Black Creek Diversified Property Fund Inc. - FORM 8-K - EX-99.2

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EX-99.1 - EX-99.1 - Black Creek Diversified Property Fund Inc.	d883952dex991.htm
8-K - 8-K - Black Creek Diversified Property Fund Inc.	d883952d8k.htm

Exhibit 99.2

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TABLE OF CONTENTS


PERFORMANCE			3

NET ASSET VALUE			4

FINANCIAL HIGHLIGHTS			6

PORTFOLIO PROFILE			7

BALANCE SHEETS			8

STATEMENTS OF OPERATIONS			9

FUNDS FROM OPERATIONS			10

RESULTS OF OPERATIONS			12

FINANCE & CAPITAL			14

REAL PROPERTIES			17

LEASING ACTIVITY			18

INVESTMENT ACTIVITY			21

DEFINITIONS			23

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

Statements included in this portfolio performance and review package that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance or assumptions or forecasts related thereto) are forward looking statements. These statements are only predictions. We caution that forward looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in the forward looking statements. Forward looking statements are typically identified by the use of terms such as “may,” “will,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.

The forward looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward looking statements. Factors which could have a material adverse effect on our operations and future prospects include, but are not limited to: the continuing impact of high unemployment and the slow economic recovery, which is having and may continue to have a negative effect on the following, among other things, the fundamentals of our business, including overall market demand and occupancy, tenant space utilization, and rental rates; the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis; general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate); our ability to effectively raise and deploy proceeds from our equity offerings; risks associated with the availability and terms of debt and equity financing and refinancing and the use of debt to fund acquisitions and developments, including the risk associated with interest rates impacting the cost and/or availability of financing and refinancing; the business opportunities that may be presented to and pursued by us, changes in laws or regulations (including changes to laws governing the taxation of real estate investment trusts; changes in accounting principles, policies and guidelines applicable to real estate investment trusts; environmental, regulatory and/or safety requirements; and the availability and cost of comprehensive insurance, including coverage for terrorist acts and earthquakes. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward looking statements after the date of this supplemental package, whether as a result of new information, future events, changed circumstances or any other reason. You should review the risk factors contained in Part I, Item 1A of our 2014 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 3, 2015.

Please see the section titled “Definitions” at the end of this portfolio performance and review package for definitions of terms used herein.

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PERFORMANCE

Dividend Capital Diversified Property Fund Inc. is a daily NAV-based REIT and has invested in a diverse portfolio of real property and real estate related investments. As used herein, “the Portfolio,” “we,” “our” and “us” refer to Dividend Capital Diversified Property Fund Inc. and its consolidated subsidiaries and partnerships except where the context otherwise requires.

Quarter Highlights

•

Total return of 2.32% for the quarter; 8.57% for the last 12 months

•

Acquired retail property in Narragansett, RI for $39.2 million

•

Reported percentage leased of 93.7% as of December 31, 2014

•

Paid weighted-average distribution of $0.0872/share

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Shareholder Returns


	Q4 2014	Year-to-Date	1-Year	Since Inception (9/30/12) – Annualized⁽⁶⁾
Distribution returns⁽³⁾⁽⁴⁾	1.23%	5.22%	5.22%	5.31%
Net change in NAV, per share⁽⁴⁾	1.08%	3.36%	3.36%	3.43%
Total return⁽⁴⁾⁽⁵⁾	2.32%	8.57%	8.57%	8.74%

Key Statistics


	As of December 31, 2014
Fair Value⁽¹⁾ of Real Estate Investments		$2,482 million
Number of Properties		68
Number of Markets		24
Total Square Feet		11.9 million
Number of Tenants		Approximately 475
Percentage Leased		93.7%
Debt to Fair Value of Real Estate Investments		46.5%

(1)

As determined in accordance with our Valuation Procedures, filed as Exhibit 99.1 to our 2014 Annual Report on Form 10-K. See a discussion of some of the differences between the definition of “fair value” of our real estate assets as used in our Valuation Procedures and in this document versus GAAP values in the section titled “Definitions” beginning on page 23. For a description of key assumptions used in calculating the value of our real properties as of December 31, 2014, please refer to “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Part II, Item 5 of our 2014 Annual Report on Form 10-K.

(2)

In addition to the markets shown, we had real property investments, each accounting for 1% or less of the total fair value of our real property portfolio, in the following markets: Central Kentucky, Cleveland, OH, Fayetteville, AR, Jacksonville, FL, Louisville, KY, Minneapolis/St. Paul, MN, Pittsburgh, PA, and San Antonio, TX.

(3)

Represents the compounded return realized from reinvested distributions before class specific expenses. We pay our dealer manager (1) a dealer manager fee equal to 1/365th of 0.60% of our NAV per share for Class A shares and Class W shares for each day, (2) a dealer manager fee equal to 1/365th of 0.10% of our NAV per share for Class I shares for each day and (3) for Class A shares only, a distribution fee equal to 1/365th of 0.50% of our NAV per share for Class A shares for each day.

(4)

Excludes the impact of up-front commissions paid with respect to certain Class A shares. We pay selling commissions on Class A shares sold in the primary offering of up to 3.0% of the NAV per share, which may be higher or lower due to rounding. Selling commissions may be reduced or eliminated to or for the account of certain categories of purchasers.

(5)

Total return represents the compound annual rate of return assuming reinvestment of all dividend distributions. Past performance is not a guarantee of future results.

(6)

Q4 2012 represents the first full quarter for which we have complete NAV return data. As such, we use 9/30/12 as “inception” for the purpose of calculating cumulative returns since inception.

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NET ASSET VALUE

The following table sets forth the components of NAV for the Portfolio as of the end of each of the five quarters ending December 31, 2014, as determined in accordance with our valuation procedures. As used below, “Fund Interests” means our Class E shares, Class A shares, Class W shares, and Class I shares, along with the OP Units held by third parties, and “Aggregate Fund NAV” means the NAV of all of the Fund Interests (amounts in thousands except per share information).


	As of
	December 31, 2014 ⁽¹⁾			September 30, 2014 ⁽²⁾			June 30, 2014 ⁽³⁾			March 31, 2014 ⁽⁴⁾			December 31, 2013 ⁽⁵⁾
Real properties:
Office	$	1,446,850		$	1,442,900		$	1,354,250		$	1,355,230		$	1,378,080
Industrial		248,300			263,150			261,700			261,900			430,770
Retail		786,705			745,155			743,465			715,225			716,525

Total real properties		2,481,855			2,451,205			2,359,415			2,332,355			2,525,375
Debt related investments		94,951			94,673			94,414			94,180			123,935

Total investments		2,576,806			2,545,878			2,453,829			2,426,535			2,649,310
Cash and other assets, net of other liabilities		(10,814	)		663			7,036			77,452			3,904
Debt obligations		(1,192,250	)		(1,182,819	)		(1,139,657	)		(1,182,210	)		(1,325,286	)
Outside investors’ interests		(8,652	)		(10,310	)		(10,570	)		(10,512	)		(16,004	)

Aggregate Fund NAV	$	1,365,090		$	1,353,412		$	1,310,638		$	1,311,265		$	1,311,924
Total Fund Interests outstanding		190,547			190,967			187,310			188,318			189,280
NAV per Fund Interest	$	7.16		$	7.09		$	7.00		$	6.96		$	6.93

⁽¹⁾	For information about the valuation procedures and key assumptions used in these calculations, please refer to “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Part II, Item 5 of our 2014 Annual Report on Form 10-K.

⁽²⁾

For information about the valuation procedures and key assumptions used in these calculations, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of our Quarterly Report on Form 10-Q for the period ended September 30, 2014, filed with the Securities and Exchange Commission on November 12, 2014.

⁽³⁾

For information about the valuation procedures and key assumptions used in these calculations, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of our Quarterly Report on Form 10-Q for the period ended June 30, 2014, filed with the Securities and Exchange Commission on August 12, 2014.

⁽⁴⁾

For information about the valuation procedures and key assumptions used in these calculations, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of our Quarterly Report on Form 10-Q for the period ended March 31, 2014, filed with the Securities and Exchange Commission on May 13, 2014.

⁽⁵⁾

For information about the valuation procedures and key assumptions used in these calculations, please refer to “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” in Part II, Item 5 of our 2013 Annual Report on Form 10-K, filed with the Securities and Exchange Commission on March 10, 2014.

When the fair value of our real estate assets is calculated for the purposes of determining our NAV per share, the calculation is done using the fair value methodologies detailed within the Financial Accounting Standards Board Accounting Standards Codification under Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). However, our valuation procedures and our NAV are not subject to GAAP and will not be subject to independent audit. In the determination of our NAV, the value of certain of our assets and liabilities are generally determined based on their carrying amounts under GAAP; however, those principles are generally based upon historic cost and therefore may not be determined in accordance with ASC Topic 820. Readers should refer to our audited financial statements for our net book value determined in accordance with accounting principles generally accepted in the United States (“GAAP”) from which one can derive our net book value per share by dividing our stockholders’ equity by shares of our common stock outstanding as of the date of measurement.

Our valuation procedures, which address specifically each category of our assets and liabilities and are applied separately from the preparation of our financial statements in accordance with GAAP, involve adjustments from historical cost. There are certain factors which cause NAV to be different from net book value on a GAAP basis. Most significantly, the valuation of our real estate assets, which is the largest component of our NAV calculation, will be provided to us by the Independent Valuation Firm on a daily basis. For GAAP purposes, these assets are generally recorded at depreciated or amortized cost. Other examples that will cause our NAV to differ from our GAAP net book value include the straight-lining of rent, which results in a receivable for GAAP purposes that is not included in the determination of our NAV, and, for purposes of determining our NAV, the assumption of a value of zero in certain instances where the balance of a loan exceeds the value of the underlying real estate properties, where GAAP net book value would reflect a negative equity value for such real estate properties, even if such loans are non-recourse. Third party appraisers may value our individual real estate assets using appraisal standards that deviate from market value standards under GAAP. The use of such appraisal standards may cause our NAV to deviate from GAAP fair value principles. We did not develop our valuation procedures with the intention of complying with fair value concepts under GAAP and, therefore, there could be differences between our fair values and the fair values derived from the principal market or most advantageous market concepts of establishing fair value under GAAP.

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NET ASSET VALUE (continued)

The following table sets forth the quarterly changes to the components of NAV for the Portfolio, for each of the most recent four quarters, and for the twelve month period ended December 31, 2014 (amounts in thousands, except per share information):


	Three Months Ended												Previous Four Quarters
	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			Previous Four Quarters
NAV as of beginning of period	$	1,353,412		$	1,310,638		$	1,311,265		$	1,311,924		$	1,311,924
*Fund level changes to NAV*
Realized/unrealized gains (losses) on net assets		11,515			14,391			3,745			2,821			32,472
Income accrual		24,269			23,733			23,266			23,612			94,880
Net dividend accrual		(16,751	)		(16,698	)		(16,620	)		(16,607	)		(66,676	)
Advisory fee		(3,967	)		(3,901	)		(3,802	)		(3,743	)		(15,413	)
Performance based fee		(204	)		(189	)		(1	)		(19	)		(413	)
*Class specific changes to NAV*
Dealer Manager fee		(46	)		(37	)		(23	)		(14	)		(120	)
Distribution fee		(10	)		(8	)		(7	)		(3	)		(28	)

NAV as of end of period before share sale/redemption activity	$	1,368,218		$	1,327,929		$	1,317,823		$	1,317,971		$	1,356,626
*Share sale/redemption activity*
Shares sold		14,097			44,429			30,715			9,249			98,490
Shares redeemed		(17,225	)		(18,946	)		(37,900	)		(15,955	)		(90,026	)

NAV as of end of period	$	1,365,090		$	1,353,412		$	1,310,638		$	1,311,265		$	1,365,090

Shares outstanding beginning of period		190,967			187,310			188,318			189,280			189,280
Shares sold		1,986			6,332			4,409			1,332			14,059
Shares redeemed		(2,406	)		(2,675	)		(5,417	)		(2,294	)		(12,792	)

Shares outstanding end of period		190,547			190,967			187,310			188,318			190,547
NAV per share as of beginning of period	$	7.09		$	7.00		$	6.96		$	6.93		$	6.93
Change in NAV per share		0.07			0.09			0.04			0.03			0.23

NAV per share as of end of period	$	7.16		$	7.09		$	7.00		$	6.96		$	7.16

We include no discounts to our NAV for the illiquid nature of our shares, including the limitations on your ability to redeem shares under our share redemption programs and our ability to suspend or terminate our share redemption programs at any time. Our NAV generally does not consider exit costs (e.g. selling costs and commissions related to the sale of a property) that would likely be incurred if our assets and liabilities were liquidated or sold. While we may use market pricing concepts to value individual components of our NAV, our per share NAV is not derived from the market pricing information of open-end real estate funds listed on stock exchanges.

Please note that our NAV is not a representation, warranty or guarantee that: (1) we would fully realize our NAV upon a sale of our assets; (2) shares of our common stock would trade at our per share NAV on a national securities exchange; or (3) a stockholder would be able to realize the per share NAV if such stockholder attempted to sell his or her shares to a third party.

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FINANCIAL HIGHLIGHTS

Amounts in thousands, except per share information and percentages.


	As of or For the Three Months Ended															As of or For the Twelve Months Ended
Selected Operating Data (as adjusted) ⁽¹⁾	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Total revenues	$	59,093		$	58,591		$	56,814		$	58,068		$	60,288		$	232,565		$	256,801
Net income (loss)		5,700			(7,514	)		3,816			31,988			(1,452	)		33,994			56,470

Portfolio Statistics
Operating properties		68			69			68			68			82			68			82
Square feet		11,871			12,000			11,732			11,652			15,250			11,871			15,250
Percentage leased at end of period		93.7	%		92.8	%		92.6	%		92.2	%		93.6	%		93.7	%		93.6	%

Earnings Per Share
Net (loss) income per share	$	0.03		$	(0.04	)	$	0.02		$	0.15		$	(0.02	)	$	0.16		$	0.29
Funds from Operations (“FFO”) per share ⁽²⁾	$	0.12		$	0.12		$	0.12		$	0.11		$	0.11		$	0.48		$	0.48
Company-defined FFO per share ⁽²⁾	$	0.12		$	0.13		$	0.12		$	0.11		$	0.12		$	0.48		$	0.49
Weighted average number of common shares outstanding — basic		179,926			178,729			177,529			176,873			177,548			178,273			178,196
Weighted average number of common shares outstanding — diluted		192,137			191,422			190,386			189,993			190,942			190,991			191,932

Net Asset Value (“NAV”) ⁽³⁾
NAV per share at the end of period	$	7.16		$	7.09		$	7.00		$	6.96		$	6.93		$	7.16		$	6.93
High NAV per share during period	$	7.19		$	7.09		$	7.00		$	6.96		$	6.93		$	7.19		$	6.93
Low NAV per share during period	$	7.08		$	7.00		$	6.96		$	6.93		$	6.84		$	6.93		$	6.71
Weighted average distributions per share	$	0.0872		$	0.0872		$	0.0873		$	0.0874		$	0.0874		$	0.3492		$	0.3499
Weighted average closing dividend yield - annualized		4.87	%		4.92	%		4.99	%		5.02	%		5.05	%		4.87	%		5.05	%
Weighted average total return for the period		2.31	%		2.53	%		1.75	%		1.72	%		2.24	%		8.56	%		8.75	%
Aggregate fund NAV at end of period	$	1,365,090		$	1,353,412		$	1,310,638		$	1,311,265		$	1,311,924		$	1,365,090		$	1,311,924

Consolidated Debt
Leverage ⁽⁴⁾		47	%		47	%		47	%		49	%		50	%		47	%		50	%
Secured borrowings	$	853,267		$	871,230		$	875,968		$	918,716		$	1,023,472		$	853,267		$	1,023,472
Secured borrowings as % of total borrowings		71	%		73	%		76	%		77	%		77	%		71	%		77	%
Unsecured borrowings	$	345,000		$	317,500		$	270,000		$	270,000		$	300,000		$	345,000		$	300,000
Unsecured borrowings as % of total borrowings		29	%		27	%		24	%		23	%		23	%		29	%		23	%
Fixed rate borrowings ⁽⁵⁾	$	1,145,017		$	1,062,890		$	1,067,538		$	1,110,196		$	1,214,892		$	1,145,017		$	1,214,892
Fixed rate borrowings as % of total borrowings		96	%		89	%		93	%		93	%		92	%		96	%		92	%
Floating rate borrowings	$	53,250		$	125,840		$	78,430		$	78,520		$	108,580		$	53,250		$	108,580
Floating rate borrowings as % of total borrowings		4	%		11	%		7	%		7	%		8	%		4	%		8	%
Total borrowings	$	1,198,267		$	1,188,730		$	1,145,968		$	1,188,716		$	1,323,472		$	1,198,267		$	1,323,472

(1)

Operating data in this table and throughout this document are presented inclusive of amounts relating to real properties that have been disposed of or classified as held for sale at the end of the period, and in certain cases, reclassified as discontinued operations in our GAAP financial statements. Certain asset and liability amounts in this table and throughout this document are presented inclusive of amounts relating to real properties that have been classified as held for sale in our GAAP financial statements.

(2)	For a reconciliation of FFO and Company-Defined FFO to GAAP net income, see the section titled “Funds from Operations” beginning on page 10.

(3)

(4)	Leverage presented represents our total borrowings, calculated on a GAAP basis, divided by the fair value of our real property and debt investments.

(5)	Fixed rate borrowings presented includes floating rate borrowings that are effectively fixed by a derivative instrument such as a swap through maturity or substantially through maturity.

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PORTFOLIO PROFILE

The following table presents information about the operating results and fair value of our real property and debt investment portfolios as of or for the three months ended December 31, 2014 (dollar and square footage amount in thousands).


	Real Properties ⁽¹⁾												Debt Related Investments, Net			Grand Total
As of or for the three months ended December 31, 2014	Total			Office			Industrial			Retail			Debt Related Investments, Net			Grand Total
Number of investments		68			24			12			32			11			79
Square footage		11,871			5,094			3,492			3,285			N/A			11,871
Percentage leased at period end		93.7	%		94.8	%		91.8	%		94.2	%		N/A			93.7	%
Net operating income (“NOI”)⁽²⁾	$	44,218		$	26,670		$	5,158		$	12,390		$	1,825		$	46,043
Segment as % of total NOI		96.0	%		57.9	%		11.2	%		26.9	%		4.0	%		100.0	%
NOI — cash basis ⁽³⁾	$	43,522		$	27,446		$	4,393		$	11,683		$	1,825		$	45,347
Fair Value ⁽⁴⁾	$	2,481,855		$	1,446,850		$	248,300		$	786,705		$	94,951		$	2,576,806
Segment as % of total Fair Value		96.3	%		56.2	%		9.6	%		30.5	%		3.7	%		100.0	%

(1)

“As of” information includes all real properties that we owned as of December 31, 2014. Operations information provided here and throughout this document is presented inclusive of amounts related to properties that have been disposed of as of December 31, 2014, including amounts that are classified within discontinued operations in our 2014 Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

(2)	For a reconciliation of NOI to GAAP net income, see the section titled “Results of Operations” beginning on page 12.

(3)	For a reconciliation of NOI – Cash Basis to NOI and to GAAP net income, see the section titled “Results of Operations” beginning on page 12.

(4)

As of December 31, 2014, our real property investments were geographically diversified across 24 markets throughout the United States. Our debt related investments are located in six additional markets resulting in a combined portfolio allocation across 30 markets.

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BALANCE SHEETS

The following table presents our consolidated balance sheets, as adjusted, as of the end of each of the five quarters ended December 31, 2014. Certain asset and liability amounts in this table are presented inclusive of amounts relating to real properties that have been classified as held for sale in our GAAP financial statements (dollar amounts in thousands):


	As of
	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
ASSETS
Investments in real property	$	2,472,926		$	2,450,058		$	2,376,245		$	2,352,401		$	2,570,480
Accumulated depreciation and amortization		(523,246	)		(512,427	)		(489,273	)		(469,466	)		(502,847	)

Total net investments in real property		1,949,680			1,937,631			1,886,972			1,882,935			2,067,633
Debt related investments, net		94,951			94,673			94,414			94,180			123,935

Total net investments		2,044,631			2,032,304			1,981,386			1,977,115			2,191,568
Cash and cash equivalents		14,461			27,814			52,880			81,292			24,778
Restricted cash		27,454			25,784			25,212			35,209			25,556
Other assets, net		61,587			62,271			60,345			67,856			63,507

Total Assets	$	2,148,133		$	2,148,173		$	2,119,823		$	2,161,472		$	2,305,409

LIABILITIES AND EQUITY
Liabilities:
Mortgage notes and other secured borrowings	$	853,267		$	871,230		$	875,968		$	918,716		$	1,023,472
Unsecured borrowings		345,000			317,500			270,000			270,000			300,000
Intangible lease liabilities, net		86,243			78,545			74,393			72,389			77,549
Other liabilities		99,643			101,657			117,322			93,724			99,377

Total Liabilities		1,384,153			1,368,932			1,337,683			1,354,829			1,500,398
Equity:
Stockholders’ equity:
Common stock		1,784			1,787			1,746			1,755			1,760
Additional paid-in capital		1,586,444			1,589,520			1,566,332			1,576,970			1,582,886
Distributions in excess of earnings		(893,791	)		(883,418	)		(860,790	)		(848,768	)		(860,747	)
Accumulated other comprehensive loss		(10,120	)		(9,515	)		(10,672	)		(10,586	)		(10,794	)

Total stockholders’ equity		684,317			698,374			696,616			719,371			713,105
Noncontrolling interests		79,663			80,867			85,524			87,272			91,906

Total Equity		763,980			779,241			782,140			806,643			805,011

Total Liabilities and Equity	$	2,148,133		$	2,148,173		$	2,119,823		$	2,161,472		$	2,305,409

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STATEMENTS OF OPERATIONS

The following table presents our condensed consolidated statements of operations, as adjusted, for each of the five quarters ended December 31, 2014, and for the years ended December 31, 2014 and 2013. Operating data in this table are presented inclusive of amounts relating to real properties that have been reclassified as discontinued operations in our GAAP financial statements (amounts in thousands, except per share data):


	Three Months Ended															Year Ended
	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
REVENUE:
Rental revenue	$	57,268		$	56,793		$	55,054		$	56,055		$	57,498		$	225,169		$	246,352
Debt related income		1,825			1,798			1,760			2,013			2,790			7,396			10,449

Total Revenue		59,093			58,591			56,814			58,068			60,288			232,565			256,801
EXPENSES:
Rental expense		13,050			12,804			11,770			13,714			13,048			51,337			57,692
Real estate depreciation and amortization expense		22,514			21,918			22,213			22,350			25,093			88,994			108,191
General and administrative expenses		2,928			2,739			3,125			2,819			2,886			11,610			9,973
Advisory fees, related party		4,242			4,083			3,853			3,743			3,898			15,919			15,120
Acquisition-related expenses		237			214			252			—			337			703			337
Impairment of real estate property		—			9,500			—			—			2,600			9,500			2,600

Total Operating Expenses		42,971			51,258			41,213			42,626			47,862			178,063			193,913
Other Income (Expenses):
Interest and other income (expense)		480			429			334			(81	)		111			1,162			(229	)
Interest expense		(15,354	)		(15,276	)		(15,105	)		(16,465	)		(17,761	)		(62,199	)		(77,988	)
Loss on extinguishment of debt and financing commitments		—			—			—			(63	)		(1,808	)		(63	)		(2,507	)
Gain on sale of real property		4,452			—			2,986			33,155			5,580			40,592			74,306

Net (Loss) Income		5,700			(7,514	)		3,816			31,988			(1,452	)		33,994			56,470
Net loss (income) attributable to noncontrolling interests		(397	)		475			(330	)		(4,550	)		85			(4,802	)		(4,002	)

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	5,303		$	(7,039	)	$	3,486		$	27,438		$	(1,367	)	$	29,192		$	52,468

NET (LOSS) INCOME PER BASIC AND DILUTED COMMON SHARE	$	0.03		$	(0.04	)	$	0.02		$	0.15		$	(0.02	)	$	0.16		$	0.29

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		179,926			178,729			177,529			176,873			177,548			178,273			178,196

Diluted		192,137			191,422			190,386			189,993			190,942			190,991			191,932

Weighted average distributions declared per common share	$	0.0872		$	0.0872		$	0.0873		$	0.0874		$	0.0874		$	0.3492		$	0.3499

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FUNDS FROM OPERATIONS

The following tables present NAREIT-Defined Funds From Operations (“FFO”) and Company-defined FFO for each of the five quarters ended December 31, 2014, and for the years ended December 31, 2014 and 2013. Operating data in these tables are presented inclusive of amounts relating to real properties that have been reclassified as discontinued operations in our GAAP financial statements (amounts in thousands except for per share amounts and percentages):


	Three Months Ended															Year Ended
	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Reconciliation of net earnings to FFO:
Net (loss) income attributable to common stockholders	$	5,303		$	(7,039	)	$	3,486		$	27,438		$	(1,367	)	$	29,192		$	52,468
Add (deduct) NAREIT-defined adjustments:
Depreciation and amortization expense		22,514			21,918			22,213			22,350			25,093			88,994			108,191
Gain on disposition of real property		(4,452	)		—			(2,986	)		(33,155	)		(5,580	)		(40,592	)		(74,306	)
Impairment of real property		—			9,500			—			—			2,600			9,500			2,600
Noncontrolling interests’ share of adjustments		(1,251	)		(2,187	)		(1,399	)		2,989			(1,772	)		(1,848	)		(3,737	)

FFO attributable to common shares-basic		22,114			22,192			21,314			19,622			18,974			85,246			85,216
FFO attributable to dilutive OP units		1,501			1,576			1,544			1,456			1,431			6,077			6,575

FFO attributable to common shares-diluted	$	23,615		$	23,768		$	22,858		$	21,078		$	20,405		$	91,323		$	91,791

FFO per share-basic and diluted	$	0.12		$	0.12		$	0.12		$	0.11		$	0.11		$	0.48		$	0.48

FFO payout ratio		71	%		70	%		73	%		79	%		82	%		73	%		73	%

Reconciliation of FFO to Company-Defined FFO:
FFO attributable to common shares-basic	$	22,114		$	22,192		$	21,314		$	19,622		$	18,974		$	85,246		$	85,216
Add (deduct) our adjustments:
Acquisition-related expenses		237			214			252			—			337			703			337
Loss on extinguishment of debt and financing commitments		—			—			—			63			1,808			63			2,507
Noncontrolling interests’ share of our adjustments		(15	)		(14	)		(17	)		(4	)		(150	)		(50	)		(201	)

Company-Defined FFO attributable to common shares-basic		22,336			22,392			21,549			19,681			20,969			85,962			87,859
Company-Defined FFO attributable to dilutive OP units		1,516			1,590			1,561			1,460			1,582			6,127			6,776

Company-Defined FFO attributable to common shares-diluted	$	23,852		$	23,982		$	23,110		$	21,141		$	22,551		$	92,089		$	94,635

Company-Defined FFO per share-basic and diluted	$	0.12		$	0.13		$	0.12		$	0.11		$	0.12		$	0.48		$	0.49

Weighted average number of shares outstanding
Basic		179,926			178,729			177,529			176,873			177,548			178,273			178,196

Diluted		192,137			191,422			190,386			189,993			190,942			190,991			191,932

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FUNDS FROM OPERATIONS (continued)

The following table presents certain other supplemental information for each of the five quarters ended December 31, 2014, and for the years ended December 31, 2014 and 2013 (amounts in thousands):


	Three Months Ended															Year Ended
	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
Other Supplemental Information
Capital Expenditures Summary
Recurring capital expenditures	$	4,084		$	2,501		$	1,597		$	3,789		$	6,980		$	11,971		$	21,172
Non-recurring capital improvements		818			284			1,401			210			1,177			2,713			4,059

Total Capital Expenditures		4,902			2,785			2,998			3,999			8,157			14,684			25,231
Other non-cash adjustments
Straight-line rent (increase) to rental revenue		(98	)		(1,150	)		(485	)		(1,305	)		(1,497	)		(3,038	)		(8,864	)
Amortization of above- and below- market rent decrease (increase) to rental revenue		(537	)		(124	)		152			(108	)		(21	)		(617	)		(244	)
Amortization of loan costs and hedges - increase to interest expense		1,240			1,205			1,192			1,208			1,202			4,845			5,253
Amortization of mark-to-market adjustments on borrowings - (decrease) increase to interest expense		(262	)		(276	)		(283	)		100			338			(721	)		1,348

Total other non-cash adjustments	$	343		$	(345	)	$	576		$	(105	)	$	22		$	469		$	(2,507	)

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RESULTS OF OPERATIONS

The following tables present revenue and net operating income (“NOI”) of our four operating segments, as adjusted, for each of the five quarters ending December 31, 2014, and for the years ended December 31, 2014 and 2013. Our same store portfolio includes all operating properties owned for the entirety of all periods presented, and includes 64 properties acquired prior to January 1, 2013, and owned through December 31, 2014, comprising approximately 11.0 million square feet. (amounts in thousands):


	Three Months Ended										Year Ended
	December 31, 2014		September 30, 2014		June 30, 2014		March 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Revenue:
Same store real property:
Office	$	30,293	$	31,139	$	30,773	$	30,697	$	30,025	$	122,902	$	117,980
Industrial		5,587		5,566		5,737		5,611		5,802		22,501		24,207
Retail		14,718		14,836		14,863		15,006		14,509		59,423		56,992

Total same store real property revenue		50,598		51,541		51,373		51,314		50,336		204,826		199,179
2013/2014 Acquisitions/Dispositions		6,670		5,252		3,681		4,741		7,162		20,343		47,173
Debt related investments		1,825		1,798		1,760		2,013		2,790		7,396		10,449

Total	$	59,093	$	58,591	$	56,814	$	58,068	$	60,288	$	232,565	$	256,801

NOI:
Same store real property:
Office	$	23,340	$	24,049	$	24,124	$	23,205	$	23,227	$	94,718	$	91,611
Industrial		5,137		5,102		5,257		4,950		5,331		20,446		22,431
Retail		11,439		11,631		11,745		11,429		11,056		46,244		43,931

Total same store real property NOI		39,916		40,782		41,126		39,584		39,614		161,408		157,973
2013/2014 Acquisitions/Dispositions		4,302		3,207		2,158		2,757		4,836		12,424		30,687
Debt related investments		1,825		1,798		1,760		2,013		2,790		7,396		10,449

Total	$	46,043	$	45,787	$	45,044	$	44,354	$	47,240	$	181,228	$	199,109

NOI — cash basis:
Same store real property:
Office	$	24,765	$	24,939	$	25,225	$	23,600	$	23,018	$	98,531	$	90,466
Industrial		4,373		4,067		4,612		4,203		4,713		17,253		20,192
Retail		10,882		11,056		11,108		10,805		10,473		43,851		41,537

Total same store real property NOI — cash basis		40,020		40,062		40,945		38,608		38,204		159,635		152,195
2013/2014 Acquisitions/Dispositions		3,502		2,586		1,942		2,233		4,643		10,261		27,160
Debt related investments		1,825		1,798		1,760		2,013		2,790		7,396		10,449

Total	$	45,347	$	44,446	$	44,647	$	42,854	$	45,637	$	177,292	$	189,804

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RESULTS OF OPERATIONS (continued)

The following tables present a reconciliation of NOI – Cash Basis and NOI of our four operating segments, as adjusted, to GAAP net income attributable to common stockholders for each of the five quarters ending December 31, 2014, and for the years ended December 31, 2014 and 2013 (amounts in thousands):


	Three Months Ended															Year Ended
	December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013			December 31, 2014			December 31, 2013
NOI — cash basis	$	45,347		$	44,446		$	44,647		$	42,854		$	45,637		$	177,292		$	189,804
Straight line rent		98			1,150			485			1,305			1,497			3,038			8,864
Net amortization of above- and below-market lease assets and liabilities, and other non-cash adjustments to rental revenue		598			191			(88	)		195			106			898			441

NOI	$	46,043		$	45,787		$	45,044		$	44,354		$	47,240		$	181,228		$	199,109
Real estate depreciation and amortization expense		(22,514	)		(21,918	)		(22,213	)		(22,350	)		(25,093	)		(88,994	)		(108,191	)
General and administrative expenses		(2,928	)		(2,739	)		(3,125	)		(2,819	)		(2,886	)		(11,610	)		(9,973	)
Advisory fees, related party		(4,242	)		(4,083	)		(3,853	)		(3,743	)		(3,898	)		(15,919	)		(15,120	)
Acquisition-related expenses		(237	)		(214	)		(252	)		—			(337	)		(703	)		(337	)
Impairment of real estate property		—			(9,500	)		—			—			(2,600	)		(9,500	)		(2,600	)
Interest and other income		480			429			334			(81	)		111			1,162			(229	)
Interest expense		(15,354	)		(15,276	)		(15,105	)		(16,465	)		(17,761	)		(62,199	)		(77,988	)
Loss on extinguishment of debt and financing commitments		—			—			—			(63	)		(1,808	)		(63	)		(2,507	)
Gain on sale of real property		4,452			—			2,986			33,155			5,580			40,592			74,306
Net (income) loss attributable to noncontrolling interests		(397	)		475			(330	)		(4,550	)		85			(4,802	)		(4,002	)

Net (loss) income attributable to common stockholders	$	5,303		$	(7,039	)	$	3,486		$	27,438		$	(1,367	)	$	29,192		$	52,468

The following tables present details regarding our capital expenditures for each of the five quarters ending December 31, 2014, and for the years ended December 31, 2014 and 2013 (amounts in thousands):


	Three Months Ended										Year Ended
	December 31, 2014		September 30, 2014		June 30, 2014		March 31, 2014		December 31, 2013		December 31, 2014		December 31, 2013
Recurring Capital Expenditures:
Land and building improvements	$	1,626	$	311	$	546	$	1,056	$	1,140	$	3,539	$	4,828
Tenant improvements		1,250		1,045		406		1,770		3,828		4,471		7,807
Leasing costs		1,208		1,145		645		963		2,012		3,961		8,537

Total recurring capital expenditures	$	4,084	$	2,501	$	1,597	$	3,789	$	6,980	$	11,971	$	21,172
Non-recurring Capital Expenditures:
Land and building improvements	$	93	$	94	$	19	$	22	$	201	$	228	$	1,554
Tenant improvements		618		149		1,113		9		872		1,889		1,703
Leasing costs		107		41		269		179		104		596		802

Total non-recurring capital expenditures	$	818	$	284	$	1,401	$	210	$	1,177	$	2,713	$	4,059

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FINANCE & CAPITAL

The following table describes certain information about our capital structure. Amounts reported as financing capital and our joint venture partners’ interests are presented on a GAAP basis. Amounts reported as equity capital other than our joint venture partners’ interests are presented based on the NAV as of December 31, 2014 (shares and dollar amounts other than price per share / unit in thousands).


FINANCING:								As of December 31, 2014
Mortgage notes and other secured borrowings								$	853,267
Unsecured borrowings									345,000
Financing obligations									17,934

Total Financing								$	1,216,201

EQUITY:	Shares / Units		Percentage of aggregate Shares and Units outstanding			NAV Per Share / Unit		Value
Class E Common Stock		163,068		85.6	%	$	7.16	$	1,168,234
Class A Common Stock		1,187		0.6	%		7.16		8,503
Class W Common Stock		1,117		0.6	%		7.16		7,997
Class I Common Stock		13,028		6.8	%		7.16		93,331
Class E OP Units		12,147		6.4	%		7.16		87,025

Total/Weighted Average		190,547		100.0	%	$	7.16	$	1,365,090
Joint venture partners’ noncontrolling interests									2,583

Total Equity									1,367,673

TOTAL CAPITALIZATION								$	2,583,874

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FINANCE & CAPITAL (continued)

The following table presents a summary of our borrowings as of December 31, 2014 (dollar amounts in thousands):


	Weighted Average Stated Interest Rate			Outstanding Balance		Gross Investment Amount Securing Borrowings ⁽¹⁾
Fixed rate mortgages		5.8	%	$	807,994	$	1,625,637
Floating rate mortgages		3.2	%		8,250		16,118

Total mortgage notes		5.8	%		816,244		1,641,755
Repurchase facility ⁽²⁾		2.8	%		37,023		51,156

Total secured borrowings		5.6	%		853,267		1,692,911

Line of credit ⁽²⁾		2.6	%		75,000		N/A
Term loan ⁽²⁾		2.7	%		270,000		N/A

Total unsecured borrowings		2.7	%		345,000		N/A

Total borrowings		4.8	%	$	1,198,267	$	1,692,911

(1)

“Gross Investment Amount” as used here and throughout this document represents the allocated gross basis of real property, calculated in accordance with GAAP, inclusive of the effect of gross intangible lease liabilities totaling approximately $124.8 million and before accumulated depreciation and amortization of approximately $523.2 million as of December 31, 2014.

(2)	$337.0 million of our floating rate borrowings are effectively fixed by the use of fixed-for-floating rate swap instruments as of December 31, 2014. The stated interest rates disclosed above include the impact of these swaps.

The following table presents a summary of our covenants and our actual results for each of the five quarterly periods ended December 31, 2014. Results for December 31, 2014 and September 30, 2014 were calculated in accordance with the terms of our amended and restated $550 million senior unsecured term loan and revolving line of credit, which we closed on January 13, 2015. Results for June 30, 2014, March 31, 2014, and December 31, 2013 were calculated in accordance with the terms of our previous senior unsecured term loan and revolving credit agreement, which we closed in December 2012.


	Covenant			Actual as of:
	Covenant			December 31, 2014			September 30, 2014			June 30, 2014			March 31, 2014			December 31, 2013
Portfolio-Level Covenants:
Leverage		< 60	%		43.9	%		42.8	%		45.4	%		47.6	%		49.8	%
Fixed Charge Coverage		> 1.50			2.14			2.17			2.00			1.91			1.96
Secured Indebtedness		< 55	%		31.2	%		31.3	%		34.2	%		36.3	%		38.0	%
Unencumbered Pool Covenants:
Unsecured interest coverage		>2.0			9.44			9.94			21.6	%		17.6	%		16.2	%
Leverage		< 60	%		38.8	%		35.9	%		33.5	%		38.7	%		46.2	%

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FINANCE & CAPITAL (continued)

The following table presents a detailed analysis of our borrowings outstanding as of December 31, 2014 (dollar amounts in thousands).


	As of December 31, 2014
Borrowings	Principal Balance			Secured / Unsecured		Maturity Date		Extension Options		% of Total Borrowings			Fixed or Floating Interest Rate			Current Interest Rate
Repurchase Facility	$	37,023			Secured		5/30/2015		2 -1 Year		3.1	%		Floating	⁽¹⁾		2.84	%
Orleans & Whitman ⁽²⁾		21,135			Secured		7/1/2015		None		1.8	%		Fixed			6.02	%
Campus Road Office Center		33,650			Secured		7/10/2015		None		2.8	%		Fixed			4.75	%
Preston Sherry Plaza		22,469			Secured		9/1/2015		None		1.9	%		Fixed			5.85	%
Mansfield		8,369			Secured		10/1/2015		None		0.7	%		Fixed			6.03	%

Total 2015		122,646									10.2	%					4.68	%
Abington		4,735			Secured		1/1/2016		None		0.4	%		Fixed			6.75	%
Hyannis		4,688			Secured		1/1/2016		None		0.4	%		Fixed			6.75	%
Austin-Mueller Health Center (Seton)		18,065			Secured		1/1/2016		None		1.5	%		Fixed			7.50	%
40 Boulevard		8,250			Secured		1/24/2016		None		0.7	%		Floating			3.16	%
Line of Credit ⁽³⁾		75,000			Unsecured		1/31/2016		2 -1 Year		6.3	%		Floating	⁽¹⁾		2.56	%
DeGuigne		7,150			Secured		2/1/2016		None		0.6	%		Fixed			7.78	%
Washington Commons		21,300			Secured		2/1/2016		None		1.8	%		Fixed			5.94	%
1300 Connecticut		34,114			Secured		4/10/2016		None		2.8	%		Fixed			7.25	%
1300 Connecticut B Note		11,640			Secured		4/10/2016		None		1.0	%		Fixed			5.53	%
Riverport Industrial Portfolio		8,162			Secured		4/1/2016		None		0.7	%		Fixed			7.38	%
655 Montgomery		57,006			Secured		6/11/2016		None		4.8	%		Fixed			6.01	%
Jay Street		23,500			Secured		7/11/2016		None		2.0	%		Fixed			6.05	%
Bala Pointe		24,000			Secured		9/1/2016		None		2.0	%		Fixed			5.89	%
Harborside		110,934			Secured		12/10/2016		2 -1 Year		9.3	%		Fixed			5.50	%

Total 2016		408,544									34.1	%					5.40	%
Shiloh Road		22,700			Secured		1/8/2017		None		1.9	%		Fixed			5.57	%
Bandera Road		21,500			Secured		2/8/2017		None		1.8	%		Fixed			5.46	%
Eastern Retail Portfolio		110,000			Secured		6/11/2017		None		9.2	%		Fixed			5.51	%
Wareham		24,400			Secured		8/8/2017		None		2.0	%		Fixed			6.13	%
Kingston		10,574			Secured		11/1/2017		None		0.9	%		Fixed			6.33	%
Sandwich		15,825			Secured		11/1/2017		None		1.3	%		Fixed			6.33	%

Total 2017		204,999									17.1	%					5.69	%
Term Loan⁽³⁾		270,000			Unsecured		1/31/2018		None		22.5	%		Floating	⁽¹⁾		2.69	%
NOIP Fixed		173,304			Secured		7/1/2020		None		14.5	%		Fixed			5.46	%
Norwell		5,542			Secured		10/1/2022		None		0.5	%		Fixed			6.76	%
Harwich		5,623			Secured		9/1/2028		None		0.5	%		Fixed			5.24	%
New Bedford		7,918			Secured		12/1/2029		None		0.7	%		Fixed			5.91	%

Total 2018 - 2029		462,387									38.6	%					3.86	%

Total borrowings		1,198,576									100.0	%					4.78	%

Add: mark-to-market adjustment on assumed debt		1,975
Less: GAAP principal amortization on restructured debt		(2,284	)

Total Borrowings (GAAP basis)	$	1,198,267

(1)	Our repurchase facility borrowings, term loan borrowings, and $30.0 million of our line of credit borrowings are effectively fixed by the use of fixed-for-floating rate swap instruments as of December 31, 2014. The stated interest rates disclosed above include the impact of these swaps.

(2)	Subsequent to December 31, 2014, we repaid amounts due on our Orleans & Whitman mortgage note using proceeds from our line of credit.

(3)

Subsequent to December 31, 2014, we amended and restated our existing $620 million senior unsecured term loan and revolving line of credit (the “Old Facility”) to provide for a $550 million senior unsecured term loan and revolving line of credit (the “Amended Facility”). At that time, we repaid $380.0 million we owed on the Old Facility using borrowings from our Amended Facility, specifically (i) revolving credit facility borrowings of $280.0 million, which will mature in 2019, subject to one 12-month extension option, and (ii) term loan borrowings of $100.0 million, which will mature in 2018, subject to two 12-month extension options.

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REAL PROPERTIES

The following table describes our operating property portfolio as of December 31, 2014 (dollar and square feet amounts in thousands):


Market	Number of Properties		Gross Investment Amount		Net Rentable Square Feet		Secured Indebtedness⁽¹⁾		% of Gross Investment Amount			% of Total Net Rentable Square Feet			% Leased⁽²⁾
Office Properties:
Washington, DC		3	$	282,674		878	$	59,510		11.4	%		7.4	%		99.3	%
Northern New Jersey		2		249,797		807		127,012		10.1	%		6.8	%		100.0	%
East Bay, CA		1		145,242		405		—		5.9	%		3.4	%		100.0	%
San Francisco, CA		1		118,697		270		57,006		4.8	%		2.3	%		89.6	%
Dallas, TX		3		118,663		620		45,950		4.8	%		5.2	%		94.9	%
Denver, CO		1		86,366		257		—		3.5	%		2.2	%		95.0	%
Los Angeles, CA		3		77,308		450		31,104		3.1	%		3.8	%		75.3	%
Silicon Valley, CA		2		61,844		196		30,650		2.5	%		1.7	%		84.4	%
Princeton, NJ		1		51,239		167		33,650		2.1	%		1.4	%		100.0	%
Miami, FL		1		48,244		240		19,056		2.0	%		2.0	%		100.0	%
Chicago, IL		2		48,004		305		29,550		1.9	%		2.6	%		87.9	%
Austin, TX		1		44,978		156		18,065		1.8	%		1.3	%		100.0	%
Philadelphia, PA		1		41,966		173		24,000		1.7	%		1.5	%		95.5	%
Minneapolis/St Paul, MN		1		29,504		107		—		1.2	%		0.9	%		100.0	%
Fayetteville, AR		1		11,695		63		—		0.5	%		0.5	%		100.0	%

Total Office: 24 properties, 15 markets with average annual rent of $26.75 per sq. ft.		24		1,416,221		5,094		475,553		57.3	%		43.0	%		94.8	%
Industrial Properties:
Los Angeles, CA		1		78,159		107		16,647		3.2	%		0.9	%		100.0	%
Dallas, TX		2		43,928		567		26,205		1.8	%		4.8	%		48.9	%
Houston, TX		1		41,338		465		18,235		1.7	%		3.9	%		100.0	%
Central Kentucky		1		27,053		727		11,390		1.1	%		6.1	%		100.0	%
Louisville, KY		4		26,626		736		8,162		1.1	%		6.2	%		100.0	%
Cleveland, OH		1		23,805		230		8,543		1.0	%		1.9	%		100.0	%
Chicago, IL		1		20,660		575		8,762		0.8	%		4.8	%		100.0	%
Denver, CO		1		6,232		85		2,749		0.3	%		0.7	%		100.0	%

Total Industrial: 12 properties, eight markets with average annual rent of $5.63 per sq. ft.		12		267,801		3,492		100,693		11.0	%		29.3	%		91.8	%
Retail Properties:
Greater Boston		26		509,525		2,147		108,807		20.5	%		18.0	%		94.1	%
Philadelphia, PA		1		104,955		426		67,800		4.2	%		3.6	%		100.0	%
Washington, DC		1		62,516		233		—		2.5	%		2.0	%		98.4	%
Raleigh, NC		1		45,281		142		26,200		1.8	%		1.2	%		97.9	%
San Antonio, TX		1		32,065		161		21,500		1.3	%		1.4	%		89.6	%
Jacksonville, FL		1		19,494		73		—		0.8	%		0.6	%		54.4	%
Pittsburgh, PA		1		15,068		103		16,000		0.6	%		0.9	%		94.1	%

Total Retail: 32 properties, seven markets with average annual rent of $16.11 per sq. ft.		32		788,904		3,285		240,307		31.7	%		27.7	%		94.2	%

Grand Total/Weighted Average		68	$	2,472,926		11,871	$	816,553		100.0	%		100.0	%		93.7	%

(1)	Secured indebtedness represents the principal balance outstanding and does not include our mark-to-market adjustment on debt or GAAP principal amortization on our troubled debt restructuring.

(2)	Based on executed leases as of December 31, 2014.

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LEASING ACTIVITY

The following graphs highlight our total portfolio and same store portfolio percentage leased at the end of each of the five quarters ended December 31, 2014, by segment and in total:

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LEASING ACTIVITIES (continued)

The following table presents our lease expirations, by segment and in total, as of December 31, 2014 (dollars and square feet in thousands):


	Total									Office						Industrial						Retail
Year	Number of Leases Expiring		Annualized Base Rent		% of Total Annualized Base Rent			Square Feet		Number of Leases Expiring		Annualized Base Rent		Square Feet		Number of Leases Expiring		Annualized Base Rent		Square Feet		Number of Leases Expiring		Annualized Base Rent		Square Feet
2015⁽¹⁾		141	$	13,202		6.7	%		1,029		82	$	7,016		394		3	$	1,032		279		56	$	5,154		356
2016		75		22,882		11.6	%		1,034		47		18,686		702		1		726		121		27		3,470		211
2017		70		45,764		23.2	%		1,878		37		37,211		961		4		4,674		604		29		3,879		313
2018		84		9,430		4.8	%		413		58		7,456		301		1		39		3		25		1,935		109
2019		99		32,197		16.3	%		1,621		59		23,383		971		2		1,143		212		38		7,671		438
2020		61		14,908		7.6	%		723		26		5,476		231		—		—		—		35		9,432		492
2021		25		16,590		8.4	%		1,758		14		9,587		417		4		4,885		1,251		7		2,118		90
2022		21		8,927		4.5	%		515		12		4,470		196		—		—		—		9		4,457		319
2023		20		17,489		8.9	%		835		11		13,398		553		—		—		—		9		4,091		282
2024		17		3,432		1.8	%		239		4		830		32		—		—		—		13		2,602		207
Thereafter		19		12,206		6.2	%		1,081		2		1,614		70		3		5,542		733		14		5,050		278

Total		632	$	197,027		100.0	%		11,126		352	$	129,127		4,828		18	$	18,041		3,203		262	$	49,859		3,095

(1)	Includes leases that are on a month-to-month basis.

The following table presents our top 10 tenants by annualized base rent and their related industry sector, as of December 31, 2014 (dollars and square feet in thousands):


	Tenant	Locations	Industry Sector	Annualized Base Rent ⁽¹⁾		% of Total Annualized Base Rent			Square Feet		% of Occupied Square Feet
1	Charles Schwab & Co, Inc	1	Securities, Commodities, Fin. Inv./Rel. Activites	$	22,992		11.7	%		594		5.3	%
2	Sybase	1	Publishing Information (except Internet)		17,971		9.1	%		405		3.6	%
3	Northrop Grumman	2	Professional, Scientific and Technical Services		17,928		9.1	%		699		6.3	%
4	Stop & Shop	16	Food and Beverage Stores		14,885		7.5	%		933		8.4	%
5	Nokia Siemens Networks US LLC	1	Telecommunications		5,143		2.6	%		294		2.6	%
6	CEVA Freight/Logistics	2	Truck Transportation		4,490		2.3	%		550		4.9	%
7	Novo Nordisk	1	Chemical Manufacturing		4,444		2.3	%		167		1.5	%
8	Seton Health Care	1	Hospitals		4,339		2.2	%		156		1.4	%
9	Crawford and Company	1	Insurance Carriers and Related Activities		3,951		2.0	%		240		2.2	%
10	Shaw’s Supermarket	4	Food and Beverage Stores		3,873		2.0	%		240		2.2	%

	Total	30		$	100,016		50.8	%		4,278		38.4	%

(1)	Annualized base rent represents the annualized monthly base rent of executed leases as of December 31, 2014.

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LEASING ACTIVITIES (continued)

The following series of tables details leasing activity during the four quarters ended December 31, 2014:


Quarter	Number of Leases Signed		Gross Leasable Area (“GLA”) Signed		Average Rent Per Sq. Ft.		Average Growth /Straight Line Rent			Weighted Average Lease term (mos)		Tenant Improvements & Incentives Per Sq. Ft.		Average Free Rent (mos)
Office Comparable ⁽¹⁾
Q4 2014		9		34,887	$	29.69		12.6	%		55	$	8.32		2.8
Q3 2014		10		87,176		25.26		10.8	%		94		18.62		2.0
Q2 2014		11		32,049		18.64		44.4	%		53		14.81		1.3
Q1 2014		13		164,869		13.67		-3.3	%		40		6.32		0.4

Total - twelve months		43		318,981	$	20.96		8.2	%		58	$	10.76		1.2

Industrial Comparable ⁽¹⁾
Q4 2014		1		50,500	$	3.82		155.2	%		124	$	7.30		4.0
Q3 2014		3		852,000		3.25		-4.2	%		74		3.65		1.7
Q2 2014		—		—		—		—			—		—		—
Q1 2014		2		177,965		4.10		25.7	%		28		0.46		0.6

Total - twelve months		6		1,080,465	$	3.36		3.3	%		69	$	3.30		1.6

Retail Comparable ⁽¹⁾
Q4 2014		14		49,789	$	24.67		7.0	%		42	$	0.75		—
Q3 2014		9		32,770		23.54		7.7	%		44		0.65		—
Q2 2014		15		69,035		21.17		14.0	%		62		2.51		—
Q1 2014		13		155,852		18.39		8.8	%		61		0.67		—

Total - twelve months		51		307,446	$	20.26		9.5	%		57	$	1.09		—

Total Comparable Leasing ⁽¹⁾
Q4 2014		24		135,176	$	12.93		14.9	%		76	$	5.15		2.2
Q3 2014		22		971,946		6.13		2.1	%		75		4.90		1.7
Q2 2014		26		101,084		20.45		21.5	%		59		6.41		0.4
Q1 2014		28		498,686		13.57		6.3	%		42		2.46		0.3

Total - twelve months		100		1,706,892	$	8.96		7.3	%		65	$	4.29		1.3

Total Leasing
Q4 2014		35		214,761	$	13.83					53	$	5.32		1.6
Q3 2014		31		1,055,135		6.76					74		6.32		1.7
Q2 2014		32		113,278		20.49					58		7.68		0.6
Q1 2014		39		623,432		15.89					40		5.63		0.4

Total - twelve months		137		2,006,606	$	10.04					60	$	6.07		1.3

(1)

Comparable leases comprise leases for which prior leases were in place for the same suite within 12 months of executing a new lease. Comparable leases must have terms of at least six months and the square footage of the suite occupied by the prior tenant cannot be more or less than 50% different from the size of the new lease’s suite.

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INVESTMENT ACTIVITY

The following tables describe changes in our portfolio from December 31, 2012 through December 31, 2014 (dollars and square feet in thousands):


	Number of Properties			Square Feet
Properties and Square Feet Activity	Number of Properties			Total			Office			Industrial			Retail
Properties owned as of
December 31, 2012		94			19,086			7,053			8,965			3,068
2013 Acquisitions		1			269			269			—			—
2013 Dispositions		(13	)		(4,111	)		(2,192	)		(1,919	)		—
Building remeasurement and other ⁽¹⁾		—			6			2			—			4

December 31, 2013		82			15,250			5,132			7,046			3,072
Q1 2014 Dispositions		(14	)		(3,598	)		(102	)		(3,386	)		(110	)
Q2 2014 Acquisitions		1			138			—			—			138
Q2 2014 Dispositions		(1	)		(60	)		(60	)		—			—
Q3 2014 Acquisitions		1			262			262			—			—
Q4 2014 Acquisitions		1			185			—			—			185
Q4 2014 Dispositions		(2	)		(315	)		(138	)		(177	)		—
Building remeasurement and other ⁽¹⁾		—			9			—			9			—

December 31, 2014		68			11,871			5,094			3,492			3,285

(1)	Building remeasurements reflect changes in gross leasable area due to renovations or expansions of existing properties.


Property acquisitions	Location		Acquisition Date		Number of Properties		Purchase Price		Square Feet
2013:
655 Montgomery ⁽¹⁾		San Francisco, CA		11/7/2013		1	$	109,710		269
2014:
Durgin Square		Portsmouth, NH		5/28/2014		1	$	24,700		138
1st Avenue Plaza		Denver, CO		8/22/2014		1		75,000		262
Salt Pond		Narragansett, RI		11/4/2014		1		39,160		185

Total 2014						3	$	138,860		585

(1)	Related to this acquisition, we assumed a mortgage note with an outstanding principal balance of $57.9 million and an estimated fair value of $61.7 million as of the acquisition date.

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INVESTMENT ACTIVITY (continued)

Property dispositions

Segment

Location

Disposition
Date

Number
of
Properties

Sales Price

Square
Feet

(dollars and square feet in thousands)

During 2013

Waterview Parkway

Office

Dallas, TX

1/13/2013

8,500

Column Loan Portfolio

Industrial

Various

⁽¹⁾

5/10/2013

85,935

1,918

Comerica Bank Tower ⁽²⁾

Office

Dallas, TX

5/31/2013

122,231

1,509

Crown Colony Drive

Office

Boston, MA

6/6/2013

25,500

132

Inverness Drive West

Office

Denver, CO

7/31/2013

71,000

257

Millennium Drive

Office

Denver, CO

9/13/2013

58,100

133

North Fairway Drive

Office

Chicago, IL

10/15/2013

18,000

100

Total for the year ended December 31, 2013

389,266

4,111

During 2014

Industrial Portfolio

Industrial

Various

⁽³⁾

1/22/2014

175,000

3,387

Cranston

Retail

Cranston, RI

2/18/2014

6,750

110

Shackleford

Office

Little Rock, AR

2/25/2014

19,550

102

Shadelands

Office

East Bay, CA

6/13/2014

5,700

Lundy ⁽⁴⁾

Industrial

Silicon Valley, CA

10/15/2014

13,579

177

South Havana

Office

Denver, CO

11/7/2014

9,100

138

Total for the year ended December 31, 2014

229,679

3,974

(1)	The Column Loan Portfolio comprised seven industrial buildings located in the Atlanta, GA, Central Pennsylvania, Charlotte, NC, Chicago, IL, Philadelphia, PA, and Sacramento, CA markets.

(2)	Sales price for the Comerica Bank Tower property represents our carrying value of the mortgage note on the property. Due to the contractual balance of the mortgage note, we did not receive any proceeds from the sale of Comerica Bank Tower.

(3)	The Industrial Portfolio comprised 12 industrial buildings located in the Atlanta, GA, Cincinnati, OH, Central Pennsylvania, Columbus, OH, Dallas, TX, Indianapolis, IN, and Minneapolis, MN markets.

(4)	Sales price for the Lundy property represents the principal balance outstanding of the mortgage note on the property as of the date of the foreclosure sale. Due to the contractual balance of the mortgage note, we did not receive any proceeds from the sale of Lundy.

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DEFINITIONS

This section contains an explanation of certain non-GAAP financial measures we provide in other sections of this document, as well as the reasons why management believes these measures provide useful information to investors about the Company’s financial condition or results of operations. Additional detail can be found in the Portfolio’s most recent annual report on Form 10-K and quarterly report on Form 10-Q, as well as other documents filed with or furnished to the Securities and Exchange Commission from time to time.

2014 Annual Report on Form 10-K

We refer to our Annual Report on Form 10-K for the period ended December 31, 2014, filed with the Securities and Exchange Commission on March 3, 2015, as our “2014 Annual Report on Form 10-K.”

Annualized Base Rent

Annualized base rent represents the annualized monthly base rent of leases executed as of December 31, 2014.

Comparable leases

Fair Value as determined by our NAV Valuation Procedures

When the fair value of our real estate assets is calculated for the purposes of determining our NAV per share, the calculation is done using the fair value methodologies detailed within the Financial Accounting Standards Board Accounting Standards Codification under Topic 820, Fair Value Measurements and Disclosures (“ASC Topic 820”). However, our valuation procedures and our NAV are not subject to GAAP and will not be subject to independent audit. In the determination of our NAV, the value of certain of our assets and liabilities are generally determined based on their carrying amounts under GAAP; however, those principles are generally based upon historic cost and therefore may not be determined in accordance with ASC Topic 820. Readers should refer to our audited financial statements for our net book value determined in accordance with GAAP from which one can derive our net book value per share by dividing our stockholders’ equity by shares of our common stock outstanding as of the date of measurement.

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DEFINITIONS (continued)

Funds From Operations (“FFO”)

We believe that FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), is a meaningful supplemental measure of our operating performance because historical cost accounting for real estate assets in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) implicitly assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization expense. However, since real estate values have historically risen or fallen with market and other conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient. Thus, NAREIT created FFO as a supplemental measure of operating performance for real estate investment trusts that consists of net income (loss), calculated in accordance with GAAP, plus real estate-related depreciation and amortization and impairment of depreciable real estate, less gains (or losses) from dispositions of real estate held for investment purposes.

Company-Defined FFO

As part of its guidance concerning FFO, NAREIT has stated that the “management of each of its member companies has the responsibility and authority to publish financial information that it regards as useful to the financial community.” As a result, modifications to FFO are common among REITs as companies seek to provide financial measures that meaningfully reflect the specific characteristics of their businesses. In addition to the NAREIT definition of FFO and other GAAP measures, we provide a Company-Defined FFO measure that we believe is helpful in assisting management and investors assess the sustainability of our operating performance. As described further below, our Company-Defined FFO presents a performance metric that adjusts for items that we do not believe to be related to our ongoing operations. In addition, these adjustments are made in connection with calculating certain of the Company’s financial covenants including its interest coverage ratio and fixed charge coverage ratio and therefore we believe this metric will help our investors better understand how certain of our lenders view and measure the financial performance of the Company and ultimately its compliance with these financial covenants. However, no single measure can provide users of financial information with sufficient information and only our disclosures read as a whole can be relied upon to adequately portray our financial position, liquidity and results of operations.

Our Company-Defined FFO is derived by adjusting FFO for the following items: acquisition-related expenses and gains and losses associated with extinguishment of debt and financing commitments. Historically, Management has also adjusted FFO for certain other adjustments that did not occur in any of the periods presented, and are further described in Item 7 of Part II of our 2014 Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—How We Measure Our Performance.” Management’s evaluation of our future operating performance excludes these items based on the following economic considerations:

Acquisition-related expenses — For GAAP purposes, expenses associated with the acquisition of real property, including acquisition fees paid to our Advisor and gains or losses related to the change in fair value of contingent consideration related to the acquisition of real property, are recorded to earnings. We believe by excluding acquisition-related expenses, Company-Defined FFO provides useful supplemental information for management and investors when evaluating the sustainability of our operating performance, because these types of expenses are directly correlated to our investment activity rather than our ongoing operating activity.

Gains and losses on derivatives and on the extinguishment of debt and financing commitments — Gains and losses on derivatives represent the gains or losses on the fair value of derivative instruments that are not accounted for as hedges of the underlying financing transactions. Such gains and losses may be due to the nonoccurrence of forecasted financings or ineffectiveness due to changes in the expected terms of financing transactions. As these gains or losses relate to underlying long-term assets and liabilities, where we are not speculating or trading assets, our management believes that any such gains or losses are not reflective of our ongoing operations. Losses on extinguishment of debt and financing commitments represent losses incurred as a result of the early retirement of debt obligations and breakage costs and fees incurred related to certain of our derivatives and other financing commitments. Such losses may be due to dispositions of assets, the repayment of debt prior to its contractual maturity or the nonoccurrence of forecasted financings. Our management believes that any such losses are not related to our ongoing operations. Accordingly, we believe by excluding anticipated gains or losses on derivatives and losses on extinguishment of debt and financing commitments, Company-Defined FFO provides useful supplemental information for management and investors when evaluating the sustainability of our operating performance.

We also believe that Company-Defined FFO allows investors and analysts to compare the performance of our portfolio with other REITs that are not currently affected by the adjusted items. In addition, as many other REITs adjust FFO to exclude the items described above, we believe that our calculation and reporting of Company-Defined FFO may assist investors and analysts in comparing our performance with that of other REITs. However, because Company-Defined FFO excludes items that are an important component in an analysis of our historical performance, such supplemental measure should not be construed as a complete historical performance measure and may exclude items that have a material effect on the value of our common stock.

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DEFINITIONS (continued)

Limitations of FFO and Company-Defined FFO

FFO (both NAREIT-defined and Company-Defined) is presented herein as a supplemental financial measure and has inherent limitations. We do not use FFO or Company-Defined FFO as, nor should they be considered to be, an alternative to net income (loss) computed under GAAP as an indicator of our operating performance, or as an alternative to cash from operating activities computed under GAAP, or as an indicator of liquidity or our ability to fund our short or long-term cash requirements, including distributions to stockholders. Management uses FFO and Company-Defined FFO as indications of our future operating performance and as a guide to making decisions about future investments. Our FFO and Company-Defined FFO calculations do not present, nor do we intend them to present, a complete picture of our financial condition and operating performance. In addition, other REITs may define FFO and an adjusted FFO metric differently and choose to treat impairment charges, acquisition-related expenses and potentially other accounting line items in a manner different from us due to specific differences in investment strategy or for other reasons; therefore, comparisons with other REITs may not be meaningful. Our Company-Defined FFO calculation is limited by its exclusion of certain items previously discussed, but we continuously evaluate our investment portfolio and the usefulness of our Company-Defined FFO measure in relation thereto. We believe that net income (loss) computed under GAAP remains the primary measure of performance and that FFO or Company-Defined FFO are only meaningful when they are used in conjunction with net income (loss) computed under GAAP. Further, we believe that our consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of our financial condition and operating performance.

Specifically with respect to fees and expenses associated with the acquisition of real property, which are excluded from Company-Defined FFO, such fees and expenses are characterized as operational expenses under GAAP and included in the determination of net income (loss) and income (loss) from operations, both of which are performance measures under GAAP. The purchase of operating properties is a key strategic objective of our business plan focused on generating operating income and cash flow in order to fund our obligations and to make distributions to investors. However, as the corresponding acquisition-related costs are paid in cash, these acquisition-related costs negatively impact our GAAP operating performance and our GAAP cash flows from operating activities during the period in which properties are acquired. In addition, if we acquire a property after all offering proceeds from our public offerings have been invested, there will not be any offering proceeds to pay the corresponding acquisition-related costs. Accordingly, such costs will then be paid from other sources of cash such as additional debt proceeds, operational earnings or cash flow, net proceeds from the sale of properties, or other ancillary cash flows. Among other reasons as previously discussed, the treatment of acquisition-related costs is a reason why Company-Defined FFO is not a complete indicator of our overall financial performance, especially during periods in which properties are being acquired. Note that, pursuant to our valuation policies, acquisition expenses result in an immediate decrease to our NAV.

FFO and Company-Defined FFO may not be useful performance measures as a result of the various adjustments made to net income for the charges described above to derive such performance measures. Specifically, we intend to operate as a perpetual-life vehicle and, as such, it is likely for our operating results to be negatively affected by certain of these charges in the future, specifically acquisition-related expenses, as it is currently contemplated as part of our business plan to acquire additional investment properties which would result in additional acquisition-related expenses. Any change in our operational structure would cause the non-GAAP measure to be re-evaluated as to the relevance of any adjustments included in the non-GAAP measure. As a result, we caution investors against using FFO or Company-Defined FFO to determine a price to earnings ratio or yield relative to our NAV.

Further, FFO or Company-Defined FFO is not comparable to the performance measure established by the Investment Program Association (the “IPA”), referred to as “modified funds from operations,” or “MFFO,” as MFFO makes further adjustments including certain mark-to-market items and adjustments for the effects of straight-line rent. As such, FFO and Company-Defined FFO may not be comparable to the MFFO of non-listed REITs that disclose MFFO in accordance with the IPA standard. More specifically, Company-Defined FFO has limited comparability to the MFFO and other adjusted FFO metrics of those REITs that do not intend to operate as perpetual-life vehicles as such REITs have a defined acquisition stage. Because we do not have a defined acquisition stage, we may continue to acquire real estate and real estate-related investments for an indefinite period of time. Therefore, Company-Defined FFO may not reflect our future operating performance in the same manner that the MFFO or other adjusted FFO metrics of a REIT with a defined acquisition stage may reflect its operating performance after the REIT had completed its acquisition stage.

Neither the Securities and Exchange Commission nor any other regulatory body, nor NAREIT, has adopted a set of standardized adjustments that includes the adjustments that we use to calculate Company-Defined FFO. In the future, the Securities and Exchange Commission or another regulatory body, or NAREIT, may decide to standardize the allowable adjustments across the non-listed REIT industry at which point we may adjust our calculation and characterization of Company-Defined FFO.

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LOGO

DEFINITIONS (continued)

Gross Investment Amount

The allocated gross basis of real property and debt related investments, after certain adjustments. Gross Investment Amount for real property (i) includes the effect of intangible lease liabilities, (ii) excludes accumulated depreciation and amortization on, and (iii) includes the impact of impairments. Amounts reported for debt related investments represent our net accounting basis of the debt investments, which includes (i) unpaid principal balances, (ii) unamortized discounts, premiums, and deferred charges, and (iii) allowances for loan loss.

Net Operating Income (“NOI”) and NOI – Cash Basis

We also use NOI as a supplemental financial performance measure because NOI reflects the specific operating performance of our real properties and debt related investments and excludes certain items that are not considered to be controllable in connection with the management of each property, such as other-than-temporary impairment, gains and losses related to provisions for losses on debt related investments, gains or losses on derivatives, acquisition-related expenses, losses on extinguishment of debt and financing commitments, interest income, depreciation and amortization, general and administrative expenses, asset management fees, interest expense and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our financial performance as a whole, since it does exclude such items that could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance. “NOI – Cash Basis” is NOI after eliminating the effects of straight-lining of rent and the impact of above- and below-market lease amortization and other non-cash amortization adjustments to rental revenue.

Non-Recurring Capital Expenditures

We classify capital expenditures that significantly increase a property’s ability to generate additional revenues relative to our initial underwriting as non-recurring capital expenditures. Examples of such capital expenditures may include property expansions, renovations or other significant strategic upgrades. Conversely, we classify capital expenditures incurred to maintain a property’s ability to generate expected revenues as “recurring.” In addition, we also classify the following capital expenditures as non-recurring:

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First Generation Leasing Costs: We classify capital expenditures incurred to lease spaces for which we have either (i) never had a tenant or (ii) we expected a vacancy of the leasable space within two years of acquisition as non-recurring capital expenditures.

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Value-Add Acquisitions: We define a Value-Add Acquisition as a property that we acquire with one or more of the following characteristics: (i) existing vacancy equal to or in excess of 20%, (ii) short-term lease roll-over, typically during the first two years of ownership, that results in vacancy in excess of 20% when combined with the existing vacancy at the time of acquisition or (iii) significant capital improvement requirements in excess of 20% of the purchase price within the first two years of ownership. We classify any capital expenditures in Value-Add Acquisitions as non-recurring until the property reaches the earlier of (i) stabilization, which we define as 90% leased or (ii) five years after the date we acquire the property.

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Other Acquisitions: For property acquisitions that do not meet the criteria to qualify as Value-Add Acquisitions, we classify all anticipated capital expenditures within the first year of ownership as non-recurring.

Same Store Properties

In our analysis of NOI, particularly to make comparisons of NOI between periods meaningful, it is important to provide information for properties that were in-service and owned by us throughout each period presented. We refer to properties acquired or placed in-service prior to the beginning of the earliest period presented and owned by us through the end of the latest period presented as “Same Store Properties.” “Same Store Properties” therefore exclude properties placed in-service, acquired, repositioned, or in development or redevelopment after the beginning of the earliest period presented or disposed of prior to the end of the latest period presented. Accordingly, it takes at least one year and one quarter after a property is acquired or treated as “in-service” for that property to be included in “Same Store Properties.” For the purposes of this supplement, our “Same Store Properties” include properties classified as held for sale in our annual financial statements at the end of the most recently completed period.

Valuation Procedures

We refer to our Valuation Procedures filed as Exhibit 99.1 to our 2014 Annual Report on Form 10-K as our “Valuation Procedures.”

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Black Creek Diversified Property Fund Inc. - FORM 8-K - EX-99.2 - March 3, 2015

Attached files

Black Creek Diversified Property Fund Inc. Reports