Gramercy Property Trust - FORM 8-K/A

Gramercy Property Trust - FORM 8-K/A - February 10, 2011

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 21, 2010

CB RICHARD ELLIS REALTY TRUST

(Exact name of registrant as specified in its charter)


Maryland	000-53200	56-2466617
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

47 Hulfish Street, Suite 210, Princeton, NJ 08542 (Address of principal executive offices)

(609) 683-4900

(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.01

Completion of Acquisition or Disposition of Assets.

CB Richard Ellis Realty Trust (the “Company”) previously disclosed that Duke/Hulfish, LLC, a joint venture (the “Duke Joint Venture”) between CBRE Operating Partnership, L.P. (“CBRE OP”), the Company’s operating partnership and Duke Realty Limited Partnership (“Duke”), the operating partnership of Duke Realty Corporation (NYSE: DRE), entered into a purchase and sale agreement with Duke, Duke Secured Financing 2009-1PAC, LLC and Duke Realty Ohio for the acquisition of up to $516,650,000 in office real property assets (the “Office Portfolio”) in a Current Report on Form 8-K filed on December 23, 2010 (the “Office Portfolio Form 8-K”). The Office Portfolio consists of 20 office properties (each a “Property” and together the “Properties”) that are expected to be contributed to the Duke Joint Venture in three separate tranches. CBRE OP owns an 80% interest and Duke owns a 20% interest in the Duke Joint Venture. On December 21, 2010, the Duke Joint Venture acquired fee interests in the first tranche of Properties (“Office Portfolio Tranche I”) as described in the Office Portfolio Form 8-K.

The Company is filing this Form 8-K/A to incorporate by reference the required financial information as described below in Item 9.01 with respect to Office Portfolio Tranche I.

Item 9.01

Financial Statements and Exhibits.

(a) Financial Statements. The following is required financial information relating to Office Portfolio Tranche I:

Office Portfolio Tranche I


Report of Independent Registered Public Accounting Firm			F-1

Combined Statements of Revenue in Excess of Certain Expenses for the Year Ended December 31, 2009 and for the Unaudited Nine-Months Ended September 30, 2010			F-2

Notes to Combined Statements of Revenue in Excess of Certain Expenses for the Year Ended December 31, 2009 and for the Unaudited Nine-Months Ended September 30, 2010			F-3

(b) Pro Forma Financial Information.

Pro Forma Condensed Consolidated Financial Statements (unaudited)			F-6

Pro Forma Condensed Consolidated Balance Sheet as of September 30, 2010 (unaudited)			F-7

Pro Forma Condensed Consolidated Statements of Operations for the Nine Months Ended September 30, 2010 (unaudited)			F-8

Pro Forma Condensed Consolidated Statements of Operations for the Year Ended December 31, 2009 (unaudited)			F-9

Notes to the Pro Forma Condensed Consolidated Financial Statements (unaudited)			F-10

Report of Independent Registered Public Accounting Firm

The Members

Duke/Hulfish, LLC:

We have audited the accompanying combined statement of revenue in excess of certain expenses (the “Combined Statement”) of the Duke Office Portfolio Tranche I (the “Properties”), described in note 1, for the year ended December 31, 2009. This Combined Statement is the responsibility of Duke/Hulfish, LLC’s management. Our responsibility is to express an opinion on this Combined Statement based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Combined Statement is free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Combined Statement. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the Combined Statement. We believe that our audit provides a reasonable basis for our opinion.

The accompanying Combined Statement was prepared for the purpose of complying with the rules and regulations of the Securities and Exchange Commission and for inclusion in the Form 8 K/A of CB Richard Ellis Realty Trust, as described in note 2 to the Combined Statement. It is not intended to be a complete presentation of the Properties’ revenue and expenses.

In our opinion, the Combined Statement referred to above presents fairly, in all material respects, the combined revenue in excess of certain expenses, as described in note 2, of the Properties for the year ended December 31, 2009, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Indianapolis, IN

February 7, 2011

F-1

DUKE OFFICE PORTFOLIO TRANCHE I

Combined Statements of Revenue in Excess of Certain Expenses


	Year Ended December 31, 2009		Nine Months Ended September 30, 2010 (unaudited)
Revenue:
Rental income, including reimbursements from tenants	$	20,647,588	$	16,828,263
Certain expenses:
Rental Expenses		5,140,467		4,057,124
Real estate taxes		2,514,799		2,031,813

		7,655,266		6,088,937

Revenue in excess of certain expenses	$	12,992,322	$	10,739,326

See accompanying notes to combined statements of revenue in excess of certain expenses.

F-2

DUKE OFFICE PORTFOLIO TRANCHE I

Notes to Combined Statements of Revenue in Excess of Certain Expenses

for the Year Ended December 31, 2009 and for the

Unaudited Nine-Months Ended September 30, 2010

(1) Operating Properties

The Combined Statement for the year ended December 31, 2009 relates to the operations of the following properties (“Duke Office Portfolio Tranche I”), which has been acquired by Duke/Hulfish, LLC from affiliates of Duke Realty Corporation. An affiliate of Duke Realty Corporation is one of the members of Duke/Hulfish, LLC.


Property	Property market	Property type	Rental square footage
McAuley Place	Cincinnati, OH	Office	190,733

Easton III	Cincinnati, OH	Office	135,485

Point West I	Dallas, TX	Office	182,700

Sam Houston Crossing I	Houston, TX	Office	159,175

Regency Creek	Raleigh, NC	Office	122,087

533 Maryville Center	St. Louis, MO	Office	125,296

555 Maryville Center	St. Louis, MO	Office	127,082

(2) Basis of Presentation

The accompanying Combined Statement has been prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission Regulation S-X and for inclusion in a Form 8-K/A to be filed by CB Richard Ellis Realty Trust and is not intended to be a complete presentation of the revenues and expenses of the Duke Office Portfolio Tranche I properties. The Combined Statement is not representative of the actual results of operations of Duke Office Portfolio Tranche I for the year ended December 31, 2009, due to the exclusion of the following expenses, which may not be comparable to the proposed future operations of the Duke Office Portfolio Tranche I properties:

Depreciation and amortization.

Other costs not directly related to the proposed future operations of the Duke Office Portfolio Tranche I properties acquired.

Unaudited Interim Financial Information

The unaudited Combined Statement for the nine months ended September 30, 2010 has been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information. Accordingly, it does not include all of the information and footnotes required by GAAP for complete financial statements.

In the opinion of management, all adjustments considered necessary for a fair presentation of the unaudited Combined Statement for the nine months ended September 30, 2010 have been included, and all such adjustments are of a normal recurring nature. The unaudited Combined Statement for the nine months ended September 30, 2010 is not necessarily indicative of the revenues in excess of certain expenses that can be expected for the year ending December 31, 2010.

(3) Summary of Significant Accounting Policies

(a) Revenue Recognition

The Properties lease office space under various lease agreements with its tenants. All leases are accounted for as operating leases. The leases include provisions under which the Properties are reimbursed for common area, real estate tax, management fees, and insurance expenses. Revenue related to these reimbursed expenses is recognized in the period the applicable expenses are incurred and billed to tenants pursuant to the lease agreements. Certain leases contain renewal options at various periods at various rental rates.

F-3

DUKE OFFICE PORTFOLIO TRANCHE I

Notes to Combined Statements of Revenue in Excess of Certain Expenses—(Continued)

for the Year Ended December 31, 2009 and for the

Unaudited Nine-Months Ended September 30, 2010

Although certain leases may provide for tenant occupancy during periods for which no rent is due and/or increases exist in minimum lease payments over the term of the lease, rental income accrues for the full period of occupancy on a straight-line basis. Related adjustments increased base rental income by $178,071 (unaudited) for the nine months ended September 30, 2010 and increased base rental income by $2,341,177 for the year ended December 31, 2009.

(b) Rental Expenses

Rental expenses include only those expenses expected to be comparable to the proposed future operations of the Properties. Repairs and maintenance expenses are charged to expense as incurred. Expenses such as depreciation, amortization, interest expense related to mortgage debt not assumed, and professional fees are excluded from the Combined Statement.

(c) Use of Estimates

The Combined Statement has been prepared on the accrual basis of accounting. Management has made a number of estimates and assumptions relating to the reporting and disclosure of revenue and certain expenses during the reporting period to prepare the Combined Statement in conformity with GAAP. Actual results could differ from those estimates.

(4) Rental Revenue

Space is leased to tenants under various operating leases with initial terms ranging from one year to fifteen years. The leases provide for reimbursement of real estate taxes, common area maintenance and certain other operating expenses. At September 30, 2010, future minimum rentals to be received under noncancelable operating leases for each of the years ended December 31 are as follows:


2010 (remaining three months)	$	4,532,444
2011		17,758,242
2012		17,506,422
2013		16,924,499
2014		16,293,501
		76,951,240

Thereafter	$	149,966,368

(5) Tenant Concentrations

At December 31, 2009, the following tenants represented over 10% of the total rental income or square footage at the Duke Office Portfolio Tranche I properties:


Building	Tenant	Percentage of total square footage	Percentage of total rental income	Lease expiration
McAuley Place	Mercy Health Partners of Southwest Ohio	10%	14%	8/31/2023

Easton III	Lane Bryant, Inc.	13%	10%	1/31/2019

533 Maryville Centre and 555 Maryville Centre	Eveready Battery Company	16%	29%	4/30/2011

Point West I	American Home Mortgage Services	18%	8%	12/6/2016

In 2010, Eveready Battery Company extended both of its leases through April 30, 2021.

If these tenants were to default on their leases, future revenues of the properties could be adversely impacted. No other tenants represented more than 10% of the properties’ total rental income or square footage.

F-4

DUKE OFFICE PORTFOLIO TRANCHE I

Notes to Combined Statements of Revenue in Excess of Certain Expenses—(Continued)

for the Year Ended December 31, 2009 and for the

Unaudited Nine-Months Ended September 30, 2010

(6) Related Party Transactions

Duke Realty Services, LLC, an affiliate of Duke Realty Corporation, provides management services for the Duke Office Portfolio Tranche I properties. The properties incurred management fees of approximately $518,143 (unaudited) and $571,760, which are included in operating expenses for the nine month period ended September 30, 2010 and the year ended December 31, 2009, respectively. Duke Realty Services, LLC will continue to provide management services for the properties.

F-5

CB RICHARD ELLIS REALTY TRUST

Pro Forma Condensed Consolidated Financial Statements

(unaudited)

The following unaudited pro forma condensed consolidated statements of operations of CB Richard Ellis Realty Trust (the “Company”) including its consolidated subsidiaries, for the nine months ended September 30, 2010 and for the year ended December 31, 2009 are based on the historical consolidated statements of operations of CB Richard Ellis Realty Trust and gives effect to the acquisitions of the following single tenant leased properties as if they were acquired on January 1, 2009, (i) the 13201 Wilfred Lane property (“13201 Wilfred Lane”) which was acquired on June 30, 2009, (ii) the 3011, 3055, 3077 Comcast Place property (“Comcast”) which was acquired on July 1, 2009, (iii) the 12650 Ingenuity Dr. property (“Ingenuity”) which was acquired on August 5, 2009, (iv) the Northpoint III property (“Duke NP III”) which was acquired on October 15, 2009, (v) the West Point Trade Center property (“West Point”) which was acquired on December 30, 2009, (vi) the Miramar I property acquired on December 31, 2009 and subsequently contributed to the Duke joint venture on March 31, 2010, (vii) the Miramar II property acquired on December 31, 2009 and subsequently contributed to the Duke joint venture on March 31, 2010, (viii) the 3900 North Paramount Parkway, 3900 South Paramount Parkway and 1400 Perimeter Park Drive properties (collectively the “Duke North Carolina Portfolio”), a Duke joint venture interest which was acquired on March 31, 2010, (ix) the 5160 Hacienda Drive property which was acquired on April 8, 2010, (x) the 10450 Pacific Court Center property which was acquired on May 7, 2010, (xi) the Amber Park and Brackmills properties, UK JV interests which were acquired on June 10, 2010, (xii) the Düren and Shönberg properties, European JV interests which were acquired on June 10, 2010, (xiii) the 225 Summit Avenue property which was acquired on June 21, 2010, (xiv) the One Wayside Road property which was acquired on June 24, 2010, (xv) the 100 Tice Blvd. property which was acquired on September 28, 2010, (xvi) the National Industrial Portfolio (“NIP”) which was acquired on October 27, 2010 and (xvii) and the Duke Office Portfolio – Tranche I (“Duke Tranche I”) which was acquired on December 21, 2010.

Our unaudited pro forma condensed consolidated balance sheet as of September 30, 2010 is presented as if the acquisition of NIP, Pacific Corporate Park (“Pacific”), Duke Tranche I and the Duke joint venture financing with Metropolitan Life Insurance Company (the “Duke Financing”) had taken place on September 30, 2010. NIP was acquired on October 27, 2010, Pacific was acquired on November 15, 2010, Duke Tranche I was acquired on December 21, 2010 and the Duke Financing closed on November 24, 2010.

The unaudited pro forma condensed consolidated statements of operations do not purport to represent our results of operations that would actually have occurred assuming the acquisitions of 13201 Wilfred Lane, Comcast, Ingenuity, Duke NP III, West Point, Miramar I, Miramar II, Duke North Carolina Portfolio, 5160 Hacienda Drive, 10450 Pacific Court Center, UK JV interests, European JV interests, 225 Summit Avenue, One Wayside Road, 100 Tice Blvd., NIP and Duke Tranche I had occurred on January 1, 2009, nor do they purport to project our results of operations as of any future date or for any future period.

F-6

CB RICHARD ELLIS REALTY TRUST

Pro Forma Condensed Consolidated Balance Sheet

as of September 30, 2010 (unaudited)

(In Thousands, Except Share Data)


	CB Richard Ellis Realty Trust Historical			NIP			Pacific			Duke Financing			Duke Tranche I			Consolidated Company Pro Forma
	A			B			C			D			E
Net Investments in Real Estate	$	793,378		$	73,000		$	144,500		$	—		$	—		$	1,010,878
Investment in Unconsolidated Entity		323,467			—			—			(72,888	)		139,080			389,659
Cash and Cash Equivalents		294,350			(74,515	)		(147,573	)		72,888			(141,977	)		3,174
Restricted Cash		2,490			—			—			—			—			2,490
Accounts and Other Receivables		3,950			—			—			—			—			3,950
Deferred Rent		6,618			—			—			—			—			6,618
Acquired Above Market Leases		18,922			—			—			—			—			18,922
Acquired in Place Lease Value		81,340			—			—			—			—			81,340
Deferred Financing Costs		5,082			—			—			—			—			5,082
Lease Commissions		1,581			—			—			—			—			1,581
Other Assets		4,174			—			—			—			—			4,174

Total Assets	$	1,535,352		$	(1,515	)	$	(3,073	)	$	—		$	(2,897	)	$	1,527,868

LIABILITIES
Notes Payable	$	269,883		$	—		$	—		$	—		$	—		$	269,883
Loan Payable		25,000															25,000
Security Deposits		1,666			—			—			—			—			1,666
Accounts Payable and Accrued Expenses		13,643			—			—			—			—			13,643
Accrued Offering Costs Payable to Related Parties		2,103			—			—			—			—			2,103
Acquired Below Market Leases		14,689			—			—			—			—			14,689
Property Management Fee Payable to Related Party		132			—			—			—			—			132
Investment Management Fees Payable to Related Party		990			—			—			—			—			990
Distributions Payable		21,623			—			—			—			—			21,623
Interest Rate Swaps at Fair Value—Non-Qualifying Hedges		1,625			—			—			—			—			1,625
Interest Rate Swaps at Fair Value—Qualifying Hedges		2,083			—			—			—			—			2,083

Total Liabilities		353,437			—			—			—			—			353,437
COMMITMENTS AND CONTINGENCIES
NON-CONTROLLING INTEREST
Operating Partnership Units		2,464			—			—			—			—			2,464
SHAREHOLDERS’ EQUITY
Common Stock, $.01 par value, 990,000,000 shares authorized; 155,627,892 issued and outstanding		1,557			—			—			—			—			1,557
Additional Paid-in-Capital		1,372,485			—			—			—			—			1,372,485
Accumulated Deficit		(184,844	)		(1,515	)		(3,073	)		—			(2,897	)		(192,328	)
Accumulated Other Comprehensive Loss		(9,747	)		—			—			—			—			(9,747	)

Total Shareholders’ Equity		1,179,451			(1,515	)		(3,073	)		—			(2,897	)		1,171,967

Total Liabilities and Shareholders’ Equity	$	1,535,352		$	(1,515	)	$	(3,073	)	$	—		$	(2,897	)	$	1,527,868

See accompanying notes to the pro forma condensed consolidated financial statements.

F-7

CB RICHARD ELLIS REALTY TRUST

Pro Forma Condensed Consolidated Statements of Operations

for the Nine Months Ended September 30, 2010 (unaudited)

(In Thousands, Except Share Data)


	CB Richard Ellis Realty Trust Historical			NIP		Duke Tranche I		Duke NC Portfolio Pro Forma Adjustments			5160 Hacienda Dr. Pro Forma Adjustments			10450 Pacific Ctr. Court Pro Forma Adjustments			UK JV Pro Forma Adjustments			European JV Pro Forma Adjustments			225 Summit Ave. Pro Forma Adjustments			One Wayside Dr. Pro Forma Adjustments			100 Tice Blvd. Pro Forma Adjustments			NIP Pro Forma Adjustments			Duke Tranche I Pro Forma Adjustments			Consolidated Company Pro Forma
	AA			BB		CC		DD			EE			FF			GG			HH			II			JJ			KK			LL			MM
REVENUES
Rental	$	46,529		$	5,720	$	—	$	—		$	942		$	951		$	—		$	—		$	2,054		$	2,680		$	3,963		$	—		$	—		$	62,839
Tenant Reimbursements		8,947			1,256		—		—			144			136			—			—			49			211			981			—			—			11,725

Total Revenues		55,476			6,976		—		—			1,086			1,087			—			—			2,103			2,891			4,944			—			—			74,564

EXPENSES
Operating and Maintenance		5,130			364		—		—			22			22			—			—			103			91			624			—			—			6,356
Property Taxes		7,836			868		—		—			123			126			—			—			208			250			461			—			—			9,872
Interest		10,232			—		—		—			—			—			—			—			—			838			1,900			—			—			12,971
General and Administrative		4,243			71		—		—			—			—			—			—			—			—			—			—			—			4,315
Property Management Fee to Related Party		607			186		—		—			18			—			—			—			99			132			137			—			—			1,180
Investment Management Fee to Related Party		8,050			—		—		69			94			97			103			104			180			250			450			579			—			9,978
Acquisition Expenses		7,414			—		—		—			—			—			—			—			—			—			—			—			—			7,415
Depreciation and Amortization		21,902			—		—		—			132			237			—			—			763			1,113			1,184			1,094			—			26,427

Total Expenses		65,414			1,489		—		69			389			482			103			104			1,353			2,674			4,755			1,673			—			78,514

OTHER INCOME AND EXPENSES
Interest and Other Income		931			—		—		—			—			—			—			—			—			—			—			—			—			931
Net Settlement Payments on Interest Rate Swaps		(1,012	)		—		—		—			—			—			—			—			—			—			—			—			—			(1,012	)
Loss on Interest Rate Swaps		(239	)		—		—		—			—			—			—			—			—			—			—			—			—			(239	)
Loss on Note Payable at Fair Value		(98	)		—		—		—			—			—			—			—			—			—			—			—			—			(98	)
Loss on Early Extinguishment of Debt		(72	)		—		—		—			—			—			—			—			—			—			—			—			—			(72	)

Total Other Income and (Expenses)		(490	)		—		—		—			—			—			—			—			—			—			—			—			—			(490	)

(LOSS) INCOME BEFORE PROVISION FOR INCOME TAXES AND EQUITY IN (LOSS) INCOME OF UNCONSOLIDATED ENTITIES		(10,428	)		5,487		—		(69	)		697			605			(103	)		(104	)		750			217			189			(1,673	)		—			(4,441	)
PROVISION FOR INCOME TAXES		(248	)		—		—		—			—			—			—			—			—			—			—			—			—			(248	)
EQUITY IN INCOME OF UNCONSOLIDATED ENTITIES		5,385			—		8,591		524			—			—			648			141			—			—			—			—			(7,379	)		7,910

NET (LOSS) INCOME		(5,291	)		5,487		8,591		455			697			605			545			37			750			217			189			(1,673	)		(7,379	)		3,222

Net Loss (Income) Attributable to Non-Controlling Operating Partnership Units		9			—		—		(1	)		(1	)		(1	)		(1	)		(0	)		(1	)		(1	)		(1	)		(6	)		12			2

NET (LOSS) INCOME ATTRIBUTABLE TO CB RICHARD ELLIS REALTY TRUST SHAREHOLDERS	$	(5,282	)	$	5,487	$	8,591	$	454		$	696		$	604		$	544		$	37		$	749		$	216		$	188		$	(1,679	)	$	(7,367	)	$	3,224

Basic and Diluted Net (Loss) Income per Share	$	(0.04	)																																			$	0.03
Weighted Average Common Shares Outstanding—Basic and Diluted		128,405,833																																					128,405,833

See accompanying notes to the pro forma condensed consolidated financial statements.

F-8

CB RICHARD ELLIS REALTY TRUST

Pro Forma Condensed Consolidated Statements of Operations

for the Year Ended December 31, 2009 (unaudited)

(In Thousands, Except Share Data)


	CB Richard Ellis Realty Trust Historical			NIP		Duke Tranche I			13201 Wilfred Lane Pro Forma Adjustments			Comcast Pro Forma Adjustments			Ingenuity Pro Forma Adjustments			Duke–NPIII Pro Forma Adjustments			West Point Pro Forma Adjustments			Miramar I Pro Forma Adjustments			Miramar II Pro Forma Adjustments			Duke NC Portfolio Pro Forma Adjustments			5160 Hacienda Dr. Pro Forma Adjustments			10450 Pacific Ctr. Court Pro Forma Adjustments			UK JV Pro Forma Adjustments			European JV Pro Forma Adjustments			225 Summit Ave. Pro Forma Adjustments			One Wayside Dr. Pro Forma Adjustments			100 Tice Blvd. Pro Forma Adjustments			NIP Pro Forma Adjustments			Duke Tranche I Pro Forma Adjustments			Consolidated Company Pro Forma
	NN			OO		PP			QQ			RR			SS			TT			UU			VV			WW			XX			YY			ZZ			AAA			BBB			CCC			DDD			EEE			FFF			GGG
REVENUES
Rental	$	47,023		$	8,008	$	—		$	828		$	1,750		$	1,351		$	—		$	2,927		$	—		$	—		$	—		$	3,545		$	2,754		$	—		$	—		$	4,370		$	5,730		$	5,363		$	—		$	—		$	83,649
Tenant Reimbursements		9,301			1,658		—			280			477			265			—			135			—			—			—			541			394			—			—			106			451			1,326			—			—			14,934

Total Revenues		56,324			9,666		—			1,108			2,227			1,616			—			3,062			—			—			—			4,086			3,148			—			—			4,476			6,181			6,689			—			—			98,583

EXPENSES
Operating and Maintenance		4,974			545		—			19			376			37			—			142			—			—			—			81			63			—			—			221			195			843			—			—			7,496
Property Taxes		7,624			1,124		—			260			288			218			—			90			—			—			—			463			364			—			—			444			534			623			—			—			12,033
Interest		11,378			—		—			—			—			539			—			—			—			—			—			—			—			—			—			—			1,788			2,569			—			—			16,273
General and Administrative		4,246			130		—			—			12			15			—			16			—			—			—			—			—			176			114			—			—			—			—			—			4,709
Property Management Fee to Related Party		656			231		—			—			—			—			—			—			—			—			—			21			—			—			—			212			283			185			—			—			1,588
Investment Management Fee to Related Party		7,803			—		—			71			192			114			115			168			146			205			275			355			282			235			237			384			534			609			788			—			12,513
Acquisition Expenses		5,832			—		—			—			—			—			—			—			—			—			529			701			650			584			609			1,184			1,032			2,071			1,491			—			14,683
Depreciation and Amortization		25,093			—		—			284			638			469			—			953			—			—			—			498			687			—			—			1,455			2,095			1,571			1,458			—			35,204
Loss on Impairment		9,160			—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			9,160

Total Expenses		76,766			2,030		—			635			1,506			1,392			115			1,369			146			205			804			2,119			2,047			995			960			3,900			6,461			8,471			3,738			—			113,658

OTHER INCOME AND EXPENSES
Interest and Other Income		344			—		—			—			—			5			—			—			—			—			—			—			—			—			—			—			—			—			—			—			349
Net Settlement Payments on Interest Rate Swaps		(660	)		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			(660	)
Gain on Interest Rate Swaps and Cap		89			—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			89
Loss on Note Payable at Fair Value		(807	)		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			(807	)

Total Other Income and (Expenses)		(1,034	)		—		—			—			—			5			—			—			—			—			—			—			—			—			—			—			—			—			—			—			(1,029	)

(LOSS) INCOME BEFORE NON—CONTROLLING INTEREST, PROVISION FOR INCOME TAXES AND EQUITY IN INCOME OF UNCONSOLIDATED ENTITIES		(21,476	)		7,635		(1	)		474			721			229			(115	)		1,693			(146	)		(205	)		(804	)		1,967			1,102			(995	)		(960	)		576			(280	)		(1,782	)		(3,738	)		—			(16,104	)
PROVISION FOR INCOME TAXES		(169	)		—		—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			—			(169	)
EQUITY IN INCOME OF UNCONSOLIDATED ENTITIES		2,743			—		10,394			—			—			—			810			—			1,034			1,126			2,094			—			—			1,317			884			—			—			—			—			(12,368	)		8,034

NET (LOSS) INCOME		(18,902	)		7,635		10,393			474			721			229			695			1,693			888			921			1,290			1,967			1,102			322			(76	)		576			(280	)		(1,782	)		(3,738	)		(12,368	)		(8,240	)

Net Loss (Income) Attibutable to Non–Controlling Operating Partnership Units		54			—		—			(1	)		(2	)		(1	)		(2	)		(5	)		(3	)		(3	)		(7	)		(6	)		(3	)		(1	)		0			(2	)		(0	)		5			(11	)		6			18

NET (LOSS) INCOME ATTIBUTABLE TO CB RICHARD ELLIS REALTY TRUST SHAREHOLDERS	$	(18,848	)	$	7,635	$	10,393		$	473		$	719		$	228		$	693		$	1,688		$	885		$	918		$	1,283		$	1,961		$	1,099		$	321		$	(76	)	$	574		$	(280	)	$	(1,777	)	$	(3,749	)	$	(12,363	)	$	(8,223	)

Basic and Diluted Net Loss per Share	$	(0.23	)																																																									$	(0.10	)
Weighted Average Common Shares Outstanding—Basic and Diluted		81,367,593																																																											81,367,593

See accompanying notes to the pro forma condensed consolidated financial statements.

F-9

CB RICHARD ELLIS REALTY TRUST

Notes to the Pro Forma Condensed Consolidated Financial Statements

(unaudited)

Adjustments to Pro Forma Condensed Consolidated Balance Sheet

The adjustments to the pro forma condensed consolidated balance sheet of the Company are as of September 30, 2010.

(A) Reflects the historical consolidated balance sheet of the Company as of September 30, 2010.

(B) Represents the purchase price of the assets acquired on October 27, 2010 by the Company in conjunction with the acquisition of NIP. The total cost of $73,000,000 was funded using net proceeds from our public offering. Of the $1,515,000 in total acquisition costs, $1,087,500, or 1.5% of the purchase price, was paid to CBRE Advisors LLC, the Investment Advisor of the Company, upon closing.

(C) Represents the purchase price of the assets acquired on November 15, 2010 by the Company in conjunction with the acquisition of Pacific. The total cost of $144,500,000 was funded using net proceeds from our public offering. Of the $3,073,000 in total acquisition costs, $2,168,000, or 1.5% of the purchase price, was paid to the Investment Advisor, upon closing.

(D) Represents the net cash proceeds from the Duke Financing received on November 24, 2010 after financing costs and reserves. The Duke joint venture, through certain of its subsidiaries, entered into a $92,000,000 mortgage loan with Metropolitan Life Insurance Company. Our pro rata share of this mortgage is $73,600,000 based on our 80% ownership of the Duke joint venture. This mortgage carries a fixed interest rate of 4.25%, a term of five years, is secured on a cross-collateralized basis by nine of the Duke joint venture’s properties (22535 Colonial Pkwy, Celebration Office Center, Northpoint III, Goodyear Crossing Ind. Park II, 3900 North Paramount Parkway, 3900 South Paramount Parkway, 1400 Perimeter Park Drive, Miramar I and Miramar II) and may be prepaid subject to the satisfaction of certain conditions.

(E) Represents the cash contribution made in the Duke joint venture in conjunction with the closing of the Duke Tranche I on December 21, 2010. The total investment of $139,080,000, based on our 80% ownership of the Duke joint venture was funded using net proceeds from our public offering. Of the $2,897,000 in total acquisition costs, $2,086,200, or 1.5% of 80% of the agreed value of the properties was paid to the Investment Advisor upon closing.

Adjustments to Pro Forma Condensed Consolidated Statements of Operations

The adjustments to the pro forma condensed consolidated statement of operations of the Company for the nine months ended September 30, 2010 are as follows:

(AA) Reflects the historical condensed consolidated statement of operations for the nine months ended September 30, 2010.

(BB) Reflects the historical statement of operations for the nine months ended September 30, 2010 for NIP in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired NIP on October 27, 2010. Revenues and direct operations expenses are presented on an accrual basis of accounting. Rental revenues are recorded on a straight line basis. Historical depreciation and amortization and an increase in the investment management fee are included in the pro forma adjustments reflected in (LL).

(CC) Reflects the historical equity in income of unconsolidated interest in the Duke Tranche I for the nine months ended September 30, 2010 as if the properties were acquired on January 1, 2009. The properties were acquired by the Duke joint venture on December 21, 2010. The underlying revenues and direct operations expenses are presented on an accrual basis of accounting. Rental revenues are recorded on a straight line basis. Historical depreciation and amortization and an increase in the investment management fee are included in the pro forma adjustments reflected in (MM).

(DD) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the Duke North Carolina Portfolio as if the properties were acquired on January 1, 2009. The properties were acquired by the Duke joint venture on March 31, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense and an increase in the investment management fee through March 30, 2010 (the date prior to acquisition).

F-10

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Duke North Carolina Portfolio.

(EE) Reflects the pro forma adjustment for 5160 Hacienda Drive in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 5160 Hacienda Drive on April 8, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through April 7, 2010 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 5160 Hacienda Drive property.

(FF) Reflects the pro forma adjustment for 10450 Pacific Center Court in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 10450 Pacific Center Court on May 7, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through May 6, 2010 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 10450 Pacific Center Court property.

(GG) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the UK JV as if the properties were acquired on January 1, 2009. The properties were acquired by the UK JV on June 10, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense and an increase in the investment management fee through June 9, 2010 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the UK JV.

(HH) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the European JV as if the properties were acquired on January 1, 2009. The properties were acquired by the European JV on June 10, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense and an increase in the investment management fee through June 9, 2010 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the European JV.

(II) Reflects the pro forma adjustment for 225 Summit Avenue in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 225 Summit Avenue on June 21, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through June 20, 2010 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the European JV.

(JJ) Reflects the pro forma adjustment for One Wayside Road in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired One Wayside Road on June 24, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through June 23, 2010 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the One Wayside Road property.

(KK) Reflects the pro forma adjustment for 100 Tice Blvd. in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 100 Tice Blvd. on September 28, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense and an increase in the investment management fee through September 27, 2010 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 100 Tice Blvd. property.

F-11

(LL) Reflects the pro forma adjustment for NIP in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired NIP on October 27, 2010. The pro forma adjustment includes depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through September 30, 2010.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of NIP.

(MM) Reflects the pro forma adjustment for Duke Tranche I in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired Duke Tranche I on December 21, 2010. The underlying pro forma adjustment includes depreciation and amortization expense and an increase in the investment management fee through September 30, 2010.

The adjustments to the Pro Forma Condensed Consolidated Statements of Operations of the Company for the Year Ended December 31, 2009 are as follows:

(NN) Reflects the historical condensed consolidated statement of operations of the Company for the year ended December 31, 2009.

(OO) Reflects the historical statement of operations for the year ended December 31, 2009 for NIP in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired NIP on October 27, 2010. Revenues and direct operations expenses are presented on an accrual basis of accounting. Rental revenues are recorded on a straight line basis.

Historical depreciation and amortization expense, acquisition expenses and an increase in the investment management fee are included in the pro forma adjustments reflected in (FFF).

(PP) Reflects the historical equity in income of unconsolidated interest in the Duke Tranche I for the year ended December 31, 2009 as if the properties were acquired on January 1, 2009. The properties were acquired by the Duke joint venture on December 21, 2010. The underlying revenues and direct operations expenses are presented on an accrual basis of accounting. Rental revenues are recorded on a straight line basis. Historical depreciation and amortization, acquisition expenses and an increase in the investment management fee are included in the pro forma adjustments reflected in (GGG).

(QQ) Reflects the pro forma adjustment for 13201 Wilfred Lane in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 13201 Wilfred Lane on June 29, 2009. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through June 28, 2009 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 13201 Wilfred Lane property.

(RR) Reflects the pro forma adjustment for Comcast in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired Comcast on July 1, 2009. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through June 30, 2009 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Comcast property.

(SS) Reflects the pro forma adjustment for Ingenuity in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired Ingenuity on August 5, 2009. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through August 4, 2009 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Ingenuity property.

(TT) Reflects the pro forma adjustment of equity in income of unconsolidated interest in Duke NP III as if the property was acquired on January 1, 2009. The property was contributed to the joint venture on October 15, 2009. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through October 14, 2009 (the date prior to contribution into the joint venture).

F-12

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Duke NP III property.

(UU) Reflects the pro forma adjustment for West Point in order to present the operations as if the property was acquired on January 9, 2009. The Company acquired West Point on December 30, 2009. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through December 29, 2009 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the West Point property.

(VV) Reflects the pro forma adjustment for Miramar I in order to present the operations as if the property was acquired and contributed to the Duke joint venture on January 1, 2009. The Company acquired Miramar I on December 31, 2009 and contributed the property to the Duke joint venture on March 31, 2010. The pro forma adjustments included in equity in income of unconsolidated entities include the recognition of revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through December 30, 2009 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Miramar I property.

(WW) Reflects the pro forma adjustment for Miramar II in order to present the operations as if the property was acquired and contributed to the Duke joint venture on January 1, 2009. The Company acquired Miramar II on December 31, 2009 and contributed the property to the Duke joint venture on March 31, 2010. The pro forma adjustments included in equity in income of unconsolidated entities include the recognition of revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through December 30, 2009 (the date prior to acquisition).

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Miramar II property.

(XX) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the Duke North Carolina Portfolio as if the properties were acquired on January 1, 2009. The properties were contributed by Duke to the Duke joint venture on March 31, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses depreciation and amortization expense, acquisition expenses and an increase in the investment management fee through December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the Duke North Carolina Portfolio.

(YY) Reflects the pro forma adjustment for 5160 Hacienda Drive in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 5160 Hacienda Drive on April 8, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 5160 Hacienda Drive property.

(ZZ) Reflects the pro forma adjustment for 10450 Pacific Center Court in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 10450 Pacific Center Court on April 8, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 10450 Pacific Center Court property.

(AAA) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the UK JV as if the properties were acquired on January 1, 2009. The properties were contributed to the UK JV on June 10, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense plus acquisition expenses and an increase in the investment management fee through December 31, 2009.

F-13

Net (income) attributable to non-controlling operating partnership units reflect an adjustment for the allocable portion of the pro forma income of the UK JV.

(BBB) Reflects the pro forma adjustment of equity in income of unconsolidated interest in the European JV as if the properties were acquired on January 1, 2009. The properties were contributed to the European JV on June 10, 2010. The pro forma adjustments included in equity in income of unconsolidated entities is presented to include revenues, direct operating expenses, depreciation and amortization expense plus acquisition expenses and an increase in the investment management fee through December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the European JV.

(CCC) Reflects the pro forma adjustment for 225 Summit Avenue in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 225 Summit Avenue on June 21, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 225 Summit Avenue property.

(DDD) Reflects the pro forma adjustment for One Wayside Road in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired One Wayside Road on June 24, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the One Wayside Road property.

(EEE) Reflects the pro forma adjustment for 100 Tice Blvd. in order to present the operations as if the property was acquired on January 1, 2009. The Company acquired 100 Tice Blvd. on September 28, 2010. The pro forma adjustment recognizes revenues and operating expenses, depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of the 100 Tice Blvd. property.

(FFF) Reflects the pro forma adjustment for NIP in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired NIP on October 27, 2010. The pro forma adjustment includes depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of NIP.

(GGG) Reflects the pro forma adjustment for Duke Tranche I in order to present the operations as if the properties were acquired on January 1, 2009. The Company acquired Duke Tranche I on December 21, 2010. The underlying pro forma adjustment includes depreciation and amortization expense, acquisition expenses and an increase in the investment management fee for the year ended December 31, 2009.

Net (income) attributable to non-controlling operating partnership units reflects an adjustment for the allocable portion of the pro forma income of Duke Tranche I.

F-14

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 hereunto duly authorized.

CB RICHARD ELLIS REALTY TRUST

February 11, 2011

/S/ PHILIP L. KIANKA

Philip L. Kianka

Chief Operating Officer