as of October 23, 2017. Amounts outstanding under the Revolving Credit Facility bear interest at LIBOR, plus an applicable margin ranging from 0.875% to 1.55% for LIBOR borrowings, or an alternate base rate, plus an applicable margin ranging from 0.00% to 0.55% for base-rate borrowings, based on our applicable credit rating. The per-annum facility fee on the aggregate revolving commitment (used or unused) ranges from 0.125% to 0.30%, also based on our applicable credit rating. Additionally, we have the ability to increase the capacity of the Revolving Credit Facility, along with the $300 Million Term Loan, which provides for four accordion options for an aggregate amount of up to $400 million, subject to certain limitations.

Term Loans

The $300 Million Term Loan matures in July 2020 and, along with the Revolving Credit Facility, provides for four accordion options for an aggregate amount of up to $400 million, subject to certain conditions. The $300 Million Term Loan bears interest, at our option, at either (i) LIBOR, plus an applicable margin ranging from 0.90% to 1.75% for LIBOR loans, or (ii) an alternate base rate, plus an applicable margin ranging from 0.00% to 0.75% for base-rate loans, based on our applicable credit rating.

The $150 million term loan matures in July 2022 (the "$150 Million Term Loan"). ~~As of June 30, 2017, the~~The $150 Million Term Loan incurred interest, at our option, at either (i) LIBOR, plus an applicable margin ranging from ~~1.40%~~0.90% to ~~2.35%~~1.75% for LIBOR loans, or (ii) an alternate base rate, plus an applicable margin ranging from ~~0.40%~~0.00% to ~~1.35%~~0.75% for base-rate loans. ~~As of June 30, 2017, the~~The interest rate on the $150 Million Term Loan ~~was~~is effectively fixed at ~~3.52%~~3.07% with an interest rate swap agreement on the LIBOR component of the rate, which is designated as a cash flow hedge.

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~~Million Term Loan are unchanged. The existing interest rate swap agreement effectively fixes the new interest rate at 3.07% per annum and retains its cash flow hedge designation.~~

Bonds Payable

In August 2016, we issued $350.0 million of 10-year, unsecured 3.650% senior notes at 99.626% of their face ~~value under our Universal Shelf Registration Statement (defined below).~~value. We received proceeds from the 2026 Bonds Payable, net of fees, of $346.4 million, which were used to prepay our $250 million 2018 Bonds Payable, originally due in April of 2018. The 2026 Bonds Payable require semi-annual interest payments in February and August, based on a contractual annual interest rate of 3.650%. The principal amount of the 2026 Bonds Payable is due and payable on the maturity date, August 15, 2026.

In March 2015, we issued $350.0 million of 10-year, unsecured 4.150% senior notes at 99.859% of their face ~~value under our Universal Shelf Registration Statement (defined below).~~value. We received proceeds from the 2025 Bonds Payable, net of fees, of $347.2 million. The 2025 Bonds Payable require semi-annual interest payments in April and October based on a contractual annual interest rate of 4.150%. The principal amount of the 2025 Bonds Payable is due and payable on the maturity date, April 1, 2025.

Debt Covenants

Our mortgage debt, the $300 Million Term Loan, the $150 Million Term Loan, the Revolving Credit Facility, the 2026 Bonds Payable and the 2025 Bonds Payable contain certain covenants and restrictions that require us to meet certain financial ratios. We believe we were in compliance with all of our debt covenants as of ~~June~~September 30, 2017. We expect to continue to be able to meet the requirements of our debt covenants over the next 12 months.

~~Universal Shelf Registration Statement~~

We have on file a universal shelf registration statement on Form S-3 (No. 333-198764) with the SEC (the "Universal Shelf Registration Statement"), which was effective upon filing in September 2014. The Universal Shelf Registration Statement provides us with future flexibility to offer, from time to time and in one or more offerings, debt securities, common stock, preferred stock, depositary shares, warrants, or any combination thereof. The terms of any such future offerings would be established at the time of an offering.

Contractual Commitments and Contingencies

As of ~~June~~September 30, 2017, our contractual obligations will become payable in the following periods (in thousands):


Contractual Obligations	Total		2017		2018-2019		2020-2021		Thereafter		Total		2017			2018-2019		2020-2021		Thereafter
Debt obligations⁽¹⁾	$	1,514,523	$	51,898	$	146,875	$	300,000	$	1,015,750	$	1,388,728	$	49,802	⁽²⁾	$	23,176	$	300,000	$	1,015,750
Interest obligations on debt⁽²⁾⁽³⁾	341,762		28,285		103,894		86,010		123,573		315,748		12,157			95,752		84,660		123,179
Capital lease obligations⁽³⁾⁽⁴⁾	120,000		—		—		120,000		—		120,000		—			—		120,000		—
Operating lease obligations⁽⁴⁾⁽⁵⁾	207,121		1,321		5,342		5,342		195,116		206,461		661			5,342		5,342		195,116
Total	$	2,183,406	$	81,504	$	256,111	$	511,352	$	1,334,439	$	2,030,937	$	62,620		$	124,270	$	510,002	$	1,334,045

⁽¹⁾

Includes 51% of the debt and interest obligations for the Market Square Joint Venture, which we own through an unconsolidated joint venture. The Market Square Joint Venture holds a $325 million mortgage note on the Market Square Buildings, bearing interest at 5.07% and maturing on July 1, 2023. As of ~~June~~September 30, 2017, we guarantee ~~$12.6~~$11.2 million of the Market Square Buildings mortgage note (see Note 7, Commitments & Contingencies, to the accompanying financial statements). None of our other joint-venture owned properties carry a mortgage note.


⁽²⁾	2017 debt obligations includes the $49.0 million 263 Shuman mortgage note, which matured in July 2017. We are in the process of working to transfer this property to the lender in settlement of the mortgage note.


⁽³⁾	Interest obligations on variable-rate debt are measured at the rate at which they are effectively fixed with interest rate swap agreements (where applicable). Interest obligations on all other debt are measured at the contractual rate. See Item 3, Quantitative and Qualitative Disclosure About Market Risk, for more information regarding our interest rate swaps.

⁽³⁾⁽⁴⁾

Amounts include principal obligations only. We made interest payments on these obligations of ~~$3.6~~$5.4 million during the ~~six~~nine months ended ~~June~~September 30, 2017, all of which were funded with interest income earned on the corresponding investments in development authority bonds. These obligations will be fully satisfied at maturity with equivalent investments in development authority bonds.

⁽⁴⁾⁽⁵⁾

Reflects obligations related to ground leases at certain properties, as described in Note 2, Summary of Significant Accounting Policies. In addition to the amounts shown, certain lease agreements include provisions that, at the option of the tenant, may obligate us to expend capital to expand an existing property or provide other expenditures for the benefit of the tenant, including a remaining commitment to contribute ~~$69.0~~$61.1 million toward leasehold improvements.

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Results of Operations

Overview

As of ~~June 30, 2017, we owned controlling interests in 15 operating properties. As of June~~September 30, 2017, our portfolio of 16 operating properties ~~including 51% of~~was approximately 95.1% leased. For the ~~Market Square Joint Venture, which we own through an unconsolidated joint venture, were approximately 95.3% leased. Our~~periods presented, our operating results are impacted by ~~recent disposition~~investing activity as set forth below. In the ~~near-term,~~near term, we expect real estate operating income to ~~fluctuate,~~vary, primarily based on investing and leasing activities.

~~Recent Dispositions~~



Dispositions
Property	Location	Rentable Square Footage	Transaction Date	Sale Price⁽¹⁾ (in thousands)
2017
Allianz Joint Ventures:		1,108,000	July 6, 2017	$	234,000
22.5% of University Circle⁽²⁾	San Francisco, CA	451,000
22.5% of 333 Market Street⁽²⁾	San Francisco, CA	657,000
Key Center Tower & Marriott	Cleveland, OH	1,326,000	January 31, 2017	$	267,500
Houston Properties Sale:		1,187,000	January 6, 2017	$	272,000
5 Houston Center	Houston, TX	581,000
Energy Center I	Houston, TX	332,000
515 Post Oak	Houston, TX	274,000
2016
SanTan Corporate Center	Phoenix, AZ	267,000	December 15, 2016	$	58,500
Sterling Commerce	Dallas, TX	310,000	November 30, 2016	$	51,000
9127 South Jamaica Street	Denver, CO	108,000	October 12, 2016	$	19,500
80 Park Plaza	Newark, NJ	961,000	September 30, 2016	$	174,500
9189, 9191 & 9193 South Jamaica Street	Denver, CO	370,000	September 22, 2016	$	122,000
800 North Frederick	Suburban MD	393,000	July 8, 2016	$	48,000
100 East Pratt	Baltimore, MD	653,000	March 31, 2016	$	187,000


⁽¹⁾	Exclusive of transaction costs and price adjustments.


⁽²⁾	Columbia Property Trust retains a 77.5% ownership interest in both University Circle and 333 Market Street through unconsolidated joint ventures.

Property Location Rentable Square Footage Transaction Date
Sale Price⁽¹⁾
(in thousands)
2017
Key Center Tower & Marriott Cleveland, OH 1,326,000
January 31, 2017 $ 267,500
Houston Properties Sale: 1,187,000
January 6, 2017 $ 272,000
5 Houston Center Houston, TX 581,000

Energy Center I Houston, TX 332,000

515 Post Oak Houston, TX 274,000

2016
SanTan Corporate Center Phoenix, AZ 267,000
December 15, 2016 $ 58,500
Sterling Commerce Dallas, TX 310,000
November 30, 2016 $ 51,000
9127 South Jamaica Street Denver, CO 108,000
October 12, 2016 $ 19,500
80 Park Plaza Newark, NJ 961,000
September 30, 2016 $ 174,500
9189, 9191 & 9193 South Jamaica Street Denver, CO 370,000
September 22, 2016 $ 122,000
800 North Frederick Suburban MD 393,000
July 8, 2016 $ 48,000
100 East Pratt Baltimore, MD 653,000
March 31, 2016 $ 187,000



Acquisitions
Property	Location	Rentable Square Feet	Transaction Date	Purchase Price⁽¹⁾ (in thousands)
2017
49.5% of 114 Fifth Avenue⁽²⁾	New York, NY	352,000	July 6, 2017	$	108,900


⁽¹⁾	Exclusive of transaction costs and purchase price ~~adjustments~~adjustments.


⁽²⁾	Columbia Property Trust holds a 49.5% ownership interest in 114 Fifth Avenue through an unconsolidated joint venture.

Comparison of the Three Months Ended ~~June~~September 30, 2017 with the Three Months Ended ~~June~~September 30, 2016

Rental income was ~~$67.1~~$55.0 million for the three months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$93.6~~$87.6 million for the three months ended ~~June~~September 30, 2016. The decrease is primarily due to dispositions ($~~26.2~~24.6 million) and the transfer of University Circle and 333 Market Street to unconsolidated joint ventures ($12.2 million), partially offset by our lease with NYU Langone Medical at 222 East 41st Street ($4.3 million). 222 East 41st Street was vacant during the prior year period as the full building was prepared for the lease with NYU Langone Medical that commenced in October 2016. We expect future rental income to ~~fluctuate~~vary based on recent and future investing and leasing activities.

Tenant reimbursements and property operating costs were ~~$7.0~~$3.1 million and ~~$21.8~~$18.6 million, respectively, for the three months ended ~~June~~September 30, 2017, which reflects corresponding decreases as compared with ~~$18.7~~$17.1 million and ~~$40.2~~$39.1 million, respectively, for the three months ended ~~June~~September 30, 2016. The decrease in tenant reimbursements is primarily due to dispositions ($11.7 million) and the transfer of University Circle and 333 Market Street to unconsolidated joint ventures ($2.6 million). The decrease in property operating costs is primarily due to dispositions ($~~15.5~~17.6 million) ~~and~~, the new net lease at 222 East 41st Street ($~~3.3~~3.1 million)~~. The decrease in tenant reimbursements is primarily due~~, and

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transferring University Circle and 333 Market Street to ~~dispositions~~unconsolidated joint ventures ($~~9.1 million) and the new net lease at 222 East 41st Street ($1.7~~1.9 million). Tenant reimbursements and property operating costs are expected to ~~fluctuate~~vary with leasing activity and changes in our portfolio.

Hotel income, net of hotel operating costs, was ~~$1.5~~$1.3 million for the three months ended ~~June~~September 30, 2016. The Key Center Marriott was sold on January 31, 2017.

~~Other~~Asset and property management fee income was ~~$0.8~~$1.2 million for the three months ended ~~June~~September 30, 2017, which represents an increase as compared with $0.5 million for the three months ended September 30, 2016. In the current year period, we provided asset and property management services to the Market Square Joint Venture and the San Francisco Joint Ventures, since their formation in July 2017. In the prior year period, such services were provided only to the Market Square Joint Venture. We anticipate asset and property management fee income to increase in the near term as a result of the newly formed 1800 M Street Joint Venture (see Note 4, Unconsolidated Joint Ventures).

Other property income was $1.1 million for the three months ended September 30, 2017, which represents a decrease as compared with ~~$9.1~~$1.8 million for the three months ended ~~June~~September 30, 2016, primarily due to earning ~~an early termination fee of $6.2 million at 222 East 41~~^st ~~Street~~less income from lease terminations in ~~June 2016. The terminated lease was replaced with a full-building lease, which commenced in the fourth quarter of 2016.~~2017 ($1.5 million), partially offset by increased reimbursements from unconsolidated joint ventures ($0.8 million). Other property operating income is expected to ~~fluctuate~~vary in the future, based on additional lease restructuring ~~activities and as a result of providing asset management services to the San Francisco Joint Ventures (see Note 3,~~ ~~Real Estate Transactions, of the accompanying financial statements).~~activities.

Asset and property management ~~fees remained stable at $0.3~~fee expenses were $0.2 million for the three months ended ~~June~~September 30, 2017, ~~and June~~which represents a decrease as compared with $0.4 million for the three months ended September 30, ~~2016.~~2016, primarily due to the sale of the Key Center Marriott in January 2017 ($0.2 million). Future asset and property management ~~fees~~fee expenses are expected to remain stable in the near term, and may increase as a result of future investing activity.

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Depreciation was ~~$20.4~~$18.5 million for the three months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$28.5~~$26.8 million for the three months ended ~~June~~September 30, 2016. The decrease is primarily due to dispositions ($~~7.3~~5.2 million) and transferring University Circle and 333 Market Street to unconsolidated joint ventures ($2.8 million). Depreciation is expected to ~~fluctuate~~vary based on recent and future investing activity.

Amortization was ~~$8.2~~was $6.9 million for the three months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$14.9~~$11.9 million for the three months ended ~~June~~September 30, 2016. The decrease is primarily due to dispositions ($2.1 million) ~~and intangibles~~, intangible lease assets written off due to the early termination or expiration of leases ($~~4.1~~1.7 million), and transferring University Circle and 333 Market Street to unconsolidated joint ventures ($1.1 million). We e~~expect~~xpect future amortization to ~~fluctuate,~~vary, based on recent and future investing activity.

~~General~~Effective July 1, 2017, we began to allocate certain general and administrative expenses ~~were $9.2~~to unconsolidated joint ventures based on the time incurred to manage assets owned by our unconsolidated joint ventures. The method for measuring aggregate general and administrative expenses has not changed, and total general and administrative expenses remained relatively stable at $7.7 million and $7.5 million for the three months ended ~~June~~September 30, 2017 ~~which represents an increase as compared with $7.8 million for~~ ~~the three months ended~~ ~~June 30,~~and 2016, ~~primarily due to vesting under our stock-based incentive compensation plan ($1.1 million). We expect future general~~respectively. General and administrative expenses - corporate decreased to ~~remain at similar levels over the near term.~~

~~Interest expense was $14.5~~$7.0 million for the three months ended ~~June~~September 30, 2017 from $7.5 million for the three months ended September 30, 2016; and general and administrative expenses - unconsolidated joint ventures increased to $0.7 million for the three months ended September 30, 2017 from $0.0 million for the three months ended September 30, 2016.

Interest expense was $14.7 million for the three months ended September 30, 2017, which represents a decrease as compared with ~~$17.4~~$17.1 million for the three months ended ~~June~~September 30, 2016, primarily due to mortgage note payoffs ($~~1.5~~1.4 million)~~, incurring interest on our line of credit borrowings in the prior period ($1.0 million),~~ and bond interest savings resulting from the issuance of the 2026 Bonds Payable and redemption of the 2018 Bonds Payable in 2016 ($~~0.5~~1.1 million). We expect interest expense to ~~decrease~~increase in the ~~near-term~~near term due to ~~the $150 Million Term Loan amendment, which results in a lower effective interest rate, and~~borrowings to ~~fluctuate based on future acquisition activities.~~fund acquisitions occurring subsequent to period end.

Interest and other income was ~~$2.5~~$2.8 million for the three months ended ~~June~~September 30, 2017, which represents an increase compared with $1.8 million for the three months ended ~~June~~September 30, 2016. The increase is due to interest income earned on additional cash deposits held in 2017 ($~~0.6~~1.0 million). The majority of this income is earned on investments in development authority bonds with a remaining term of approximately ~~4.5~~4.3 years as of ~~June~~September 30, 2017 ($1.8 million for both the three months ended ~~June~~September 30, 2017 and ~~June~~September 30, 2016). Interest income earned on development authority bonds is entirely offset by interest expense incurred on the corresponding capital leases. Interest income is expected to ~~remain at similar levels until~~decrease in the near term, as we ~~reinvest~~have reinvested cash on hand.

We recognized a loss on early extinguishment of debt of ~~$0.1~~$0.3 million and $18.9 million for the three months ended ~~June~~September 30, ~~2016.~~2017 and September 30, 2016, respectively. In August 2017, we repaid the $124.8 million 650 California Street building mortgage note approximately 23 months early; and, in April 2016, we repaid the $119.0 million remaining balance on a bridge loan approximately three months early. These early ~~which~~repayments resulted in the write-off of related deferred financing costs. We expect future gains or losses on early extinguishments of debt to ~~fluctuate~~vary with financing activities.

~~Loss~~

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Income (loss) from the unconsolidated joint ~~venture~~ventures was ~~relatively stable at $1.8 million and $2.0~~$2.9 million for the three months ended ~~June~~September 30, 2017, which represents an increase as compared to $(1.9) million for the three months ended September 30, 2016. The increase is due to the transfer of University Circle and ~~June 30, 2016, respectively.~~ 333 Market Street to unconsolidated joint ventures, in which we retain a 77.5% ownership interest, and the acquisition of a 49.5% interest in 114 Fifth Avenue through an unconsolidated joint venture, none of which are encumbered by mortgage debt. Future income or loss from unconsolidated joint ~~venture~~ventures may ~~fluctuate~~vary as a result of future investing activities and leasing at the ~~Market Square Buildings.~~properties owned through joint ventures.

Net income was ~~$1.1~~$101.5 million, or ~~$0.01~~$0.84 per basic and diluted share, for the three months ended ~~June~~September 30, 2017, which represents ~~a decrease~~an increase as compared with ~~$13.3~~$36.9 million, or ~~$0.11~~$0.30 per basic and diluted share, for the three months ended ~~June~~September 30, 2016. The ~~decrease~~increase is due to gains recognized on dispositions ($52.0 million), 2016 debt repayment activity ($18.6 million), the lease with NYU Langone Medical at 222 East 41st Street that commenced in the fourth quarter of 2016 ($7.6 million), and fees earned for managing the new Allianz Joint Ventures ($0.6 million), partially offset by lost income from sold properties ($~~10.2 million) and the lease termination income earned in June 2016 ($6.2 million), partially offset by interest savings as a result of debt repayments ($3.0~~15.1 million). See the "Supplemental Performance Measures" section below for our same-store results compared with the prior year. We expect future earnings to ~~fluctuate~~vary as a result of leasing activity at our existing properties and investing activity.

Comparison of the ~~Six~~Nine Months ~~ended June~~Ended September 30, 2017 with the ~~Six~~Nine Months Ended ~~June~~September 30, 2016

Rental income was ~~$138.3~~$193.3 million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$193.2~~$280.7 million for the ~~six~~nine months ended ~~June~~September 30, 2016. The decrease is primarily due to dispositions ($~~52.9~~76.3 million) and transferring University Circle and 333 Market Street to unconsolidated joint ventures ($11.4 million). We expect future rental income to ~~fluctuate~~vary based on recent and future investing and leasing activity.

Tenant reimbursements and property operating costs were ~~$15.6~~$18.6 million and ~~$45.9~~$64.5 million, respectively, for the ~~six~~nine months ended ~~June~~September 30, 2017, which reflects corresponding decreases as compared with ~~$38.5~~$55.6 million and ~~$81.6~~$120.7 million, respectively, for the ~~six~~nine months ended ~~June~~September 30, 2016. The decrease in tenant reimbursements is primarily due to dispositions ($30.2 million), and the new net lease at 222 East 41st Street ($2.9 million), and transferring University Circle and 333 Market Street to unconsolidated joint ventures ($2.2 million). The decrease in property operating costs is primarily due to dispositions ($~~31.0~~47.1 million) ~~and~~, the new net lease at 222 East 41st Street ($~~6.0~~9.2 million)~~. The decrease in tenant reimbursements is primarily due~~, and transferring University Circle and 333 Market Street to ~~dispositions~~unconsolidated joint ventures ($~~19.4 million) and the new net lease at 222 East 41st Street ($2.8~~1.8 million). Tenant reimbursements and property operating costs are expected to ~~fluctuate~~vary with leasing activity and changes in our portfolio.

Hotel income, net of hotel operating costs, was $(0.7) million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$1.8~~$3.2 million for the ~~six~~nine months ended ~~June~~September 30, 2016, due to the sale of the Key Center Marriott on January 31, 2017.

Asset and property management fee income was $2.1 million for the nine months ended September 30, 2017, which represents an increase as compared with $1.7 million for the nine months ended September 30, 2016. In the current year period, we provided asset and property management services to the Market Square Joint Venture and the San Francisco Joint Ventures, since their formation in July 2017. In the prior year period, such services were provided only to the Market Square Joint Venture. We anticipate asset and property management fee income to increase in the near term as a result of the newly formed 1800 M Street Joint Venture (see Note 4, Unconsolidated Joint Ventures).

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Other property income was ~~$1.8~~$2.0 million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$11.7~~$12.4 million for the ~~six~~nine months ended ~~June~~September 30, 2016, primarily due to earning an early termination fee of $6.2 million at 222 East 41st Street in June 2016 and ~~$2.8~~$4.5 million for other lease ~~terminations.~~terminations in 2016. The terminated lease at 222 East 41st Street was replaced with a full-building lease, which commenced in the fourth quarter of 2016. The decrease in termination fee income was partially offset by increased reimbursements from unconsolidated joint ventures ($0.8 million). Other property operating income is expected to ~~fluctuate~~vary in the future based on additional lease restructuring ~~activities, and as a result of providing asset management services to the San Francisco Joint Ventures (see Note 3,~~ ~~Real Estate Transactions, of the accompanying financial statements).~~activities.

Asset and property management ~~fees~~fee expenses were ~~$0.5~~$0.7 million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$0.7~~$1.1 million and ~~June~~September 30, 2016, primarily due to ~~dispositions~~the sale of the Key Center Marriott in January 2017 ($~~0.2~~0.3 million). Future asset and property management ~~fees~~fee expenses are expected to remain stable in the ~~near-term~~near term and may increase as a result of future investing activity.

Depreciation was ~~$42.0~~$60.5 million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$57.7~~$84.5 million for the ~~six~~nine months ended ~~June~~September 30, 2016. The decrease is primarily due to dispositions ($~~15.5~~20.6 million) and transferring University Circle and 333 Market Street to unconsolidated joint ventures ($2.8 million). Depreciation is expected to ~~fluctuate~~vary based on recent and future investing activity.

Amortization was ~~$17.6~~$24.5 million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$31.0~~$42.9 million for the ~~six~~nine months ended ~~June~~September 30, 2016. The decrease is primarily due to ~~dispositions ($5.9 million) and~~ intangibles written off due to the

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early termination or expiration of leases ($~~6.6~~8.2 million), dispositions ($8.1 million), and transferring University Circle and 333 Market Street to unconsolidated joint ventures ($1.2 million). We expect future amortization to ~~fluctuate~~vary based on recent and future investing activity.

~~General~~Effective July 1, 2017, we began to certain allocate general and administrative expenses to unconsolidated joint ventures based on the time incurred to manage assets owned by our unconsolidated joint ventures. The method for measuring aggregate general and administrative expenses has not changed, and total general and administrative expenses remained relatively stable at ~~$18.0~~$25.7 million for both the nine months ended September 30, 2017 and ~~$18.3~~2016. General and administrative expenses - corporate decreased to $25.0 million for the ~~six~~nine months ended ~~June~~September 30, 2017 ~~and June~~from $25.7 million for the nine months ended September 30, ~~2016, respectively. We expect future~~2016; and general and administrative expenses - unconsolidated joint ventures increased to ~~remain at similar levels over~~$0.7 million for the ~~near term.~~nine months ended September 30, 2017 from $0.0 million for the nine months ended September 30, 2016.

Interest expense was ~~$29.6~~$44.3 million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents a decrease as compared with ~~$35.3~~$52.4 million for the ~~six~~nine months ended ~~June~~September 30, 2016, primarily due to mortgage note payoffs ($3.5 million), incurring interest on ~~bridge loan and~~our line of credit borrowings in the prior period ($~~2.5~~2.9 million), ~~mortgage note payoffs ($2.1 million), and~~ bond interest savings resulting from the issuance of the 2026 Bonds Payable and redemption of the 2018 Bonds Payable in 2016 ($~~1.0~~2.1 million). We expect interest expense to ~~decrease~~increase in the near term due to ~~the $150 Million Term Loan amendment, which results in a lower effective interest rate, and~~borrowings to ~~fluctuate based on future acquisition activities.~~fund acquisitions occurring subsequent to period end.

Interest and other income was ~~$4.8~~$7.7 million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents an increase compared with ~~$3.6~~$5.5 million for the ~~six~~nine months ended ~~June~~September 30, 2016. The increase is due to interest income earned on cash deposits ($~~1.1~~2.2 million). The majority of this income is earned on investments in development authority bonds with a remaining term of approximately ~~4.5~~4.3 years as of ~~June~~September 30, 2017 ($~~3.6~~5.4 million for both the ~~six~~nine months ended ~~June~~September 30, 2017 and ~~June~~September 30, 2016). Interest income earned on development authority bonds is entirely offset by interest expense incurred on the corresponding capital leases. Interest income is expected to ~~remain at similar levels until~~decrease in the near term, as we ~~reinvest~~have reinvested cash on hand.

We recognized a loss on early extinguishment of debt of ~~$45,000~~$0.3 million and ~~$92,000~~$19.0 million for the ~~six~~nine months ended ~~June~~September 30, 2017 and ~~June~~September 30, 2016, respectively. In March 2017, we repaid the 221 Main Street building mortgage note approximately two months early; and in August 2017, we repaid the 650 California Street building mortgage note approximately 23 months early. In April 2016, we repaid the $119.0 million remaining balance on a bridge loan approximately three months early. ~~Both of these~~These early repayments resulted in the write-off of related deferred financing costs. We expect future gains or losses on early extinguishments of debt to ~~fluctuate~~vary with financing activities.

~~We recognized a loss~~Loss from ~~the~~ unconsolidated joint ~~venture of $3.7 million and $3.5~~ventures was $0.8 million for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents an increase as compared with $5.4 million for the nine months ended September 30, 2016. The increase is due to the transfer of University Circle and ~~June 30, 2016, respectively.~~333 Market Street to unconsolidated joint ventures, in which we retain a 77.5% ownership interest, and the acquisition of a 49.5% interest in 114 Fifth Avenue. Future income or loss from unconsolidated joint ~~venture may fluctuate~~ventures will vary as a result of future investing activities and leasing at the ~~Market Square Buildings.~~properties held in unconsolidated joint ventures.

We recognized a gain on sale of real estate assets of ~~$73.2~~$175.5 million for the ~~six~~nine months ended ~~June~~September 30, 2017, ~~and~~as a ~~loss on sale~~result of ~~real estate assets of $0.3 million for the six months ended June 30, 2016. During the first three months of 2017, we sold~~selling three properties in Houston, Texas, and the Key Center Tower and Marriott in Cleveland, ~~Ohio. The loss~~Ohio in January 2017; and selling a 22.5% interest in each of the University Circle property and the 333 Market Street building in July 2017. We recognized a gain on sale of real estate assets of $50.1 million for the nine months ended September 30, 2016, ~~results from post-closing adjustments and true ups for prior period transactions.~~as a result of selling three properties in separate transactions during the first nine months of 2016. See Note 3, Real Estate Transactions, for details of these transactions. Future gains on sale of real estate assets will ~~fluctuate~~vary with future disposition activity.

Net income was ~~$75.9~~$177.4 million, or ~~$0.62~~$1.46 per basic and diluted share, for the ~~six~~nine months ended ~~June~~September 30, 2017, which represents an increase as compared with ~~$20.0~~$56.9 million, or ~~$0.16~~$0.46 per basic and diluted share, for the ~~six~~nine months ended ~~June~~September 30, 2016. The increase is due to gains on sale of real estate ($~~73.2~~125.4 million) and financing activities resulting in interest savings ~~as a result~~in the current year and losses on early extinguishment of debt ~~repayments~~in the prior year ($~~5.6~~26.8 million), partially offset by lost income from sold properties ($~~20.8 million) and lease termination income earned in June 2016 ($6.2~~32.8 million). See the "Supplemental Performance Measures" section below for our same-store results compared with the prior year. We expect future earnings to ~~fluctuate~~vary as a result of leasing activity at our existing properties and investing activity.

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NOI by Geographic Segment

We consider geographic location when evaluating our portfolio composition, and in assessing the ongoing operations and performance of our properties. As of ~~June~~September 30, 2017, we aggregated our properties into the following geographic segments: New York, San Francisco, Atlanta, Washington, D.C., Boston, Los Angeles, and all other office markets. All other office markets consists of properties in low-barrier-to-entry geographic locations in which we do not plan to make further investments. See Note 11, Segment Information, to the accompanying consolidated financial statements.

The following table presents NOI by geographic segment (in thousands):


	Three Months Ended June 30,					Six Months Ended June 30,					Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016		2017			2016		2017			2016			2017			2016
New York	$	16,259		$	24,086	$	33,875		$	41,135	$	16,536		$	11,380		$	50,411		$	52,515
San Francisco	19,701			19,381		39,567			40,452		18,166			20,095			57,733			60,547
Atlanta	8,285			8,226		16,578			16,507		8,500			8,249			25,078			24,756
Washington, D.C.	3,565			4,555		6,843			9,671		4,209			3,632			11,052			13,303
Boston	1,192			1,463		2,601			2,686		1,196			1,425			3,797			4,111
Los Angeles	1,202			1,192		2,284			2,442		1,155			894			3,439			3,336
All other office markets	4,597			23,605		11,527			52,388		4,071			23,723			15,598			76,111
Total office segments	54,801			82,508		113,275			165,281		53,833			69,398			167,108			234,679
Hotel	(14		)	1,523		(890		)	1,870		(24		)	1,301			(914		)	3,171
Corporate	395			517		847			1,066		(364		)	(59		)	(489		)	(137		)
Total	$	55,182		$	84,548	$	113,232		$	168,217	$	53,445		$	70,640		$	165,705		$	237,713

New York

~~Prior-year~~Current quarter NOI was positively impacted by ~~an early termination fee earned~~the commencement of our lease with NYU Langone Medical at 222 East 41^st41st Street, ~~in June 2016. The terminated~~which was vacant during the prior year period, as the full building was prepared for the lease ~~was replaced~~ with ~~a full-building lease,~~NYU Langone Medical, which commenced in ~~the fourth quarter of~~October 2016. New York NOI is expected to increase in the ~~near-term~~near term with the ~~acquisition~~acquisitions of 245-249 West 17th Street and 218 West 18th Street in October 2017, as described in Note 3, Real Estate Transactions, of the accompanying consolidated financial statements.

San Francisco

NOI has decreased quarter over quarter due to the July 6, 2017 sale of a ~~49.5%~~22.5% interest in ~~114 5th Avenue,~~both 333 Market Street and University Circle. San Francisco NOI is expected to decrease in the near term as a result of the planned sale of an additional 22.5% interest in each of these properties, as described in Note 3, Real Estate Transactions, of the accompanying consolidated financial statements.

Washington, D.C.

NOI for the nine month period has been impacted by ~~a decrease in~~decreased occupancy at 80 M Street and Market ~~Square. Washington, D.C.~~Square earlier in the current year. Over the near term, Washington, D.C. NOI is expected to increase ~~primarily due to~~as a result of recent leasing activity and the October 2017 acquisition of a 55% interest in 1800 M Street, as described in Note 3, Real Estate Transactions, of the accompanying consolidated financial statements.

Boston

NOI has been impacted by decreased occupancy at ~~80 M Street.~~116 Huntington. NOI is expected to vary with leasing activity at the property.

Los Angeles

NOI for the quarter was impacted positively by property tax reimbursements in prior year at Pasadena Corporate Park. NOI is expected to remain at similar levels for the near term.

All other office markets

NOI has decreased significantly as a result of selling 9 office properties between July 1, 2016 and January 31, 2017. We expect all other office markets NOI to ~~further decrease~~remain relatively stable in the ~~near-term due to the expiration of the OfficeMax lease at 263 Shuman and the planned return of this property to the lender.~~near term.

Hotel

~~NOI has decreased significantly as a result of the sale of the~~The Key Center Marriott, our only hotel, was sold on January 31, 2017.

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Supplemental Performance Measures

In addition to net income, we measure the performance of the company using certain non-GAAP supplemental performance measures, including: (i) Funds From Operations ("FFO"), (ii) Net Operating Income ("NOI"), and (iii) Same Store Net Operating Income ("Same Store NOI"). These non-GAAP metrics are commonly used by industry analysts and investors as supplemental operation 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 using historical cost accounting alone to be insufficient. Management believes that the use of FFO, NOI, and Same Store NOI, combined with net income, improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful.

Net income is the most comparable GAAP measure to FFO, NOI, and Same Store NOI. Each of these supplemental performance measures exclude expenses that materially impact our overall results of operations and, therefore, should not be considered as a

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substitute for net income, income before income taxes, or any other measures derived in accordance with GAAP. Furthermore, these metrics may not be comparable to other similarly titled measures used by other companies.

Funds From Operations

FFO is a non-GAAP measure used by many investors and analysts who follow the real estate industry to measure the performance of an equity REIT. We consider FFO a useful measure of our performance because it principally adjusts for the effects of GAAP depreciation and amortization of real estate assets, which assumes that the value of real estate diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a meaningful supplemental measure of our performance. We believe that the use of FFO, combined with the required GAAP presentations, is beneficial in improving our investors' understanding of our operating results and allowing for comparisons among other companies who define FFO as we do.

FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), represents net income (computed in accordance with GAAP), excluding gains or losses on sales of real estate and impairments of real estate assets, plus real estate-related depreciation and amortization and, after adjustments for unconsolidated partnerships and joint ventures, for both continuing and discontinued operations. We compute FFO in accordance with NAREIT's definition, which may differ from the methodology for calculating FFO, or similarly titled measures, used by other companies, and this may not be comparable to those presentations.

FFO is not reduced for the amounts needed to fund capital replacements or expansions, debt service obligations, or other commitments and uncertainties, nor is it indicative of funds available to fund our cash needs, including our ability to make distributions. Our presentation of FFO should not be considered as an alternative to net income (computed in accordance with GAAP) or as an indicator of financial performance.

Net income reconciles to FFO as follows (in thousands):


	Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,						Nine Months Ended September 30,
	2017		2016		2017			2016		2017			2016			2017			2016
Net income	$	1,133	$	13,286	$	75,855		$	19,983	$	101,534		$	36,898		$	177,389		$	56,881
Adjustments:
Depreciation of real estate assets	20,423		28,450		42,028			57,739		18,501			26,778			60,529			84,517
Amortization of lease-related costs	8,191		14,932		17,648			31,007		6,870			11,895			24,518			42,902
Depreciation and amortization included in loss from unconsolidated joint venture⁽¹⁾	2,123		2,077		4,221			4,547
Depreciation and amortization included in income (loss) from unconsolidated joint ventures⁽¹⁾										7,180			2,123			11,401			6,670
Loss (gains) on sales of real estate assets	—		19		(73,153		)	329		(102,365		)	(50,412		)	(175,518		)	(50,083		)
Total funds from operations adjustments	30,737		45,478		(9,256		)	93,622		(69,814		)	(9,616		)	(79,070		)	84,006
NAREIT FFO available to common stockholders	$	31,870	$	58,764	$	66,599		$	113,605	$	31,720		$	27,282		$	98,319		$	140,887


⁽¹⁾	Reflects ~~51% of~~our ownership interest in depreciation and amortization for ~~the Market Square buildings, which we own through an~~investments in unconsolidated joint ~~venture.~~ventures.

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Net Operating Income

As set forth below, NOI is calculated by deducting property operating costs from rental and other property revenues for continuing operations. As a performance metric consisting of only revenues and expenses directly related to ongoing real estate rental operations, which have been or will be settled in cash, NOI is narrower in scope than FFO.

NOI, as we calculate it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs. We believe that NOI 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.

The major factors influencing our NOI are property acquisitions and dispositions, occupancy levels, rental rate increases or decreases, and the recoverability of operating expenses.

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Same Store Net Operating Income

We also evaluate the performance of our properties, on a ~~"same store"~~"same-store" basis, using a metric referred to as Same Store NOI. We view Same Store NOI as a useful supplemental performance measure because it improves comparability between periods by eliminating the near-term effects of acquisitions and dispositions. On an individual property basis, Same Store NOI is computed in the same manner as NOI (as described in the preceding section). For the periods presented, we have defined our same-store portfolio as those properties that have been continuously owned and operated since ~~April~~July 1, 2016 (the first day of the first period presented). NOI and Same Store NOI are calculated as follows for the three months ended ~~June~~September 30, 2017 and 2016 (in thousands):


	Three Months Ended June 30,						Three Months Ended September 30,
	2017			2016			2017			2016
Revenues:
Rental income	$	67,120		$	67,379		$	54,293		$	48,862
Tenant reimbursements	7,038			9,687			4,293			4,067
Other property income	734			673			946			1,703
Lease termination income	(47		)	8,085
Total revenues	74,845			85,824			59,532			54,632
Property operating expenses	(21,987		)	(23,764		)	(19,991		)	(19,122		)
Same Store NOI – wholly owned properties⁽¹⁾	$	52,858		$	62,060		$	39,541		$	35,510
Same Store NOI – Market Square Buildings⁽²⁾	$	2,425		$	2,239
Same Store NOI – joint venture owned properties⁽²⁾							$	13,079		$	12,215
NOI from acquisitions⁽³⁾	—			—			533			—
NOI from dispositions⁽⁴⁾	(101		)	20,249			292			22,915
NOI	$	55,182		$	84,548		$	53,445		$	70,640


⁽¹⁾	Reflects NOI from properties that were wholly owned for the entirety of the periods presented.

⁽²⁾

~~Reflects~~

For both periods, reflects our ownership interest in NOI for ~~51% of the Market Square Buildings, in which we own an interest~~properties owned through an unconsolidated joint ~~venture.~~ventures as of September 30, 2017. The NOI for ~~the Market Square Buildings~~properties held through unconsolidated joint ventures is included in ~~loss~~income (loss) from unconsolidated joint ~~venture~~ventures in our accompanying consolidated statements of operations. See Note 4, Unconsolidated Joint Ventures, of the accompanying consolidated financial statements, for more information.


⁽³⁾	NoReflects activity for the following properties ~~have been~~ acquired since ~~April~~July 1, ~~2016.~~2016, for all periods presented: 49.5% of 114 Fifth Avenue.


⁽⁴⁾	Reflects activity for the following properties sold since ~~April~~July 1, 2016, for all periods presented: 22.5% of University Circle, 22.5% of 333 Market Street, Key Center Tower & Key Center Marriott, 5 Houston Center, Energy Center I, 515 Post Oak, SanTan Corporate Center, Sterling Commerce, 80 Park Plaza, 9127, 9189, 9191 & 9193 South Jamaica Street, and 800 North Frederick.

Same store NOI ~~decreased~~increased for the three months ended ~~June~~September 30, 2017, as compared with the three months ended ~~June~~September 30, 2016, primarily due to ~~a $6.2 million early termination fee earned~~our lease with NYU Langone Medical at 222 East 41st Street, which was vacant during the prior year period as the full building was prepared for the lease with NYU Langone Medical to commence in June 2016, and lease expirations at 315 Park Avenue South and 80 M Street. The terminated lease at 222 East 41st Street has been replaced with a full-building lease, which commenced in the fourth quarter of 2016, and most of the expired space at 80 M Street has been leased to WeWork, with a lease commencing in July 2017. The decline in sameOctober 2016. Same store NOI is expected ~~to reverse and~~ increase over the near term as a result of recent leasing activity.

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A reconciliation of GAAP net income to NOI and Same Store NOI is presented below (in thousands):


	Three Months Ended June 30,						Three Months Ended September 30,
	2017			2016			2017			2016
Net income	$	1,133		$	13,286		$	101,534		$	36,898
Depreciation	20,423			28,450			18,501			26,778
Amortization	8,191			14,932			6,870			11,895
General and administrative	9,201			7,761
General and administrative - corporate							7,034			7,467
General and administrative - joint venture							713			—
Net interest expense	13,785			17,372			13,690			17,116
Interest income from development authority bonds	(1,800		)	(1,800		)	(1,800		)	(1,800		)
Loss on early extinguishment of debt	—			92			280			18,905
Income tax expense	7			245			3			65
Adjustments included in loss from unconsolidated joint venture	4,242			4,191
Asset and property management fee income							(1,154		)	(511		)
Adjustments included in income (loss) from unconsolidated joint ventures							10,139			4,239
Loss on sales of real estate assets	—			19			(102,365		)	(50,412		)
NOI:	$	55,182		$	84,548		$	53,445		$	70,640
Same Store NOI – Market Square Buildings⁽¹⁾	(2,425		)	(2,239		)
Same Store NOI – joint venture owned properties⁽¹⁾							(13,079		)	(12,215		)
NOI from acquisitions⁽²⁾	—			—			(533		)	—
NOI from dispositions⁽³⁾	101			(20,249		)	(292		)	(22,915		)
Same Store NOI – wholly owned properties⁽⁴⁾	$	52,858		$	62,060		$	39,541		$	35,510

⁽¹⁾

~~Reflects~~For both periods, reflects our ownership interest in NOI for ~~51% of the Market Square Buildings, in which we own an interest~~properties owned through an unconsolidated joint ~~venture.~~ventures as of September 30, 2017. The NOI for ~~the Market Square Buildings~~properties held through unconsolidated joint ventures is included in ~~loss~~income (loss) from unconsolidated joint ~~venture~~ventures in our accompanying consolidated statements of operations.


⁽²⁾	NoReflects activity for the following properties ~~have been~~ acquired since ~~April~~July 1, ~~2016.~~2016, for all periods presented: 49.5% of 114 Fifth Avenue.


⁽³⁾	Reflects activity for the following properties sold since ~~April~~July 1, 2016, for all periods presented: 22.5% of University Circle, 22.5% of 333 Market Street, Key Center Tower & Key Center Marriott, 5 Houston Center, Energy Center I, 515 Post Oak, SanTan Corporate Center, Sterling Commerce, 80 Park Plaza, 9127, 9189, 9191 & 9193 South Jamaica Street, and 800 North Frederick.


⁽⁴⁾	Reflects NOI from properties that were wholly owned for the entirety of the periods presented.

Election as a REIT

We have elected to be taxed as a REIT under the Code and have operated as such beginning with our taxable year ended December 31, 2003. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our adjusted taxable income, as defined in the Code, to our stockholders, computed without regard to the dividends-paid deduction and by excluding our net capital gain. As a REIT, we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will then be subject to federal income taxes on our taxable income for that year and for the four years following the year during which qualification is lost, unless the Internal Revenue Service grants us relief under certain statutory provisions. Such an event could materially affect our net income and net cash available for distribution to our stockholders. However, we believe that we are organized and operate in such a manner as to qualify for treatment as a REIT for federal income tax purposes.

The TRS Entities are wholly owned subsidiaries of Columbia Property Trust and are organized as Delaware limited liability companies. The TRS Entities, among other things, provide tenant services that Columbia Property Trust, as a REIT, cannot otherwise provide. We have elected to treat the TRS Entities as taxable REIT subsidiaries. We may perform certain additional, noncustomary services for tenants of our buildings through the TRS Entities; however, any earnings related to such services are subject to federal and state income taxes. In addition, for us to continue to qualify as a REIT, we must limit our investments in taxable REIT subsidiaries to 25% of the value of our total assets. Deferred tax assets and liabilities are established for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at the enacted rates expected to be in effect when the temporary differences reverse.

No provisions for federal income taxes have been made in our accompanying consolidated financial statements, other than the provisions relating to the TRS Entities, as we made distributions in excess of taxable income for the periods presented. We are subject to certain state and local taxes related to property operations in certain locations, which have been provided for in our accompanying consolidated financial statements.

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Inflation

We are exposed to inflation risk, as income from long-term leases is the primary source of our cash flows from operations. There are provisions in the majority of our tenant leases that are intended to protect us from, and mitigate the risk of, the impact of inflation. These provisions include rent steps, reimbursement billings for operating expense pass-through charges, real estate tax and insurance reimbursements on a per-square-foot basis, or, in some cases, annual reimbursement of operating expenses above a certain per-square-foot allowance. However, due to the long-term nature of the leases, the leases may not reset frequently enough to fully cover inflation.

Application of Critical Accounting Policies

There have been no material changes in our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2016.

Related-Party Transactions

During the ~~six~~nine months ended ~~June~~September 30, 2017 and 2016, we did not have any ~~related party~~related-party transactions, except as described in Note 4, Unconsolidated Joint ~~Venture~~Ventures, of the accompanying financial statements.

Commitments and Contingencies

We are subject to certain commitments and contingencies with regard to certain transactions. Refer to Note 7, Commitments and Contingencies, of our accompanying consolidated financial statements for further explanation. Examples of such commitments and contingencies include:

guaranty of debt of an unconsolidated joint venture of ~~$12.6~~$11.2 million;

obligations under operating leases;

obligations under capital leases;

commitments under existing lease agreements; and

litigation.

Subsequent ~~Event~~Events

We have evaluated subsequent events in connection with the preparation of the consolidated financial statements and notes thereto included in this report on Form 10-Q and noted the following in addition to those disclosed elsewhere in this report:

~~Allianz Joint Ventures~~Acquisition of 245-249 West 17th Street & 218 West 18th Street, as described in Note 3, Real Estate Transactions,,of the accompanying consolidated financial statements; and

~~Amendment~~Acquisition of ~~$150 Million Term Loan,~~investment in 1800 M Street through a joint venture, as described in Note 5,3, ~~Line of Credit and Notes Payable~~Real Estate Transactions, ,of the accompanying consolidated financial ~~statements~~.statements.


ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a result of certain of our debt facilities, we are exposed to interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flow, primarily through a low to moderate level of overall borrowings. However, we currently have a substantial amount of debt outstanding. We manage our ratio of fixed- to floating-rate debt with the objective of achieving a mix that we believe is appropriate in light of anticipated changes. We closely monitor interest rates and will continue to consider the sources and terms of our borrowing facilities to determine whether we have appropriately guarded ourselves against the risk of increasing interest rates in future periods.

Additionally, we have entered into interest rate swaps and may enter into other interest rate swaps, caps, or other arrangements to mitigate our interest rate risk on a related financial instrument. We do not currently enter into derivative or interest rate transactions for speculative purposes; however, certain of our derivatives may not qualify for hedge accounting treatment. All of our debt was entered into for other-than-trading purposes.

Our financial instruments consist of both fixed-rate and variable-rate debt. Our variable-rate borrowings consist of the Revolving Credit Facility, the $300 Million Term Loan, and the $150 Million Term Loan. However, only the Revolving Credit Facility and the $300 Million Term Loan bear interest at effectively variable rates, as the variable rate on the $150 Million Term Loan has been effectively fixed through the interest rate swap agreement described in the "Liquidity and Capital Resources" section of Item 2, Management's Discussion and Analysis of Financial Condition and Results of Operations.

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As of ~~June~~September 30, 2017, we had no outstanding borrowings under the Revolving Credit Facility; $150.0 million outstanding on the $150 Million Term Loan; $300.0 million outstanding on the $300 Million Term Loan; $349.6 million in 2025 Bonds Payable outstanding; $348.8 million in 2026 Bonds Payable outstanding; and ~~$198.8~~$73.0 million outstanding on fixed-rate, term mortgage loans. The weighted-average interest rate of all our debt instruments was ~~3.57%~~3.72% as of ~~June~~September 30, 2017.

Approximately ~~$1,047.2~~$921.4 million of our total debt outstanding as of ~~June~~September 30, 2017, is subject to fixed rates, either directly or when coupled with an interest rate swap agreement. As of ~~June~~September 30, 2017, these balances incurred interest expense at an average interest rate of ~~3.93%~~4.17% and have expirations ranging from 2017 through 2026. A change in the market interest rate impacts the net financial instrument position of our fixed-rate debt portfolio; however, it has no impact on interest incurred or cash flows. A 1.0% change in interest rates would have a $3.0 million annual impact on our interest payments. The amounts outstanding on our Revolving Credit Facility in the future will largely depend upon future acquisition and disposition activity.

Our unconsolidated Market Square Joint Venture holds a $325 million mortgage note, which bears interest at 5.07%. Adjusting for 51% of the debt at the Market Square Joint Venture, which we own through an unconsolidated joint venture, our weighted-average interest rate is ~~3.74%~~3.88%. None of the other joint venture owned properties have mortgage debt.

We do not believe there is any exposure to increases in interest rates related to the capital lease obligations of $120.0 million at ~~June~~September 30, 2017, as the obligations are at fixed interest rates.


ITEM 4.	CONTROLS AND PROCEDURES

Management's Conclusions Regarding the Effectiveness of Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of management, including the Principal Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) under the Securities Exchange Act of 1934 as of the end of the period covered by this report. Based upon that evaluation, the Principal Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report in providing a reasonable level of assurance that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods in SEC rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our Principal Executive Officer and our Principal Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarter ended ~~June~~September 30, 2017, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II.	OTHER INFORMATION


ITEM 1.	LEGAL PROCEEDINGS

From time to time, we are party to legal proceedings, which arise in the ordinary course of our business. We are not currently involved in any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations, liquidity, or financial condition, nor are we aware of any such legal proceedings contemplated by governmental authorities.


ITEM 1A.	RISK FACTORS

There have been no material changes from the risk factors disclosed in the "Risk Factors" section of our Annual Report on Form 10-K for the year ended December 31, 2016.


ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS


(a)	During the quarter ended ~~June~~September 30, 2017, we did not sell any equity securities that were not registered under the Securities Act of 1933.


(b)	Not applicable.


(c)	On September 4, 2015, our board of directors approved the 2015 Stock Repurchase Program, which ~~provides~~provided for Columbia Property Trust to buy up to $200 million of our common stock over a two-year period, ~~ending~~which expired on September 4, 2017.

On September 4, 2017, our board of directors approved the 2017 Stock Repurchase Program, which provides for Columbia Property Trust to buy up to $200 million of our common stock over a two-year period, expiring on September 4, 2019.

During the quarter ended ~~June~~September 30, 2017, we repurchased and retired the following shares in accordance with the 2015 Stock Repurchase Program and the 2017 Stock Repurchase Program, as described in Note 8, Stockholders'Equity.

Period
Total Number
of Shares
Purchased

Average
Price Paid
per Share
Total Number of Shares Purchased as Part of Publicly Announced Plan
Maximum Approximate Dollar Value Available for Future Purchase⁽¹⁾
April 2017 —
$ —
—
$ 130,943,000
May 2017 1,200,000
$ 21.956
1,200,000
$ 104,596,000
June 2017 51,670
$ 21.735
51,670
$ 103,473,000



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plan	Maximum Approximate Dollar Value Available for Future Purchase⁽¹⁾
July 2017	18,770	$	21.470	18,770	$	103,069,583	⁽¹⁾
August 2017	1,107,243	$	20.992	1,107,243	$	79,826,569	⁽¹⁾
September 2017	305,254	$	21.118	305,254	$	194,826,742	⁽²⁾


⁽¹⁾	Amounts available for future purchase for July 2017 and August 2017 relate only to our 2015 Stock Repurchase Program, ~~and represent the remainder of the $200 million authorized by~~which expired on September 4, 2017.


⁽²⁾	Amounts available for future purchase for September 2017 relate only to our ~~board of directors for share repurchases.~~2017 Stock Repurchase Program, which was effective on September 4, 2017.


ITEM 3.	DEFAULTS UPON SENIOR SECURITIES


(a)	There have been no defaults with respect to any of our indebtedness.


(b)	Not applicable.


ITEM 4.	MINE SAFETY DISCLOSURES

Not applicable.


ITEM 5.	OTHER INFORMATION


(a)	During the ~~second~~third quarter of 2017, there was no information that was required to be disclosed in a report on Form 8-K that was not disclosed in a report on Form 8-K.

On July 25, 2017, we amended the terms of the $150 Million Term Loan to reduce the current interest rate from 3.52% to 3.07% per annum. The amendment reduced the interest rate from LIBOR, plus an applicable margin ranging from 1.40% to 2.35%, to LIBOR, plus an applicable margin ranging from 0.90% to 1.75%. The maturity date, debt covenants, and other terms of the $150 Million Term Loan are unchanged. The new interest rate of 3.07% per annum is effectively fixed by an existing interest rate swap agreement designated as a cash flow hedge.


(b)	There are no material changes to the procedures by which stockholders may recommend nominees to our board of directors since the filing of our most recent Schedule 14A.

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Table of Contents


ITEM 6.	EXHIBITS


(a)	Exhibits

EXHIBIT INDEX TO

THIRD QUARTER 2017 FORM 10-Q OF

COLUMBIA PROPERTY TRUST, INC.

The following documents are filed as exhibits to this report. Exhibits that are not required ~~to be filed with~~for this report are ~~set forth in the Exhibit Index to this quarterly report attached hereto.~~omitted.



Ex.	Description
2.1	Agreement of Purchase and Sale of Partnership Interest in 333 Market Street, dated as of July 6, 2017 by and between the Company and Allianz (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Commission on July 7, 2017).
2.2	Agreement of Purchase and Sale of Partnership Interest in University Circle, dated as of July 6, 2017 by and between the Company and Allianz (incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K filed with the Commission on July 7, 2017).
3.1	Second Amended and Restated Articles of Incorporation as Amended by the First, Second, Third and Fourth Articles of Amendment and the Articles Supplementary (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 5, 2013).
3.2	Second Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on August 15, 2013).
3.3	Third Articles of Amendment (incorporated by reference to Exhibit 3.2 to the Company's Current Report on From 8-K filed with the Commission on August 15, 2013).
3.4	Fourth Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on July 1, 2014).
3.5	Articles Supplementary (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on September 4, 2013).
3.6	Fifth Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on May 3, 2017).
3.7	Third Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the Commission on February 13, 2017).
4.1	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K filed with the Commission on March 1, 2013).
4.2	Indenture, dated March 12, 2015 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on March 12, 2015).
4.3	Supplemental Indenture, dated March 12, 2015 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Commission on March 12, 2015).
4.4	Form of 4.150% Senior Notes due 2025 (included in Exhibit 4.3).
4.5	Supplemental Indenture, dated August 12, 2016 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on August 12, 2016).
4.6	Form of 3.650% Senior Notes due 2026 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Commission on August 12, 2016).
10.2*	Amendment to the $150 Million Term Loan dated July 25, 2017
31.1*	Certification of the Principal Executive Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of the Principal Financial Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of the Principal Executive Officer and Principal Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase.
101.LAB*	XBRL Taxonomy Extension Label Linkbase.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase.

*	Filed herewith.

Page 4854

Table of Contents

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.



		COLUMBIA PROPERTY TRUST, INC. (Registrant)

Dated:	~~July 27,~~October 26, 2017	By:	/s/ JAMES A. FLEMING
			James A. Fleming Executive Vice President and Chief Financial Officer

Page 4955

~~Table of Contents~~

~~EXHIBIT INDEX TO~~

~~SECOND QUARTER 2017 FORM 10-Q OF~~

~~COLUMBIA PROPERTY TRUST, INC.~~

~~The following documents are filed as exhibits to this report. Exhibits that are not required for this report are omitted.~~



~~Ex.~~	~~Description~~
~~3.1~~	Second Amended and Restated Articles of Incorporation as Amended by the First, Second, Third and Fourth Articles of Amendment and the Articles Supplementary (incorporated by reference to Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q filed with the Commission on November 5, 2013).
~~3.2~~	~~Second Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on August 15, 2013).~~
~~3.3~~	~~Third Articles of Amendment (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the Commission on August 15, 2013).~~
~~3.4~~	~~Fourth Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on July 1, 2014).~~
~~3.5~~	~~Articles Supplementary (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on September 4, 2013).~~
~~3.6~~	~~Fifth Articles of Amendment (incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K filed with the Commission on May 3, 2017).~~
~~3.7~~	~~Third Amended and Restated Bylaws, as amended (incorporated by reference to Exhibit 3.2 to the Company's Current Report on Form 8-K filed with the Commission on February 13, 2017).~~
~~4.1~~	Statement regarding restrictions on transferability of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates) (incorporated by reference to Exhibit 4.1 to the Company's Annual Report on Form 10-K filed with the Commission on March 1, 2013).
~~4.2~~	~~Indenture, dated March 12, 2015 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on March 12, 2015).~~
~~4.3~~	~~Supplemental Indenture, dated March 12, 2015 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Commission on March 12, 2015).~~
~~4.4~~	~~Form of 4.150% Senior Notes due 2025 (included in Exhibit 4.3).~~
~~4.5~~	~~Supplemental Indenture, dated August 12, 2016 (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed with the Commission on August 12, 2016).~~
~~4.6~~	~~Form of 3.650% Senior Notes due 2026 (incorporated by reference to Exhibit 4.2 to the Company's Current Report on Form 8-K filed with the Commission on August 12, 2016).~~
~~10.1~~	Columbia Property Trust, Inc. Amended and Restated 2013 Long-Term Incentive Plan (incorporated by reference to Appendix A to the Company's definitive Proxy Statement of Schedule 14A filed with the Commission on March 17, 2017).
12.1*	~~Calculation of Earnings to Fixed Charges~~
31.1*	~~Certification of the Principal Executive Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
31.2*	~~Certification of the Principal Financial Officer of the Company, pursuant to Securities Exchange Act Rules 13a-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~
32.1*	Certification of the Principal Executive Officer and Principal Financial Officer of the Company, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS*	~~XBRL Instance Document.~~
101.SCH*	~~XBRL Taxonomy Extension Schema.~~
101.CAL*	~~XBRL Taxonomy Extension Calculation Linkbase.~~
101.DEF*	~~XBRL Taxonomy Extension Definition Linkbase.~~
101.LAB*	~~XBRL Taxonomy Extension Label Linkbase.~~
101.PRE*	~~XBRL Taxonomy Extension Presentation Linkbase.~~

*	~~Filed herewith.~~

~~Page 50~~