Form 10-K

10-K 1 d10k.htm FORM 10-K Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2010

TRANSITION

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

For the transition period from to .

Commission File Number: 0-20625

DUKE REALTY LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Its Charter)


Indiana		35-1898425
(State or Other Jurisdiction of Incorporation or Organization)		(IRS Employer Identification Number)

600 East 96^th Street, Suite 100 Indianapolis, Indiana		46240
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (317) 808-6000

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

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

Indicate by check mark whether the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes X No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes No X

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes No

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer Accelerated filer Non-accelerated filer X Smaller reporting company

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

The aggregate market value of Limited Partner Units held by non-affiliates of the registrant is $65.8 million based on the last reported sale price of the common shares of Duke Realty Corporation on June 30, 2010 into which Limited Partner Units are exchangeable.

The aggregate number of Common Units outstanding as of February 25, 2011 was 259,331,061.

DOCUMENTS INCORPORATED BY REFERENCE

Certain portions of the registrant’s General Partner’s Proxy Statement for its 2011 Annual Meeting of Shareholders (the “Proxy Statement”) to be filed pursuant to Rule 14a-6 of the Securities Exchange Act of 1934, as amended, are incorporated by reference into this Form 10-K. Other than those portions of the Proxy Statement specifically incorporated by reference pursuant to Items 10 through 14 of Part III hereof, no other portions of the Proxy Statement shall be deemed so incorporated.

TABLE OF CONTENTS

Form 10-K


Item No.			Page(s)

PART I

	1.	Business		2 - 6
	1A.	Risk Factors		6 - 14
	1B.	Unresolved Staff Comments		15
	2.	Properties		15 - 17
	3.	Legal Proceedings		18
	4.	Reserved		18
PART II
	5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		18 - 19
	6.	Selected Financial Data		20
	7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		21 - 48
	7A.	Quantitative and Qualitative Disclosures About Market Risk		48 - 49
	8.	Financial Statements and Supplementary Data		49
	9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure		49
	9A.	Controls and Procedures		49 - 50
	9B.	Other Information		50
PART III
	10.	Directors and Executive Officers of the Registrant		50 - 51
	11.	Executive Compensation		51
	12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		51
	13.	Certain Relationships and Related Transactions, and Director Independence		51
	14.	Principal Accountant Fees and Services		51
PART IV
	15.	Exhibits and Financial Statement Schedules		51 - 112
Signatures				113 - 114

IMPORTANT INFORMATION ABOUT THIS REPORT

In this Annual Report on Form 10-K (this “Report”), the words “the Partnership,” “we,” “us” and “our” refer to Duke Realty Limited Partnership and its subsidiaries, as well as Duke Realty Limited Partnership’s predecessors and their subsidiaries. The “General Partner” refers to our parent, Duke Realty Corporation.

Cautionary Notice Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this Report, including, without limitation, those related to our future operations, constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words “believe,” “estimate,” “expect,” “anticipate,” “intend,” “plan,” “seek,” “may” and similar expressions or statements regarding future periods are intended to identify forward-looking statements.

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

•

Changes in general economic and business conditions, including, without limitation, the continuing impact of the economic down-turn, which is having and may continue to have a negative effect on the fundamentals of our business, the financial condition of our tenants, and the value of our real estate assets;

•

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

•

Heightened competition for tenants and potential decreases in property occupancy;

•

Potential changes in the financial markets and interest rates;

•

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

•

Our continuing ability to raise funds on favorable terms;

•

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

•

Potential increases in real estate construction costs;

•

Our ability to successfully dispose of properties on terms that are favorable to us;

•

Our ability to retain our current credit ratings;

•

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

•

Other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in the Partnership’s and the General Partner’s other reports and other public filings with the Securities and Exchange Commission (“SEC”).

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

This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included under the caption “Risk Factors” in this Report, and is updated by us from time to time in Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings that we make with the SEC.

PART I

Item 1. Business

Background

The Partnership was formed on October 4, 1993, when Duke Realty Corporation (the “General Partner”) contributed all of its properties and related assets and liabilities, together with the net proceeds of $309.2 million from an offering of an additional 14,000,833 shares of its common stock, to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest. The General Partner was formed in 1985 and we believe it qualifies as a REIT under provisions of the Internal Revenue Code of 1986, as amended (the “Code”). The General Partner is the sole general partner of the Partnership, owning 98.0% of the common Partnership interest as of December 31, 2010 (“General Partner Units”). The remaining 2.0% of the Partnership’s common interest is owned by limited partners (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”). Limited Partners have the right to redeem their Limited Partner Units, subject to certain restrictions. Pursuant to the Partnership Agreement, the General Partner is obligated to redeem the Limited Partner Units in shares of its common stock, unless it determines in its reasonable discretion that the issuance of shares of its common stock could cause it to fail to qualify as a REIT. Each Limited Partner Unit shall be redeemed for one share of the General Partner’s common stock, or, in the event that the issuance of shares could cause the General Partner to fail to qualify as a REIT, cash equal to the fair market value of one share of the General Partner’s common stock at the time of redemption, in each case, subject to certain adjustments described in the Partnership Agreement. The Limited Partner Units are not required, per the terms of the Partnership Agreement, to be redeemed in registered shares of the General Partner. The General Partner also owns preferred partnership interests in the Partnership (“Preferred Units”). As of December 31, 2010, our diversified portfolio of 793 rental properties (including 114 jointly controlled in-service properties with approximately 22.7 million square feet, eight consolidated properties under development with approximately 2.9 million square feet and two jointly controlled properties under development with approximately 866,000 square feet) encompasses approximately 140.5 million rentable square feet and is leased by a diverse base of approximately 3,600 tenants whose businesses include government services, manufacturing, retailing, wholesale trade, distribution, healthcare and professional services. We also own, including through ownership interests in unconsolidated joint ventures, approximately 4,800 acres of land and control an additional 1,650 acres through purchase options.

Our headquarters and executive offices are located in Indianapolis, Indiana. In addition, we have 17 regional offices located in Alexandria, Virginia; Atlanta, Georgia; Baltimore, Maryland; Chicago, Illinois; Cincinnati, Ohio; Columbus, Ohio; Dallas, Texas; Houston, Texas; Minneapolis, Minnesota; Nashville, Tennessee; Orlando, Florida; Phoenix, Arizona; Raleigh, North Carolina; St. Louis, Missouri; Savannah, Georgia; Tampa, Florida; and Weston, Florida. We had approximately 1,000 employees as of December 31, 2010.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for information related to our operations, asset and capital strategies.

Reportable Operating Segments

The third reportable segment consists of providing various real estate services such as property management, asset management, maintenance, leasing, development and construction management to third-party property owners and joint ventures, and is collectively referred to as “Service Operations.” Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise. Our Service Operations segment also includes our taxable REIT subsidiary, a legal entity through which certain of the segment’s operations are conducted. Through our Service Operations reportable segment, we have historically developed or acquired properties with the intent to sell (hereafter referred to as “Build-for-Sale” properties). Build-for-Sale properties were generally identified as such prior to construction commencement and were sold within a relatively short time after being placed in service. Build-for-Sale properties, which are no longer part of our operating strategy, did not represent a significant component of our operations in 2010 or 2009.

We assess and measure our overall operating results based upon an industry performance measure referred to as Funds From Operations (“FFO”), which management believes is a useful indicator of our consolidated operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of an equity REIT like our General Partner. The National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from net income determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). FFO is a non-GAAP financial measure. The most comparable GAAP measure is net income (loss) attributable to common unitholders. Consolidated FFO attributable to common unitholders should not be considered as a substitute for net income (loss) attributable to common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT.

Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP and gains or losses from sales of previously depreciated real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures.

Management believes that the use of consolidated FFO attributable to common unitholders, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that, by excluding gains or losses related to sales of previously depreciated real estate assets and excluding real estate asset depreciation and amortization, investors and analysts are able to readily identify the operating results of the long-term assets that form the core of a REIT’s activity and assist in comparing these operating results between periods or as compared to different companies.

See Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Financial Statements and Supplementary Data” for financial information related to our reportable segments.

Competitive Conditions

As a fully integrated commercial real estate firm, we provide in-house leasing, management, development and construction services which, coupled with our significant base of commercially zoned and unencumbered land in existing business parks, should give us a competitive advantage both as a real estate operator and in future development activities.

We believe that the management of real estate opportunities and risks can be done most effectively at regional or local levels. As a result, we intend to continue our emphasis on increasing our market share and effective rents in the primary markets where we own properties. We believe that this regional focus will allow us to assess market supply and demand for real estate more effectively as well as to capitalize on the strong relationships with our tenant base. In addition, we seek to further capitalize on strong customer relationships to provide third-party construction services across the United States. As a fully integrated real estate company, we are able to arrange for or provide to our industrial, office and medical office customers not only well located and well maintained facilities, but also additional services such as build-to-suit construction, tenant finish construction, and expansion flexibility.

All of our properties are located in areas that include competitive properties. Institutional investors, REITs or local real estate operators generally own such properties; however, no single competitor or small group of competitors is dominant in our current markets. The supply and demand of similar available rental properties may affect the rental rates we will receive on our properties. Other competitive factors include the attractiveness of the property location, the quality of the property and tenant services provided, and the reputation of the owner and operator. In addition, our Service Operations face competition from a considerable number of other real estate companies that provide comparable services, some of whom may have greater marketing and financial resources than are available to us.

Corporate Governance

As a limited partnership that has one general partner owning over 90% of the Partnership’s common interest, the governance of the Partnership is necessarily linked to the corporate governance of the General Partner. Summarized below are the highlights of the General Partner’s Corporate Governance initiatives.


Board Composition		• The General Partner’s Board is controlled by supermajority (90.9%) of “Independent Directors”, as such term is defined under the rules of the New York Stock Exchange (the “NYSE”) as of January 30, 2011 and thereafter

Board Committees		• The General Partner’s Board Committee members are all Independent Directors



Lead Director		• The Chairman of the General Partner’s Corporate Governance Committee serves as Lead Director of the General Partner’s Independent Directors

Board Policies		• No Shareholder Rights Plan (Poison Pill) • Code of Conduct applies to all Directors and employees of the General Partner, including the Chief Executive Officer and senior financial officers; waivers require the vote of a majority of the General Partner’s Board of Directors or the General Partner’s Corporate Governance Committee. • Effective orientation program for new Directors of the General Partner • Independence of Directors of the General Partner is reviewed annually • Independent Directors of the General Partner meet at least quarterly in executive sessions • Independent Directors of the General Partner receive no compensation from the General Partner other than as Directors • Equity-based compensation plans require the General Partner’s shareholder approval • Board effectiveness and performance is reviewed annually by the General Partner’s Corporate Governance Committee • The General Partner’s Corporate Governance Committee conducts an annual review of the General Partner’s Chief Executive Officer succession plan • Independent Directors and all Board Committees of the General Partner may retain outside advisors, as they deem appropriate • Policy governing retirement age for Directors of the General Partner • Prohibition on repricing of outstanding stock options of the General Partner • Directors of the General Partner required to offer resignation upon job change • Majority voting for election of Directors of the General Partner • Shareholder Communications Policy

Ownership		Minimum Stock Ownership Guidelines apply to all Directors and Executive Officers of the General Partner

The General Partner’s Code of Conduct (which applies to all Directors and employees of the General Partner, including the Chief Executive Officer and senior financial officers) and the Corporate Governance Guidelines are available in the Investor Relations/Corporate Governance section of the General Partner’s website at www.dukerealty.com. A copy of these documents may also be obtained without charge by writing to Duke Realty Corporation, 600 East 96th Street, Suite 100, Indianapolis, Indiana 46240, Attention: Investor Relations.

Additional Information

For additional information regarding our investments and operations, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 8, “Financial Statements and Supplementary Data.” For additional information about our business segments, see Item 8, “Financial Statements and Supplementary Data.”

Available Information and Exchange Certifications

In addition to this Report, we file quarterly and special reports, proxy statements and other information with the SEC. All documents that are filed with the SEC are available free of charge on the General Partner’s corporate website, which is www.dukerealty.com. We are not incorporating the information on the General Partner’s website into this Report, and the General Partner’s website and the information appearing on the General Partner’s website is not included in, and is not part of, this Report. You may also read and copy any document filed at the public reference facilities of the SEC at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at (800) SEC-0330 for further information about the public reference facilities. These documents also may be accessed through the SEC’s Interactive Data Electronic Application (“IDEA”) via the SEC’s home page on the Internet (http://www.sec.gov). In addition, since some of the General Partner’s securities are listed on the NYSE, you may read the General Partner’s SEC filings at the offices of the NYSE, 20 Broad Street, New York, New York 10005.

The NYSE requires that the Chief Executive Officer of each listed company certify annually to the NYSE that he or she is not aware of any violation by the company of NYSE corporate governance listing standards as of the date of such certification. The General Partner submitted the certification of its Chairman and Chief Executive Officer, Dennis D. Oklak, with its 2010 Annual Written Affirmation to the NYSE on May 13, 2010.

The General Partner included the certifications of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002 and related rules, relating to the quality of the General Partner’s public disclosure, in this Report as Exhibits 31.1 and 31.2.

Item 1A. Risk Factors

In addition to the other information contained in this Report, you should carefully consider, in consultation with your legal, financial and other professional advisors, the risks described below, as well as the risk factors and uncertainties discussed in our other public filings with the SEC under the caption “Risk Factors” in evaluating us and our business before making a decision regarding an investment in the General Partner’s securities.

The risks contained in this Report are not the only risks that we face. Additional risks that are not presently known, or that we presently deem to be immaterial, also could have a material adverse effect on our financial condition, results of operations, business and prospects. The trading price of the General Partner’s securities could decline due to the materialization of any of these risks, and our unitholders may lose all or part of their investment.

This Report also contains forward-looking statements that may not be realized as a result of certain factors, including, but not limited to, the risks described herein and in our other public filings with the SEC. Please refer to the section in this Report entitled “Cautionary Notice Regarding Forward-Looking Statements” for additional information regarding forward-looking statements.

Risks Related to Our Business

Our use of debt financing could have a material adverse effect on our financial condition.

We are subject to the risks normally associated with debt financing, including the risk that our cash flow will be insufficient to meet required principal and interest payments and the long-term risk that we will be unable to refinance our existing indebtedness, or that the terms of such refinancing will not be as favorable as the terms of existing indebtedness. Additionally, we may not be able to refinance borrowings at our unconsolidated subsidiaries on favorable terms or at all. If our debt cannot be paid, refinanced or extended, we may not be able to make distributions to unitholders at expected levels. Further, if prevailing interest rates or other factors at the time of a refinancing result in higher interest rates or other restrictive financial covenants upon the refinancing, then such refinancing would adversely affect our cash flow and funds available for operation, development and distribution.

We are also subject to financial covenants under our existing debt instruments. Should we fail to comply with the covenants in our existing debt instruments, then we would not only be in breach under the applicable debt instruments but we would also likely be unable to borrow any further amounts under our other debt instruments, which could adversely affect our ability to fund operations. We also have incurred, and may incur in the future, indebtedness that bears interest at variable rates. Thus, if market interest rates increase, so will our debt expense, which could reduce our cash flow and our ability to make distributions to unitholders at expected levels.

Debt financing may not be available and equity issuances could be dilutive to our unitholders.

Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including common and preferred equity issued by the General Partner. Debt financing may not be available over a longer period of time in sufficient amounts, on favorable terms or at all. If the General Partner issues additional equity securities, instead of debt, to manage capital needs, the interests of our existing unitholders could be diluted (if and when they convert their Limited Partner Units to shares of the General Partner’s common stock).

Financial and other covenants under existing credit agreements could limit our flexibility and adversely affect our financial condition.

The terms of our various credit agreements and other indebtedness require that we comply with a number of customary financial and other covenants, such as maintaining debt service coverage and leverage ratios and maintaining insurance coverage. These covenants may limit our flexibility in our operations, and breaches of these covenants could result in defaults under the instruments governing the applicable indebtedness even if we have satisfied our payment obligations. If we are unable to refinance our indebtedness at maturity or meet our payment obligations, the amount of our distributable cash flow would be adversely affected.

Downgrades in our credit ratings could increase our borrowing costs or reduce our access to funding sources in the credit and capital markets.

We have a significant amount of debt outstanding, consisting mostly of unsecured debt. We are currently assigned corporate credit ratings from Moody’s Investors Service, Inc. and Standard and Poor’s Ratings Group (“S&P”) based on their evaluation of our creditworthiness. These agencies’ ratings are based on a number of factors, some of which are not within our control. In addition to factors specific to our financial strength and performance, the rating agencies also consider conditions affecting REITs generally. In January 2010, S&P downgraded our credit rating. All of our debt ratings remain investment grade, but in light of the difficulties continuing to confront the economy generally, including, among others, the weak global economic conditions, credit market disruptions, and the severe stress on commercial real estate markets, there can be no assurance that we will not be further downgraded or that any of our ratings will remain investment grade. If our credit ratings are further downgraded or other negative action is taken, we could be required, among other things, to pay additional interest and fees on outstanding borrowings under our revolving credit agreement.

Further credit rating reductions by one or more rating agencies could also adversely affect our access to funding sources, the cost and other terms of obtaining funding as well as our overall financial condition, operating results and cash flow.

If we are unable to generate sufficient capital and liquidity, then we may be unable to pursue future development projects and other strategic initiatives.

To complete our ongoing and planned development projects, and to pursue our other strategic initiatives, we must continue to generate sufficient capital and liquidity to fund those activities. To generate that capital and liquidity, we rely upon funds from our existing operations, as well as funds that we raise through our capital raising activities. In the event that we are unable to generate sufficient capital and liquidity to meet our long-term needs, or if we are unable to generate capital and liquidity on terms that are favorable to us, then we may not be able to pursue development projects, acquisitions, or our other long-term strategic initiatives.

The General Partner’s stock price and trading volume may be volatile, which could result in substantial losses to our unitholders if and when they convert their Limited Partner Units to shares of the General Partner’s common stock.

The market price of the General Partner’s common and preferred stock could change in ways that may or may not be related to our business, our industry or our operating performance and financial condition. In addition, the trading volume in the General Partner’s common stock may fluctuate and cause significant price variations to occur. Some of the factors that could negatively affect the General Partner’s share price, or result in fluctuations in the price or trading volume of the General Partner’s common stock, include uncertainty in the markets, general market and economic conditions, as well as those factors described in these “Risk Factors” and in other reports that we file with the SEC.

Many of these factors are beyond our control, and we cannot predict their potential effects on the price of the General Partner’s common and preferred stock. If the market prices of the General Partner’s common and preferred stock decline, then our unitholders may be unable to resell or exchange their securities upon terms that are attractive to them. We cannot assure that the market price of the General Partner’s common and preferred stock will not fluctuate or decline significantly in the future. In addition, the securities markets in general may experience considerable unexpected price and volume fluctuations.

We, or our General Partner, may issue debt and equity securities which are senior to our General Partner’s common stock and preferred stock as to distributions and in liquidation, which could negatively affect the value of our Units and the General Partner’s common and preferred stock.

In the future, we or our General Partner may attempt to increase our capital resources by entering into debt or debt-like financing that is unsecured or secured by certain of our assets, or issuing debt or equity securities, which could include issuances of secured or unsecured commercial paper, medium-term notes, senior notes, subordinated notes, preferred stock or common stock. In the event of our liquidation, our lenders and holders of our debt securities would receive a distribution of our available assets before distributions to the holders of our Common Units and Preferred Units. Our General Partner’s preferred stock has a preference over our Common Units with respect to distributions and upon liquidation, which could further limit our ability to make distributions to our unitholders. Any additional preferred stock that our General Partner may issue may have a preference over our Common Units and existing series of Preferred Units with respect to distributions and upon liquidation.

We may be required to seek commercial credit and issue debt securities to manage our capital needs. Because our, or our General Partner’s, decision to incur debt and issue securities in our future offerings will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings and debt financings. Further, market conditions could require us, or our General Partner, to accept less favorable terms for the issuance of our securities in the

future. Thus, our unitholders will bear the risk of our future offerings reducing the value of their Units and diluting their interest in us.

Our use of joint ventures may limit our flexibility with jointly owned investments.

We currently have joint ventures that are not consolidated with our financial statements. We may develop and acquire properties in joint ventures with other persons or entities when circumstances warrant the use of these structures. Our participation in joint ventures is subject to the risks that:

•

We could become engaged in a dispute with any of our joint venture partners that might affect our ability to develop or operate a property;

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Our joint venture partners may have different objectives than we have regarding the appropriate timing and terms of any sale or refinancing of properties;

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Our joint venture partners may have competing interests in our markets that could create conflict of interest issues; and

•

Maturities of debt encumbering our jointly owned investments may not be able to be refinanced at all or on terms that are as favorable as the current terms.

Risks Related to the Real Estate Industry

Our net earnings available for investment or distribution to unitholders could decrease as a result of factors related to the ownership and operation of commercial real estate that are outside of our control.

Our business is subject to the risks incident to the ownership and operation of commercial real estate, many of which involve circumstances not within our control. Such risks include the following:

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Changes in the general economic climate;

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The availability of capital on favorable terms, or at all;

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Increases in interest rates;

•

Local conditions such as oversupply of property or a reduction in demand;

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Competition for tenants;

•

Changes in market rental rates;

•

Oversupply or reduced demand for space in the areas where our properties are located;

•

Delay or inability to collect rent from tenants who are bankrupt, insolvent or otherwise unwilling or unable to pay;

•

Difficulty in leasing or re-leasing space quickly or on favorable terms;

•

Costs associated with periodically renovating, repairing and reletting rental space;

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Our ability to provide adequate maintenance and insurance on our properties;

•

Our ability to control variable operating costs;

•

Changes in government regulations; and

•

Potential liability under, and changes in, environmental, zoning, tax and other laws.

Further, a significant portion of our costs, such as real estate taxes, insurance and maintenance costs and our debt service payments, are generally not reduced when circumstances cause a decrease in cash flow from our properties. Any one or more of these factors could result in a reduction in our net earnings available for investment or distribution to unitholders.

Many real estate costs are fixed, even if income from properties decreases.

Our financial results depend on leasing space in our real estate to tenants on terms favorable to us. Our income and funds available for distribution to our unitholders will decrease if a significant number of our tenants cannot meet their lease obligations to us or we are unable to lease properties on favorable terms. In addition, if a tenant does not pay its rent, we may not be able to enforce our rights as landlord without delays and we may incur substantial legal costs. Costs associated with real estate investment, such as real estate taxes and maintenance costs, generally are not reduced when circumstances cause a reduction in income from the investment.

Our real estate development activities are subject to risks particular to development.

We continue to selectively develop new pre-leased properties for rental operations in our existing markets when accretive returns are present. These development activities generally require various government and other approvals, which we may not receive. In addition, we also are subject to the following risks associated with development activities:

•

Unsuccessful development opportunities could result in direct expenses to us;

•

Construction costs of a project may exceed original estimates, possibly making the project less profitable than originally estimated, or possibly unprofitable;

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Time required to complete the construction of a project or to lease up the completed project may be greater than originally anticipated, thereby adversely affecting our cash flow and liquidity;

•

Occupancy rates and rents of a completed project may not be sufficient to make the project profitable;

•

Our ability to dispose of non-strategic properties we identify for sale could be impacted by the ability of prospective buyers to obtain financing given the current state of the credit markets; and

•

Favorable sources to fund our development activities may not be available.

We may be unsuccessful in operating completed real estate projects.

We face the risk that the real estate projects we develop or acquire will not perform in accordance with our expectations. This risk exists because of factors such as the following:

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Prices paid for acquired facilities are based upon a series of market judgments; and

•

Costs of any improvements required to bring an acquired facility up to standards to establish the market position intended for that facility might exceed budgeted costs.

Further, we can give no assurance that acquisition targets meeting our guidelines for quality and yield will continue to be available.

We are exposed to the risks of defaults by tenants.

Any of our tenants may experience a downturn in their businesses that may weaken their financial condition. In the event of default or the insolvency of a significant number of our tenants, we may experience a substantial loss of rental revenue and/or delays in collecting rent and incur substantial costs in enforcing our rights as landlord. If a tenant files for bankruptcy protection, a court could allow the tenant to reject and terminate its lease with us. Our income and distributable cash flow would be adversely affected if a significant number of our tenants became unable to meet their obligations to us, became insolvent or declared bankruptcy.

We may be unable to renew leases or relet space.

When our tenants decide not to renew their leases upon their expiration, we may not be able to relet the space. Even if our tenants do renew or we are able to relet the space, the terms of renewal or reletting (including the cost of renovations, if necessary) may be less favorable than current lease terms. If we are unable to promptly renew the leases or relet the space, or if the rental rates upon such renewal or reletting are significantly lower than current rates, then our income and distributable cash flow would be adversely affected, especially if we were unable to lease a significant amount of the space vacated by tenants in our properties.

Our insurance coverage on our properties may be inadequate.

We maintain comprehensive insurance on each of our facilities, including property, liability, fire, flood and extended coverage. We believe this coverage is of the type and amount customarily obtained for real property. However, there are certain types of losses, generally of a catastrophic nature, such as earthquakes, hurricanes and floods or acts of war or terrorism that may be uninsurable or not economically insurable. We use our discretion when determining amounts, coverage limits and deductibles for insurance. These terms are determined based on retaining an acceptable level of risk at a reasonable cost. This may result in insurance coverage that in the event of a substantial loss would not be sufficient to pay the full current market value or current replacement cost of our lost investment. Inflation, changes in building codes and ordinances, environmental considerations and other factors also may make it unfeasible to use insurance proceeds to replace a facility after it has been damaged or destroyed. Under such circumstances, the insurance proceeds we receive may not be adequate to restore our economic position in a property. If an insured loss occurred, we could lose both our investment in and anticipated profits and cash flow from a property, and we would continue to be obligated on any mortgage indebtedness or other obligations related to the property. Although we believe our insurance is with highly rated providers, we are also subject to the risk that such providers may be unwilling or unable to pay our claims when made.

Acquired properties may expose us to unknown liability.

From time to time, we may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle or contest it, which could adversely affect our results of operations and cash flow. Unknown liabilities with respect to acquired properties might include:

•

liabilities for clean-up of undisclosed environmental contamination;

•

claims by tenants, vendors or other persons against the former owners of the properties;

•

liabilities incurred in the ordinary course of business; and

•

claims for indemnification by general partners, directors, officers and others indemnified by the former owners of the properties.

We could be exposed to significant environmental liabilities as a result of conditions of which we currently are not aware.

As an owner and operator of real property, we may be liable under various federal, state and local laws for the costs of removal or remediation of certain hazardous substances released on or in our property. Such laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of the hazardous substances. In addition, we could have greater difficulty in selling real estate on which hazardous substances were present or in obtaining borrowings using such real estate as collateral. It is our general policy to have Phase I environmental audits performed for all of our properties and land by qualified environmental consultants. These Phase I environmental audits have not revealed any environmental liability that would have a material adverse effect on our business. However, a Phase I environmental audit does not involve invasive procedures such as soil sampling or ground water analysis, and we cannot be sure that the Phase I environmental audits did not fail to reveal a significant environmental liability or that a prior owner did not create a material environmental condition on our properties or land which has not yet been discovered. We could also incur environmental liability as a result of future uses or conditions of such real estate or changes in applicable environmental laws.

We are exposed to the potential impacts of future climate change and climate-change related risks.

We are exposed to potential physical risks from possible future changes in climate. Our properties may be exposed to rare catastrophic weather events, such as severe storms and/or floods. If the frequency of extreme weather events increases due to climate change, our exposure to these events could increase.

We do not currently consider that we are exposed to regulatory risk related to climate change. However, we may be adversely impacted as a real estate developer in the future by stricter energy efficiency standards for buildings.

Risks Related to Our Organization and Structure

If the General Partner were to cease to qualify as a REIT, the General Partner and its shareholders would lose significant tax benefits.

The General Partner intends to continue to operate so as to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Qualification as a REIT provides significant tax advantages to the General Partner and its shareholders. However, in order for the General Partner to continue to qualify as a REIT, it must satisfy numerous requirements established under highly technical and complex Code provisions for which there are only limited judicial and administrative interpretations. Satisfaction of these requirements also depends on various factual circumstances not entirely within the General Partner’s control. The fact that the General Partner holds its assets through us further complicates the application of the REIT requirements. Even a technical or inadvertent mistake could jeopardize the General Partner’s REIT status. Although the General Partner believes that it can continue to operate so as to qualify as a REIT, we cannot offer any assurance that it will continue to do so or that legislation, new regulations, administrative interpretations or court decisions will not significantly change the qualification requirements or the federal income tax consequences of qualification. If the General Partner were to fail to qualify as a REIT in any taxable year, it would have the following effects:

•

The General Partner would not be allowed a deduction for distributions to shareholders and would be subject to federal income tax (including any applicable alternative minimum tax) on our taxable income at regular corporate rates;

•

Unless the General Partner were entitled to relief under certain statutory provisions, it would be disqualified from treatment as a REIT for the four taxable years following the year during which it ceased to qualify as a REIT;

•

The General Partner’s and our net earnings available for investment or distribution would decrease due to the additional tax liability for the year or years involved; and

•

The General Partner would no longer be required to make any distributions to shareholders in order to qualify as a REIT.

As such, the General Partner’s failure to qualify as a REIT would likely have a significant adverse effect on the value of the General Partner’s securities and, consequently, the Partnership’s Units.

REIT distribution requirements limit the amount of cash we have available for other business purposes, including amounts that we need to fund our future capital needs.

To maintain its qualification as a REIT under the Code, the General Partner must annually distribute to its shareholders at least 90% of its ordinary taxable income, excluding net capital gains. The General Partner intends to continue to make distributions to its shareholders to comply with the 90% distribution requirement. However, this requirement limits the General Partner’s and our ability to accumulate capital for use for other business purposes. If the General Partner does not have sufficient cash or other liquid assets to meet the distribution requirements, it may have to borrow funds or sell properties on adverse terms in order to meet the distribution requirements. If the General Partner fails to make a required distribution, it would cease to qualify as a REIT.

U.S. federal income tax treatment of REITs and investments in REITs may change, which may result in the loss of the General Partner’s tax benefits of operating as a REIT.

The present U.S. federal income tax treatment of a REIT and an investment in a REIT may be modified by legislative, judicial or administrative action at any time. Revisions in U.S. federal income tax laws and interpretations of these laws could adversely affect us and the General Partner and the tax consequences of an investment in the General Partner’s common shares.

We are subject to certain provisions that could discourage change-of-control transactions, which may reduce the likelihood of the General Partner’s shareholders receiving a control premium for their shares.

Indiana anti-takeover legislation and certain provisions in our governing documents, as we discuss below, may discourage potential acquirers from pursuing a change-of-control transaction with us. As a result, the General Partner’s shareholders may be less likely to receive a control premium for their shares.

Unissued Preferred Stock. The General Partner’s charter permits its board of directors to classify unissued preferred stock by setting the rights and preferences of the shares at the time of issuance. This power enables the General Partner’s board to adopt a shareholder rights plan, also known as a poison pill. Although the General Partner has repealed its previously existing poison pill and its current board of directors has adopted a policy not to issue preferred stock as an anti-takeover measure, the General Partner’s board can change this policy at any time. The adoption of a poison pill would discourage a potential bidder from acquiring a significant position in the General Partner without the approval of its board.

Business-Combination Provisions of Indiana Law. The General Partner has not opted out of the business-combination provisions of the Indiana Business Corporation Law. As a result, potential bidders may have to negotiate with the General Partner’s board of directors before acquiring 10% of its stock. Without securing board approval of the proposed business combination before crossing the 10% ownership

threshold, a bidder would not be permitted to complete a business combination for five years after becoming a 10% shareholder. Even after the five-year period, a business combination with the significant shareholder would require a “fair price” as defined in the Indiana Business Corporation Law or the approval of a majority of the disinterested shareholders.

Control-Share-Acquisition Provisions of Indiana Law. The General Partner has not opted out of the provisions of the Indiana Business Corporation Law regarding acquisitions of control shares. Therefore, those who acquire a significant block (at least 20%) of the General Partner’s shares may only vote a portion of their shares unless its other shareholders vote to accord full voting rights to the acquiring person. Moreover, if the other shareholders vote to give full voting rights with respect to the control shares and the acquiring person has acquired a majority of the General Partner’s outstanding shares, the other shareholders would be entitled to special dissenters’ rights.

Supermajority Voting Provisions. The General Partner’s charter prohibits business combinations or significant disposition transactions with a holder of 10% of its shares unless:

•

The holders of 80% of the General Partner’s outstanding shares of capital stock approve the transaction;

•

The transaction has been approved by three-fourths of those directors who served on the General Partner’s board before the shareholder became a 10% owner; or

•

The significant shareholder complies with the “fair price” provisions of the General Partner’s charter.

Among the transactions with large shareholders requiring the supermajority shareholder approval are dispositions of assets with a value greater than or equal to $1,000,000 and business combinations.

Operating Partnership Provisions. The limited partnership agreement of the Partnership contains provisions that could discourage change-of-control transactions, including a requirement that holders of at least 90% of the Common Units approve:

•

Any voluntary sale, exchange, merger, consolidation or other disposition of all or substantially all of the assets of the Partnership in one or more transactions other than a disposition occurring upon a financing or refinancing of the Partnership;

•

The General Partner’s merger, consolidation or other business combination with another entity unless after the transaction substantially all of the assets of the surviving entity are contributed to the Partnership in exchange for units;

•

The General Partner’s transfer of its interests in the Partnership other than to one of its wholly owned subsidiaries; and

•

Any reclassification or recapitalization or change of outstanding shares of the General Partner’s common stock other than certain changes in par value, stock splits, stock dividends or combinations.

We are dependent on key personnel.

The General Partner’s executive officers and other senior officers have a significant role in the success of the Partnership. Our ability to retain our management group or to attract suitable replacements should any members of the management group leave the General Partner is dependent on the competitive nature of the employment market. The loss of services from key members of the management group or a limitation in their availability could adversely impact our financial condition and cash flow. Further, such a loss could be negatively perceived in the capital markets.

Item 1B. Unresolved Staff Comments

The Partnership has no unresolved comments with the SEC staff regarding its periodic or current reports under the Exchange Act.

Item 2. Properties

Product Review

As of December 31, 2010, we own interests in a diversified portfolio of 793 commercial properties encompassing approximately 140.5 million net rentable square feet (including 114 jointly controlled in-service properties with approximately 22.7 million square feet, eight consolidated properties under development with approximately 2.9 million square feet and two jointly controlled properties under development with approximately 866,000 square feet).

Industrial Properties: We own interests in 467 industrial properties encompassing more than 101.5 million square feet (72% of total square feet). These properties primarily consist of bulk warehouses (industrial warehouse/distribution centers with clear ceiling heights of 20 feet or more), but also include service center properties (also known as flex buildings or light industrial, having 12-18 foot clear ceiling heights and a combination of drive-up and dock-height loading access). Of these properties, 397 buildings with more than 84.5 million square feet are consolidated and 70 buildings with more than 17.0 million square feet are jointly controlled.

Office Properties: We own interests in 290 office buildings totaling approximately 34.7 million square feet (26% of total square feet). These properties include primarily suburban office properties. Of these properties, 248 buildings with approximately 29.3 million square feet are consolidated and 42 buildings with approximately 5.4 million square feet are jointly controlled.

Other Properties: We own interests in 36 medical office and retail buildings totaling approximately 4.3 million square feet (2% of total square feet). Of these properties, 32 buildings with approximately 3.2 million square feet are consolidated and four buildings with more than 1.1 million square feet are jointly controlled.

Land: We own, including through ownership interests in unconsolidated joint ventures, approximately 4,800 acres of land and control an additional 1,650 acres through purchase options.

Property Descriptions

The following tables represent the geographic highlights of consolidated and jointly controlled in-service properties in our primary markets.

Consolidated Properties


	Square Feet										Annual Net Effective Rent (1)		Percent of Annual Net Effective Rent
	Industrial		Office		Other		Overall		Percent of Overall		Annual Net Effective Rent (1)		Percent of Annual Net Effective Rent
Primary Market

Indianapolis		16,001,378		2,686,406		819,899		19,507,683		17.1%	$	97,392,192		14.3%
Cincinnati		10,461,024		5,007,148		107,470		15,575,642		13.7%		84,327,922		12.4%
Atlanta		8,320,351		3,883,039		386,355		12,589,745		11.0%		74,217,168		10.9%
Chicago		7,212,854		2,685,963		56,531		9,955,348		8.7%		62,412,686		9.2%
South Florida		3,602,978		1,331,877		390,942		5,325,797		4.7%		54,073,903		7.9%
Raleigh		2,101,449		2,615,802		210,834		4,928,085		4.3%		47,140,818		6.9%
Columbus		5,303,537		2,791,482		73,238		8,168,257		7.2%		45,775,822		6.7%
St. Louis		3,763,928		2,681,290		-		6,445,218		5.6%		42,433,249		6.2%
Nashville		3,252,010		1,368,513		120,658		4,741,181		4.2%		34,345,441		5.0%
Central Florida		3,360,479		1,177,540		84,130		4,622,149		4.0%		31,141,654		4.6%
Minneapolis		3,363,691		1,028,803		-		4,392,494		3.8%		28,343,158		4.2%
Dallas		5,379,082		463,283		279,127		6,121,492		5.4%		23,363,015		3.4%
Savannah		6,784,550		-		-		6,784,550		5.9%		20,655,208		3.0%
Cleveland		-		1,324,451		-		1,324,451		1.2%		12,470,052		1.8%
Houston		1,418,380		-		-		1,418,380		1.2%		8,070,693		1.2%
Baltimore		462,070		-		-		462,070		0.4%		2,659,588		0.4%
Norfolk		466,000		-		-		466,000		0.4%		2,290,177		0.3%
Washington DC		78,560		219,464		-		298,024		0.3%		1,551,605		0.2%
Phoenix		445,056		-		-		445,056		0.4%		1,503,398		0.2%
Austin		-		-		96,829		96,829		0.1%		865,940		0.1%
Other (2)		120,000		-		289,855		409,855		0.4%		7,462,020		1.1%

Total		81,897,377		29,265,061		2,915,868		114,078,306		100.0%	$	682,495,709		100.0%

		71.8%		25.7%		2.5%		100.0%

Jointly Controlled Properties


	Square Feet										Annual Net Effective Rent (1)		Percent of Annual Net Effective Rent
	Industrial		Office		Other		Overall		Percent of Overall		Annual Net Effective Rent (1)		Percent of Annual Net Effective Rent
Primary Market

Washington DC		658,322		2,146,378		-		2,804,700		12.4%	$	15,173,023		30.9%
Dallas		8,080,278		182,700		62,390		8,325,368		36.7%		12,174,115		24.8%
Central Florida		908,422		624,796		-		1,533,218		6.8%		3,806,761		7.7%
Minneapolis		-		-		381,922		381,922		1.7%		3,739,485		7.6%
Raleigh		-		687,549		-		687,549		3.0%		3,302,290		6.7%
Indianapolis		4,182,919		89,178		-		4,272,097		18.9%		2,980,929		6.1%
Phoenix		1,425,062		-		-		1,425,062		6.3%		1,529,334		3.1%
Cincinnati		211,486		190,733		206,315		608,534		2.7%		1,190,723		2.4%
Atlanta		-		436,275		-		436,275		1.9%		1,148,881		2.3%
Columbus		1,142,400		135,485		-		1,277,885		5.6%		1,044,676		2.1%
South Florida		-		222,600		-		222,600		1.0%		970,684		2.0%
St. Louis		-		252,378		-		252,378		1.1%		766,237		1.6%
Houston		-		248,925		-		248,925		1.1%		751,874		1.5%
Nashville		-		180,147		-		180,147		0.8%		597,195		1.2%

Total		16,608,889		5,397,144		650,627		22,656,660		100.0%	$	49,176,207		100.0%

		73.3%		23.8%		2.9%		100.0%


	Occupancy %
	Consolidated Properties								Jointly Controlled Properties
	Industrial		Office		Other		Overall		Industrial		Office		Other		Overall
Primary Market

Indianapolis		95.5%		88.0%		85.3%		94.1%		96.6%		82.9%		-		96.3%
Cincinnati		85.2%		84.6%		91.1%		85.0%		100.0%		97.6%		100.0%		99.2%
Atlanta		86.1%		87.5%		94.4%		86.8%		-		26.9%		-		26.9%
Chicago		96.5%		89.5%		90.1%		94.6%		-		-		-		-
South Florida		81.0%		92.0%		93.2%		84.7%		-		100.0%		-		100.0%
Raleigh		96.3%		89.1%		93.2%		92.3%		-		83.0%		-		83.0%
Columbus		98.7%		78.9%		100.0%		92.0%		100.0%		100.0%		-		100.0%
St. Louis		89.1%		79.9%		-		85.3%		-		83.8%		-		83.8%
Nashville		81.9%		89.9%		95.6%		84.5%		-		100.0%		-		100.0%
Central Florida		89.9%		88.6%		80.5%		89.4%		100.0%		78.9%		-		91.4%
Minneapolis		89.0%		97.4%		-		91.0%		-		-		70.5%		70.5%
Dallas		83.6%		74.5%		62.8%		82.0%		81.5%		100.0%		100.0%		82.1%
Savannah		91.8%		-		-		91.8%		-		-		-		-
Cleveland		-		76.4%		-		76.4%		-		-		-		-
Houston		98.0%		-		-		98.0%		-		100.0%		-		100.0%
Baltimore		100.0%		-		-		100.0%		-		-		-		-
Norfolk		100.0%		-		-		100.0%		-		-		-		-
Washington DC		91.4%		26.0%		-		43.2%		89.5%		97.6%		-		95.7%
Phoenix		87.8%		-		-		87.8%		100.0%		-		-		100.0%
Austin		-		-		46.3%		46.3%		-		-		-		-
Other (2)		100.0%		-		86.0%		90.1%		-		-		-		-

Total		90.6%		85.4%		85.7%		89.1%		89.7%		87.4%		82.7%		89.0%

(1)

Represents the average annual rental property revenue due from tenants in occupancy as of December 31, 2010, excluding additional rent due as operating expense reimbursements, landlord allowances for operating expenses and percentage rents. Joint venture properties are shown at our ownership percentage.

(2)	Represents properties not located in our primary markets.

Item 3. Legal Proceedings

We are not subject to any material pending legal proceedings, other than routine litigation arising in the ordinary course of business. Our management expects that these ordinary routine legal proceedings will be covered by insurance and does not expect these legal proceedings to have a material adverse effect on our financial condition, results of operations, or liquidity.

Item 4. Reserved

PART II

Item 5. Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

There is no established trading market for the Common Units. The following table sets forth the cash distributions paid during each quarter. As of February 25, 2011, there were 161 record holders of Common Units.


Quarter Ended	2010 Distributions Per Common Unit		2009 Distributions Per Common Unit

December 31	$	.170	$	.170
September 30		.170		.170
June 30		.170		.170
March 31		.170		.250

On January 26, 2011, the General Partner declared a quarterly cash dividend of $0.17 per Common Unit, payable on February 28, 2011, to Common Unitholders of record on February 14, 2011.

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by this Item concerning securities authorized for issuance under the General Partner’s equity compensation plans is set forth in or incorporated herein by reference to Part III, Item 12 of this Report.

Sales of Unregistered Securities

The General Partner did not sell any of its securities during the year ended December 31, 2010 that were not registered under the Securities Act.

Issuer Purchases of Equity Securities

From time to time, the General Partner repurchases its securities under a repurchase program that initially was approved by the General Partner’s board of directors and publicly announced in October 2001 (the “Repurchase Program”). On April 28, 2010, the General Partner’s board of directors adopted a resolution that amended and restated the Repurchase Program and delegated authority to management to repurchase a maximum of $75.0 million of the General Partner’s common shares, $250.0 million of debt securities and $75.0 million of the General Partner’s preferred shares (the “April 2010 Resolution”). The April 2010 Resolution will expire on April 27, 2011. Under the Repurchase Program, the General Partner also executes share repurchases on an ongoing basis associated with certain employee elections under its compensation and benefit programs.

The following table shows the share repurchase activity for each of the three months in the quarter ended December 31, 2010:


Month	Total Number of Shares Purchased (1)		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs

October		5,258	$	11.90		5,258
November		12,039	$	11.60		12,039
December		4,695	$	11.54		4,695

Total		21,992	$	11.66		21,992

(1) All 21,992 shares repurchased represent common shares of the General Partner repurchased under its Employee Stock Purchase Plan.

Item 6. Selected Financial Data

The following sets forth selected financial and operating information on a historical basis for each of the years in the five-year period ended December 31, 2010. The following information should be read in conjunction with Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8, “Financial Statements and Supplementary Data” included in this Form 10-K (in thousands, except per unit amounts):


	2010			2009			2008		2007		2006
Results of Operations:
Revenues:
Rental and related revenue	$	878,242		$	842,232		$	802,791	$	761,751	$	711,821
General contractor and service fee revenue		515,361			449,509			434,624		311,548		330,195

Total Revenues from Continuing Operations	$	1,393,603		$	1,291,741		$	1,237,415	$	1,073,299	$	1,042,016


Income (loss) from continuing operations	$	29,476		$	(254,225	)	$	86,167	$	160,927	$	157,913


Net income (loss) attributable to common unitholders	$	(14,459	)	$	(344,700	)	$	53,665	$	226,098	$	159,303


Per Unit Data:
Basic income (loss) per Common Unit:
Continuing operations	$	(0.22	)	$	(1.59	)	$	0.18	$	0.64	$	0.66
Discontinued operations		0.15			(0.08	)		0.16		0.88		0.41
Diluted income (loss) per Common Unit:
Continuing operations		(0.22	)		(1.59	)		0.18		0.64		0.66
Discontinued operations		0.15			(0.08	)		0.16		0.87		0.40
Distributions paid per Common Unit		0.68			0.76			1.93		1.91		1.89
Weighted average Common Units outstanding		244,870			207,893			154,534		148,459		148,069
Weighted average Common Units and potential dilutive securities		244,870			207,893			154,553		149,250		149,156

Balance Sheet Data (at December 31):
Total Assets	$	7,644,124		$	7,304,493		$	7,690,442	$	7,660,651	$	7,238,204
Total Debt		4,207,079			3,854,032			4,276,990		4,288,436		4,074,979
Total Preferred Equity		904,540			1,016,625			1,016,625		744,000		876,250
Total Partners’ Equity		2,984,619			2,960,516			2,895,810		2,858,921		2,693,462
Total Common Units Outstanding		257,426			230,638			155,199		154,055		146,328
Other Data:
Consolidated Funds from Operations attributable to common unitholders (1)	$	305,375		$	13,269		$	388,865	$	403,264	$	371,074

(1) Funds From Operations (“FFO”) is used by industry analysts and investors as a supplemental operating performance measure of an equity real estate investment trust (“REIT”) like our General Partner. The National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from net income determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). FFO is a non-GAAP financial measure. The most comparable GAAP measure is net income (loss) attributable to common unitholders. Consolidated FFO attributable to common unitholders should not be considered as a substitute for net income (loss) attributable to common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT.

See reconciliation of FFO to GAAP net income (loss) attributable to common unitholders under the caption “Year in Review” under Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations”.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Business Overview

As of December 31, 2010, we:

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Owned or jointly controlled 793 industrial, office, medical office and other properties, of which 783 properties with more than 136.7 million square feet are in service and ten properties with approximately 3.8 million square feet are under development. The 783 in-service properties are comprised of 669 consolidated properties with approximately 114.1 million square feet and 114 jointly controlled properties with approximately 22.7 million square feet. The ten properties under development consist of eight consolidated properties with approximately 2.9 million square feet and two jointly controlled properties with approximately 866,000 square feet.

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Owned, including through ownership interests in unconsolidated joint ventures, approximately 4,800 acres of land and controlled an additional 1,650 acres through purchase options.

Through our Service Operations reportable segment, we have historically developed or acquired properties with the intent to sell (hereafter referred to as “Build-for-Sale” properties). Build-for-Sale properties were generally identified as such prior to construction commencement and were sold within a relatively short time after being placed in service. Build-for-Sale properties, which are no longer part of our operating strategy, did not represent a significant component of our operations in 2010 or 2009.

Operations Strategy

Our operational focus is to drive profitability, by maximizing cash from operations as well as Funds from Operations (“FFO”) through (i) maintaining and increasing property occupancy and rental rates by effectively managing our portfolio of existing properties; (ii) selectively developing new pre-leased medical office and build-to-suit projects at accretive returns; (iii) leveraging our construction expertise to act as a general contractor or construction manager on a fee basis; and (iv) providing a full line of real estate services to our tenants and to third parties.

Asset Strategy

Our asset strategy is to reposition our investment among product types and further diversify our geographic presence. Our strategic objectives include (i) increasing our investment in quality industrial properties in both existing markets and select new markets; (ii) expanding our medical office portfolio nationally to take advantage of demographic trends; (iii) increasing our asset investment in markets we believe provide the

best potential for future growth; and (iv) reducing our investment in suburban office properties located primarily in the Midwest as well as reducing our investment in other non-strategic assets. We are executing our asset strategy through our disciplined approach in identifying accretive acquisition opportunities and our focused development initiatives, which are financed primarily from our active asset disposition program.

Capital Strategy

Our capital strategy is to maintain a strong balance sheet by actively managing the components of our capital structure, in coordination with the execution of our overall operating and asset strategy. We are focused on maintaining investment grade ratings from our credit rating agencies with the ultimate goal of improving the key metrics that formulate our credit ratings.

In support of our capital strategy, as well as our asset strategy, we employ an asset disposition program to sell non-strategic real estate assets, which generates proceeds that can be recycled primarily into new property investments that better fit our growth objectives both within the industrial and medical office product types and in markets that provide the best future growth potential.

We continue to focus on improving our balance sheet by maintaining a balanced and flexible capital structure which includes: (i) extending and sequencing the maturity dates of our outstanding debt obligations; (ii) borrowing primarily at fixed rates by targeting a variable rate component of total debt less than 20%; (iii) issuing common equity from time-to-time to maintain appropriate leverage parameters or support significant strategic acquisitions; and (iv) generating proceeds from the sale of non-strategic properties. With our successes to date and continued focus on strengthening our balance sheet, we believe we are well-positioned for future growth.

Year in Review

After the recessionary conditions of 2008 and most of 2009, the economy and business fundamentals improved during 2010, although unemployment, tax legislation matters and related issues remained key areas of concern. There also continued to be an oversupply of leasable space in many markets and product types, particularly in suburban office properties, as improvement in the commercial real estate industry lagged behind improvement in many other areas of the general economy. Many property owners continued to reduce rental rates and offer increased capital expenditure allowances in order to compete for the available transactions in the marketplace. During 2010, however, we had a strong increase in leasing volume, which helped offset rental rate decreases that continued in many markets.

We also made significant progress during 2010 on our asset strategy of increasing our industrial and medical office portfolio while reducing our exposure to suburban office properties, primarily through our disposition and acquisition activity. Overall, we believe 2010 was a successful year in all aspects of our strategic focus. The efforts in our operations, asset and capital strategies contributed to our positive performance.

Net loss attributable to common unitholders for the year ended December 31, 2010, was $14.5 million, or $.07 per Common Unit (diluted), compared to a net loss of $344.7 million, or $1.67 per Common Unit (diluted) for the year ended December 31, 2009. The significant reduction in net loss from 2009 was the result of a $292.7 million decrease in non-cash impairment charges as well as a $53.6 million increase in gains on sales of properties. Partially offsetting the positive changes in impairment charges and property sales was a $28.1 million increase in interest expense that was primarily driven by a decrease in interest

costs capitalized to development projects. FFO attributable to common unitholders totaled $305.4 million for the year ended December 31, 2010, compared to $13.3 million for 2009, with the increase resulting from the same factors, excluding gains on property sales, which improved the results attributable to common unitholders in 2010.

Industry analysts and investors use FFO as a supplemental operating performance measure of an equity REIT. The National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from net income determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”). FFO is a non-GAAP financial measure. The most comparable GAAP measure is net income (loss) attributable to common unitholders. Consolidated FFO attributable to common unitholders should not be considered as a substitute for net income (loss) attributable to common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT.


	2010			2009			2008
Net income (loss) attributable to common unitholders	$	(14,459	)	$	(344,700	)	$	53,665
Adjustments:
Depreciation and amortization		360,184			340,126			314,952
Share of joint venture depreciation and amortization		34,674			36,966			37,704
Earnings from depreciable property sales - wholly owned		(72,716	)		(19,123	)		(16,961	)
Earnings from depreciable property sales - share of joint venture		(2,308	)		-			(495	)

Funds From Operations attributable to common unitholders	$	305,375		$	13,269		$	388,865

As the economy improved in 2010, we executed in all areas of the operations, asset, and capital strategies that we established in 2009. Of specific note was the significant progress made in our efforts to increase the concentration within our portfolio towards the industrial and medical office product types in stronger growth markets. Highlights of our 2010 strategic activities are as follows:

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On July 1, 2010, we acquired our joint venture partner’s 50% interest in Dugan Realty, L.L.C. (“Dugan”), a real estate joint venture that we had previously accounted for using the equity method, for a net cash payment of $138.6 million. As the result of this transaction, we obtained 100% of Dugan’s membership interests. Dugan had secured debt, which, at the time of acquisition, had a total face value of $283.0 million. Dugan owned 106 industrial buildings totaling 20.8 million square feet and 62.6 net acres of undeveloped land located in Midwest and Southeast markets.

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On December 30, 2010, we completed the acquisition of the first tranche of the Premier Realty Corporation South Florida property portfolio (the “Premier Portfolio”) for $281.7 million, including the assumption of secured debt that had a face value of $155.7 million. The first tranche includes 39 buildings, totaling more than 3.4 million square feet, nearly all of which are industrial properties. The Premier Portfolio, in its entirety, includes 51 industrial and five office buildings with over 4.9 million rentable square feet and four ground leases, for a total price of approximately $449.4 million. The remainder of the acquisition is under contract and expected to close in early 2011, subject to the execution of certain debt assumptions and customary closing conditions.

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We generated $499.5 million of total net cash proceeds from the disposition of 36 wholly-owned buildings, either through outright sales or partial sales to unconsolidated joint ventures, as well as 130 acres of wholly-owned undeveloped land. Included in the wholly-owned building dispositions in 2010 is the sale of seven suburban office buildings, totaling over 1.0 million square feet, to a newly formed subsidiary of an existing 20% owned joint venture. These buildings were sold to the joint venture for an agreed value of $173.9 million, of which our 80% share of proceeds totaled $139.1 million. We expect to sell additional buildings to this joint venture by the end of the second quarter 2011, subject to financing and other customary closing conditions. The total 2011 sale is under contract and expected to consist of 13 office buildings, totaling over 2.0 million square feet, with an agreed upon value of $342.8 million, which is expected to generate proceeds of $274.2 million for the 80% portion that we sell.

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We have limited our new development starts to selected projects in markets or product types expected to have strong future rent growth and demand or projects that have significant pre-leasing. The total estimated cost of our consolidated properties under construction was $151.5 million at December 31, 2010 with $47.2 million of such costs incurred through that date. Our total estimated cost for jointly controlled properties under construction was $176.0 million at December 31, 2010 with $106.2 million of costs incurred through that date.

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The occupancy level for our in-service portfolio of consolidated properties increased from 87.6% at December 31, 2009 to 89.1% at December 31, 2010. The increase in occupancy was driven by a significant increase in total leasing volume as, during 2010, we had our highest total leasing volume since 2007. A significant portion of the leasing volume in 2010 was related to buildings where development was started on a speculative basis between 2005 and 2008.

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Despite the continued challenges presented by the overall economy, total leasing activity for our consolidated properties totaled 20.4 million square feet in 2010 compared to 15.3 million square feet in 2009.

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Total leasing activity for our consolidated properties in 2010 included 10.1 million square feet of renewals, which represented a 77.2% success rate but resulted in a 4.9% reduction in net effective rents.

We executed a number of significant transactions in support of our capital strategy during 2010 in order to optimally sequence our unsecured debt maturities, manage our overall leverage profile, and support our acquisition strategy. Highlights of our key financing activities in 2010 are as follows:

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In January 2010, we repaid $99.8 million of senior unsecured notes, which had an effective interest rate of 5.37%, on their scheduled maturity date.

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In April 2010, we issued $250.0 million of 10-year unsecured debt, which bears interest at an effective rate of 6.75%.

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In June 2010, the General Partner issued 26.5 million shares of its common stock at $11.75 per share, which generated net proceeds of $298.1 million. The proceeds from this offering were contributed to us in exchange for an additional interest in the Partnership.

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During 2010, through a cash tender offer and open market transactions, we repurchased certain of our outstanding series of unsecured notes scheduled to mature in 2011 and 2013, which had a weighted average stated interest rate of 4.48%. In total, we repurchased unsecured notes that had a face value of $279.9 million.

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During 2010, the General Partner also completed open market repurchases of approximately 4.5 million shares of its 8.375% Series O preferred stock. The General Partner repurchased preferred shares that had a face value of $112.1 million. We then repurchased corresponding Preferred Units held by the General Partner at the same price at which it repurchased its shares on the open market.

Key Performance Indicators

Our operating results depend primarily upon rental income from our industrial, office, medical office and retail properties (collectively referred to as “Rental Operations”). The following discussion highlights the areas of Rental Operations that we consider critical drivers of future revenues.

Occupancy Analysis: As discussed above, our ability to maintain high occupancy rates is a principal driver of maintaining and increasing rental revenue from continuing operations. The following table sets forth occupancy information regarding our in-service portfolio of consolidated rental properties as of December 31, 2010 and 2009, respectively (in thousands, except percentage data):


	Total Square Feet				Percent of Total Square Feet						Percent Leased
Type	2010		2009		2010			2009			2010			2009
Industrial		81,897		56,426		71.8	%		62.3	%		90.6	%		89.4	%
Office		29,265		31,073		25.7	%		34.3	%		85.4	%		84.7	%
Other (Medical Office and Retail)		2,916		3,082		2.5	%		3.4	%		85.7	%		82.9	%

Total		114,078		90,581		100.0	%		100.0	%		89.1	%		87.6	%

The increase in occupancy at December 31, 2010 compared to December 31, 2009 is primarily because we achieved a volume of executed leases in 2010 that was the highest since 2007, with a significant portion of that volume related to buildings where development was started on a speculative basis between 2005 and 2008. Our ongoing ability to maintain favorable occupancy levels may be adversely affected by the continued effects of the economic recession on current and prospective tenants and such a reduction in the level of occupancy may have an adverse impact on revenues from rental operations.

Lease Expiration and Renewals: Our ability to maintain and improve occupancy rates primarily depends upon our continuing ability to re-lease expiring space. The following table reflects our consolidated in-service portfolio lease expiration schedule by property type as of December 31, 2010. The table indicates

square footage and annualized net effective rents (based on December 2010 rental revenue) under expiring leases (in thousands, except percentage data):


	Total Portfolio								Industrial					Office					Other
Year of Expiration	Square Feet			Ann. Rent Revenue		% of Revenue			Square Feet			Ann. Rent Revenue		Square Feet			Ann. Rent Revenue		Square Feet			Ann. Rent Revenue
2011		11,504		$	66,476		10	%		8,875		$	34,325		2,585		$	31,552		44		$	599
2012		9,177			65,612		9	%		6,226			27,327		2,890			37,184		61			1,101
2013		14,713			100,084		15	%		10,626			43,031		4,033			55,980		54			1,073
2014		12,012			72,919		11	%		9,102			34,097		2,747			36,029		163			2,793
2015		12,389			73,126		11	%		9,557			36,249		2,807			36,327		25			550
2016		9,309			52,548		8	%		7,289			26,675		1,937			23,981		83			1,892
2017		7,069			46,303		7	%		5,381			20,586		1,393			19,410		295			6,307
2018		5,461			49,951		7	%		3,155			12,008		1,766			25,407		540			12,536
2019		3,670			40,840		6	%		1,603			7,067		1,795			27,001		272			6,772
2020		6,974			48,653		7	%		5,107			18,325		1,469			22,049		398			8,279
2021 and Thereafter		9,381			65,984		9	%		7,244			30,523		1,573			22,081		564			13,380

		101,659		$	682,496		100	%		74,165		$	290,213		24,995		$	337,001		2,499		$	55,282


Total Portfolio Square Feet		114,078								81,897					29,265					2,916


Percent Leased		89.1	%							90.6	%				85.4	%				85.7	%

We renewed 77.2% and 82.0% of our leases up for renewal totaling approximately 10.1 million and 8.8 million square feet in 2010 and 2009, respectively. There was a 4.9% decline in net effective rents on these renewals during 2010, compared to a 2.2% increase in 2009. Although general economic conditions have improved since 2009, there continues to be an over-supply of rentable space in many markets that has necessitated a continuation of the 2009 trend toward a reduction in overall rental rates in order to maintain occupancy. Our lease renewal percentages over the past three years have remained at a relatively consistent success rate. The effects of future economic conditions upon our base of existing tenants may adversely affect our ability to continue to achieve this renewal rate.

Acquisition and Disposition Activity: In 2010, we consolidated 106 industrial buildings as the result of acquiring Dugan. We also acquired 38 industrial buildings and one office building as a result of closing the first tranche of the Premier Portfolio. We expect to complete the purchase of the Premier Portfolio, which is under contract, in early 2011 and will continue to evaluate other acquisition opportunities to the extent they support our overall strategy. In addition to these two transactions, we purchased an additional 10 industrial buildings, two office buildings and one medical office building in 2010. Including the additional 50% ownership interest in Dugan, we acquired real estate and other assets totaling $901.5 million in 2010.

In 2009, we acquired $32.1 million of income producing properties comprised of three industrial real estate properties in Savannah, Georgia.

Net cash proceeds related to the dispositions of wholly owned undeveloped land and buildings totaled $499.5 million in 2010, compared to $288.2 million in 2009. Included in the wholly owned building dispositions in 2010 is the previously mentioned sale of seven suburban office buildings, totaling over 1.0 million square feet, to a newly formed subsidiary of an existing 20% owned joint venture. Our share of proceeds from sales of properties from within unconsolidated joint ventures in which we have less than a 100% interest totaled $15.0 million in 2010, and we had no such dispositions in 2009.

We intend to pursue additional disposition opportunities for non-strategic properties and land in accordance with our strategy. We believe that the number of dispositions we execute in 2011 will be impacted by the ability of prospective buyers to obtain favorable financing or pay cash, given the current state of the economy and credit markets in particular.

Future Development: Another source of our earnings growth is our wholly owned and joint venture development activities. We expect to generate future earnings from Rental Operations as the development properties are placed in service and leased. During 2010, we directed a significant portion of our available

resources toward acquisition activities as well as limited our development activities to pre-leased industrial and medical office product types. We believe these two product lines will be the areas of greatest future growth.

We had 3.8 million square feet of consolidated or jointly controlled properties under development with total estimated costs upon completion of $327.5 million at December 31, 2010, compared to 1.6 million square feet of property under development with total estimated costs of $440.6 million at December 31, 2009. The square footage and estimated costs include both wholly owned and joint venture development activity at 100%.

The following table summarizes our properties under development as of December 31, 2010 (in thousands, except percentage data):


Ownership Type	Square Feet		Percent Leased		Total Estimated Project Costs		Total Incurred to Date		Amount Remaining to be Spent
Consolidated properties		2,895		90%	$	151,502	$	47,181	$	104,321
Joint venture properties		866		96%		175,985		106,150		69,835

Total		3,761		92%	$	327,487	$	153,331	$	174,156

Results of Operations

A summary of our operating results and property statistics for each of the years in the three-year period ended December 31, 2010, is as follows (in thousands, except number of properties and per unit data):


	2010			2009			2008
Rental and related revenue	$	878,242		$	842,232		$	802,791
General contractor and service fee revenue		515,361			449,509			434,624
Operating income (loss)		227,728			(75,210	)		259,758
Net income (loss) attributable to common unitholders		(14,459	)		(344,700	)		53,665
Weighted average Common Units outstanding		244,870			207,893			154,534
Weighted average Common Units and potential dilutive securities		244,870			207,893			154,553
Basic income (loss) per Common Unit:
Continuing operations	$	(0.22	)	$	(1.59	)	$	0.18
Discontinued operations	$	0.15		$	(0.08	)	$	0.16
Diluted income (loss) per Common Unit:
Continuing operations	$	(0.22	)	$	(1.59	)	$	0.18
Discontinued operations	$	0.15		$	(0.08	)	$	0.16
Number of in-service consolidated properties at end of year		669			543			537
In-service consolidated square footage at end of year		114,078			90,581			90,101
Number of in-service joint venture properties at end of year		114			211			204
In-service joint venture square footage at end of year		22,657			43,248			40,948

Comparison of Year Ended December 31, 2010 to Year Ended December 31, 2009

Rental and Related Revenue

The following table sets forth rental and related revenue from continuing operations by reportable segment for the years ended December 31, 2010 and 2009, respectively (in thousands):


	2010		2009
Rental and Related Revenue:
Office	$	504,812	$	523,695
Industrial		295,960		254,515
Non-reportable segments		77,470		64,022

Total	$	878,242	$	842,232

The primary reasons for the increase in rental revenue from continuing operations, with specific references to a particular segment when applicable, are summarized below:

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We consolidated 106 industrial buildings as a result of acquiring our joint venture partner’s 50% interest in Dugan on July 1, 2010. The consolidation of these buildings resulted in an increase of $38.7 million in rental and related revenue for the year ended December 31, 2010, as compared to the same period in 2009.

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Including the December 30, 2010 acquisition of the first tranche of the Premier Portfolio, we acquired or consolidated an additional 56 properties and placed 18 developments in service from January 1, 2009 to December 31, 2010, which provided incremental revenues of $29.2 million in the year ended December 31, 2010.

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We contributed 15 properties to an unconsolidated joint venture in 2009 and 2010, resulting in a $9.2 million reduction in rental and related revenue in 2010.

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We sold eight properties in 2009 and 2010 that were excluded from discontinued operations as a result of continuing involvement in the properties through management agreements. These dispositions resulted in a decrease in rental and related revenue from continuing operations of $7.5 million in 2010.

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Rental and related revenue includes lease termination fees, which relate to specific tenants who pay a fee to terminate their lease obligation before the end of the contractual lease term. Lease termination fees included in continuing operations decreased from $12.3 million in 2009 to $6.7 million in 2010.

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Average occupancy for the year ended December 31, 2010 decreased slightly for our office properties, while increasing for our industrial properties, when compared to the year ended December 31, 2009. These changes in occupancy, as well as decreases in rental rates in certain of our 2010 lease renewals, resulted in a net decrease to rental and related revenues which partially offset the increases generated from acquisitions and developments placed in service.

Rental Expenses and Real Estate Taxes

The following table reconciles rental expenses and real estate taxes by reportable segment to our total reported amounts in the statements of operations for the years ended December 31, 2010 and 2009, respectively (in thousands):


	2010		2009
Rental Expenses:
Office	$	146,279	$	147,774
Industrial		32,880		27,016
Non-reportable segments		18,826		17,480

Total	$	197,985	$	192,270


Real Estate Taxes:
Office	$	67,104	$	68,055
Industrial		43,814		36,383
Non-reportable segments		7,088		6,751

Total	$	118,006	$	111,189

Of the overall $5.7 million increase in rental expenses in 2010 compared to 2009, $4.4 million was attributable to the consolidation of the 106 industrial buildings in Dugan. There were also incremental costs of $6.2 million associated with the additional 56 properties acquired or otherwise consolidated and 18 developments placed in service. These increases were partially offset by a decrease in rental expenses of approximately $3.3 million related to 23 properties that were sold in 2009 and 2010, but did not meet the criteria for classification as discontinued operations.

Overall, real estate taxes increased by $6.8 million in 2010 compared to 2009. The primary reason for this increase is the consolidation of an additional 106 industrial buildings related to the acquisition of Dugan,

which resulted in incremental real estate taxes of $7.1 million. There were also incremental costs of $3.1 million associated with the additional 56 properties acquired or otherwise consolidated and 18 developments placed in service. These increases were partially offset by a decrease in real estate taxes of approximately $2.7 million related to 23 properties that were sold in 2009 and 2010, but did not meet the criteria for classification as discontinued operations.

Service Operations

The following table sets forth the components of the Service Operations reportable segment (excluding Build-for-Sale Properties) for the years ended December 31, 2010 and 2009, respectively (in thousands):


	2010			2009
Service Operations:
General contractor and service fee revenue	$	515,361		$	449,509
General contractor and other services expenses		(486,865	)		(427,666	)

Total	$	28,496		$	21,843

Service Operations primarily consist of the leasing, property management, asset management, development, construction management and general contractor services for joint venture properties and properties owned by third parties. Service Operations are heavily influenced by the current state of the economy, as leasing and property management fees are dependent upon occupancy while construction and development services rely on the expansion of business operations of third-party property owners and joint venture partners. The increase in earnings from Service Operations was largely the result of an overall increase in third-party construction volume and fees.

Depreciation and Amortization Expense

Depreciation and amortization expense increased from $323.4 million in 2009 to $349.1 million in 2010 due to increases in our real estate asset base from properties acquired or consolidated and developments placed in service during 2010 and 2009. The consolidation of 106 additional industrial properties related to the July 1, 2010 acquisition of our partner’s ownership interest in Dugan resulted in $25.4 million of additional depreciation expense.

Equity in Earnings of Unconsolidated Companies

Equity in earnings represents our ownership share of net income or loss from investments in unconsolidated companies that generally own and operate rental properties and develop properties for sale. Equity in earnings decreased from $9.9 million in 2009 to $8.0 million in 2010. The decrease was largely the result of the acquisition of Dugan, which was previously accounted for under the equity method, which took place on July 1, 2010.

Gain on Sale of Properties

Gains on sales of properties classified in continuing operations increased from $12.3 million in 2009 to $39.7 million in 2010. We sold nine properties in 2009 compared to 17 properties in 2010. Because the properties sold in 2009 and 2010 either had insignificant operations prior to sale or because we maintained varying forms of continuing involvement after sale, they are not classified within discontinued operations. Seven of the properties sold in 2010, with a combined gain on sale of $31.9 million, were made to a newly formed subsidiary of an existing 20% owned joint venture to which we expect to sell additional properties during 2011.

Impairment Charges

Impairment charges classified in continuing operations include the impairment of undeveloped land and buildings, investments in unconsolidated subsidiaries and other real estate related assets. The decrease from $275.6 million in 2009 to $9.8 million in 2010 is primarily due to the following activity:

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In 2010, we sold approximately 60 acres of land, in two separate transactions, which resulted in impairment charges of $9.8 million. These sales were opportunistic in nature and we had not identified or actively marketed this land for disposition, as it was previously intended to be held for development.

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A result of the refinement of our business strategy that took place in 2009 was the decision to dispose of approximately 1,800 acres of land, which had a total cost basis of $385.3 million, rather than holding it for future development. Our change in strategy for this land triggered the requirement to conduct an impairment analysis, which resulted in a determination that a significant portion of the land, representing over 35% of the land’s carrying value, was impaired. We recognized impairment charges on land of $136.6 million in 2009, primarily as the result of writing down to fair value the land that was identified for disposition and determined to be impaired.

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Also in 2009, an impairment charge of $78.1 million was recognized for 28 office, industrial and retail buildings. Nine of these properties met the criteria for discontinued operations at December 31, 2010, either as a result of being sold or classified as held-for-sale, and the $26.9 million of impairment charges related to these properties is accordingly reflected in discontinued operations. The impairment analysis was triggered either as the result of changes in management’s strategy, resulting in certain buildings being identified as non-strategic, or changes in market conditions.

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We hold a 50% ownership interest in an unconsolidated entity (the “3630 Peachtree joint venture”) whose sole activity is the development and operation of the office component of a multi-use office and residential high-rise building located in the Buckhead sub-market of Atlanta. We recognized an impairment charge in 2009 to write off our $14.4 million investment in the 3630 Peachtree joint venture as the result of an other-than-temporary decline in value. As a result of the joint venture’s obligations to the lender in its construction loan agreement, the likelihood that our partner will be unable to contribute their share of the additional equity to fund the joint venture’s future capital costs, and ultimately from our contingent obligation stemming from our joint and several guarantee of the joint venture’s loan, we recorded an additional liability of $36.3 million in 2009 for our probable future obligation to the lender.

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In 2009, we recognized a $5.8 million charge on our investment in an unconsolidated joint venture (the “Park Creek joint venture”).

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We recognized $31.5 million of impairment charges on other real estate related assets in 2009, which related primarily to reserving loans receivable from other real estate entities, as well as writing off previously deferred development costs.

General and Administrative Expense

General and administrative expense decreased from $47.9 million in 2009 to $41.3 million in 2010. General and administrative expenses consist of two components. The first component includes general corporate expenses and the second component includes the indirect operating costs not allocated to the development or operations of our owned properties and Service Operations. The decrease in general and administrative expenses resulted from a $9.6 million reduction in our total overhead costs, which was largely a result of reduced severance charges when compared to 2009. The reduction in overall overhead expenses was partially offset by a $3.3 million decrease in overhead costs absorbed by an allocation to leasing, construction and other areas, which was primarily a result of lower wholly owned construction and development activities than in 2009.

Interest Expense

Interest expense from continuing operations increased from $206.0 million in 2009 to $239.4 million in 2010. The increase was largely the result of a $15.4 million decrease in the capitalization of interest costs, due to properties previously undergoing significant development activities being placed in service or otherwise not meeting the criteria for the capitalization of interest. The remaining increase in interest expense was largely the result of our 2010 acquisition activity which, in addition to other uses of capital, drove higher overall borrowings in 2010.

Gain (Loss) on Debt Transactions

During 2009, we repurchased certain of our outstanding series of unsecured notes scheduled to mature in 2009 through 2011. The majority of our debt repurchases during 2009 were of our 3.75% Exchangeable Senior Notes (“Exchangeable Notes”). In total, we paid $500.9 million for unsecured notes that had a face value of $542.9 million, recognizing a net gain on extinguishment of $27.5 million after considering the write-off of unamortized deferred financing costs, discounts and other accounting adjustments. Partially offsetting these gains, we recognized $6.8 million of expense in 2009 for the write-off of fees paid for a pending secured financing that we cancelled in the third quarter of 2009.

Income Taxes

We recognized an income tax benefit of $1.1 million and $6.1 million, respectively, in 2010 and 2009.

We recorded a net valuation allowance of $7.3 million against our deferred tax assets during 2009. The valuation allowance was recorded as the result of changes to our projections for future taxable income within our taxable REIT subsidiary. The decreased projection of taxable income was the result of a revision in strategy, whereby we determined that we would indefinitely discontinue the development of Build-for-Sale properties, necessitating the revision of our taxable income projections.

Discontinued Operations

The results of operations for properties sold during the year to unrelated parties or classified as held-for-sale at the end of the period, and meet the applicable criteria, are required to be classified as discontinued operations. The property specific components of earnings that are classified as discontinued operations include rental revenues, rental expenses, real estate taxes, allocated interest expense and depreciation expense, impairment charges as well as the net gain or loss on the disposition of properties.

The operations of 41 buildings are currently classified as discontinued operations. These 41 properties consist of 12 industrial, 27 office, and two retail properties. As a result, we classified income, before gain on sales and impairment charges, of $2.7 million, $2.9 million and $8.5 million in discontinued operations for the years ended December 31, 2010, 2009 and 2008, respectively.

Of these properties, 19 were sold during 2010, five properties were sold during 2009 and eight properties were sold during 2008. The gains on disposal of these properties of $33.1 million, $6.8 million and $17.0 million for the years ended December 31, 2010, 2009 and 2008, respectively, are also reported in discontinued operations. Discontinued operations also includes impairment charges of $26.9 million and $1.3 million for the years ended December 31, 2009 and 2008, respectively, recognized on properties that were subsequently sold. There are nine properties classified as held-for-sale at December 31, 2010.

Comparison of Year Ended December 31, 2009 to Year Ended December 31, 2008

Rental and Related Revenue

The following table sets forth rental and related revenue from continuing operations by reportable segment for the years ended December 31, 2009 and 2008, respectively (in thousands):


	2009		2008
Rental and Related Revenue:
Office	$	523,695	$	509,203
Industrial		254,515		245,663
Non-reportable segments		64,022		47,925

Total	$	842,232	$	802,791

The primary reasons for the increase in rental revenue from continuing operations, with specific references to a particular segment when applicable, are summarized below:

•

In 2009, we acquired three properties, consolidated two retail properties in which we previously had a partial ownership interest, and placed 15 developments in service. The acquisitions and developments provided incremental revenues of $1.4 million and $7.2 million, respectively. The two retail properties that were consolidated in 2009 provided $16.3 million of incremental revenues. Of the development properties placed in service in 2009, ten were medical office properties accounting for $4.1 million of the $7.2 million incremental revenues.

•

Acquisitions and developments that were placed in service in 2008 provided $422,000 and $31.9 million, respectively, of incremental revenue in 2009.

•

Lease termination fees included in rental and related revenue from continuing operations increased from $9.2 million in 2008 to $12.3 million in 2009.

•

We contributed five properties to an unconsolidated joint venture in 2008, resulting in a $2.2 million reduction in revenues for the year ended December 31, 2009, as compared to the same period in 2008.

•

The increase in rental revenues was partially offset by a $6.8 million increase in expense related to doubtful receivables, including both contractual and straight-line receivables, as a result of economic conditions during 2009.

•

Decreases in rental rates and occupancy in certain of our existing properties, resulting from the economy’s impact on the leasing environment, partially offset the above-mentioned items.

Rental Expenses and Real Estate Taxes


	2009		2008
Rental Expenses:
Office	$	147,774	$	141,993
Industrial		27,016		27,154
Non-reportable segments		17,480		10,226

Total	$	192,270	$	179,373


Real Estate Taxes:
Office	$	68,055	$	62,546
Industrial		36,383		29,992
Non-reportable segments		6,751		3,334

Total	$	111,189	$	95,872

Of the overall $12.9 million increase in rental expenses in 2009 compared to 2008, $10.2 million was attributable to properties acquired or consolidated and developments placed in service from January 1, 2008 through December 31, 2009.

Of the overall $15.3 million increase in real estate taxes in 2009 compared to 2008, $9.8 million was attributable to properties acquired or consolidated and developments placed in service from January 1, 2008 through December 31, 2009. The remaining increase in real estate taxes was driven by increases in tax rates and assessed values on our existing properties.

Service Operations

The following table sets forth the components of the Service Operations reportable segment (excluding Build-for-Sale Properties) for the years ended December 31, 2009 and 2008, respectively (in thousands):


	2009			2008
Service Operations:
General contractor and service fee revenue	$	449,509		$	434,624
General contractor and other services expenses		(427,666	)		(418,743	)

Total	$	21,843		$	15,881

The increase in earnings from Service Operations was primarily a result of general contractor expenses being higher than usual in 2008 as a result of increases in our total cost estimates for two third-party fixed price construction contracts, which reduced the margins on the contracts.

Depreciation and Amortization Expense

Depreciation and amortization expense increased from $293.0 million in 2008 to $323.4 million in 2009 due to increases in our real estate asset base from properties acquired or consolidated and developments placed in service during 2008 and 2009.

Equity in Earnings of Unconsolidated Companies

Equity in earnings decreased from $23.8 million in 2008 to $9.9 million in 2009. The decrease was primarily a result of our share of the gain on sale of five properties from unconsolidated subsidiaries in 2008 totaling $10.1 million, compared to no such sales in 2009. The decreased gains on property sales were partially offset as the result of consolidating two retail joint ventures in April 2009, for which our share of net loss was $3.5 million in 2008. The remaining decrease in equity in earnings is primarily due to a decrease in operating income within certain of our joint ventures due to decreased occupancy in the underlying rental properties.

Gain on Sale of Properties

Gains on sales of properties decreased from $39.1 million in 2008 to $12.3 million in 2009. We sold 14 properties in 2008 compared to nine properties in 2009. The properties sold in 2008 were part of our Build-for-Sale program, which is no longer a significant part of our Service Operations. Because the properties sold in 2008 and 2009 either had insignificant operations prior to sale or because we maintained varying forms of continuing involvement after sale, they are not classified within discontinued operations.

Earnings from Sales of Land

Earnings from sales of land decreased from $12.7 million in 2008 to $357,000 in 2009. The decrease in earnings was the result of the current state of the real estate market, as fewer developers are willing to make speculative purchases of land for future development.

Impairment Charges

Impairment charges classified in continuing operations include the impairment of undeveloped land and buildings, investments in unconsolidated subsidiaries and other real estate related assets. The increase from $10.2 million in 2008 to $275.6 million in 2009 is primarily due to a refinement of our business strategy coupled with decreases in real estate values and is comprised of the following activity:

•

Also in 2009, an impairment charge of $78.1 million was recognized for 28 office, industrial and retail buildings. Nine of these properties met the criteria for discontinued operations, either as a result of being sold or classified as held-for-sale, and the $26.9 million of impairment charges related to these properties is accordingly reflected in discontinued operations. The impairment analysis was triggered either as the result of changes in management’s strategy, resulting in certain buildings being identified as non-strategic, or changes in market conditions.

•

We recognized an impairment charge in 2009 to write off our $14.4 million investment in the 3630 Peachtree joint venture as the result of an other-than-temporary decline in value. As a result of the joint venture’s obligations to the lender in its construction loan agreement, the likelihood that our partner will be unable to contribute their share of the additional equity to fund the joint venture’s future capital costs, and ultimately from our contingent obligation stemming from our joint and several guarantee of the joint venture’s loan, we recorded an additional liability of $36.3 million in 2009 for our probable future obligation to the lender.

•

In 2009, we recognized a $5.8 million charge on our investment in the Park Creek joint venture.

•

In 2008, as the result of a re-assessment of our intended use of some of our land holdings, we recognized non-cash impairment charges on seven of our tracts of undeveloped land totaling $8.6 million. Also, as the result of the economy’s negative effect on real estate selling prices, we recognized $2.8 million of impairment charges on two of our Build-for-Sale properties that were under construction at December 31, 2008, and were expected to sell in 2009. One of these properties met the criteria for discontinued operations upon sale and the $1.3 million impairment charge related to this property is accordingly reflected in discontinued operations.

General and Administrative Expense

General and administrative expense increased from $39.5 million in 2008 to $47.9 million in 2009. The increase in general and administrative expenses is primarily the result of a $4.8 million increase in severance pay. Other than this expense item, we reduced our total overhead costs by $22.7 million to compensate for the reduction in the volume of leasing and construction activity. However, the absorption of actual overhead costs by an allocation to leasing, construction and other areas decreased by $26.3 million, which, when netted with the $22.7 million reduction in costs, resulted in the remaining increase in general and administrative expenses.

Interest Expense

Interest expense from continuing operations increased from $184.0 million in 2008 to $206.0 million in 2009, primarily as a result of a $26.6 million decrease in capitalization of interest costs, due to properties previously undergoing significant development activities being placed in service or otherwise not meeting the criteria for the capitalization of interest. Additionally, as the result of the conditions in the credit markets driving up interest rates on new borrowings in 2009, the weighted average interest rate on our total outstanding borrowings increased from 5.43% at December 31, 2008 to 6.36% at December 31, 2009.

Gain on Debt Transactions

During 2009, we repurchased certain of our outstanding series of unsecured notes scheduled to mature in 2009 through 2011. The majority of our debt repurchases during 2009 were of our Exchangeable Notes. In total, we paid $500.9 million for unsecured notes that had a face value of $542.9 million, recognizing a net gain on extinguishment of approximately $27.5 million after considering the write-off of unamortized deferred financing costs, discounts and other accounting adjustments. Partially offsetting these gains, we recognized $6.8 million of expense in 2009 for the write-off of fees paid for a pending secured financing that we cancelled in the third quarter of 2009.

Income Taxes

We recognized an income tax benefit of $6.1 million and $7.0 million, respectively, in 2009 and 2008.

Notwithstanding the valuation allowance recorded during 2009, our taxable REIT subsidiary recognized significantly higher taxable losses in 2009 than in 2008 as the result of the timing and profitability of land and building sales.

Critical Accounting Policies

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reported period. Our estimates, judgments and assumptions are inherently subjective and based on the existing business and market conditions, and are therefore continually evaluated based upon available information and experience. Note 2 to the Consolidated Financial Statements includes further discussion of our significant accounting policies. Our management has assessed the accounting policies used in the preparation of our financial statements and discussed them with the General Partner’s Audit Committee and independent auditors. The following accounting policies are considered critical based upon materiality to the financial statements, degree of judgment involved in estimating reported amounts and sensitivity to changes in industry and economic conditions:

Accounting for Joint Ventures: We analyze our investments in joint ventures to determine if the joint venture is a variable interest entity (a “VIE”) and would require consolidation. We (i) evaluate the sufficiency of the total equity at risk, (ii) review the voting rights and decision-making authority of the equity investment holders as a group, and whether there are any guaranteed returns, protection against losses, or capping of residual returns within the group and (iii) establish whether activities within the venture are on behalf of an investor with disproportionately few voting rights in making this VIE determination. We would consolidate a venture that is determined to be a VIE if we were the primary beneficiary. Beginning January 1, 2010, a new accounting standard became effective and changed the method by which the primary beneficiary of a VIE is determined to a primarily qualitative approach whereby the variable interest holder, if any, that controls a VIE’s most significant activities is the primary beneficiary. To the extent that our joint ventures do not qualify as VIEs, we further assess each partner’s substantive participating rights to determine if the venture should be consolidated.

We have equity interests in unconsolidated joint ventures that own and operate rental properties and hold land for development. To the extent applicable, we consolidate those joint ventures that are considered to be VIE’s where we are the primary beneficiary. For non-variable interest entities, we consolidate those joint ventures that we control through majority ownership interests or where we are the managing entity and our partner does not have substantive participating rights. Control is further demonstrated by the ability of the general partner to manage day-to-day operations, refinance debt and sell the assets of the joint venture without the consent of the limited partner and inability of the limited partner to replace the general partner. We use the equity method of accounting for those joint ventures where we do not have control over operating and financial policies. Under the equity method of accounting, our investment in each joint venture is included on our balance sheet; however, the assets and liabilities of the joint ventures for which we use the equity method are not included on our balance sheet.

To the extent that we contribute assets to a joint venture, our investment in the joint venture is recorded at our cost basis in the assets that were contributed to the joint venture. To the extent that our cost basis is different than the basis reflected at the joint venture level, the basis difference is amortized over the life of the related asset and included in our share of equity in earnings of the joint venture. We recognize gains on the contribution or sale of real estate to joint ventures, relating solely to the outside partner’s interest, to the extent the economic substance of the transaction is a sale.

Cost Capitalization: Direct and certain indirect costs, including interest, clearly associated with the development, construction, leasing or expansion of real estate investments are capitalized as a cost of the property.

We capitalize interest and direct and indirect project costs associated with the initial construction of a property up to the time the property is substantially complete and ready for its intended use. We believe the completion of the building shell is the proper basis for determining substantial completion and that this basis is the most widely accepted standard in the real estate industry. The interest rate used to capitalize interest is based upon our average borrowing rate on existing debt.

We also capitalize direct and indirect costs, including interest costs, on vacant space during extended lease-up periods after construction of the building shell has been completed if costs are being incurred to ready the vacant space for its intended use. If costs and activities incurred to ready the vacant space cease, then cost capitalization is also discontinued until such activities are resumed. Once necessary work has been completed on a vacant space, project costs are no longer capitalized. We cease capitalization of all project costs on extended lease-up periods after the shorter of a one-year period after the completion of the building shell or when the property attains 90% occupancy. In addition, all leasing commissions paid to third parties for new leases or lease renewals are capitalized.

In assessing the amount of indirect costs to be capitalized, we first allocate payroll costs, on a department-by-department basis, among activities for which capitalization is warranted (i.e., construction, development and leasing) and those for which capitalization is not warranted (i.e., property management, maintenance, acquisitions and dispositions and general corporate functions). To the extent the employees of a department split their time between capitalizable and non-capitalizable activities, the allocations are made based on estimates of the actual amount of time spent in each activity. Once the payroll costs are allocated, the non-payroll costs of each department are allocated among the capitalizable and non-capitalizable activities in the same proportion as payroll costs.

To ensure that an appropriate amount of costs are capitalized, the amount of capitalized costs that are allocated to a specific project are limited to amounts using standards we developed. These standards consist of a percentage of the total development costs of a project and a percentage of the total gross lease amount payable under a specific lease. These standards are derived after considering the amounts that would be allocated if the personnel in the departments were working at full capacity. The use of these standards ensures that overhead costs attributable to downtime or to unsuccessful projects or leasing activities are not capitalized.

Impairment of Real Estate Assets: We evaluate our real estate assets, with the exception of those that are classified as held-for-sale, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If such an evaluation is considered necessary, we compare the carrying amount of that real estate asset, or asset group, with the expected undiscounted cash flows that are directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of that asset, or asset group. Our estimate of the expected future cash flows used in testing for impairment is based on, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, costs of tenant improvements, leasing commissions and other tenant concessions, assumptions regarding the residual value of our properties at the end of our anticipated holding period and the length of our anticipated holding period and is, therefore, subjective by nature. These assumptions could differ materially from actual results. If our strategy changes or if market conditions otherwise dictate a reduction in the holding period and an earlier sale date, an impairment loss could be recognized and such loss could be material. To the extent the carrying amount of a real estate asset, or asset group, exceeds the associated estimate of undiscounted cash flows, an impairment loss is recorded to reduce the carrying value of the asset to its fair value.

The determination of the fair value of real estate assets is also highly subjective, especially in markets where there is a lack of recent comparable transactions. We primarily utilize the income approach to estimate the fair value of our income producing real estate assets. To the extent that the assumptions used in testing long-lived assets for impairment differ from those of a marketplace participant, the assumptions are modified in order to estimate the fair value of a real estate asset when an impairment charge is measured. In addition to determining future cash flows, which make the estimation of a real estate asset’s undiscounted cash flows highly subjective, the selection of the discount rate and exit capitalization rate used in applying the income approach is also highly subjective.

To the extent applicable marketplace data is available, we generally use the market approach in estimating the fair value of undeveloped land that is determined to be impaired.

Real estate assets that are classified as held-for-sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell.

Acquisition of Real Estate Property and Related Assets: We allocate the purchase price of acquired properties to net tangible and identified intangible assets based on their respective fair values. Beginning January 1, 2009, we record assets acquired in step acquisitions at their full fair value and record a gain or loss for the difference between the fair value and the carrying value of our existing equity interest. Additionally, beginning January 1, 2009, contingencies arising from a business combination are recorded at fair value if the acquisition date fair value can be determined during the measurement period.

The allocation to tangible assets (buildings, tenant improvements and land) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models similar to those used by independent appraisers. Factors considered by management include an estimate of carrying costs during the expected lease-up periods considering current market conditions, and costs to execute similar leases. The purchase price of real estate assets is also allocated among three categories of intangible assets consisting of the above or below market component of in-place leases, the value of in-place leases and the value of customer relationships.

•

The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using an interest rate which reflects the risks associated with the lease) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term and (ii) management’s estimate of the amounts that would be paid using current fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in deferred leasing and other costs in the balance sheet and below market leases are included in other liabilities in the balance sheet; both are amortized to rental income over the remaining terms of the respective leases.

•

The total amount of intangible assets is further allocated to in-place lease values and to customer relationship values, based upon management’s assessment of their respective values. These intangible assets are included in deferred leasing and other costs in the balance sheet and are amortized over the remaining term of the existing lease, or the anticipated life of the customer relationship, as applicable.

Valuation of Receivables: We are subject to tenant defaults and bankruptcies that could affect the collection of rent due under leases or of outstanding receivables. In order to mitigate these risks, we perform credit reviews and analyses on major existing tenants and prospective tenants before leases are executed. We have established the following procedures and policies to evaluate the collectability of outstanding receivables and record allowances:

•

We maintain a tenant “watch list” containing a list of significant tenants for which the payment of receivables and future rent may be at risk. Various factors such as late rent payments, lease or debt

instrument defaults, and indications of a deteriorating financial position are considered when determining whether to include a tenant on the watch list.

•

As a matter of policy, we reserve the entire receivable balance, including straight-line rent, of any tenant with an amount outstanding over 90 days.

•

Straight-line rent receivables for any tenant on the watch list or any other tenant identified as a potential long-term risk, regardless of the status of current rent receivables, are reviewed and reserved as necessary.

Construction Contracts: We recognize income on construction contracts where we serve as a general contractor on the percentage of completion method. Using this method, profits are recorded on the basis of our estimates of the overall profit and percentage of completion of individual contracts. A portion of the estimated profits is accrued based upon our estimates of the percentage of completion of the construction contract. To the extent that a fixed-price contract is estimated to result in a loss, the loss is recorded immediately. Cumulative revenues recognized may be less or greater than cumulative costs and profits billed at any point in time during a contract’s term. This revenue recognition method involves inherent risks relating to profit and cost estimates with those risks reduced through approval and monitoring processes.

With regard to critical accounting policies, management has discussed the following with the Audit Committee of the General Partner’s board of directors:

•

Criteria for identifying and selecting our critical accounting policies;

•

Methodology in applying our critical accounting policies; and

•

Impact of the critical accounting policies on our financial statements.

The Audit Committee of the General Partner has reviewed the critical accounting policies identified by management.

Liquidity and Capital Resources

Sources of Liquidity

As the result of generating capital in excess of $1.0 billion through a common equity issuance of the General Partner, unsecured borrowings, and property dispositions, we have more than sufficient capacity to meet our short-term liquidity requirements over the next twelve months.

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

Rental Operations

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

We are subject to a number of risks related to general economic conditions, including reduced occupancy, tenant defaults and bankruptcies, and potential reduction in rental rates upon renewal or re-letting of properties, each of which would result in reduced cash flow from operations. In 2010, we recognized $5.9

million of expense related to reserving doubtful receivables, including reserves on straight-line rent, compared to $12.0 million in 2009.

Unsecured Debt and Equity Securities

Our unsecured lines of credit as of December 31, 2010 are described as follows (in thousands):


Description	Borrowing Capacity		Maturity Date	Outstanding Balance at December 31, 2010
Unsecured Line of Credit – Partnership	$	850,000	February 2013	$	175,000
Unsecured Line of Credit – Consolidated Subsidiary	$	30,000	July 2011	$	18,046

The Partnership’s unsecured line of credit has a borrowing capacity of $850.0 million with an interest rate on borrowings of LIBOR plus 2.75% (equal to 3.01% for borrowings as of December 31, 2010), and matures in February 2013. Subject to certain conditions, the terms also include an option to increase the facility by up to an additional $200.0 million, for a total of up to $1.05 billion. This line of credit provides us with an option to obtain borrowings from financial institutions that participate in the line, at rates that may be lower than the stated interest rate, subject to certain restrictions.

This line of credit contains financial covenants that require us to meet certain financial ratios and defined levels of performance, including those related to fixed charge coverage and debt-to-asset value (with asset value being defined in the Partnership’s unsecured line of credit agreement). As of December 31, 2010, we were in compliance with all covenants under this line of credit.

At December 31, 2010, we and the General Partner had on file with the SEC an automatic shelf registration statement on Form S-3, relating to the offer and sale, from time to time, of an indeterminate amount of debt and equity securities, as well as guarantees of our debt securities by the General Partner. Equity securities are offered and sold by the General Partner and the net proceeds of such offerings are contributed to us in exchange for additional General Partner Units or Preferred Units. From time to time, we and the General Partner expect to issue additional securities under this automatic shelf registration statement to fund the repayment of the credit facility and other long-term debt upon maturity.

Pursuant to its automatic shelf registration statement, at December 31, 2010 the General Partner had on file with the SEC a prospectus supplement that allows it to issue new shares of its common stock, from time to time, with an aggregate offering price of up to $150.0 million. No new shares have been issued pursuant to this prospectus supplement as of December 31, 2010.

The indentures (and related supplemental indentures) governing our outstanding series of notes also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such covenants as of December 31, 2010.

Sale of Real Estate Assets

We pursue opportunities to sell non-strategic real estate assets in order to generate additional liquidity. Our ability to dispose of such properties is dependent on the availability of credit to potential buyers to purchase properties at prices that we consider acceptable. In light of current market and economic conditions, including, without limitation, the availability and cost of credit, the U.S. mortgage market, and condition of the equity and real estate markets, we may be unable to dispose of such properties quickly, or on favorable terms.

Transactions with Unconsolidated Entities

Transactions with unconsolidated partnerships and joint ventures also provide a source of liquidity. From time to time we will sell properties to an unconsolidated entity, while retaining a continuing interest in that entity, and receive proceeds commensurate to the interest that we do not own.

Additionally, unconsolidated entities will from time to time obtain debt financing and will distribute to us, and our joint venture partners, all or a portion of the proceeds.

We have a 20% equity interest in an unconsolidated joint venture (“Duke/Hulfish, LLC”) that may acquire up to $800.0 million of our newly developed build-to-suit projects over a three-year period from its formation in May 2008. Properties are sold to the joint venture upon completion, lease commencement and satisfaction of other customary conditions. We have received cumulative net sale and financing proceeds, commensurate to our partner’s ownership interest, of approximately $380.4 million through December 31, 2010 related to the joint venture’s acquisition of 15 of our properties.

In December 2010, we formed a new joint venture (“Duke/Princeton, LLC”) which is a wholly owned subsidiary of, and with the same membership composition and ownership percentages as, Duke/Hulfish, LLC. We made an initial sale of seven suburban office buildings, totaling over 1.0 million square feet, to Duke/Princeton, LLC, for an agreed value of $173.9 million for which our 80% share of net proceeds totaled $138.3 million. We expect, and are under contract, to sell additional buildings to Duke/Princeton, LLC by the end of the second quarter 2011, subject to financing and other customary closing conditions. The total 2011 sale is expected to consist of 13 office buildings, totaling over 2.0 million square feet, with an agreed upon value of $342.8 million, and is expected to generate proceeds of $274.2 million for the 80% portion that we sell.

Uses of Liquidity

Our principal uses of liquidity include the following:

•

accretive property investment;

•

leasing/capital costs;

•

distributions to unitholders;

•

long-term debt maturities;

•

repurchases of outstanding debt and Preferred Units; and

•

other contractual obligations.

Property Investment

We evaluate development and acquisition opportunities based upon market outlook, supply and long-term growth potential. Our ability to make future property investments is dependent upon our continued access to our longer-term sources of liquidity including the issuances of debt or equity securities as well as generating cash flow by disposing of selected properties. In light of current economic conditions, management continues to evaluate our investment priorities and is focused on accretive growth.

We have continued to operate at a substantially reduced level of new development activity, as compared to recent years, and are focused on the core operations of our existing base of properties.

Leasing/Capital Costs

One of our principal uses of our liquidity is to fund the second generation leasing/capital expenditures of our real estate investments. The following is a summary of our second generation capital expenditures for the years ended December 31, 2010, 2009 and 2008, respectively (in thousands):


	2010		2009		2008
Second generation tenant improvements	$	36,676	$	29,321	$	36,885
Second generation leasing costs		39,090		40,412		28,205
Building improvements		12,957		9,321		9,724

Totals	$	88,723	$	79,054	$	74,814

Distributions

In order to qualify as a REIT for federal income tax purposes, the General Partner must currently distribute at least 90% of its taxable income to its shareholders. Because depreciation and impairments are non-cash expenses, cash flow will typically be greater than operating income. We paid distributions per Common Unit of $0.68, $0.76 and $1.93 for the years ended December 31, 2010, 2009 and 2008, respectively. We expect to continue to distribute at least an amount equal to our taxable earnings, to meet the requirements of the General Partner to maintain its REIT status, and additional amounts as determined by the General Partner’s board of directors. Distributions are declared at the discretion of the General Partner’s board of directors and are subject to actual cash available for distribution, our financial condition, capital requirements and such other factors as the General Partner’s board of directors deems relevant.

At December 31, 2010 the General Partner had six series of preferred shares outstanding. The annual distribution rates on the General Partner’s preferred shares range between 6.5% and 8.375% and are paid in arrears quarterly.

Debt Maturities

Debt outstanding at December 31, 2010 had a face value totaling $4.2 billion with a weighted average interest rate of 6.24% maturing at various dates through 2028. We had $3.0 billion of unsecured debt, $193.0 million outstanding on our unsecured lines of credit and $1.1 billion of secured debt outstanding at December 31, 2010. We made scheduled and unscheduled principal payments of $587.3 million on outstanding debt during the year ended December 31, 2010.

The following is a summary of the scheduled future amortization and maturities of our indebtedness at December 31, 2010 (in thousands, except percentage data):


	Future Repayments						Weighted Average
Year	Scheduled Amortization		Maturities		Total		Interest Rate of Future Repayments
2011	$	17,428	$	383,883	$	401,311		5.10	%
2012		15,926		304,854		320,780		5.85	%
2013		15,444		686,893		702,337		5.47	%
2014		14,138		305,012		319,150		6.34	%
2015		11,919		309,335		321,254		7.06	%
2016		10,561		492,560		503,121		6.16	%
2017		9,031		469,324		478,355		5.94	%
2018		7,356		300,000		307,356		6.08	%
2019		6,322		518,438		524,760		7.97	%
2020		4,732		250,000		254,732		6.73	%
2021		3,416		-		3,416		5.57	%
Thereafter		17,789		50,000		67,789		6.86	%

	$	134,062	$	4,070,299	$	4,204,361		6.24	%

We anticipate generating capital to fund our debt maturities by using undistributed cash generated from rental operations and property dispositions, as well as by raising additional capital from future debt or equity transactions.

Repurchases of Outstanding Debt and Preferred Units

To the extent that it supports our overall capital strategy, we may purchase additional amounts of our outstanding unsecured debt prior to its stated maturity or redeem or repurchase certain of our Preferred Units held by the General Partner in conjunction with any redemption or repurchases it makes of the corresponding outstanding series of its preferred stock.

Guarantee Obligations

We are subject to various guarantee obligations in the normal course of business and, in most cases, do not anticipate these obligations to result in significant cash payments.

We are, however, subject to a joint and several guarantee of the construction loan agreement of the 3630 Peachtree joint venture. A contingent liability in the amount of $36.3 million was established in 2009 based on the probability of us being required to pay this obligation to the lender.

Historical Cash Flows

Cash and cash equivalents were $18.4 million and $147.5 million at December 31, 2010 and 2009, respectively. The following highlights significant changes in net cash associated with our operating, investing and financing activities (in thousands):


	Years Ended December 31,
	2010			2009			2008
Net Cash Provided by Operating Activities	$	390,776		$	401,184		$	643,800
Net Cash Used for Investing Activities		(288,790	)		(176,139	)		(522,764	)
Net Cash Used for Financing Activities		(231,106	)		(99,791	)		(145,797	)

Operating Activities

Cash flows from operating activities provide the cash necessary to meet normal operational requirements of our Rental Operations and Service Operations activities. The receipt of rental income from Rental Operations continues to provide the primary source of our revenues and operating cash flows. In addition, we have historically developed Build-for-Sale properties with the intent to sell them at or soon after completion. As a result of the refinement to our strategy in 2009, we have ceased new Build-for-Sale development activity to focus on completion of existing projects. Highlights of operating cash changes are as follows:

•

During the year ended December 31, 2010, we incurred no Build-for-Sale property development costs, compared to $16.9 million and $216.1 million for the years ended December 31, 2009 and 2008, respectively. The decrease is a result of the planned elimination of our Build-for-Sale program.

•

We sold no Build-for-Sale properties in 2010 compared to three in 2009 and 14 in 2008, receiving net proceeds of $31.9 million and $343.0 million, respectively. The 2009 sales were nearly break-even, while the 2008 sales resulted in pre-tax gains of $39.1 million.

•

Net cash flows from third-party construction contracts totaled a net outflow of $6.4 million for the year ended December 31, 2010, compared to a net outflow of $4.6 million and a net inflow of $125.9 million for the years ended December 31, 2009 and 2008, respectively. The higher operating cash flows in 2008 from third-party construction contracts were driven by $105.1 million in cash proceeds from the 2008 sale of a parcel of land that was completed in conjunction with a significant third-party construction project.

Investing Activities

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

•

Development expenditures for our held-for-rental portfolio totaled $119.4 million for the year ended December 31, 2010, compared to $268.9 million and $436.3 million for the years ended December 31, 2009 and 2008, respectively. The decrease is consistent with our planned reduction in new development activity.

•

During 2010, we paid cash of $488.5 million for real estate acquisitions, compared to $31.7 million in 2009 and $20.1 million in 2008. In addition, we paid cash of $14.4 million for undeveloped land in 2010, compared to $5.5 million in 2009 and $40.9 million in 2008.

•

Sales of land and depreciated property provided $499.5 million in net proceeds in 2010, compared to $256.3 million in 2009 and $116.6 million in 2008.

•

During 2010, we contributed or advanced $53.2 million to fund development activities within unconsolidated companies, compared to $23.5 million in 2009 and $132.2 million in 2008.

•

We received capital distributions (as a result of the sale of properties or refinancing) from unconsolidated subsidiaries of $22.1 million in 2010 and $95.4 million in 2008. We received no such distributions from unconsolidated companies in 2009.

Financing Activities

The following items highlight significant capital transactions:

•

In January 2010, we repaid $99.8 million of senior unsecured notes with an effective interest rate of 5.37% on their scheduled maturity date. This compares to repayments of $124.0 million of corporate unsecured debt and $82.1 million of senior unsecured notes with effective interest rates of 6.83% and 7.86%, respectively, on their scheduled maturity dates in February 2009 and November 2009, respectively. We also repaid $125.0 million and $100.0 million of senior unsecured notes with effective interest rates of 3.36% and 6.76%, respectively, on their scheduled maturity dates in January 2008 and May 2008, respectively.

•

In April 2010, we issued $250.0 million of senior unsecured notes that bear interest at an effective rate of 6.75% and mature in March 2020. In August 2009, we issued $250.0 million of senior unsecured notes due in 2015 bearing interest at an effective rate of 7.50% and $250.0 million of senior unsecured notes due in 2019 bearing interest at an effective rate of 8.38%. We also issued $325.0 million of senior unsecured notes in May 2008 with an effective interest rate of 7.36% due in 2013.

•

In June 2010, the General Partner issued 26.5 million shares of its common stock for net proceeds of $298.1 million. In April 2009, the General Partner issued 75.2 million shares of its common stock for net proceeds of $551.4 million. The proceeds from both offerings were contributed to us in exchange for additional General Partner Units. The General Partner had no common stock issuances in 2008.

•

During 2010, through a cash tender offer and open market transactions, we repurchased certain of our outstanding series of unsecured notes scheduled to mature in 2011 and 2013. In total, we paid $292.2 million for unsecured notes that had a face value of $279.9 million. Throughout 2009 and the fourth quarter of 2008, we repurchased certain of our outstanding series of unsecured notes maturing in 2009 through 2011. In 2009, cash payments of $500.9 million were made to repurchase notes with a face value of $542.9 million, compared to cash payments of $36.5 million made in the fourth quarter of 2008 for notes with a face value of $38.5 million.

•

Throughout 2010, the General Partner completed open market repurchases of approximately 4.5 million shares of its 8.375% Series O preferred stock. The General Partner paid $118.8 million to repurchase these shares, which had a face value of $112.1 million. During the fourth quarter of 2008, in order to take advantage of the significant discounts at which they were trading, the General Partner opportunistically repurchased portions of all outstanding series of its preferred shares, which had a total redemption value of approximately $27.4 million, in the open market for $12.4 million. For all of these repurchases, we then repurchased corresponding Preferred Units held by the General Partner at the same price at which it repurchased its shares on the open market.

•

We increased net borrowings on the Partnership’s $850.0 million line of credit by $175.0 million for the year ended December 31, 2010, compared to a decrease of $474.0 million in 2009 and a decrease of $69.0 million in 2008.

•

We paid cash distributions of $0.68 per Common Unit in 2010, compared to cash distributions of $0.76 per Common Unit in 2009 and $1.93 per Common Unit in 2008. In order to retain

additional cash to help meet our capital needs, we reduced our quarterly distributions beginning in the first quarter of 2009.

•

In February, March and July 2009, we received cash proceeds of $270.0 million from three 10-year secured debt financings that are secured by 32 rental properties. The secured debt bears interest at a weighted average rate of 7.69% and matures at various points in 2019.

•

In March 2008, we settled three forward-starting swaps and made a cash payment of $14.6 million to the counterparties.

•

In February 2008, we received net proceeds of approximately $290.0 million from the General Partner’s issuance of shares of its Series O Cumulative Redeemable Preferred Stock; the General Partner had no new preferred equity issuances in 2009 or 2010.

Credit Ratings

The General Partner and the Partnership are currently assigned investment grade corporate credit ratings on our senior unsecured notes from Moody’s Investors Service and Standard and Poor’s Ratings Group. Our senior unsecured notes have been assigned ratings of BBB- and Baa2 by Standard and Poor’s Ratings Group and Moody’s Investors Service, respectively.

The General Partner’s preferred shares carry ratings of BB+ and Baa3 from Standard and Poor’s Ratings Group and Moody’s Investors Service, respectively.

The ratings of our senior unsecured notes and the General Partner’s preferred shares could change based upon, among other things, the impact that prevailing economic conditions may have on our results of operations and financial condition.

Financial Instruments

We are exposed to capital market risk, such as changes in interest rates. In order to reduce the volatility relating to interest rate risk, we may enter into interest rate hedging arrangements from time to time. We do not utilize derivative financial instruments for trading or speculative purposes.

Off Balance Sheet Arrangements

Investments in Unconsolidated Companies

We have equity interests in unconsolidated partnerships and joint ventures that own and operate rental properties and hold land for development. Our unconsolidated subsidiaries are primarily engaged in the operations and development of Industrial, Office and Medical Office real estate properties. The equity method of accounting (see Critical Accounting Policies) is used for these investments in which we have the ability to exercise significant influence, but not control, over operating and financial policies. As a result, the assets and liabilities of these joint ventures are not included on our balance sheet.

Our investments in and advances to unconsolidated companies represent approximately 5% and 7% of our total assets as of December 31, 2010 and 2009, respectively. These investments provide several benefits to us, including increased market share, tenant and property diversification and an additional source of capital to fund real estate projects.

The following table presents summarized financial information for unconsolidated companies for the years ended December 31, 2010 and 2009, respectively (in thousands, except percentage data):


	Joint Ventures
	2010			2009
Land, buildings and tenant improvements, net	$	1,687,228		$	2,072,435
Construction in progress		120,834			128,257
Undeveloped land		177,473			176,356
Other assets		242,461			260,249

	$	2,227,996		$	2,637,297


Indebtedness	$	1,082,823		$	1,319,696
Other liabilities		66,471			75,393

		1,149,294			1,395,089
Owners’ equity		1,078,702			1,242,208

	$	2,227,996		$	2,637,297


Rental revenue	$	228,378		$	254,787

Gain on sale of properties	$	4,517		$	-

Net income	$	19,202		$	9,760


Total square feet		23,522			44,207
Percent leased		89.24	%		86.31	%

Dugan generated $42.5 million in revenues and $6.4 million of net income in the six months of 2010 prior to its July 1 consolidation. Dugan generated $85.7 million of revenues and $12.5 million of net income during 2009, and had total assets of $649.3 million as of December 31, 2009.

We do not have any relationships with unconsolidated entities or financial partnerships (“special purpose entities”) that have been established solely for the purpose of facilitating off-balance sheet arrangements.

Contractual Obligations

At December 31, 2010, we were subject to certain contractual payment obligations as described in the table below:


	Payments due by Period (in thousands)
Contractual Obligations	Total		2011		2012		2013		2014		2015		Thereafter
Long-term debt (1)	$	5,413,606	$	629,781	$	548,966	$	725,060	$	498,912	$	473,417	$	2,537,470
Lines of credit (2)		214,225		28,046		9,604		176,575		-		-		-
Share of debt of unconsolidated joint ventures (3)		447,573		87,602		27,169		93,663		34,854		65,847		138,438
Ground leases		103,563		2,199		2,198		2,169		2,192		2,202		92,603
Operating leases		2,704		840		419		395		380		370		300
Development and construction backlog costs (4)		521,041		476,314		44,727		-		-		-		-
Other		1,967		1,015		398		229		90		54		181

Total Contractual Obligations	$	6,704,679	$	1,225,797	$	633,481	$	998,091	$	536,428	$	541,890	$	2,768,992

(1)	Our long-term debt consists of both secured and unsecured debt and includes both principal and interest. Interest expense for variable rate debt was calculated using the interest rates as of December 31, 2010.

(2)

Our unsecured lines of credit consist of an operating line of credit that matures February 2013 and the line of credit of a consolidated subsidiary that matures July 2011. Interest expense for our unsecured lines of credit was calculated using the most recent stated interest rates that were in effect.

(3)	Our share of unconsolidated joint venture debt includes both principal and interest. Interest expense for variable rate debt was calculated using the interest rate at December 31, 2010.

(4)	Represents estimated remaining costs on the completion of owned development projects and third-party construction projects.

Related Party Transactions

We provide property and asset management, leasing, construction and other tenant related services to unconsolidated companies in which we have equity interests. For the years ended December 31, 2010, 2009 and 2008, respectively, we earned management fees of $7.6 million, $8.4 million and $7.8 million, leasing fees of $2.7 million, $4.2 million and $2.8 million and construction and development fees of $10.3 million, $10.2 million and $12.7 million from these companies. We recorded these fees based on contractual terms that approximate market rates for these types of services, and we have eliminated our ownership percentages of these fees in the consolidated financial statements.

Commitments and Contingencies

We have guaranteed the repayment of $95.4 million of economic development bonds issued by various municipalities in connection with certain commercial developments. We will be required to make payments under our guarantees to the extent that incremental taxes from specified developments are not sufficient to pay the bond debt service. Management does not believe that it is probable that we will be required to make any significant payments in satisfaction of these guarantees.

We also have guaranteed the repayment of secured and unsecured loans of six of our unconsolidated subsidiaries. At December 31, 2010, the maximum guarantee exposure for these loans was approximately $245.4 million. With the exception of the guarantee of the debt of 3630 Peachtree joint venture, for which we recorded a contingent liability in 2009 of $36.3 million, management believes it probable that we will not be required to satisfy these guarantees.

We lease certain land positions with terms extending to December 2080, with a total obligation of $103.6 million. No payments on these ground leases are material in any individual year.

We are subject to various legal proceedings and claims that arise in the ordinary course of business. In the opinion of management, the amount of any ultimate liability with respect to these actions will not materially affect our consolidated financial statements or results of operations.

Recent Accounting Pronouncements

On January 1, 2009, we adopted a newly effective accounting standard for convertible debt instruments that may be settled in cash upon conversion. The new standard required separate accounting for the debt and equity components of certain convertible instruments. Our Exchangeable Notes issued in November 2006 have an exchange rate of 20.47 common shares per $1,000 principal amount of the notes, representing an exchange price of $48.85 per share of the General Partner’s common stock. The Exchangeable Notes were subject to the accounting changes required by the new standard, which required that the value assigned to the debt component equal the estimated fair value of debt with similar contractual cash flows, but without the conversion feature, resulting in the debt being recorded at a discount. The resulting debt discount will be amortized over the period from its issuance through November 2011, the first optional redemption date, as additional non-cash interest expense.

At December 31, 2010, the Exchangeable Notes had $167.6 million of principal outstanding, with an unamortized discount of $2.1 million and a net carrying amount of $165.6 million. The carrying amount

of the equity component was $34.7 million at December 31, 2010. Subsequent to the implementation of the new standard, interest expense is recognized on the Exchangeable Notes at an effective rate of 5.6%. The increase to interest expense (in thousands) on the Exchangeable Notes, which led to a corresponding decrease to net income, for the years ended December 31, 2010, 2009 and 2008 is summarized as follows:


	2010		2009		2008
Interest expense on Exchangeable Notes, excluding effect of accounting for convertible debt	$	7,136	$	14,850	$	21,574
Effect of accounting for convertible debt		2,474		5,024		6.536

Total interest expense on Exchangeable Notes	$	9,610	$	19,874	$	28,110

In June 2009, the Financial Accounting Standards Board (“FASB”) issued a new accounting standard that became effective on January 1, 2010. This accounting standard is a revision to a previous FASB interpretation and changes how a reporting entity evaluates whether an entity is a VIE and which entity is considered the primary beneficiary of a VIE and is therefore required to consolidate such VIE. This accounting standard also requires assessments at each reporting period of which party within the VIE is considered the primary beneficiary and requires a number of new disclosures related to VIE’s. This new accounting standard did not have a significant impact on our financial position and results of operations upon adoption.

Item 7A. Quantitative and Qualitative Disclosure About Market Risks

We are exposed to interest rate changes primarily as a result of our line of credit and long-term borrowings. Our interest rate risk management objective is to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we borrow primarily at fixed rates. We do not enter into derivative or interest rate transactions for speculative purposes. Our two outstanding swaps, which fixed the rates on two of our variable rate loans, were not significant to the Financial Statements in terms of notional amount or fair value at December 31, 2010.

Our interest rate risk is monitored using a variety of techniques. The table below presents the principal amounts (in thousands) of the expected annual maturities, weighted average interest rates for the average debt outstanding in the specified period, fair values (in thousands) and other terms required to evaluate the expected cash flows and sensitivity to interest rate changes.


	2011		2012		2013		2014		2015		Thereafter		Total		Fair Value
Fixed rate secured debt	$	27,048	$	102,028	$	99,492	$	66,123	$	68,728	$	674,494	$	1,037,913	$	1,069,562
Weighted average interest rate		6.95%		6.00%		5.86%		6.46%		5.50%		6.62%
Variable rate secured debt	$	785	$	16,906	$	880	$	935	$	300	$	3,101	$	22,907	$	22,906
Weighted average interest rate		0.72%		4.79%		0.74%		0.75%		0.50%		0.50%
Fixed rate unsecured debt	$	355,432	$	201,846	$	426,965	$	252,092	$	252,226	$	1,461,934	$	2,950,495	$	3,164,651
Weighted average interest rate		5.17%		5.87%		6.40%		6.33%		7.49%		6.66%
Unsecured lines of credit	$	18,046	$	-	$	175,000	$	-	$	-	$	-	$	193,046	$	193,224
Rate at December 31, 2010		1.11%		N/A		3.01%		N/A		N/A		N/A

As the table incorporates only those exposures that exist as of December 31, 2010, it does not consider those exposures or positions that could arise after that date. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period, our hedging strategies at that time to the extent we are party to interest rate derivatives, and interest rates.

Interest expense on our unsecured lines of credit will be affected by fluctuations in LIBOR indices as well as changes in our credit rating.

At December 31, 2010, the par value of our unsecured debt was $3.0 billion and we estimated the fair value of that unsecured debt to be $3.2 billion. At December 31, 2009, the par value of our unsecured notes was $3.1 billion and our estimate of the fair value of that debt was $3.0 billion.

Item 8. Financial Statements and Supplementary Data

The financial statements and supplementary data are included under Item 15 of this Report.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There was no change or disagreement with our accountants related to our accounting and financial disclosures.

Item 9A. Controls and Procedures

We conducted an evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” as of the end of the period covered by this Report. The controls evaluation was done under the supervision and with the participation of management, including the General Partner’s Chief Executive Officer and Chief Financial Officer.

Attached as exhibits to this Report are certifications of the General Partner’s Chief Executive Officer and Chief Financial Officer, which are required in accordance with Rule 13a-14 of the Securities Exchange Act of 1934. This Controls and Procedures section includes the information concerning the controls evaluation referred to in the certifications and it should be read in conjunction with the certifications for a more complete understanding of the topics presented.

Disclosure controls and procedures (as defined in Rule 13a-15 and 15d-15f under the Securities Exchange Act of 1934 (the “Exchange Act”) are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures are also designed to ensure that such information is accumulated and communicated to our management, including the General Partner’s principal executive and principal financial officers, as appropriate, to allow timely decisions regarding required disclosure.

Based on the disclosure controls and procedures evaluation referenced above, the General Partner’s Chief Executive Officer and Chief Financial Officer have concluded that as of the end of the period covered by this Report, our disclosure controls and procedures were effective.

Management’s annual report on internal control over financial reporting and the audit report of our registered public accounting firm are included in Item 15 of Part IV under the headings “Management’s Report on Internal Control” and “Report of Independent Registered Public Accounting Firm,” respectively, and are incorporated herein by reference.

There were no changes in our internal controls over financial reporting during the quarter ended December 31, 2010, that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

Item 9B. Other Information

There was no information required to be disclosed in a report on Form 8-K during the fourth quarter of 2010 for which no Form 8-K was filed.

PART III

Item 10. Directors and Executive Officers of the Registrant

The Partnership does not have any directors or executive officers. The following is a summary of the executive officers of the General Partner as of January 1, 2011:

Dennis D. Oklak, age 57. Mr. Oklak joined the General Partner in 1986. He held various senior executive positions within the General Partner and was promoted to Chief Executive Officer of the General Partner and joined the General Partner’s Board of Directors in April 2004. In April 2005, Mr. Oklak was appointed Chairman of the General Partner’s Board of Directors. Mr. Oklak serves on the Board of Governors of the National Association of Real Estate Investment Trusts, or “NAREIT,” and is a member of the Real Estate Roundtable and co-chair of the Roundtable’s Sustainability Policy Advisory Committee. From 2003 to 2009, Mr. Oklak was a member of the board of directors of publicly-traded recreational vehicle manufacturer, Monaco Coach Corporation. He also is a member of the board of directors and the Executive Committee of the Central Indiana Corporate Partnership and serves on the Dean’s Executive Advisory Board of Ball State University’s Miller College of Business. Mr. Oklak has served as a director of the General Partner since 2004.

Christie B. Kelly, age 49. Ms. Kelly was appointed as Executive Vice President and Chief Financial Officer of the General Partner effective February 27, 2009. Ms. Kelly has 25 years of experience ranging from financial planning and strategic development to senior leadership roles in financial management, mergers and acquisitions, information technology and investment banking. Prior to joining the General Partner, Ms. Kelly served as Senior Vice President of the Global Real Estate Group at Lehman Brothers from 2007 to February 2009. Previously, Ms. Kelly was employed by General Electric Company from 1983 to 2007 and served in numerous finance and operational leadership roles, including Business Development Leader for Mergers and Acquisitions for GE Real Estate from 2003 to 2007.

Howard L. Feinsand, age 63. Mr. Feinsand has served as the General Partner’s Executive Vice President and General Counsel since 1999, and, since 2003, also has served as the General Partner’s Corporate Secretary. Mr. Feinsand served on the General Partner’s Board of Directors from 1988 to January 2003. From 1996 until 1999, Mr. Feinsand was the founder and principal of Choir Capital Ltd. From 1995 until 1996, he was Managing Director of Citicorp North America, Inc. He was the Senior Vice President and Manager-Capital Markets, Pricing and Investor Programs of GE Capital Aviation Services, Inc. from 1989 to 1995. From 1971 through 1989, Mr. Feinsand practiced law in New York City. Mr. Feinsand serves as Chair of the Board of Directors of The Alliance Theatre at the Woodruff Arts Center in Atlanta, Georgia and as Vice Chair of the Board of Trustees and member of the Executive Committee of the Woodruff Arts Center. Mr. Feinsand is a trustee of the Jewish Federation of Greater Atlanta.

Steven R. Kennedy, age 54. Mr. Kennedy was named as the General Partner’s Executive Vice President, Construction on January 1, 2004. From 1986 until 2004, he served in various capacities in the construction group, most recently as Senior Vice President.

All other information required by this item will be contained in the General Partner’s 2011 Proxy Statement and is incorporated herein by reference.

Item 11. Executive Compensation

The information required by Item 11 of this Report will be contained in the General Partner’s 2011 Proxy Statement, which information is incorporated herein by this reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by Item 12 of this Report will be contained in the General Partner’s 2011 Proxy Statement, which information is incorporated herein by this reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required to be furnished pursuant to Item 13 of this Report will be contained in the General Partner’s 2011 Proxy Statement, which information is incorporated herein by this reference.

Item 14. Principal Accountant Fees and Services

The information required to be furnished pursuant to Item 14 of this Report will be contained in the General Partner’s 2011 Proxy Statement, which information is incorporated herein by this reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a)

The following documents are filed as part of this Annual Report:

Consolidated Financial Statements


		The following Consolidated Financial Statements, together with the Management’s Report on Internal Control and the Report of Independent Registered Public Accounting Firm are listed below:

		Management’s Report on Internal Control
		Report of Independent Registered Public Accounting Firm
		Consolidated Balance Sheets, December 31, 2010 and 2009
		Consolidated Statements of Operations, Years Ended December 31, 2010, 2009 and 2008
		Consolidated Statements of Cash Flows, Years Ended December 31, 2010, 2009 and 2008
		Consolidated Statements of Changes in Equity, Years Ended December 31, 2010, 2009 and 2008
		Notes to Consolidated Financial Statements

Consolidated Financial Statement Schedules

Schedule III – Real Estate and Accumulated Depreciation

Exhibits

The following exhibits are filed with this Form 10-K or incorporated herein by reference to the listed document previously filed with the SEC. Previously unfiled documents are noted with an asterisk (*).


Number		Description

3.1		Certificate of Limited Partnership of the Partnership, dated September 17, 1993 (filed as Exhibit 3.1(i) to the Partnership’s Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 13, 2007, and incorporated herein by this reference).

3.2		Fourth Amended and Restated Agreement of Limited Partnership of the Partnership (filed as Exhibit 3.1 to the Partnership’s Current Report on Form 8-K, filed with the SEC on November 3, 2009, and incorporated herein by this reference).

4.1		Fourth Amended and Restated Articles of Incorporation of the General Partner (filed as Exhibit 3.1 to the General Partner’s Current Report on Form 8-K, filed with the SEC on July 30, 2009, and incorporated herein by this reference).

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

4.3(i)		Indenture, dated September 19, 1995, between the Partnership and The First National Bank of Chicago, Trustee (filed as Exhibit 4.1 to the General Partner’s Current Report on Form 8-K, filed with the SEC on September 22, 1995, and incorporated herein by this reference).

4.3(ii)		Fourth Supplemental Indenture, dated August 21, 1997, between the Partnership and The First National Bank of Chicago, Trustee (filed as Exhibit 4.8 to the General Partner’s Registration Statement on Form S-4, filed with the SEC on May 4, 1999, and incorporated herein by this reference).

4.3(iii)		Ninth Supplemental Indenture, dated March 5, 2001, between the Partnership and Bank One Trust Company, N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form 8-K, filed with the SEC on March 2, 2001, and incorporated herein by this reference).

4.3(iv)		Eleventh Supplemental Indenture, dated August 26, 2002, between the Partnership and Bank One Trust Company, N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form 8-K, filed with the SEC on August 26, 2002, and incorporated herein by this reference).

4.3(v)		Thirteenth Supplemental Indenture, dated May 22, 2003, between the Partnership and Bank One Trust Company, N.A., Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form 8-K, filed with the SEC on May 22, 2003, and incorporated herein by this reference).

4.3(vi)		Seventeenth Supplemental Indenture, dated August 16, 2004, between the Partnership and J.P. Morgan Trust Company, National Association, Trustee (filed as Exhibit 4 to the Partnership’s Current Report on Form 8-K, filed with the SEC on August 18, 2004, and incorporated herein by this reference).

4.3(vii)		Nineteenth Supplemental Indenture, dated as of March 1, 2006, by and between the Partnership and J.P. Morgan Trust Company, National Association (successor in



		interest to Bank One Trust Company, N.A.), including the form of global note evidencing the 5.5% Senior Notes Due 2016 (filed as Exhibit 4.1 to the Partnership’s Current Report on Form 8-K, filed with the SEC on March 3, 2006, and incorporated herein by this reference).

4.3(viii)		Twentieth Supplemental Indenture, dated as of July 24, 2006, by and between the Partnership and J.P. Morgan Trust Company, National Association (successor in interest to The First National Bank of Chicago), modifying certain financial covenants contained in Sections 1004 and 1005 of the Indenture, dated September 19, 1995, between the Partnership and The First National Bank of Chicago, Trustee (filed as Exhibit 4.1 to the Partnership’s Current Report on Form 8-K, filed with the SEC on July 28, 2006, and incorporated herein by this reference).

4.4(i)		Indenture, dated as of July 28, 2006, by and between the Partnership and J.P. Morgan Trust Company, National Association (filed as Exhibit 4.1 to the General Partner’s automatic shelf registration statement on Form S-3, filed with the SEC on July 31, 2006, and incorporated herein by this reference).

4.4(ii)		First Supplemental Indenture, dated as of August 24, 2006, by and between the Partnership and J.P. Morgan Trust Company, National Association, including the form of global note evidencing the 5.625% Senior Notes Due 2011 (filed as Exhibit 4.1 to the Partnerships’ Current Report on Form 8-K, filed with the SEC on August 30, 2006, and incorporated herein by this reference).

4.4(iii)		Second Supplemental Indenture, dated as of August 24, 2006, by and between the Partnership and J.P. Morgan Trust Company, National Association, including the form of global note evidencing the 5.95% Senior Notes Due 2017 (filed as Exhibit 4.2 to the Partnership’s Current Report on Form 8-K, filed with the SEC on August 30, 2006, and incorporated herein by this reference).

4.4(iv)		Third Supplemental Indenture, dated as of September 11, 2007, by and between the Partnership and The Bank of New York Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 6.50% Senior Notes Due 2018 (filed as Exhibit 4.1 to the Partnership’s Current Report on Form 8-K, filed with the SEC on September 12, 2007, and incorporated herein by this reference).

4.4(v)		Fourth Supplemental Indenture, dated as of May 8, 2008, by and between the Partnership and The Bank of New York Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 6.25% Senior Notes due 2013 (filed as Exhibit 4.1 to the Partnership’s Current Report on Form 8-K, filed with the SEC on May 8, 2008, and incorporated herein by this reference).

4.4(vi)		Fifth Supplemental Indenture, dated as of August 11, 2009, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 7.375% Senior Notes due 2015 (filed as Exhibit 4.1 to the



		Partnership’s Current Report on Form 8-K, filed with the SEC on August 12, 2009, and incorporated herein by this reference).

4.4(vii)		Sixth Supplemental Indenture, dated as of August 11, 2009, by and between the Partnership and The Bank of New York Mellon Trust Company, N.A. (as successor to J.P. Morgan Trust Company, National Association), including the form of global note evidencing the 8.25% Senior Notes due 2019 (filed as Exhibit 4.2 to the Partnership’s current Report on Form 8-K, filed with the SEC on August 12, 2009, and incorporated herein by this reference).

4.4(viii)		Seventh Supplemental Indenture, dated as of April 1, 2010, by and between the Partnership and J.P. Morgan Trust Company, National Association, including the form of global note evidencing the 6.75% Senior Notes Due 2020 (filed as Exhibit 4.1 to the Partnership’s Current Report on Form 8-K, filed with the SEC on April 1, 2010, and incorporated herein by this reference).

4.5		Indenture, dated November 22, 2006, by and among the Partnership, the General Partner and The Bank of New York Trust Company, N.A., as trustee, including the form of 3.75% Exchangeable Senior Note due 2011 (filed as Exhibit 4.1 to the Partnership’s Current Report on Form 8-K,filed with the SEC on November 29, 2006, and incorporated herein by this reference).

10.1		Promissory Note of Duke Realty Services Limited Partnership (the “Services Partnership”) (filed as Exhibit 10.3 to the General Partner’s Registration Statement on Form S-2, filed with the SEC on June 8, 1993, and incorporated herein by this reference).

10.2(i)		The General Partner’s Amended and Restated 2005 Long-Term Incentive Plan (filed as Appendix A to the General Partner’s Definitive Proxy Statement on Schedule 14A, dated March 18, 2009, filed with the SEC on March 18, 2009, and incorporated herein by this reference).#

10.2(ii)		2009 Amendment to the General Partner’s Amended and Restated 2005 Long-Term Incentive Plan (filed as Exhibit 10.2 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on May 6, 2010, and incorporated herein by this reference).#

10.2(iii)		2010 Amendment to the General Partner’s Amended and Restated 2005 Long-Term Incentive Plan (filed as Exhibit 10.1 to the General Partner’s Current Report on Form 8-K, filed with the SEC on May 4, 2010, and incorporated herein by this reference).#

10.3		The General Partner’s 2005 Shareholder Value Plan, a sub-plan of the 2005 Long-Term Incentive Plan (filed as Exhibit 99.2 to the General Partner’s Current Report on Form 8-K, filed with the SEC on May 3, 2005, and incorporated herein by this reference).#

10.4(i)		The General Partner’s Non-Employee Directors Compensation Plan, a sub-plan of the 2005 Long-Term Incentive Plan (filed as Exhibit 99.3 to the General Partner’s Current Report on Form 8-K, filed with the SEC on May 3, 2005, and incorporated herein by this reference).#

10.4(ii)		Amendment One to the General Partner’s 2005 Non-Employee Directors Compensation Plan (filed as Exhibit 99.1 to the General Partner’s Current Report on



		Form 8-K, filed with the SEC on October 31, 2005, and incorporated herein by this reference).#

10.4(iii)		Amendment Two to the General Partner’s 2005 Non-Employee Directors Compensation Plan (filed as Exhibit 99.1 to the General Partner’s Current Report on Form 8-K, filed with the SEC on February 7, 2006, and incorporated herein by this reference).#

10.4(iv)		Amendment Three to the General Partner’s 2005 Non-Employee Directors Compensation Plan (filed as Exhibit 10.5 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 8, 2006, and incorporated herein by this reference).#

10.5		Form of 2005 Long-Term Incentive Plan Stock Option Award Certificate (filed as Exhibit 99.4 to the General Partner’s Current Report on Form 8-K, filed with the SEC on May 3, 2005, and incorporated herein by this reference).#

10.6		Form of 2005 Long-Term Incentive Plan Award Certificate for Restricted Stock Units and Shareholder Value Plan Awards (filed as Exhibit 99.5 to the General Partner’s Current Report on Form 8-K, filed with the SEC on May 3, 2005, and incorporated herein by this reference).#

10.7		Form of 2005 Long-Term Incentive Plan Restricted Stock Unit Award Certificate for Non-Employee Directors (filed as Exhibit 99.6 to the General Partner’s Current Report on Form 8-K, filed with the SEC on May 3, 2005, and incorporated herein by this reference).#

10.8		The General Partner’s 2005 Dividend Increase Unit Replacement Plan (filed as Exhibit 99.1 to the General Partner’s Current Report on Form 8-K, filed with the SEC on December 9, 2005, and incorporated herein by this reference).#

10.9		Form of Forfeiture Agreement/Performance Unit Award Agreement (filed as Exhibit 99.2 to the General Partner’s Current Report on Form 8-K, filed with the SEC on December 9, 2005, and incorporated herein by this reference).#

10.10(i)		1995 Key Employee Stock Option Plan of the General Partner (filed as Exhibit 10.13 to the General Partner’s Annual Report on Form 10-K for the year ended December 31, 1995, as filed with the SEC on February 21, 1996, File No. 001-09044, and incorporated herein by this reference).#

10.10(ii)		Amendment One To The 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.19 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.10(iii)		Amendment Two to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.20 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.10(iv)		Amendment Three to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.21 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#



10.10(v)		Amendment Four to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.22 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.10(vi)		Amendment Five to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.23 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.10(vii)		Amendment Six to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.24 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.10(viii)		Amendment Seven to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.1 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2002, and incorporated herein by this reference).#

10.10(ix)		Amendment Eight to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.15(ix) to the General Partner’s Annual Report on Form 10-K, filed with the SEC on March 1, 2007, and incorporated herein by this reference).#

10.10(x)		Amendment Nine to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.3 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on October 9, 2005, and incorporated herein by this reference).#

10.10(xi)		Amendment Ten to the 1995 Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.4 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 8, 2006, and incorporated herein by this reference).#

10.10(xii)		Amendment Eleven to the Key Employees’ Stock Option Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.2 to the General Partner’s Current Report on Form 8-K, filed with the SEC on May 4, 2010, and incorporated herein by this reference).

10.11(i)		Dividend Increase Unit Plan of the Services Partnership (filed as Exhibit 10.25 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.11(ii)		Amendment One to the Dividend Increase Unit Plan of the Services Partnership (filed as Exhibit 10.26 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#



10.11(iii)		Amendment Two to the Dividend Increase Unit Plan of the Services Partnership (filed as Exhibit 10.27 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.11(iv)		Amendment Three to the Dividend Increase Unit Plan of the Services Partnership (filed as Exhibit 10.5 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2002, and incorporated herein by this reference).#

10.11 (v)		Amendment Four to the Dividend Increase Unit Plan of the Services Partnership (filed as Exhibit 10.30 to the General Partner’s Annual Report on Form 10-K for the year ended December 31, 2004, filed with the SEC on March 4, 2005, and incorporated herein by this reference).#

10.12(i)		1995 Shareholder Value Plan of the Services Partnership (filed as Exhibit 10.15 to the General Partner’s Annual Report on Form 10-K for the year ended December 31, 1995, filed with the SEC on February 21, 1996, and incorporated herein by this reference).#

10.12(ii)		Amendment One to the 1995 Shareholder Value Plan of the Services Partnership (filed as Exhibit 10.29 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.12(iii)		Amendment Two to the 1995 Shareholder Value Plan of the Services Partnership (filed as Exhibit 10.30 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.12(iv)		Amendment Three to the 1995 Shareholder Value Plan of the Services Partnership (filed as Exhibit 10.31 to the General Partner’s Annual Report on Form 10-K405 for the year ended December 31, 2001, filed with the SEC on March 15, 2002, and incorporated herein by this reference).#

10.12(v)		Amendment Four to the 1995 Shareholder Value Plan of the Services Partnership (filed as Exhibit 10.2 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2002, and incorporated herein by this reference).#

10.12(vi)		Amendment Five to the 1995 Shareholder Value Plan of the Services Partnership (filed as Exhibit 10.2 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on October 9, 2005, and incorporated herein by this reference).#

10.13(i)		1999 Directors’ Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. (filed as Annex F to the prospectus in the General Partner’s Registration Statement on Form S-4, filed with the SEC on May 4, 1999, and incorporated herein by this reference).#

10.13(ii)		Amendment One to the 1999 Directors’ Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. (filed as Appendix B of the General Partner’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on March 16, 2005, and incorporated herein by this reference).#



10.14(i)		1999 Salary Replacement Stock Option and Dividend Increase Unit Plan (filed as Annex G to the prospectus in the General Partner’s Registration Statement on Form S-4, filed with the SEC on May 4, 1999, and incorporated herein by this reference).#

10.14(ii)		Amendment One to the 1999 Salary Replacement Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.3 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2002, and incorporated herein by this reference).#

10.14(iii)		Amendment Two to the 1999 Salary Replacement Stock Option and Dividend Increase Unit Plan of Duke Realty Investments, Inc. (filed as Exhibit 10.4 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2002, and incorporated herein by this reference).#

10.15(i)		2000 Performance Share Plan of Duke-Weeks Realty Corporation (filed as Exhibit A of the General Partner’s Definitive Proxy Statement on Schedule 14A, filed with the SEC on March 15, 2001, and incorporated herein by this reference).#

10.15(ii)		Amendment One to the 2000 Performance Share Plan of Duke-Weeks Realty Corporation (filed as Exhibit 10.6 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 13, 2002, and incorporated herein by this reference).#

10.15(iii)		Amendment Two to the 2000 Performance Share Plan of Duke-Weeks Realty Corporation (filed as Exhibit 10.42 to the General Partner’s Annual Report on Form 10-K for the year ended December 31, 2003, filed with the SEC on March 5, 2004, and incorporated herein by this reference).#

10.15(iv)		Amendment Three to the 2000 Performance Share Plan of Duke-Weeks Realty Corporation, (filed as Exhibit 99.1 to the General Partner’s Current Report on Form 8-K, filed with the SEC on May 2, 2006, and incorporated herein by this reference).#

10.16(i)		Directors’ Deferred Compensation Plan of Duke-Weeks Realty Corporation (filed as Exhibit 99.2 to the General Partner’s Registration Statement on Form S-8, filed with the SEC on March 24, 2004, and incorporated herein by this reference).#

10.16(ii)		Amendment One to the Directors’ Deferred Compensation Plan of Duke-Weeks Realty Corporation (filed as Exhibit 10.21(II) to the General Partner’s Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 1, 2007, and incorporated herein by this reference).#

10.16(iii)		Amendment Two to the Directors’ Deferred Compensation Plan of Duke-Weeks Realty Corporation (filed as Exhibit 10.4 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on October 9, 2005, and incorporated herein by this reference).#

10.16(iv)		Amendment Three to the Directors’ Deferred Compensation Plan of Duke-Weeks Realty Corporation (filed as Exhibit 10.5 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on November 8, 2006, and incorporated herein by this reference).#

10.17		Term Loan Agreement, Dated May 31, 2005, by and between the Partnership, the General Partner, J.P. Morgan Securities, Inc., J.P. Morgan Chase Bank, N.A. and the several banks, financial institutions and other entities from time to time parties thereto


		as lenders (filed as Exhibit 99.1 to the General Partner’s Current Report on Form 8-K, filed with the SEC on June 6, 2005, and incorporated herein by this reference).

10.18(i)		Form of Letter Agreement Regarding Executive Severance, dated December 13, 2007, between the General Partner and the following executive officers: Dennis D. Oklak, Howard L. Feinsand and Steven R. Kennedy (filed as Exhibit 10.23 to the General Partner’s Annual Report on Form 10-K for the year ended December 31, 2007, filed with the SEC on February 29, 2008, and incorporated herein by this reference).

10.18(ii)		Form of Letter Agreement Regarding Executive Severance, dated May 7, 2009, between the General Partner and Christie B. Kelly (filed as Exhibit 10.1 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on May 8, 2009, and incorporated herein by this reference).

10.19		Commercial Multi-Property Agreement of Purchase and Sale, dated January 24, 2006, by and among the Partnership, The Mark Winkler Company, and each of the other entities controlled by or affiliated with The Mark Winkler Company named therein, as amended by the First Amendment to Commercial Multi-Property Agreement of Purchase and Sale dated February 28, 2006, the Second Amendment to Commercial Multi-Property Agreement of Purchase and Sale dated March 10, 2006, and the Third Amendment to Commercial Multi-Property Agreement of Purchase and Sale dated April 21, 2006 (filed as Exhibit 10.1 to the General Partner’s Quarterly Report on Form 10-Q, filed with the SEC on May 10, 2006, and incorporated herein by this reference).

10.20		Sixth Amended and Restated Revolving Credit Agreement dated November 20, 2009, among the Partnership, the General Partner, J.P. Morgan Securities, Inc., Wells Fargo Securities, LLC, and J.P. Morgan Chase Bank, National Association (filed as Exhibit 99.1 to the General Partner’s Current Report on Form 8-K, filed with the SEC on November 25, 2009, and incorporated herein by this reference).

10.21		Term Loan Agreement, dated as of February 28, 2006, by and among the Partnership, as borrower, the General Partner, as Guarantor, certain of their respective subsidiaries, as guarantors, Bank of America, N.A., individually and as Administrative Agent, Banc of America Securities LLC, as Lead Arranger and Sole Book Runner, and each of the other lenders named therein (filed as Exhibit 10.1 to the Partnership’s Current Report on Form 8-K, filed with the SEC on March 3, 2006, and incorporated herein by this reference).

10.22		Registration Rights Agreement, dated November 22, 2006, by and among the Partnership, the General Partner, Morgan Stanley & Co. Incorporated, Citigroup Global Markets Inc. and UBS Securities LLC, as representatives of the initial purchasers of the Notes (incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K, filed with the SEC on November 29, 2006, File No. 000-20625, and incorporated herein by this reference).

10.23		Common Stock Delivery Agreement, dated November 22, 2006, by and between Duke Realty Limited Partnership and the General Partner (filed as Exhibit 10.2 to the


		Partnership’s Current Report on Form 8-K, filed with the SEC on November 29, 2006, and incorporated herein by this reference).

10.24		Contribution Agreement, dated December 5, 2006, by and between the Partnership and Quantico and Belbrook Realty Corporation, an affiliate of an investment fund managed by Eaton Vance (filed as Exhibit 10.30 to the General Partner’s Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 1, 2007, and incorporated herein by this reference).(1)

10.25		Contribution Agreement, dated December 5, 2006, by and between the Partnership and Lafayette and Belcrest Realty Corporation, an affiliate of an investment fund managed by Eaton Vance (filed as Exhibit 10.31 to the General Partner’s Annual Report on Form 10-K for the year ended December 31, 2006, filed with the SEC on March 1, 2007, and incorporated herein by this reference).(1)

12.1		Statement of Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges and Preferred Distributions.*

21.1		List of the Partnership’s Subsidiaries.*

23.1		Consent of KPMG LLP.*

24.1		Executed Powers of Attorney of certain directors.*

31.1		Certification of the General Partner’s Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

31.2		Certification of the General Partner’s Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*

32.1		Certification of the General Partner’s Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* **

32.2		Certification of the General Partner’s Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.* **

99.1		Selected Quarterly Financial Information.*

# Represents management contract or compensatory plan or arrangement.

* Filed herewith.

** The certifications attached as Exhibits 32.1 and 32.2 accompany this Report and are “furnished” to the SEC pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not be deemed “filed” by us for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.

(1) Confidential treatment of the agreement was requested.

(b)

Exhibits

The exhibits required to be filed with this Report pursuant to Item 601 of Regulation S-K are listed under “Exhibits” in Part IV, Item 15(a)(3) of this Report and are incorporated herein by reference.

(c)

Financial Statement Schedule

The Financial Statement Schedule required to be filed with this Report is listed under “Consolidated Financial Statement Schedules” in Part IV, Item 15(a)(2) of this Report, and is incorporated herein by reference.

Management’s Report on Internal Control

We, as management of Duke Realty Limited Partnership and its subsidiaries (the “Partnership”), are responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934, as amended). Pursuant to the rules and regulations of the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of, the General Partner’s principal executive and principal financial officers, or persons performing similar functions, and effected by the General Partner’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America and includes those policies and procedures that:

•

Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of assets of the Partnership;

•

Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Partnership are being made only in accordance with authorizations of management and directors of the General Partner; and

•

Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Partnership’s assets that could have a material effect on the financial statements.

Management has evaluated the effectiveness of its internal control over financial reporting as of December 31, 2010 based on the control criteria established in a report entitled Internal Control – Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on such evaluation, we have concluded that, as of December 31, 2010, our internal control over financial reporting is effective based on these criteria.

The independent registered public accounting firm of KPMG LLP, as auditors of the Partnership’s consolidated financial statements, has also issued an audit report on the Partnership’s internal control over financial reporting.


/s/ Dennis D. Oklak
Dennis D. Oklak

Chairman and Chief Executive Officer

of the General Partner


/s/ Christie B. Kelly
Christie B. Kelly

Executive Vice President and Chief Financial Officer

of the General Partner

Report of Independent Registered Public Accounting Firm

The Partners of

Duke Realty Limited Partnership:

We have audited the accompanying consolidated balance sheets of Duke Realty Limited Partnership and Subsidiaries (the “Partnership”) as of December 31, 2010 and 2009 and the related consolidated statements of operations, cash flows and changes in equity for each of the years in the three-year period ended December 31, 2010. In connection with our audits of the consolidated financial statements, we also have audited the financial statement schedule III. We also have audited the Partnership’s internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Partnership’s management is responsible for these consolidated financial statements and the financial statement schedule, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying management’s report on internal control. Our responsibility is to express an opinion on these consolidated financial statements and the financial statement schedule and an opinion on the Partnership’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly

reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Duke Realty Limited Partnership and Subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2010, in conformity with U.S generally accepted accounting principles. Also in our opinion, the related financial statement schedule III, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. Also, in our opinion, Duke Realty Limited Partnership and Subsidiaries maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

/s/ KPMG LLP

Indianapolis, Indiana

March 4, 2011

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Balance Sheets

As of December 31,

(in thousands)


	2010			2009
ASSETS
Real estate investments:
Land and improvements	$	1,166,409		$	1,106,016
Buildings and tenant improvements		5,396,339			5,284,103
Construction in progress		61,205			103,298
Investments in and advances to unconsolidated companies		367,445			501,121
Undeveloped land		625,353			660,723

		7,616,751			7,655,261
Accumulated depreciation		(1,290,417	)		(1,311,733	)


Net real estate investments		6,326,334			6,343,528

Real estate investments and related assets held-for-sale		394,287			-

Cash and cash equivalents		18,419			147,539
Accounts receivable, net of allowance of $2,945 and $3,198		22,588			20,604
Straight-line rent receivable, net of allowance of $7,260 and $6,929		125,185			131,934
Receivables on construction contracts, including retentions		7,408			18,755
Deferred financing costs, net of accumulated amortization of $46,407 and $37,577		46,317			54,486
Deferred leasing and other costs, net of accumulated amortization of $269,000 and $240,151		517,934			371,286
Escrow deposits and other assets		185,652			216,361

	$	7,644,124		$	7,304,493

LIABILITIES AND EQUITY
Indebtedness:
Secured debt	$	1,065,628		$	785,797
Unsecured notes		2,948,405			3,052,465
Unsecured lines of credit		193,046			15,770

		4,207,079			3,854,032

Liabilities related to real estate investments held-for-sale		14,732			-

Construction payables and amounts due subcontractors, including retentions		44,782			43,147
Accrued real estate taxes		83,615			84,347
Accrued interest		62,407			62,971
Other accrued expenses		61,354			49,166
Other liabilities		129,860			198,906
Tenant security deposits and prepaid rents		50,450			44,258

Total liabilities		4,654,279			4,336,827


Partners’ equity:
General Partner:
Common equity (252,195 and 224,029 General Partner Units issued and outstanding)		2,046,617			1,918,329
Preferred equity (3,618 and 4,067 Preferred Units issued and outstanding)		904,540			1,016,625

		2,951,157			2,934,954
Limited Partners’ common equity (5,231 and 6,609 Limited Partner Units issued and outstanding)		34,894			31,192
Accumulated other comprehensive loss		(1,432	)		(5,630	)

Total partners’ equity		2,984,619			2,960,516
Noncontrolling interests		5,226			7,150

Total equity		2,989,845			2,967,666

	$	7,644,124		$	7,304,493

See accompanying Notes to Consolidated Financial Statements.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Operations

For the Years Ended December 31,

(in thousands, except per unit amounts)


	2010			2009			2008
Revenues:
Rental and related revenue	$	878,242		$	842,232		$	802,791
General contractor and service fee revenue		515,361			449,509			434,624

		1,393,603			1,291,741			1,237,415

Expenses:
Rental expenses		197,985			192,270			179,373
Real estate taxes		118,006			111,189			95,872
General contractor and other services expenses		486,865			427,666			418,743
Depreciation and amortization		349,064			323,429			293,019

		1,151,920			1,054,554			987,007


Other operating activities:
Equity in earnings of unconsolidated companies		7,980			9,896			23,817
Gain on sale of properties		39,662			12,337			39,057
Earnings from sales of land		-			357			12,651
Undeveloped land carrying costs		(9,203	)		(10,403	)		(8,204	)
Impairment charges		(9,834	)		(275,630	)		(10,165	)
Other operating expenses		(1,231	)		(1,017	)		(8,298	)
General and administrative expense		(41,329	)		(47,937	)		(39,508	)

		(13,955	)		(312,397	)		9,350


Operating income (loss)		227,728			(75,210	)		259,758

Other income (expenses):
Interest and other income, net		534			1,229			1,451
Interest expense		(239,383	)		(205,952	)		(184,000	)
Gain (loss) on debt transactions		(16,349	)		20,700			1,953
Gain (loss) on acquisitions, net		55,820			(1,062	)		-

Income (loss) from continuing operations before income taxes		28,350			(260,295	)		79,162
Income tax benefit (expense)		1,126			6,070			7,005

Income (loss) from continuing operations		29,476			(254,225	)		86,167
Discontinued operations:
Income before impairment charges and gain on sales		2,732			2,885			8,546
Impairment charges		-			(26,936	)		(1,266	)
Gain on sale of depreciable properties		33,054			6,786			16,961

Income (loss) from discontinued operations		35,786			(17,265	)		24,241
Net income (loss)		65,262			(271,490	)		110,408
Distributions on Preferred Units		(69,468	)		(73,451	)		(71,426	)
Adjustments for repurchase of Preferred Units		(10,438	)		-			14,046
Net loss attributable to noncontrolling interests		185			241			637

Net income (loss) attributable to common unitholders	$	(14,459	)	$	(344,700	)	$	53,665


Basic net income (loss) per Common Unit:
Continuing operations attributable to common unitholders	$	(0.22	)	$	(1.59	)	$	0.18
Discontinued operations attributable to common unitholders		0.15			(0.08	)		0.16

Total	$	(0.07	)	$	(1.67	)	$	0.34


Diluted net income (loss) per Common Unit:
Continuing operations attributable to common unitholders	$	(0.22	)	$	(1.59	)	$	0.18
Discontinued operations attributable to common unitholders		0.15			(0.08	)		0.16

Total	$	(0.07	)	$	(1.67	)	$	0.34


Weighted average number of Common Units outstanding		244,870			207,893			154,534

Weighted average number of Common Units and potential dilutive securities		244,870			207,893			154,553

See accompanying Notes to Consolidated Financial Statements.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the Years Ended December 31,

(in thousands)


	2010			2009			2008
Cash flows from operating activities:
Net income (loss)	$	65,262		$	(271,490	)	$	110,408
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation of buildings and tenant improvements		271,058			266,803			246,441
Amortization of deferred leasing and other costs		89,126			73,323			68,511
Amortization of deferred financing costs		13,897			13,679			13,640
Straight-line rent adjustment		(15,233	)		(18,832	)		(15,118	)
Impairment charges		9,834			302,566			11,431
(Gain) loss on debt extinguishment		16,349			(20,700	)		(1,953	)
(Gain) loss on acquisitions		(57,715	)		1,062			-
Deferred tax asset valuation allowance		-			7,278			-
Earnings from land and depreciated property sales		(72,716	)		(19,480	)		(29,612	)
Build-for-Sale operations, net		-			14,482			80,751
Third-party construction contracts, net		(6,449	)		(4,583	)		125,855
Other accrued revenues and expenses, net		68,512			48,543			27,828
Operating distributions received in excess of equity in earnings from unconsolidated companies		8,851			8,533			5,618

Net cash provided by operating activities		390,776			401,184			643,800


Cash flows from investing activities:
Development of real estate investments		(119,404	)		(268,890	)		(436,256	)
Acquisition of real estate investments and related intangible assets, net of cash acquired		(488,539	)		(31,658	)		(20,123	)
Acquisition of undeveloped land		(14,404	)		(5,474	)		(40,893	)
Second generation tenant improvements, leasing costs and building improvements		(88,723	)		(79,054	)		(74,814	)
Other deferred leasing costs		(38,905	)		(23,329	)		(30,498	)
Other assets		(7,260	)		(583	)		109
Proceeds from land and depreciated property sales, net		499,520			256,330			116,563
Capital distributions from unconsolidated companies		22,119			-			95,392
Capital contributions and advances to unconsolidated companies, net		(53,194	)		(23,481	)		(132,244	)

Net cash used for investing activities		(288,790	)		(176,139	)		(522,764	)


Cash flows from financing activities:
Contributions from the General Partner		298,066			551,136			17,125
Proceeds from issuance of Preferred Units, net		-			-			290,000
Payments for repurchases of Preferred Units		(118,787	)		-			(12,405	)
Proceeds from unsecured debt issuance		250,000			500,000			325,000
Payments on and repurchases of unsecured debt		(392,597	)		(707,016	)		(261,479	)
Proceeds from secured debt financings		4,158			290,418			-
Payments on secured indebtedness including principal amortization		(207,060	)		(11,396	)		(55,600	)
Borrowings (payments) on lines of credit, net		177,276			(467,889	)		(62,408	)
Distributions to common unitholders		(165,881	)		(156,357	)		(298,220	)
Distributions to preferred unitholders		(69,468	)		(73,451	)		(71,439	)
Contributions from (distributions to) noncontrolling interests, net		(1,739	)		3,443			1,935
Cash settlement of interest rate swaps		-			-			(14,625	)
Deferred financing costs		(5,074	)		(28,679	)		(3,681	)

Net cash used for financing activities		(231,106	)		(99,791	)		(145,797	)

Net increase (decrease) in cash and cash equivalents		(129,120	)		125,254			(24,761	)

Cash and cash equivalents at beginning of year		147,539			22,285			47,046

Cash and cash equivalents at end of year	$	18,419		$	147,539		$	22,285

Non-cash investing and financing activities:
Assumption of indebtedness and other liabilities for real estate acquisitions	$	527,464		$	-		$	39,480

Contribution of properties to, net of debt assumed by, unconsolidated companies	$	41,609		$	20,663		$	133,312

Investments and advances related to acquisition of previously unconsolidated companies	$	184,140		$	206,852		$	-

Distribution of property from unconsolidated company	$	-		$	-		$	76,449

Conversion of Limited Partner Units to common shares of the General Partner	$	(8,055	)	$	592		$	3,916

See accompanying Notes to Consolidated Financial Statements.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

(in thousands, except per unit data)


	Common Unitholders
							Limited			Accumulated
	General Partner						Partners’			Other			Total
	Common			Preferred			Common			Comprehensive			Partners’			Noncontrolling			Total
	Equity			Equity			Equity			Income (Loss)			Equity			Interests			Equity
Balance at December 31, 2007	$	2,039,785		$	744,000		$	76,415		$	(1,279	)	$	2,858,921		$	2,650		$	2,861,571
Comprehensive income:
Net income		36,362			71,426			3,257			-			111,045			(637	)		110,408
Derivative instrument activity		-			-			-			(7,373	)		(7,373	)		-			(7,373	)

Comprehensive income														103,672			(637	)		103,035
Issuance of Series O Preferred Units		(10,000	)		300,000			-			-			290,000			-			290,000
Capital Contribution from the General Partner		15,516			-			-			-			15,516			-			15,516
Stock based compensation plan activity		13,668			-			-			-			13,668			-			13,668
Conversion of Limited Partner Units to common shares of the General Partner		13,149			-			(17,065	)		-			(3,916	)		-			(3,916	)
Distributions to Preferred Unitholders		-			(71,426	)		-			-			(71,426	)		-			(71,426	)
Repurchase of Preferred Units		14,970			(27,375	)		-			-			(12,405	)		-			(12,405	)
Distributions to Partners ($1.93 per Common Unit)		(283,448	)		-			(14,772	)		-			(298,220	)		-			(298,220	)
Contributions to noncontrolling interests, net		-			-			-			-			-			1,935			1,935

Balance at December 31, 2008	$	1,840,002		$	1,016,625		$	47,835		$	(8,652	)	$	2,895,810		$	3,948		$	2,899,758
Comprehensive loss:
Net income (loss)		(333,601	)		73,451			(11,099	)		-			(271,249	)		(241	)		(271,490	)
Derivative instrument activity		-			-			-			3,022			3,022			-			3,022

Comprehensive loss														(268,227	)		(241	)		(268,468	)
Capital Contribution from the General Partner		551,404			-			-			-			551,404			-			551,404
Stock based compensation plan activity		11,337			-			-			-			11,337			-			11,337
Conversion of Limited Partner Units to common shares of the General Partner		577			-			(577	)		-			-			-			-
Distributions to Preferred Unitholders		-			(73,451	)		-			-			(73,451	)		-			(73,451	)
Distributions to Partners
($.76 per Common Unit)		(151,390	)		-			(4,967	)		-			(156,357	)		-			(156,357	)
Contributions to noncontrolling interests, net		-			-			-			-			-			3,443			3,443

Balance at December 31, 2009	$	1,918,329		$	1,016,625		$	31,192		$	(5,630	)	$	2,960,516		$	7,150		$	2,967,666
Comprehensive income (loss):
Net income (loss)		(3,670	)		69,468			(351	)		-			65,447			(185	)		65,262
Derivative instrument activity		-			-			-			4,198			4,198			-			4,198

Comprehensive income (loss)														69,645			(185	)		69,460
Capital Contribution from the General Partner		298,066			-			-			-			298,066			-			298,066
Stock based compensation plan activity		10,528			-			-			-			10,528			-			10,528
Conversion of Limited Partner Units to common shares of the General Partner		(8,055	)		-			8,055			-			-			-			-
Distributions to Preferred Unitholders		-			(69,468	)		-			-			(69,468	)		-			(69,468	)
Repurchase of Preferred Units		(6,702	)		(112,085	)								(118,787	)					(118,787	)
Distributions to Partners ($.68 per Common Unit)		(161,879	)		-			(4,002	)		-			(165,881	)		-			(165,881	)
Distributions to noncontrolling interests		-			-			-			-			-			(1,739	)		(1,739	)

Balance at December 31, 2010	$	2,046,617		$	904,540		$	34,894		$	(1,432	)	$	2,984,619		$	5,226		$	2,989,845

Common Units outstanding at December 31, 2010		252,195						5,231						257,426

See accompanying Notes to Consolidated Financial Statements.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(1)

The Partnership

Duke Realty Limited Partnership (the “Partnership”) was formed on October 4, 1993, when Duke Realty Corporation (the “General Partner”) contributed all of its properties and related assets and liabilities, together with the net proceeds from an offering of additional shares of its common stock, to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest. The General Partner was formed in 1985 and we believe it qualifies as a Real Estate Investment Trust (“REIT”) under provisions of the Internal Revenue Code of 1986, as amended. The General Partner is the sole general partner of the Partnership, owning 98.0% of the common Partnership interests as of December 31, 2010 (“General Partner Units”). The remaining 2.0% of the Partnership’s common interest is owned by limited partners (“Limited Partner Units” and, together with the General Partner Units, the “Common Units”). Limited Partners have the right to redeem their Limited Partner Units, subject to certain restrictions. Pursuant to the Partnership Agreement, the General Partner is obligated to redeem the Limited Partner Units in shares of its common stock, unless it determines in its reasonable discretion that the issuance of shares of its common stock could cause it to fail to qualify as a REIT. Each Limited Partner Unit shall be redeemed for one share of the General Partner’s common stock, or, in the event that the issuance of shares could cause the General Partner to fail to qualify as a REIT, cash equal to the fair market value of one share of the General Partner’s common stock at the time of redemption, in each case, subject to certain adjustments described in the Partnership Agreement. The Limited Partner Units are not required, per the terms of the Partnership Agreement, to be redeemed in registered shares of the General Partner. The General Partner also owns preferred partnership interests in the Partnership (“Preferred Units”).

We own and operate a portfolio primarily consisting of industrial and office properties and provide real estate services to third-party owners. We conduct our Service Operations (see Note 9) through Duke Realty Services, LLC, Duke Realty Services Limited Partnership and Duke Construction Limited Partnership (“DCLP”). DCLP is owned through a taxable REIT subsidiary. The terms “we”, “us” and “our” refer to the Partnership and those entities owned or controlled by the Partnership.

(2)

Summary of Significant Accounting Policies

FASB Codification

On July 1, 2009, the Financial Accounting Standards Board (“FASB”) issued the FASB Accounting Standards Codification (“ASC” or the “Codification”) that established the exclusive authoritative reference for accounting principles generally accepted in the United States of America (“GAAP”) for use in financial statements, except for SEC rules and interpretive releases, which are also authoritative GAAP for SEC registrants. The Codification superseded all existing non-SEC accounting and reporting standards but did not impact any of our existing accounting policies.

Principles of Consolidation

The consolidated financial statements include our accounts and the accounts of our majority-owned or controlled subsidiaries. The equity interests in these controlled subsidiaries not owned by us are reflected as noncontrolling interests in the consolidated financial statements. All significant intercompany balances and transactions have been eliminated in the consolidated financial statements. Investments in entities that we do not control, and variable interest entities (“VIEs”) in which we are not the primary beneficiary, are not consolidated and are reflected as investments in unconsolidated companies under the equity method of reporting.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Reclassifications

Certain amounts in the accompanying consolidated financial statements for 2009 and 2008 have been reclassified to conform to the 2010 consolidated financial statement presentation.

Real Estate Investments

Rental real property, including land, land improvements, buildings and tenant improvements, are included in real estate investments and are generally stated at cost. Construction in process and undeveloped land are included in real estate investments and are stated at cost. Real estate investments also include our equity interests in unconsolidated joint ventures that own and operate rental properties and hold land for development.

Depreciation

Buildings and land improvements are depreciated on the straight-line method over their estimated lives not to exceed 40 and 15 years, respectively, for properties that we develop, and not to exceed 30 and 10 years, respectively, for acquired properties. Tenant improvement costs are depreciated using the straight-line method over the term of the related lease.

Cost Capitalization

Direct and certain indirect costs clearly associated with the development, construction, leasing or expansion of real estate investments are capitalized as a cost of the property. In addition, all leasing commissions paid to third parties for new leases or lease renewals are capitalized. We capitalize a portion of our indirect costs associated with our construction, development and leasing efforts. In assessing the amount of direct and indirect costs to be capitalized, allocations are made based on estimates of the actual amount of time spent in each activity. We do not capitalize any costs attributable to downtime or to unsuccessful projects.

We capitalize direct and indirect project costs associated with the initial construction of a property up to the time the property is substantially complete and ready for its intended use. In addition, we capitalize costs, including real estate taxes, insurance, and utilities, that have been allocated to vacant space based on the square footage of the portion of the building not held available for immediate occupancy during the extended lease-up periods after construction of the building shell has been completed if costs are being incurred to ready the vacant space for its intended use. If costs and activities incurred to ready the vacant space cease, then cost capitalization is also discontinued until such activities are resumed. Once necessary work has been completed on a vacant space, project costs are no longer capitalized.

We cease capitalization of all project costs on extended lease-up periods when significant activities have ceased, which does not exceed the shorter of a one-year period after the completion of the building shell or when the property attains 90% occupancy.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Impairment

We evaluate our real estate assets, with the exception of those that are classified as held-for-sale, for impairment whenever events or changes in circumstances indicate that their carrying amounts may not be recoverable. If such an evaluation is considered necessary, we compare the carrying amount of that real estate asset, or asset group, with the expected undiscounted cash flows that are directly associated with, and that are expected to arise as a direct result of, the use and eventual disposition of that asset, or asset group. Our estimate of the expected future cash flows used in testing for impairment is based on, among other things, our estimates regarding future market conditions, rental rates, occupancy levels, costs of tenant improvements, leasing commissions and other tenant concessions, assumptions regarding the residual value of our properties at the end of our anticipated holding period and the length of our anticipated holding period and is, therefore, subjective by nature. These assumptions could differ materially from actual results. If our strategy changes or if market conditions otherwise dictate a reduction in the holding period and an earlier sale date, an impairment loss could be recognized and such loss could be material. To the extent the carrying amount of a real estate asset, or asset group, exceeds the associated estimate of undiscounted cash flows, an impairment loss is recorded to reduce the carrying value of the asset to its fair value.

Real estate assets classified as held-for-sale are reported at the lower of their carrying value or their fair value, less estimated costs to sell. Once a property is designated as held-for-sale, no further depreciation expense is recorded.

Purchase Accounting

On January 1, 2009, we adopted the new accounting standard (FASB ASC 805) on purchase accounting, which required acquisition related costs to be expensed immediately as period costs. This new standard also requires that (i) 100% of the assets and liabilities of an acquired entity, as opposed to the amount proportional to the portion acquired, must be recorded at fair value upon an acquisition and (ii) a gain or loss must be recognized for the difference between the fair value and the carrying value of any existing ownership interests in acquired entities. Finally, this new standard requires that contingencies arising from a business combination be recorded at fair value if the acquisition date fair value can be determined during the measurement period.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We allocate the purchase price of acquired properties to net tangible and identified intangible assets based on their respective fair values, using all pertinent information available at the date of acquisition. The allocation to tangible assets (buildings, tenant improvements and land) is based upon management’s determination of the value of the property as if it were vacant using discounted cash flow models similar to those used by independent appraisers. Factors considered by management include an estimate of carrying costs during the expected lease-up periods considering current market conditions, and costs to execute similar leases. The purchase price of real estate assets is also allocated among three categories of intangible assets consisting of the above or below market component of in-place leases, the value of in-place leases and the value of customer relationships.

The value allocable to the above or below market component of an acquired in-place lease is determined based upon the present value (using a discount rate which reflects the risks associated with the acquired leases) of the difference between (i) the contractual amounts to be paid pursuant to the lease over its remaining term and (ii) management’s estimate of the amounts that would be paid using fair market rates over the remaining term of the lease. The amounts allocated to above market leases are included in deferred leasing and other costs in the balance sheet and below market leases are included in other liabilities in the balance sheet; both are amortized to rental income over the remaining terms of the respective leases.

The total amount of intangible assets is further allocated to in-place lease values and to customer relationship values based upon management’s assessment of their respective values. These intangible assets are included in deferred leasing and other costs in the balance sheet and are depreciated over the remaining term of the existing lease, or the anticipated life of the customer relationship, as applicable.

Joint Ventures

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

On January 1, 2010, we adopted a new accounting standard that eliminated the primarily quantitative model previously in effect to determine the primary beneficiary of a VIE and replaced it with a qualitative model that focuses on which entities have the power to direct the activities of the VIE as well as the obligation or rights to absorb the VIE’s losses or receive its benefits. This new standard requires assessments at each reporting period of which party within the VIE is considered the primary beneficiary and also requires a number of new disclosures related to VIEs. The reconsideration of the initial determination of VIE status is still based on the occurrence of certain events. We were not the primary beneficiary of any VIEs at January 1, 2010 and the implementation of this new accounting standard did not have a material impact on our results of operation or financial condition.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

During 2010, events took place within two of our unconsolidated joint ventures that required us to re-evaluate our previous conclusions that these two joint ventures were not VIEs. Upon reconsideration, we determined that the fair values of the equity investments at risk were not sufficient, when considering their overall capital requirements, and we therefore concluded that these two ventures now meet the applicable criteria to be considered VIEs.

These two joint ventures were formed with the sole purpose of developing, constructing, leasing, marketing and selling properties for a profit. The majority of the business activities of these joint ventures are financed with third-party debt, with joint and several guarantees provided by the joint venture partners. All significant decisions for both joint ventures, including those decisions that most significantly impact each venture’s economic performance, require unanimous joint venture partner approval as well as, in certain cases, lender approval. In both joint ventures, unanimous joint venture partner approval requirements include entering into new leases, setting annual operating budgets, selling an underlying property, and incurring additional indebtedness. Because no single variable interest holder exercises control over the decisions that most significantly affect each venture’s economic performance, we determined that the equity method of accounting is still appropriate for these joint ventures.

The following is a summary of the carrying value in our consolidated balance sheet, as well as our maximum loss exposure under guarantees, for entities we have determined to be VIEs as of December 31, 2010:


	Carrying Value			Maximum Loss Exposure
Investment in Unconsolidated Company	$	31.7 million		$	31.7 million
Guarantee Obligations (1)	$	(25.2 million	)	$	(63.7 million	)

(1)

We are party to joint and several guarantees of the third-party debt of both of these joint ventures and our maximum loss exposure is equal to the maximum monetary obligation pursuant to the guarantee agreements. In 2009, we recorded a liability for our probable future obligation under a guarantee to the lender of one of these ventures. Pursuant to an agreement with the lender, we may make member loans to this joint venture that will reduce our maximum guarantee obligation on a dollar-for-dollar basis. The carrying value of our recorded guarantee obligations is included in other liabilities in our Consolidated Balance Sheets.

To the extent that our joint ventures do not qualify as VIEs, we consolidate those joint ventures that we control through majority ownership interests or where we are the managing member and our partner does not have substantive participating rights. Control is further demonstrated by the ability of the general partner to manage day-to-day operations, refinance debt and sell the assets of the joint venture without the consent of the limited partner and inability of the limited partner to replace the general partner. We use the equity method of accounting for those joint ventures where we do not have control over operating and financial policies. Under the equity method of accounting, our investment in each joint venture is included on our balance sheet; however, the assets and liabilities of the joint ventures for which we use the equity method are not included on our balance sheet.

To the extent that we contribute assets to a joint venture, our investment in the joint venture is recorded at our cost basis in the assets that were contributed to the joint venture. To the extent that our cost basis is different than the basis reflected at the joint venture level, the basis difference is amortized over the life of the related asset and included in our share of equity in net income of the joint venture. We recognize gains on the contribution or sale of real estate to joint ventures, relating solely to the outside partner’s interest, to the extent the economic substance of the transaction is a sale.

Cash Equivalents

Investments with an original maturity of three months or less are classified as cash equivalents.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Valuation of Receivables

We reserve the entire receivable balance, including straight-line rent, of any tenant with an amount outstanding over 90 days. Additional reserves are recorded for more current amounts, as applicable, where we have determined collectability to be doubtful. Straight-line rent receivables for any tenant with long-term risk, regardless of the status of current rent receivables, are reviewed and reserved as necessary.

Deferred Costs

Costs incurred in connection with obtaining financing are amortized to interest expense over the term of the related loan. All direct and indirect costs, including estimated internal costs, associated with the leasing of real estate investments owned by us are capitalized and amortized over the term of the related lease. We include lease incentive costs, which are payments made on behalf of a tenant to sign a lease, in deferred leasing costs and amortize them on a straight-line basis over the respective lease terms as a reduction of rental revenues. We include as lease incentives amounts funded to construct tenant improvements owned by the tenant. Unamortized costs are charged to expense upon the early termination of the lease or upon early payment of the financing.

Convertible Debt Accounting

On January 1, 2009, we adopted a new accounting standard (FASB ASC 470) for convertible debt instruments that may be settled in cash upon conversion. This new standard required separate accounting for the debt and equity components of certain convertible instruments. Our 3.75% Exchangeable Senior Notes (“Exchangeable Notes”), issued in November 2006, have an exchange rate of 20.47 common shares per $1,000 principal amount of the notes, representing an exchange price of $48.85 per share of the General Partner’s common stock. The Exchangeable Notes were subject to the accounting changes required by this new standard, which required that the value assigned to the debt component equal the estimated fair value of debt with similar contractual cash flows, but without the conversion feature, resulting in the debt being recorded at a discount. The resulting debt discount will be amortized over the period from its issuance through November 2011, the first optional redemption date, as additional non-cash interest expense. We were required to apply this new accounting standard retrospectively to prior periods.

At December 31, 2010, the Exchangeable Notes had $167.6 million of principal outstanding, an unamortized discount of $2.1 million and a net carrying amount of $165.6 million. The carrying amount of the equity component was $34.7 million at December 31, 2010. Subsequent to the implementation of the new standard, interest expense is recognized on the Exchangeable Notes at an effective rate of 5.6%. The increase to interest expense (in thousands) on the Exchangeable Notes, which led to a corresponding decrease to net income, for the years ended December 31, 2010, 2009 and 2008 is summarized as follows:


	2010		2009		2008
Interest expense on Exchangeable Notes, excluding effect of accounting for convertible debt	$	7,136	$	14,850	$	21,574
Effect of accounting for convertible debt		2,474		5,024		6,536

Total interest expense on Exchangeable Notes	$	9,610	$	19,874	$	28,110

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Noncontrolling Interests

On January 1, 2009, we adopted a new accounting standard (FASB ASC 810) on noncontrolling interests, which required noncontrolling interests (previously referred to as minority interests) to be reported as a component of total equity, resulting in retroactive changes to the presentation of the noncontrolling interests in the consolidated balance sheets and statements of operations. This new standard also modified the accounting for changes in the level of ownership in consolidated subsidiaries.

Noncontrolling interests relate to interests in consolidated property partnerships that are not wholly owned. Noncontrolling interests are subsequently adjusted for additional contributions, distributions to noncontrolling holders and the noncontrolling holders’ proportionate share of the net earnings or losses of each respective entity.

Revenue Recognition

Rental and Related Revenue

The timing of revenue recognition under an operating lease is determined based upon ownership of the tenant improvements. If we are the owner of the tenant improvements, revenue recognition commences after the improvements are completed and the tenant takes possession or control of the space. In contrast, if we determine that the tenant allowances we are funding are lease incentives, then we commence revenue recognition when possession or control of the space is turned over to the tenant. Rental income from leases with free rental periods or scheduled rental increases during their terms is recognized on a straight-line basis.

We record lease termination fees when a tenant has executed a definitive termination agreement with us and the payment of the termination fee is not subject to any material conditions that must be met or waived before the fee is due to us.

General Contractor and Service Fee Revenue

Management fees are based on a percentage of rental receipts of properties managed and are recognized as the rental receipts are collected. Maintenance fees are based upon established hourly rates and are recognized as the services are performed. Construction management and development fees represent fee-based third-party contracts and are recognized as earned based on the terms of the contract, which approximates the percentage of completion method.

We recognize income on construction contracts where we serve as a general contractor on the percentage of completion method. Using this method, profits are recorded based on our estimates of the percentage of completion of individual contracts, commencing when the work performed under the contracts reaches a point where the final costs can be estimated with reasonable accuracy. The percentage of completion estimates are based on a comparison of the contract expenditures incurred to the estimated final costs. Changes in job performance, job conditions and estimated profitability may result in revisions to costs and income and are recognized in the period in which the revisions are determined.

Receivables on construction contracts were in an over-billed position of $160,000 and $470,000 at December 31, 2010 and 2009.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Property Sales

Gains on sales of all properties are recognized in accordance with FASB ASC 360-20. The specific timing of the sale of a building is measured against various criteria in FASB ASC 360-20 related to the terms of the transactions and any continuing involvement in the form of management or financial assistance from the seller associated with the properties. We make judgments based on the specific terms of each transaction as to the amount of the total profit from the transaction that we recognize considering factors such as continuing ownership interest we may have with the buyer (“partial sales”) and our level of future involvement with the property or the buyer that acquires the assets. If the full accrual sales criteria are not met, we defer gain recognition and account for the continued operations of the property by applying the finance, installment or cost recovery methods, as appropriate, until the full accrual sales criteria are met. Estimated future costs to be incurred after completion of each sale are included in the determination of the gain on sales.

To the extent that a property has had operations prior to sale, and that we do not have continuing involvement with the property, gains from sales of depreciated property are included in discontinued operations and the proceeds from the sale of these held-for-rental properties are classified in the investing activities section of the Consolidated Statements of Cash Flows.

Gains or losses from our sale of properties that were developed or repositioned with the intent to sell and not for long-term rental (“Build-for-Sale” properties) are classified as gain on sale of properties in the Consolidated Statements of Operations. Other rental properties that do not meet the criteria for presentation as discontinued operations are also classified as gain on sale of properties in the Consolidated Statements of Operations.

Net Income (Loss) Per Common Unit

Basic net income (loss) per Common Unit is computed by dividing net income (loss) attributable to common unitholders, less distributions on share-based awards expected to vest, by the weighted average number of Common Units outstanding for the period. Diluted net income (loss) per Common Unit is computed by dividing basic net income (loss) attributable to common unitholders by the sum of the weighted average number of Common Units outstanding and any potential dilutive securities for the period.

During the first quarter of 2009, we adopted a new accounting standard (FASB ASC 260-10) on participating securities, which we have applied retrospectively to prior period calculations of basic and diluted earnings per Common Unit. Pursuant to this new standard, certain of the General Partner’s share-based awards are considered participating securities because they earn dividend equivalents that are not forfeited even if the underlying award does not vest.

The following table reconciles the components of basic and diluted net income (loss) per Common Unit (in thousands):


	2010			2009			2008
Net income (loss) attributable to common unitholders	$	(14,459	)	$	(344,700	)	$	53,665
Less: Distributions on share-based awards expected to vest		(2,513	)		(1,759	)		(1,631	)

Basic and diluted net income (loss) attributable to common unitholders	$	(16,972	)	$	(346,459	)	$	52,034


Weighted average number of Common Units outstanding		244,870			207,893			154,534
Other potential dilutive units		-			-			19

Weighted average number of Common Units and potential dilutive securities		244,870			207,893			154,553

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Substantially all potential shares related to the General Partner’s stock-based compensation plans as well as our 3.75% Exchangeable Senior Notes (“Exchangeable Notes”) are anti-dilutive for all years presented. The following table summarizes the data that is excluded from the computation of net income (loss) per Common Unit as a result of being anti-dilutive (in thousands):


	2010		2009		2008
Anti-dilutive potential units under stock-based compensation plans		4,713		7,872		8,219
Anti-dilutive potential units under the Exchangeable Notes		3,890		8,089		11,771

Federal Income Taxes

Our financial statements include the operations of our taxable REIT subsidiary that is subject to corporate, federal, state and local income taxes. As a partnership, the allocated share of income and loss other than the operations of our taxable REIT subsidiary is included in the income tax returns of our partners; accordingly the only federal income taxes included in the accompanying consolidated financial statements are in connection with our taxable REIT subsidiary.

Refinements to our operating strategy in 2009 caused us to reduce our projections of taxable income in our taxable REIT subsidiary. As the result of these changes in our projections, we determined that it was more likely than not that the taxable REIT subsidiary would not generate sufficient taxable income to realize any of its deferred tax assets. Accordingly, a full valuation allowance was established for our deferred tax assets in 2009, which we have continued to maintain through December 31, 2010. Income taxes are not material to our operating results or financial position.

We received income tax refunds, net of federal and state income tax payments, of $19.7 million in 2010. We paid federal and state income taxes of $800,000 and $3.5 million in 2009 and 2008, respectively. The taxable REIT subsidiaries have no significant net deferred income tax or unrecognized tax benefit items.

Derivative Financial Instruments

We periodically enter into certain interest rate protection agreements to effectively convert or cap floating rate debt to a fixed rate, and to hedge anticipated future financing transactions, both of which qualify for cash flow hedge accounting treatment. Net amounts paid or received under these agreements are recognized as an adjustment to the interest expense of the corresponding debt. We do not utilize derivative financial instruments for trading or speculative purposes.

If a derivative qualifies as a cash flow hedge, the change in fair value of the derivative is recognized in other comprehensive income to the extent the hedge is effective, while the ineffective portion of the derivative’s change in fair value is recognized in earnings. Gains and losses on our interest rate protection agreements are subsequently included in earnings as an adjustment to interest expense in the same periods in which the related interest payments being hedged are recognized in earnings.

We estimate the fair value of derivative instruments using standard market conventions and techniques such as discounted cash flow analysis, option pricing models and termination cost at each balance sheet date. For all hedging relationships, we formally document the hedging relationship and its risk-management objective and strategy for undertaking the hedge, the hedging instrument, the hedged item, the nature of the risk being hedged, how the hedging instrument’s effectiveness in offsetting the hedged risk will be assessed prospectively and retrospectively, and a description of the method of measuring ineffectiveness.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Fair Value Measurements

On January 1, 2009, we adopted a new accounting standard (FASB ASC 820) that establishes a framework for measuring fair value of non-financial assets and liabilities that are not required or permitted to be measured at fair value on a recurring basis but only in certain circumstances, such as a business combination.

Assets and liabilities recorded at fair value on the consolidated balance sheets are categorized based on the inputs to the valuation techniques as follows:

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities to which we have access.

Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entity’s own assumptions, as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. Our assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability.

Use of Estimates

The preparation of the financial statements requires management to make a number of estimates and assumptions that affect the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the period. The most significant estimates, as discussed within our Summary of Significant Accounting Policies, pertain to the critical assumptions utilized in testing real estate assets for impairment as well as in estimating the fair value of real estate assets when an impairment event has taken place. Actual results could differ from those estimates.

(3)

Significant Acquisitions and Dispositions

2010 Acquisition of Remaining Interest in Dugan Realty, L.L.C.

On July 1, 2010, we acquired our joint venture partner’s 50% interest in Dugan Realty, L.L.C. (“Dugan”), a real estate joint venture that we had previously accounted for using the equity method, for a payment of $166.7 million. Dugan held $28.1 million of cash at the time of acquisition, which resulted in a net cash outlay of $138.6 million. As the result of this transaction we obtained 100% of Dugan’s membership interests.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

At the date of acquisition, Dugan owned 106 industrial buildings totaling 20.8 million square feet and 63 net acres of undeveloped land located in Midwest and Southeast markets. Dugan had a secured loan with a face value of $195.4 million due in October 2010, which was repaid at its scheduled maturity date, and a secured loan with a face value of $87.6 million due in October 2012 (see Note 8). The acquisition was completed in order to pursue our strategy to increase our overall allocation to industrial real estate assets.

The following table summarizes our allocation of the fair value of amounts recognized for each major class of assets and liabilities (in thousands):


Real estate assets	$	502,418
Lease related intangible assets		107,155
Other assets		28,658

Total acquired assets	$	638,231

Secured debt	$	285,376
Other liabilities		20,243

Total assumed liabilities	$	305,619

Fair value of acquired net assets (represents 100% interest)	$	332,612

We previously managed and performed other ancillary services for Dugan’s properties and, as a result, Dugan had no employees of its own and no separately recognizable brand identity. As such, we determined that the consideration paid to the seller, plus the fair value of the incremental share of the assumed liabilities, represented the fair value of the additional interest in Dugan that we acquired, and that no goodwill or other non-real estate related intangible assets were required to be recognized through the transaction. Accordingly, we also determined that the fair value of the acquired ownership interest in Dugan equaled the fair value of our existing ownership interest.

In conjunction with acquiring our partner’s ownership interest in Dugan, we derecognized a $50.0 million liability related to a put option held by our partners. The put liability was originally recognized in October 2000, in connection with a sale of industrial properties and undeveloped land to Dugan, at which point our joint venture partner was given an option to put up to $50.0 million of its interest in Dugan to us in exchange for our common stock or cash (at our option). Our gain on acquisition, considering the derecognition of the put liability, was calculated as follows (in thousands):


Fair value of existing interest (represents 50% interest)	$	166,306
Less:
Carrying value of investment in Dugan		158,591
Put option liability derecognized		(50,000	)

		108,591

Gain on acquisition	$	57,715

Since the acquisition date, Dugan’s results of operations have been included in continuing operations in our consolidated financial statements and have generated $38.7 million of incremental rental revenue, $4.4 million of incremental rental expenses, and $7.1 million of incremental real estate tax expense. We additionally have recognized $5.2 million of interest expense, subsequent to the acquisition date, related to Dugan’s two secured loans.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Other 2010 Acquisitions

We also acquired additional properties during the year ended December 31, 2010 as shown below:


Location	Product Type	Number of Buildings
Phoenix, Arizona	Industrial		1
South Florida	Industrial		40
Houston, Texas	Industrial		3
Chicago, Illinois	Industrial		2
Nashville, Tennessee	Industrial		1
Columbus, Ohio	Industrial		1
Charlotte, North Carolina	Medical Office		1
South Florida	Office		3

The following table summarizes our preliminary allocation of the fair value of amounts recognized for each major class of assets and liabilities (in thousands):


Real estate assets	$	483,396
Lease related intangible assets		122,069
Other assets		6,822

Total acquired assets	$	612,287

Secured and unsecured debt	$	221,696
Other liabilities		9,194

Total assumed liabilities	$	230,890

Fair value of acquired net assets	$	381,397

The above acquisitions include the first tranche of a portfolio of primarily industrial properties in South Florida (the “Premier Portfolio”), which we purchased on December 30, 2010 for $281.7 million, including the assumption of secured debt that had a face value of $155.7 million. The first tranche included 39 buildings totaling more than 3.4 million square feet, comprised of 38 industrial properties and one office property. We intend, and are under contract, to acquire another 17 buildings to complete the acquisition of the Premier Portfolio in early 2011. The acquisition of the Premier Portfolio includes an earn-out provision where we have agreed to pay the sellers 25% of any increase in the fair value of the properties over an agreed-upon value, less our additional capital investments in the buildings, at the end of the five year period subsequent to the acquisition. At the time of acquisition, we estimated the fair value of this contingent payment to be inconsequential and, as such, have not recorded any liability as part of purchase accounting. Any subsequent changes to this estimate will be recognized through future earnings. Overall purchase accounting allocations for the first tranche of the Premier Portfolio are preliminary as of December 31, 2010.

2009 Consolidation of Retail Joint Ventures

Through March 31, 2009, we were a member in two retail real estate joint ventures with a retail developer. Both entities were jointly controlled by us and our partner, through equal voting interests, and were accounted for as unconsolidated subsidiaries under the equity method. As of April 1, 2009, we had made combined equity contributions of $37.9 million to the two entities and we also had combined outstanding principal and accrued interest of $173.0 million on advances to the two entities.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We advanced $2.0 million to the two entities, who then distributed the $2.0 million to our partner in exchange for the redemption of our partner’s membership interests, effective April 1, 2009, at which time we obtained 100% control of the voting interests of both entities. We entered into these transactions to gain control of these two entities because it allowed us to operate and potentially dispose of the entities in a manner that best serves our capital needs.

In conjunction with the redemption of our partner’s membership interests, we entered a profits interest agreement that entitles our former partner to additional payments should the combined sale of the two acquired entities, as well as the sale of another retail real estate joint venture that we and our partner still jointly control, result in an aggregate profit. Aggregate profit on the sale of these three projects will be calculated by using a formula defined in the profits interest agreement. We have estimated that the fair value of the potential additional payment to our partner is insignificant.

A summary of the fair value of amounts recognized for each major class of assets and liabilities acquired is as follows (in thousands):


Buildings, land and tenant improvements	$	176,038
Undeveloped land		6,500

Total real estate assets		182,538
Lease related intangible assets		24,350
Other assets		3,987

Total acquired assets		210,875
Liabilities assumed		(4,023	)

Fair value of acquired net assets	$	206,852

The fair values recognized from the real estate and related assets acquired were primarily determined using the income approach. The most significant assumptions in the fair value estimates were the discount rates and the exit capitalization rates. The estimates of fair value were determined to have primarily relied upon Level 3 inputs.

We recognized a loss of $1.1 million upon acquisition, which represents the difference between the fair value of the recognized assets and the carrying value of our pre-existing equity interest. The acquisition date fair value of the net recognized assets as compared to the acquisition date carrying value of our outstanding advances and accrued interest, as well as the acquisition date carrying value of our pre-existing equity interests, is shown as follows (in thousands):


Net fair value of acquired assets and liabilities	$	206,852
Less advances to acquired entities eliminated upon consolidation		(173,006	)
Less acquisition date carrying value of equity in acquired entities		(34,908	)

Loss on acquisition	$	(1,062	)

Since April 1, 2009, the results of operations for both acquired entities have been included in continuing operations in our consolidated financial statements. Due to our significant pre-existing ownership and financing positions in the two acquired entities, the inclusion of their results of operations did not have a material effect on our operating income.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Fair Value Measurements

The fair value estimates used in allocating the aggregate purchase price of each acquisition among the individual components of real estate assets and liabilities were determined primarily through calculating the “as-if vacant” value of each building, using the income approach, and relied significantly upon internally determined assumptions. We have, thus, determined these estimates to have been primarily based upon Level 3 inputs, which are unobservable inputs based on our own assumptions. The most significant assumptions utilized in these estimates, for our 2010 acquisitions, are summarized as follows:


Discount rate			8.9% - 12.5%
Exit capitalization rate			7.6% - 10.5%
Lease up period			12 - 36 months
Net rental rate per square foot - Industrial			$ 1.80 - $8.00
Net rental rate per square foot - Office			$19.00
Net rental rate per square foot - Medical Office			$19.27

Acquisition-Related Transaction Costs

The gain on acquisition, in our consolidated Statements of Operations, for the year ended December 31, 2010 is presented net of $1.9 million of transaction costs.

Dispositions

We disposed of undeveloped land and income producing real estate related assets and received net proceeds of $499.5 million, $288.2 million and $459.6 million in 2010, 2009 and 2008, respectively. Included in the building dispositions in 2010 is the sale of seven suburban office buildings, totaling over 1.0 million square feet, to a newly formed subsidiary of an existing 20% owned joint venture. These buildings were sold to the new entity for an agreed value of $173.9 million, of which our 80% share of proceeds totaled $139.1 million.

All other dispositions were not individually material.

(4)

Related Party Transactions

We provide property management, asset management, leasing, construction and other tenant related services to unconsolidated companies in which we have equity interests. We recorded the corresponding fees based on contractual terms that approximate market rates for these types of services and we have eliminated our ownership percentage of these fees in the consolidated financial statements. The following table summarizes the fees earned from these companies for the years ended December 31, 2010, 2009 and 2008, respectively (in millions):


	2010		2009		2008
Management fees	$	7.6	$	8.4	$	7.8
Leasing fees		2.7		4.2		2.8
Construction and development fees		10.3		10.2		12.7

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(5)

Investments in Unconsolidated Companies

We have equity interests in unconsolidated joint ventures that develop, own and operate rental properties and hold land for development.

Combined summarized financial information for the unconsolidated companies as of December 31, 2010 and 2009, and for the years ended December 31, 2010, 2009 and 2008, are as follows (in thousands):


	2010		2009		2008
Rental revenue	$	228,378	$	254,787	$	250,312

Net income	$	19,202	$	9,760	$	40,437


Land, buildings and tenant improvements, net	$	1,687,228	$	2,072,435
Construction in progress		120,834		128,257
Undeveloped land		177,473		176,356
Other assets		242,461		260,249

	$	2,227,996	$	2,637,297


Indebtedness	$	1,082,823	$	1,319,696
Other liabilities		66,471		75,393

		1,149,294		1,395,089
Owners’ equity		1,078,702		1,242,208

	$	2,227,996	$	2,637,297

Dugan generated $42.5 million in revenues and $6.4 million of net income in the six months of 2010 prior to its July 1 consolidation. Dugan generated $85.7 million and $90.3 million of revenues and $12.5 million and $16.8 million of net income during 2009 and 2008, respectively, and had total assets of $649.3 million as of December 31, 2009.

Our share of the scheduled principal payments of long term debt for the unconsolidated joint ventures for each of the next five years and thereafter as of December 31, 2010 are as follows (in thousands):


Year	Future Repayments
2011	$	72,349
2012		3,710
2013		70,522
2014		30,157
2015		57,486
Thereafter		127,614

	$	361,838

(6)

Discontinued Operations and Assets Held for Sale

The following table illustrates the number of properties in discontinued operations:


	Held For Sale		Sold in 2010		Sold in 2009		Sold in 2008		Total
Office		7		11		5		4		27
Industrial		2		6		-		4		12
Retail		-		2		-		-		2

		9		19		5		8		41

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We allocate interest expense to discontinued operations and have included such interest expense in computing income from discontinued operations. Interest expense allocable to discontinued operations includes interest on any secured debt for properties included in discontinued operations and an allocable share of our consolidated unsecured interest expense for unencumbered properties. The allocation of unsecured interest expense to discontinued operations was based upon the gross book value of the unencumbered real estate assets included in discontinued operations as it related to the total gross book value of our unencumbered real estate assets.

The following table illustrates operations of the buildings reflected in discontinued operations for the years ended December 31 (in thousands):


	2010			2009			2008
Revenues	$	39,325		$	56,463		$	76,593
Operating expenses		(14,893	)		(21,008	)		(26,990	)
Depreciation and amortization		(11,120	)		(16,697	)		(21,933	)

Operating income		13,312			18,758			27,670
Interest expense		(10,580	)		(15,873	)		(19,124	)

Income before impairment charges and gain on sales		2,732			2,885			8,546
Impairment charges		-			(26,936	)		(1,266	)
Gain on sale of depreciable properties		33,054			6,786			16,961

Income (loss) from discontinued operations	$	35,786		$	(17,265	)	$	24,241

The income from discontinued operations for all periods presented is entirely attributable to the common unitholders.

At December 31, 2010, we classified nine properties as held-for-sale, which were included in discontinued operations. Additionally, we have classified 15 in-service properties as held-for-sale, but have included the results of operations of these properties in continuing operations, either based on our present intention to sell the properties to entities in which we will retain a minority equity ownership interest or because of continuing involvement through a management agreement. The following table illustrates aggregate balance sheet information of the aforementioned nine properties included in discontinued operations, as well as the 15 held-for-sale properties whose results are included in continuing operations at December 31, 2010 (in thousands):


	Properties Included in Discontinued Operations		Properties Included in Continuing Operations		Total Held-for-Sale Properties
Balance Sheet:
Real estate investment, net	$	89,643	$	265,049	$	354,692
Other assets		9,557		30,038		39,595

Total assets held-for-sale	$	99,200	$	295,087	$	394,287


Accrued expenses	$	2,936	$	6,679	$	9,615
Other liabilities		1,789		3,328		5,117

Total liabilities held-for-sale	$	4,725	$	10,007	$	14,732

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(7)

Impairments and Other Charges

The following table illustrates impairment and other charges recognized during the years ended December 31, 2010, 2009 and 2008, respectively (in thousands):


	2010		2009			2008
Undeveloped land	$	9,834	$	136,581		$	8,632
Buildings		-		78,087			2,799
Investments in unconsolidated companies		-		56,437			-
Other real estate related assets		-		31,461			-

Impairment charges	$	9,834	$	302,566		$	11,431
Less: Impairment charges included in discontinued operations		-		(26,936	)		(1,266	)

Impairment charges - continuing operations	$	9,834	$	275,630		$	10,165

Land and Buildings

During 2009, we refined our operating strategy and one result of this change in strategy was the decision to dispose of approximately 1,800 acres of land, which had a total cost basis of $385.3 million, rather than holding them for future development. Our change in strategy for this land triggered the requirement to conduct an impairment analysis, which resulted in a determination that a significant portion of the land was impaired. We recognized impairment charges on land of $136.6 million in 2009, primarily as the result of writing down the land that was identified for disposition, and determined to be impaired, to fair value. As part of determining the fair value of the non-strategic land in connection with the impairment analysis, we considered estimates made by national and local independent real estate brokers who were familiar both with the land parcels subject to evaluation as well as with conditions in the specific markets where the land was located. There were few, if any, recent and representative transactions in many of the markets where our non-strategic land was, or is still, located upon which we could base our impairment analysis. In such instances, we considered older comparable transactions, while adjusting estimated values downward to reflect the troubled condition of the overall economy at the time, constraints on available capital for potential buyers, and the resultant effect of both of these factors on real estate prices. In all cases, members of our senior management that were responsible for the individual markets where the non-strategic land was located and members of our accounting and financial management team reviewed the broker’s estimates for factual accuracy and reasonableness. In almost all cases, our estimate of fair value was comparable to that estimated by the brokers; however, we were ultimately responsible for all valuation estimates made in determining the extent of the impairment. Actual sales of our undeveloped land targeted for disposition could be at prices that differ significantly from our estimates and additional impairments may be necessary in the future in the event market conditions deteriorate further. Our valuation estimates primarily relied upon Level 3 inputs, as defined earlier in this report.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

During 2009, we also reviewed our existing portfolio of buildings and determined that several buildings, which had previously not been actively marketed for disposal, were not strategic and would not be held as long-term investments. Additionally, at various times throughout the year, we determined it appropriate to re-evaluate certain other buildings that were in various stages of the disposition process for impairment because new information was available that triggered further analysis. Impairment charges of $78.1 million were recognized for 28 office, industrial and retail buildings that were determined to be impaired, either as the result of a refinement in management’s strategy or changes in market conditions. Of the 28 commercial buildings that were determined to be impaired during 2009, we utilized an income approach in determining the fair value of 16 of the buildings and a market approach in determining the fair value of the other twelve buildings. The most significant assumptions, when using the income approach, included the discount rate as well as future exit capitalization rates, occupancy levels, rental rates and capital expenditures. The twelve buildings to which the market approach was applied were in various stages of the selling process. Our estimates of fair value for these twelve buildings were based upon asset-specific purchase and sales contracts, letters of intent or otherwise agreed upon offer prices, with third parties. These negotiated prices were based upon, and comparable to, income approach calculations we completed as part of the selling process. Ten of these twelve properties were sold subsequent to the recognition of the impairment charge. There were no material differences in the ultimate selling price of the buildings compared to the selling price used in measuring the initial impairment charge. Fair value measurements for the buildings that were determined to be impaired relied primarily upon Level 3 inputs, as defined earlier in this report.

Investments in Unconsolidated Subsidiaries

We have an investment in an unconsolidated entity (the “3630 Peachtree joint venture”) whose sole activity is the development and operation of the office component of a multi-use office and residential high-rise building located in the Buckhead sub-market of Atlanta. As the result of declines in rental rates and projected increases in capital costs, we analyzed our investment during the three-month period ended September 30, 2009 and recognized an impairment charge to write off our $14.4 million investment, as we determined that an other-than-temporary decline in value had taken place. As a result of the 3630 Peachtree joint venture’s obligations to the lender in its construction loan agreement, the likelihood that our partner will be unable to contribute its share of the additional equity to fund the 3630 Peachtree joint venture’s future capital costs, and ultimately the obligation stemming from our joint and several guarantee of the 3630 Peachtree joint venture loan, we recorded an additional liability of $36.3 million, and an equal charge to impairment expense, for our probable future obligations to the lender. The estimates of fair value utilized in determining the aforementioned charges relied primarily on Level 3 inputs, as defined earlier in this report.

Due to credit issues with its most significant tenant, an inability to renew third-party financing on acceptable terms and an increase to its projected capital expenditures, we analyzed an investment in an unconsolidated joint venture (the “Park Creek joint venture”) during the three-month period ended June 30, 2009 to determine whether there was an other-than-temporary decline in value. As a result of that analysis, we determined that an other-than-temporary decline in value had taken place and we wrote our investment in the Park Creek joint venture down to its fair value, thus recognizing a $5.8 million impairment charge. We estimated the fair value of the Park Creek joint venture using the income approach and the most significant assumption in the estimate was the expected period of time in which we would hold our investment in the joint venture. We concluded that the estimate of fair value relied primarily upon Level 3 inputs, as defined earlier in this report.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Other Real Estate Related Assets

We recognized $31.5 million of impairment charges on other real estate related assets during 2009. The impairment charges related primarily to reserving loans receivable from other real estate entities as well as writing off previously deferred development costs.

(8)

Indebtedness

Indebtedness at December 31, 2010 and 2009 consists of the following (in thousands):


	2010		2009
Fixed rate secured debt, weighted average interest rate of 6.41% at December 31, 2010, and 6.67% at December 31, 2009, maturity dates ranging from 2011 to 2027	$	1,042,722	$	766,299

Variable rate secured debt, weighted average interest rate of 3.69% at December 31, 2010, and 3.33% at December 31, 2009, maturity dates ranging from 2012 to 2025		22,906		19,498

Fixed rate unsecured debt, weighted average interest rate of 6.43% at December 31, 2010, and 6.32% at December 31, 2009, maturity dates ranging from 2011 to 2028		2,948,405		3,052,465

Unsecured lines of credit, weighted average interest rate of 2.83% at December 31, 2010, and 1.08% at December 31, 2009, maturity dates ranging from 2011 to 2013		193,046		15,770

	$	4,207,079	$	3,854,032

Fixed Rate Secured Debt

As of December 31, 2010, our secured debt was collateralized by rental properties with a carrying value of $1.8 billion and by letters of credit in the amount of $7.0 million.

The fair value of our fixed rate secured debt as of December 31, 2010 was $1.1 billion. Because our fixed rate secured debt is not actively traded in any marketplace, we used a discounted cash flow methodology to determine its fair value. Accordingly, we calculated fair value by applying an estimate of the current market rate to discount the debt’s remaining contractual cash flows. Our estimate of a current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. The estimated rates ranged from 4.80% to 6.70%, depending on the attributes of the specific loans. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value for our fixed rate secured debt was primarily based upon Level 3 inputs, as defined earlier in this report.

On July 1, 2010, we assumed two non-recourse secured loans associated with the acquisition of Dugan, which had acquisition-date fair values of $196.6 million and $88.8 million and face values of $195.4 million and $87.6 million. The $196.6 million loan, which bore interest at a rate of 7.52%, was repaid at its maturity in October 2010 while the $88.8 million loan, which bears interest at 5.92%, matures in October 2012. Both loans were determined at acquisition to have a market interest rate of 5.25%.

In December 2010, we assumed 14 secured loans which had an acquisition date fair value of $158.2 million and a face value of $155.7 million, in conjunction with the acquisition of the Premier Portfolio. The loans carry a weighted average interest rate of 5.58% and a weighted remaining term of 3.4 years. The assumed loans were determined to have market interest rates of 5.00%.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

In conjunction with two other acquisitions, we assumed two loans, with a combined acquisition date fair value of $36.4 million, in December 2010. These two loans had a combined face value of $35.8 million. The loans mature in May 2014 and October 2016 and were determined to have market interest rates of 5.25% and 5.12%.

In February, March and July 2009, we borrowed a total of $270.0 million from three 10-year fixed rate secured debt financings that are secured by 32 rental properties. The secured debt bears interest at a weighted average rate of 7.69% and matures at various points in 2019. Additionally, in June 2009, we borrowed $8.5 million from two 6.50% 10-year fixed rate mortgages due in 2019, which are secured by two properties.

Fixed Rate Unsecured Debt

Gains and losses on repurchase are shown after the write off of applicable issuance costs and other accounting adjustments.

We took the following actions during 2010 and 2009 as it pertains to our fixed rate unsecured indebtedness:

•

In January 2010, we repaid $99.8 million of corporate unsecured debt, which had an effective interest rate of 5.37%, at its scheduled maturity date.

•

Throughout 2010, through a cash tender offer and open market transactions, we repurchased certain of our outstanding series of senior unsecured notes scheduled to mature in 2011 and 2013 for $292.2 million. The total face value of these repurchases was $279.9 million. We recognized a loss of $16.3 million on the repurchases after writing off applicable issuance costs and other accounting adjustments.

•

On April 1, 2010, we issued $250.0 million of senior unsecured notes that bear interest at 6.75% and mature on March 15, 2020.

•

In conjunction with one of our acquisitions in 2010, we assumed a $22.4 million unsecured loan that matures in June 2020 and bears interest at an effective rate of 6.26%. This loan was originated less than one year prior to the acquisition and we concluded that the loan’s fair value equaled its face value.

•

In February 2009, we repaid $124.0 million of 6.83% corporate unsecured debt at its scheduled maturity date.

•

Throughout 2009, we repurchased portions of various series of our senior unsecured notes with various scheduled maturity dates through December 2011, both on the open market and through cash tender offers, for $500.9 million. The total face value of these repurchases was $542.9 million. We recognized a gain of $27.5 million on the repurchases after writing off applicable issuance costs and other accounting adjustments. The aforementioned gains on repurchase were partially offset by a $6.8 million charge to write off fees paid for a cancelled secured debt transaction.

•

In August 2009, we issued $500.0 million of senior unsecured notes in two equal tranches. The first $250.0 million of the senior unsecured notes mature in February 2015 and bear interest at an effective rate of 7.50%, while the other $250.0 million of the senior unsecured notes mature in August 2019 and bear interest at an effective rate of 8.38%.

•

In November 2009, we repaid $82.1 million of senior unsecured notes with an effective interest rate of 7.86% on their scheduled maturity date.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The fair value of our fixed rate unsecured debt as of December 31, 2010 was approximately $3.2 billion. We utilized broker estimates in estimating the fair value of our fixed rate unsecured debt. Our unsecured notes are thinly traded and, in many cases, the broker estimates were not based upon comparable transactions. The broker estimates took into account any recent trades within the same series of our fixed rate unsecured debt, comparisons to recent trades of other series of our fixed rate unsecured debt, trades of fixed rate unsecured debt from companies with profiles similar to ours, as well as overall economic conditions. We reviewed these broker estimates for reasonableness and accuracy, considering whether the estimates were based upon market participant assumptions within the principal and most advantageous market and whether any observable inputs would be more preferable indicators of fair value to the broker estimates. We concluded that the broker estimates were representative of fair value. We have determined that our estimation of the fair value of our fixed rate unsecured debt was primarily based upon Level 3 inputs. The estimated trading values of our fixed rate unsecured debt, depending on the maturity and coupon rates, ranged from 101.00% to 117.30% of face value.

Unsecured Lines of Credit

Our unsecured lines of credit as of December 31, 2010 are described as follows (in thousands):


Description	Borrowing Capacity		Maturity Date		Outstanding at December 31, 2010
Unsecured Line of Credit – Partnership	$	850,000		February 2013	$	175,000
Unsecured Line of Credit – Consolidated Subsidiary	$	30,000		July 2011	$	18,046

The consolidated subsidiary’s unsecured line of credit allows for borrowings up to $30.0 million at a rate of LIBOR plus .85% (equal to 1.11% for outstanding borrowings as of December 31, 2010). This unsecured line of credit is used to fund development activities within the consolidated subsidiary and matures in July 2011 with, at our option, a 12-month extension.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

To the extent that there are outstanding borrowings, we utilize a discounted cash flow methodology in order to estimate the fair value of our unsecured lines of credit. The net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate represents the difference between the book value and the fair value. Our estimate of a current market rate is based upon the rate, considering current market conditions and our specific credit profile, at which we estimate we could obtain similar borrowings. The current market rate of 2.91% that we utilized was internally estimated; therefore, we have concluded that our determination of fair value for our unsecured lines of credit was primarily based upon Level 3 inputs, as defined earlier in this report.

Changes in Fair Value

As all of our fair value debt disclosures relied primarily on Level 3 inputs, the following table summarizes the book value and changes in the fair value of our debt for the year ended December 31, 2010 (in thousands):


	Book Value at 12/31/09		Book Value at 12/31/10		Fair Value at 12/31/09		Total Realized Losses/(Gains)		Issuances and Assumptions		Payoffs			Adjustments to Fair Value		Fair Value at 12/31/10
Fixed rate secured debt	$	766,299	$	1,042,722	$	770,255	$	-	$	479,038	$	(207,061	)	$	27,330	$	1,069,562
Variable rate secured debt		19,498		22,906		14,419		-		4,158		-			4,329		22,906
Fixed rate unsecured notes		3,052,465		2,948,405		3,042,230		12,317		272,352		(380,280	)		218,032		3,164,651
Unsecured lines of credit		15,770		193,046		14,714		-		177,276		-			1,234		193,224

Total	$	3,854,032	$	4,207,079	$	3,841,618	$	12,317	$	932,824	$	(587,341	)	$	250,925	$	4,450,343

Scheduled Maturities and Interest Paid

At December 31, 2010, the scheduled amortization and maturities of all indebtedness, excluding fair value and other accounting adjustments, for the next five years and thereafter were as follows (in thousands):


Year	Amount
2011	$	401,311
2012		320,780
2013		702,337
2014		319,150
2015		321,254
Thereafter		2,139,529

	$	4,204,361

The amount of interest paid in 2010, 2009 and 2008 was $246.5 million, $224.0 million and $235.6 million, respectively. The amount of interest capitalized in 2010, 2009 and 2008 was $11.5 million, $26.9 million and $53.5 million, respectively.

(9)

Segment Reporting

We have three reportable operating segments, the first two of which consist of the ownership and rental of office and industrial real estate investments. The operations of our office and industrial properties, along with our medical office and retail properties, are collectively referred to as “Rental Operations.” Our medical office and retail properties do not meet the quantitative thresholds for separate presentation as reportable segments. The third reportable segment consists of providing various real estate services such as property management, asset management, maintenance, leasing, development and construction management to third-party property owners and joint ventures, as well as our Build-for-Sale operations (defined below), and is collectively referred to as “Service Operations.” Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Gains on sale of properties developed or acquired with the intent to sell (“Build-for-Sale” properties), and whose operations prior to sale are insignificant, are classified as part of the income of the Service Operations business segment. The periods of operation for Build-for-Sale properties prior to sale were of short duration. Build-for-Sale properties, which are no longer part of our operating strategy, did not represent a significant component of our operations in 2010 or 2009.

Other revenue consists of other operating revenues not identified with one of our operating segments. Interest expense and other non-property specific revenues and expenses are not allocated to individual segments in determining our performance measure.

We assess and measure our overall operating results based upon an industry performance measure referred to as Funds From Operations (“FFO”), which management believes is a useful indicator of our consolidated operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. The National Association of Real Estate Investment Trusts (“NAREIT”) created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from net income determined in accordance with GAAP. FFO is a non-GAAP financial measure. The most comparable GAAP measure is net income (loss) attributable to common unitholders. Consolidated FFO attributable to common unitholders should not be considered as a substitute for net income (loss) attributable to common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT. We do not allocate certain income and expenses (“Non-Segment Items” as shown in the table below) to our operating segments. Thus, the operational performance measure presented here on a segment-level basis represents net earnings excluding depreciation expense, as well as excluding the Non-Segment Items not allocated, and is not meant to present FFO as defined by NAREIT.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The following table shows (i) the revenues and FFO for each of the reportable segments and (ii) a reconciliation of consolidated FFO attributable to common unitholders to net income (loss) attributable to common unitholders for the years ended December 31, 2010, 2009 and 2008 (in thousands):


	2010			2009			2008
Revenues
Rental Operations:
Office	$	504,812		$	523,695		$	509,203
Industrial		295,960			254,515			245,663
Non-reportable Rental Operations segments		66,376			51,645			28,023
General contractor and service fee revenue		515,361			449,509			434,624

Total Segment Revenues		1,382,509			1,279,364			1,217,513
Other Revenue		11,094			12,377			19,902

Consolidated Revenue from continuing operations		1,393,603			1,291,741			1,237,415
Discontinued Operations		39,325			56,463			76,593

Consolidated Revenue	$	1,432,928		$	1,348,204		$	1,314,008


Reconciliation of Consolidated Funds From Operations
Net earnings excluding depreciation and Non-Segment Items
Office	$	291,429		$	307,866		$	304,664
Industrial		219,266			191,116			188,517
Non-reportable Rental Operations segments		43,424			33,886			17,033
Service Operations		28,496			21,843			54,938

		582,615			554,711			565,152
Non-Segment Items:
Interest expense		(239,383	)		(205,952	)		(184,000	)
Impairment charges		(9,834	)		(275,630	)		(10,165	)
Interest and other income		534			1,229			1,451
Other operating expenses		(1,231	)		(1,017	)		(8,298	)
General and administrative expenses		(41,329	)		(47,937	)		(39,508	)
Gain on land sales		-			357			12,651
Undeveloped land carrying costs		(9,203	)		(10,403	)		(8,204	)
Gain (loss) on debt transactions		(16,349	)		20,700			1,953
Gain (loss) on acquisitions, net		55,820			(1,062	)		-
Income tax benefit (expense)		1,126			6,070			7,005
Other non-segment income		8,132			5,905			17,332
Net loss attributable to noncontrolling interests		185			241			637
Joint venture items		40,346			46,862			61,026
Distributions on Preferred Units		(69,468	)		(73,451	)		(71,426	)
Adjustments for repurchase of Preferred Units		(10,438	)		-			14,046
Discontinued operations		13,852			(7,354	)		29,213

Consolidated FFO attributable to common unitholders		305,375			13,269			388,865
Depreciation and amortization on continuing operations		(349,064	)		(323,429	)		(293,019	)
Depreciation and amortization on discontinued operations		(11,120	)		(16,697	)		(21,933	)
Partnership’s share of joint venture adjustments		(34,674	)		(36,966	)		(37,704	)
Earnings from depreciated property sales on continuing operations		39,662			12,337			-
Earnings from depreciated property sales on discontinued operations		33,054			6,786			16,961
Earnings from depreciated property sales - share of joint venture		2,308			-			495

Net income (loss) attributable to common unitholders	$	(14,459	)	$	(344,700	)	$	53,665

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

The assets for each of the reportable segments as of December 31, 2010 and 2009 are as follows (in thousands):


	December 31, 2010		December 31, 2009
Assets
Rental Operations:
Office	$	3,122,565	$	3,394,229
Industrial		3,210,566		2,233,607
Non-reportable Rental Operations segments		627,491		605,102
Service Operations		231,662		332,676

Total Segment Assets		7,192,284		6,565,614
Non-Segment Assets		451,840		738,879

Consolidated Assets	$	7,644,124	$	7,304,493

Tenant improvements and leasing costs to re-let rental space that had been previously under lease to tenants are referred to as second generation expenditures. Building improvements that are not specific to any tenant but serve to improve integral components of our real estate properties are also second generation expenditures. In addition to revenues and FFO, we also review our second generation capital expenditures in measuring the performance of our individual Rental Operations segments. We review these expenditures to determine the costs associated with re-leasing vacant space and maintaining the condition of our properties. Our second generation capital expenditures by segment are summarized as follows for the years ended December 31, 2010, 2009 and 2008 (in thousands):


	2010		2009		2008
Second Generation Capital Expenditures
Office	$	65,203	$	64,281	$	56,844
Industrial		23,271		13,845		16,443
Non-reportable Rental Operations segments		249		928		1,527

Total	$	88,723	$	79,054	$	74,814

(10)

Leasing Activity

Future minimum rents due to us under non-cancelable operating leases at December 31, 2010 are as follows (in thousands):


Year	Amount
2011	$	725,006
2012		685,716
2013		601,796
2014		499,821
2015		413,880
Thereafter		1,302,113

	$	4,228,332

In addition to minimum rents, certain leases require reimbursements of specified operating expenses that amounted to $190.0 million, $191.0 million and $183.2 million for the years ended December 31, 2010, 2009 and 2008, respectively.

(11)

Employee Benefit Plans

We maintain a 401(k) plan for full-time employees. We have historically made matching contributions up to an amount equal to three percent of the employee’s salary and may also make annual discretionary contributions. The General Partner temporarily suspended its matching program beginning in July 2009; however, a discretionary contribution was made at the end of 2010. The total expense recognized for this plan was $1.3 million, $1.6 million and $3.0 million for the years ended December 31, 2010, 2009 and 2008, respectively.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We make contributions to a contributory health and welfare plan as necessary to fund claims not covered by employee contributions. The total expense we recognized related to this plan was $10.4 million, $11.2 million and $9.6 million for 2010, 2009 and 2008, respectively. These expense amounts include estimates based upon the historical experience of claims incurred but not reported as of year-end.

(12)

Partners’ Equity

The General Partner periodically uses the public equity markets to fund the development and acquisition of additional rental properties or to pay down debt. The proceeds of these offerings are contributed to us in exchange for an additional interest in the Partnership.

In June 2010, the General Partner issued 26.5 million shares of its common stock for net proceeds of approximately $298.1 million. The proceeds from this offering were used for acquisitions, general corporate purposes and repurchases of preferred shares and fixed rate unsecured debt.

Throughout 2010, pursuant to the share repurchase plan approved by the General Partner’s board of directors, the General Partner repurchased 4.5 million shares of its 8.375% Series O Cumulative Redeemable Preferred Shares. The preferred shares that the General Partner repurchased had a total face value of approximately $112.1 million, and were repurchased for $118.8 million. We then repurchased corresponding Preferred Units held by the General Partner at the same price at which it repurchased its shares on the open market. An adjustment of approximately $10.4 million, which included a ratable portion of issuance costs, increased the net loss attributable to common unitholders. All shares repurchased by the General Partner were retired prior to December 31, 2010.

In April 2009, the General Partner issued 75.2 million shares of its common stock for net proceeds of $551.4 million. The proceeds from the issuance were used to repay outstanding borrowings under the Partnership’s unsecured line of credit and for other general corporate purposes.

During the fourth quarter of 2008, pursuant to the share repurchase plan approved by the General Partner’s board of directors, the General Partner repurchased 109,500 preferred shares from all of its outstanding series. The preferred shares repurchased had a total redemption value of approximately $27.4 million, and were repurchased for $12.4 million. We then repurchased corresponding Preferred Units held by the General Partner at the same price at which it repurchased its shares on the open market. An adjustment of approximately $14.0 million, net of a ratable portion of issuance costs, increased income attributable to common unitholders. All shares repurchased by the General Partner were retired prior to December 31, 2008.

The following series of Preferred Units were outstanding as of December 31, 2010 (in thousands, except percentage data):


Description	Units Outstanding		Distribution Rate			Optional Redemption Date		Liquidation Preference
Series J Preferred		396		6.625	%		August 29, 2008	$	99,058
Series K Preferred		598		6.500	%		February 13, 2009	$	149,550
Series L Preferred		796		6.600	%		November 30, 2009	$	199,075
Series M Preferred		673		6.950	%		January 31, 2011	$	168,272
Series N Preferred		435		7.250	%		June 30, 2011	$	108,630
Series O Preferred		720		8.375	%		February 22, 2013	$	179,955

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

All series of Preferred Units require cumulative distributions and have no stated maturity date (although the General Partner may redeem all such Preferred Units on or following their optional redemption dates at its option, in whole or in part).

(13)

Stock Based Compensation

The General Partner is authorized to issue up to 12.4 million shares of its common stock under its stock based employee and non-employee compensation plans.

Cash flows resulting from tax deductions in excess of recognized compensation cost from the exercise of stock options (excess tax benefits) were not significant in any period presented.

Fixed Stock Option Plans

The General Partner had options outstanding under five fixed stock option plans as of December 31, 2010. Additional grants may be made under one of those plans. Stock option awards granted under the General Partner’s stock based employee and non-employee compensation plans generally vest over five years at 20% per year and have contractual lives of ten years. The General Partner’s most recent annual grant of stock options was in February 2008. The exercise price for stock option grants is set at the fair value of the General Partner’s common stock on the day of grant.

On June 7, 2010, the General Partner completed a one-time stock option exchange program, which was approved by the General Partner’s shareholders at its annual meeting, to allow the majority of its employees to surrender for cancellation their outstanding stock options in exchange for a lesser number of restricted stock units (“RSUs”) based on both the fair value of the options and the RSUs at the time of the exchange. As a result of the program, 4.4 million options were surrendered and cancelled and 1.2 million RSUs were granted.

The total compensation cost for the new RSUs, which is equal to the unamortized compensation expense associated with the related eligible unvested options surrendered, will be recognized over the applicable vesting period of the new RSUs. As the fair value of the RSUs granted was less than the fair value of the eligible options surrendered in exchange for the RSUs, each measured on June 7, 2010, there was no incremental expense recognized through the exchange program. The most significant assumption used in estimating the fair value of the surrendered options was the assumption for expected volatility, which was 70%. The volatility assumption was made based on both historical experience and our best estimate of future volatility. The assumption for dividend yield was 5% while the assumptions for expected term and risk-free rate varied based upon the remaining contractual lives of the surrendered options.

The following table summarizes transactions under the General Partner’s stock option plans as of December 31, 2010:


				2010				Aggregate Intrinsic Value (1) (in Millions)
	Shares			Weighted Average Exercise Price		Weighted Average Remaining Life		Aggregate Intrinsic Value (1) (in Millions)
Outstanding, beginning of year		6,473,388		$	27.96
Surrendered for exchange		(4,421,648	)	$	27.97
Exercised		-		$	-
Forfeited		(14,596	)	$	27.88
Expired		(256,345	)	$	21.77

Outstanding, end of year		1,780,799		$	28.82		4.71	$	-

Options exercisable, end of year		1,305,583		$	29.18		3.95	$	-

(1)

Although this amount changes continuously based upon the market prices of the General Partner’s stock, none of the exercisable options outstanding had any pre-tax intrinsic value as of December 31, 2010.

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Options granted in the year ended December 31, 2008 had a weighted average fair value per option of $1.76. As of December 31, 2010, there was $47,000 of total unrecognized compensation expense related to stock options granted under the plans, which is expected to be recognized over a weighted average remaining period of 1.8 years. The total intrinsic value of options exercised during the year ended December 31, 2008 was approximately $898,000. Compensation expense recognized for fixed stock option plans was $820,000, $2.6 million and $3.9 million for the years ended December 31, 2010, 2009 and 2008, respectively. The weighted average grant date fair value of options vested during the years ended December 31, 2010, 2009 and 2008 was $2.6 million, $3.0 million and $2.6 million, respectively.

The fair values of the options were determined using the Black-Scholes option-pricing model with the following assumptions:


	2008
Dividend yield		6.75	%
Volatility		20.0	%
Risk-free interest rate		2.79	%
Expected life		5 years

The risk free interest rate assumption is based upon observed interest rates appropriate for the term of the General Partner’s employee stock options. The dividend yield assumption is based on the history of and our present expectation of future dividend payouts. Our computation of expected volatility for the valuation of stock options granted in the year ended December 31, 2008 is based on historic, and our present expectation of future volatility over a period of time equal to the expected term. The expected life of employee stock options represents the weighted average period the stock options are expected to remain outstanding.

Restricted Stock Units

Under the General Partner’s 2005 Long-Term Incentive Plan and its 2005 Non-Employee Directors Compensation Plan approved by its shareholders in April 2005, RSUs may be granted to non-employee directors, executive officers and selected management employees. An RSU is economically equivalent to one share of the General Partner’s common stock. RSUs generally vest 20% per year over five years, have contractual lives of five years and are payable in shares of the General Partner’s common stock with a new share of such common stock issued upon each RSU’s vesting. However, RSUs granted to existing non-employee directors vest 100% over one year, and have contractual lives of one year. Also, RSUs granted on June 7, 2010 in exchange for stock options will vest, depending on the original terms of the surrendered options, in either June 2012 or June 2013. We recognize the value of the granted RSUs over this vesting period as expense.

The following table summarizes transactions for our RSUs, excluding dividend equivalents, for 2010:


Restricted Stock Units	Number of RSUs			Weighted Average Grant Date Fair Value
RSUs at December 31, 2009		1,683,606		$	12.23
Granted		2,203,063		$	10.86
Vested		(455,765	)	$	13.75
Forfeited		(52,065	)	$	10.99

RSUs at December 31, 2010		3,378,839		$	11.15

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Compensation cost recognized for RSUs totaled $9.0 million, $7.3 million and $4.9 million for the years ended December 31, 2010, 2009 and 2008, respectively.

As of December 31, 2010, there was $12.6 million of total unrecognized compensation expense related to nonvested RSUs granted under the Plan, which is expected to be recognized over a weighted average period of 3.5 years.

(14)

Financial Instruments

We are exposed to capital market risk, such as changes in interest rates. In an effort to manage interest rate risk, we may enter into interest rate hedging arrangements from time to time. We do not utilize derivative financial instruments for trading or speculative purposes.

In November 2007, we entered into forward starting interest swaps with notional amounts appropriate to hedge interest rates on $300.0 million of anticipated debt offerings in 2009. The forward starting swaps were appropriately designated and tested for effectiveness as cash flow hedges. In March 2008, we settled the forward starting swaps and made a cash payment of $14.6 million to the counterparties. An effectiveness test was performed as of the settlement date and it was concluded that a highly effective cash flow hedge was still in place for the expected debt offering. Of the amount paid in settlement, approximately $700,000 was immediately reclassified to interest expense, as the result of partial ineffectiveness calculated at the settlement date. The net amount of $13.9 million was recorded in Other Comprehensive Income (“OCI”) and is being recognized through interest expense over the life of the hedged debt offering, which took place in May 2008. The remaining unamortized amount included as a reduction to accumulated OCI as of December 31, 2010 is $5.5 million.

In August 2005, we entered into $300.0 million of cash flow hedges through forward starting interest rate swaps to hedge interest rates on $300.0 million of anticipated debt offerings in 2007. The swaps qualified for hedge accounting, with any changes in fair value recorded in OCI. In conjunction with the September 2007 issuance of $300.0 million of senior unsecured notes, we terminated these cash flow hedges as designated. The settlement amount received of $10.7 million is being recognized to earnings through a reduction of interest expense over the term of the hedged cash flows. The remaining unamortized amount included as an increase to accumulated OCI as of December 31, 2010 is $7.2 million. The ineffective portion of the hedge was insignificant.

The effectiveness of our hedges is evaluated throughout their lives using the hypothetical derivative method under which the change in fair value of the actual swap designated as the hedging instrument is compared to the change in fair value of a hypothetical swap. We had no material interest rate derivatives, when considering both fair value and notional amount, at December 31, 2010.

(15)

Commitments and Contingencies

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Notes to Consolidated Financial Statements

We also have guaranteed the repayment of secured and unsecured loans of six of our unconsolidated subsidiaries. At December 31, 2010, the maximum guarantee exposure for these loans was approximately $245.4 million. Included in our total guarantee exposure is a joint and several guarantee of the construction loan agreement of the 3630 Peachtree joint venture. A contingent liability in the amount of $36.3 million was established in 2009 based on the probability of us being required to pay this obligation to the lender.

We lease certain land positions with terms extending to December 2080, with a total obligation of $103.6 million. No payments on these ground leases are material in any individual year.

(16)

Subsequent Events

Declaration of Distributions

The General Partner’s board of directors declared the following distributions at its regularly scheduled board meeting held on January 26, 2011:

Class

Quarterly
Amount/Unit

Record Date

Payment Date

Common

0.17

February 14, 2011

February 28, 2011

Preferred (per depositary unit):

Series J

0.414063

February 14, 2011

February 28, 2011

Series K

0.406250

February 14, 2011

February 28, 2011

Series L

0.412500

February 14, 2011

February 28, 2011

Series M

0.434375

March 17, 2011

March 31, 2011

Series N

0.453125

March 17, 2011

March 31, 2011

Series O

0.523438

March 17, 2011

March 31, 2011

In January and February 2011, we acquired an additional twelve buildings pursuant to our planned acquisition of the Premier Portfolio. These additional buildings were acquired for $115.7 million, which included the assumption of secured loans with a total face value of $90.8 million.


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


Development	Name	Building Type		Encumbrances		Initial Cost				Cost Capitalized Subsequent to Development			Gross Book Value 12/31/10						Accumulated Depreciation (2)		Year Constructed/ Renovated		Year Acquired
						Initial Cost				Cost Capitalized Subsequent to Development			Gross Book Value 12/31/10
						Land		Buildings		or Acquisition			Land/Land Imp		Bldgs/TI		Total (1)

Acworth, Georgia
Northwest I75	240 Northpoint Parkway		Industrial		-		1,022		1,886		-			1,022		1,886		2,908		45		1997		2010

Allen, Texas
Allen Central Park	One Allen Center		Office		-		1,966		11,051		5,066			1,720		16,363		18,083		2,528		2007		2007

Alpharetta, Georgia
Brookside Office Park	Radiant I		Office		-		1,269		14,697		143			1,269		14,840		16,109		4,297		1998		1999
Brookside Office Park	Brookside I		Office		8,559		1,625		7,864		4,513			1,492		12,510		14,002		3,847		1999		1999
Brookside Office Park	Radiant II		Office		-		831		6,755		172			831		6,927		7,758		1,785		2000		2000
Brookside Office Park	Brookside II		Office		9,254		1,381		9,988		2,826			1,248		12,947		14,195		3,717		2001		2001
NorthWinds Center	Northwinds VII		Office		-		2,271		19,226		2,216			2,304		21,409		23,713		6,522		1998		1999
NorthWinds Center	Northwinds I		Office		-		1,879		12,520		2,648			1,879		15,168		17,047		3,131		1997		2004
NorthWinds Center	Northwinds II		Office		-		1,796		12,596		853			1,796		13,449		15,245		2,579		1997		2004
NorthWinds Center	Northwinds III		Office		14,125		1,868		12,599		960			1,499		13,928		15,427		2,575		1998		2004
NorthWinds Center	Northwinds IV		Office		13,444		1,844		12,407		2,230			1,844		14,637		16,481		3,306		1999		2004
NorthWinds Center	Northwinds V		Office		-		2,215		12,428		2,075			2,215		14,503		16,718		3,130		1999		2004
NorthWinds Center	Northwinds VI		Office		-		2,662		11,781		1,319			2,662		13,100		15,762		2,447		2000		2004
NorthWinds Center	Northwinds Village		Retail		-		704		4,221		210			710		4,425		5,135		863		2000		2004
NorthWinds Center	Northwinds Restaurant		Office		-		202		302		-			202		302		504		62		1997		2004
Ridgeland	1320 Ridgeland Parkway		Industrial		-		998		6,001		307			998		6,308		7,306		1,831		1999		1999
Ridgeland	1345 Ridgeland Parkway		Industrial		-		488		1,611		1,101			488		2,712		3,200		708		1999		1999
Ridgeland	1335 Ridgeland Pkwy		Industrial		-		579		1,894		828			579		2,722		3,301		992		2000		2000
Preston Ridge	Preston Ridge IV		Office		8,371		2,777		9,442		952			2,781		10,390		13,171		2,364		2000		2004
Windward	800 North Point Parkway		Office		-		1,250		18,443		-			1,250		18,443		19,693		3,812		1991		2003
Windward	900 North Point Parkway		Office		-		1,250		13,945		-			1,250		13,945		15,195		2,905		1991		2003

Arlington, Texas
Not Applicable	Baylor Ortho Hosp-Arlington		Medical Office		16,076		584		9,623		11,860			1,816		20,251		22,067		773		2009		2009

Arlington Heights, Illinois
Arlington Business Park	Atrium II		Office		-		776		6,199		2,787			776		8,986		9,762		3,062		1986		1998

Atlanta, Georgia
Druid Chase	2801 Buford Highway		Office		-		794		9,008		869			794		9,877		10,671		4,080		1977		1999
Druid Chase	1190 West Druid Hills Drive		Office		-		689		6,350		(509	)		689		5,841		6,530		2,554		1980		1999

Aurora, Illinois
Meridian Business Campus	535 Exchange		Industrial		-		386		920		269			386		1,189		1,575		459		1984		1999

Meridian Business Campus	525 North Enterprise Street		Industrial		-		342		1,678		110			342		1,788		2,130		655		1984		1999
Meridian Business Campus	615 North Enterprise Street		Industrial		-		468		2,408		719			468		3,127		3,595		1,098		1984		1999
Meridian Business Campus	4000 Sussex Avenue		Industrial		-		417		1,684		371			417		2,055		2,472		739		1990		1999
Meridian Business Campus	3737 East Exchange		Industrial		-		598		2,543		504			598		3,047		3,645		1,013		1985		1999
Meridian Business Campus	444 North Commerce Street		Industrial		-		722		5,019		597			722		5,616		6,338		1,916		1985		1999
Meridian Business Campus	880 North Enterprise Street		Industrial		4,705		1,150		5,646		815			1,150		6,461		7,611		2,165		2000		2000
Meridian Business Campus	Meridian Office Service Center		Industrial		-		567		1,083		1,688			567		2,771		3,338		1,015		2001		2001
Meridian Business Campus	Genera Corporation		Industrial		3,582		1,957		3,827		-			1,957		3,827		5,784		1,139		2004		2004
Butterfield East	Butterfield 550		Industrial		-		9,185		10,795		1,562			9,185		12,357		21,542		1,350		2008		2008

Baltimore, Maryland
Chesapeake Commerce Center	5901 Holabird Ave		Industrial		-		3,345		4,220		3,307			3,345		7,527		10,872		1,495		2008		2008
Chesapeake Commerce Center	5003 Holabird Ave		Industrial		-		6,488		9,213		1,577			6,488		10,790		17,278		1,447		2008		2008

Batavia, Ohio
Mercy Hospital Clermont MOB	Mercy Hospital Clermont MOB		Medical Office		-		-		8,249		1,215			-		9,464		9,464		1,909		2006		2007

Baytown, Texas
Cedar Crossing Business Park	Cedar Crossing		Industrial		11,170		9,323		5,934		-			9,323		5,934		15,257		1,235		2005		2007

Bloomington, Minnesota
Hampshire Dist. Center	Hampshire Dist Center North		Industrial		371		779		4,482		640			779		5,122		5,901		1,685		1979		1997
Hampshire Dist. Center	Hampshire Dist Center South		Industrial		404		901		5,010		472			901		5,482		6,383		1,838		1979		1997
Norman Pointe Office Park	Norman Pointe I		Office		-		3,650		25,417		2,430			3,650		27,847		31,497		7,922		2000		2000
Norman Pointe Office Park	Norman Pointe II		Office		-		5,885		38,649		6,954			5,700		45,788		51,488		5,059		2007		2007


Duke Realty Limited Partnership			Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Blue Ash, Ohio
Huntington Bank Building	Huntington Bank Building	Office		-		175		241		-		175		241		416		93		1986		1996
Lake Forest/Westlake	Lake Forest Place	Office		-		1,953		18,570		4,765		1,953		23,335		25,288		8,872		1985		1996
Northmark Office Park	Northmark Building 1	Office		-		1,452		2,799		887		1,452		3,686		5,138		1,124		1987		2004
Lake Forest/Westlake	Westlake Center	Office		-		2,459		14,514		4,594		2,459		19,108		21,567		7,400		1981		1996
Landings	Landings Building I	Office		-		4,302		17,512		334		4,302		17,846		22,148		3,829		2006		2006
Landings	Landings Building II	Office		-		4,817		9,377		5,215		4,817		14,592		19,409		2,690		2007		2007

Bolingbrook, Illinois
Joliet Road Business Park	555 Joliet Road	Industrial		7,644		2,184		9,263		799		2,332		9,914		12,246		2,458		2002		2002
Joliet Road Business Park	Dawes Transportation	Industrial		-		3,050		4,453		16		3,050		4,469		7,519		1,395		2005		2005
Crossroads Business Park	Chapco Carton Company	Industrial		3,330		917		4,527		64		917		4,591		5,508		1,044		1999		2002
Crossroads Business Park	Crossroads 1	Industrial		-		1,418		5,803		-		1,418		5,803		7,221		113		1998		2010
Crossroads Business Park	Crossroads 3	Industrial		-		1,330		4,407		-		1,330		4,407		5,737		91		2000		2010

Boynton Beach, Florida
Duke Realty Gateway	Gateway Center 1	Industrial		7,547		1,894		7,813		-		1,894		7,813		9,707		-		2002		2010
Duke Realty Gateway	Gateway Center 2	Industrial		4,693		1,224		5,048		-		1,224		5,048		6,272		-		2002		2010
Duke Realty Gateway	Gateway Center 3	Industrial		3,950		1,030		4,248		-		1,030		4,248		5,278		-		2002		2010
Duke Realty Gateway	Gateway Center 4	Industrial		3,587		900		3,714		-		900		3,714		4,614		-		2000		2010
Duke Realty Gateway	Gateway Center 5	Industrial		2,138		537		2,213		-		537		2,213		2,750		-		2000		2010
Duke Realty Gateway	Gateway Center 6	Industrial		2,022		507		2,093		-		507		2,093		2,600		-		2000		2010
Duke Realty Gateway	Gateway Center 7	Industrial		3,799		953		3,933		-		953		3,933		4,886		-		2000		2010
Duke Realty Gateway	Gateway Center 8	Industrial		10,359		2,416		9,965		-		2,416		9,965		12,381		-		2004		2010

Braselton, Georgia
Braselton Business Park	Braselton II	Industrial		-		1,365		8,720		1,868		1,884		10,069		11,953		2,874		2001		2001
Park 85 at Braselton	625 Braselton Pkwy	Industrial		13,325		9,855		25,497		1,671		9,855		27,168		37,023		6,137		2006		2005
Park 85 at Braselton	1350 Braselton Parkway	Industrial		-		8,227		8,874		5,178		8,227		14,052		22,279		1,883		2008		2008

Brentwood, Tennessee
Brentwood South Bus. Center	Brentwood South Bus Ctr I	Industrial		-		1,065		5,293		1,241		1,065		6,534		7,599		1,992		1987		1999
Brentwood South Bus. Center	Brentwood South Bus Ctr II	Industrial		-		1,065		2,711		1,333		1,065		4,044		5,109		1,303		1987		1999
Brentwood South Bus. Center	Brentwood South Bus Ctr III	Industrial		-		848		3,605		779		848		4,384		5,232		1,305		1989		1999
Creekside Crossing	Creekside Crossing I	Office		-		1,900		7,203		1,377		1,901		8,579		10,480		3,210		1998		1998
Creekside Crossing	Creekside Crossing II	Office		-		2,087		7,327		1,710		2,087		9,037		11,124		3,333		2000		2000
Creekside Crossing	Creekside Crossing III	Office		-		2,969		9,055		2,443		2,969		11,498		14,467		2,934		2006		2006
Creekside Crossing	Creekside Crossing IV	Office		-		2,966		7,775		4,735		2,877		12,599		15,476		2,258		2007		2007

Bridgeton, Missouri
Dukeport	DukePort I	Industrial		-		2,124		5,227		-		2,124		5,227		7,351		106		1996		2010
Dukeport	DukePort II	Industrial		-		1,470		2,747		-		1,470		2,747		4,217		64		1997		2010
Dukeport	DukePort V	Industrial		-		600		3,004		-		600		3,004		3,604		78		1998		2010
Dukeport	DukePort VI	Industrial		-		1,664		4,865		-		1,664		4,865		6,529		95		1999		2010
Dukeport	DukePort VII	Industrial		-		834		4,083		-		834		4,083		4,917		93		1999		2010
Dukeport	DukePort IX	Industrial		-		2,475		5,740		-		2,475		5,740		8,215		117		2001		2010

Brooklyn Park, Minneapolis
7300 Northland Drive	7300 Northland Drive	Industrial		-		700		5,655		315		703		5,967		6,670		1,890		1999		1998
Crosstown North Bus. Ctr.	Crosstown North Bus. Ctr. 1	Industrial		-		835		4,852		1,374		1,286		5,775		7,061		1,853		1998		1999
Crosstown North Bus. Ctr.	Crosstown North Bus. Ctr. 2	Industrial		-		449		2,553		808		599		3,211		3,810		1,039		1998		1999
Crosstown North Bus. Ctr.	Crosstown North Bus. Ctr. 4	Industrial		-		2,079		6,153		1,690		2,397		7,525		9,922		2,479		1999		1999
Crosstown North Bus. Ctr.	Crosstown North Bus. Ctr. 5	Industrial		-		1,079		4,422		724		1,354		4,871		6,225		1,652		2000		2000
Crosstown North Bus. Ctr.	Crosstown North Bus. Ctr. 6	Industrial		-		788		2,266		2,253		1,031		4,276		5,307		1,811		2000		2000
Crosstown North Bus. Ctr.	Crosstown North Bus. Ctr. 10	Industrial		-		2,757		4,423		1,078		2,723		5,535		8,258		1,915		2005		2005
Crosstown North Bus. Ctr.	Crosstown North Bus. Ctr. 12	Industrial		-		4,564		8,494		589		4,564		9,083		13,647		2,095		2005		2005

Brownsburg, Indiana
Ortho Indy West-MOB	Ortho Indy West-MOB	Medical Office		-		-		9,817		1,598		863		10,552		11,415		655		2008		2008

Carmel, Indiana
Hamilton Crossing	Hamilton Crossing I	Industrial		-		833		2,712		3,017		845		5,717		6,562		2,309		2000		1993
Hamilton Crossing	Hamilton Crossing II	Office		-		313		510		1,668		384		2,107		2,491		673		1997		1997
Hamilton Crossing	Hamilton Crossing III	Office		-		890		7,525		2,393		890		9,918		10,808		3,069		2000		2000
Hamilton Crossing	Hamilton Crossing IV	Office		-		515		4,978		629		598		5,524		6,122		1,825		1999		1999
Hamilton Crossing	Hamilton Crossing VI	Office		-		1,044		13,229		1,065		1,068		14,270		15,338		3,621		2004		2004


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Carol Stream, Illinois
Carol Stream Business Park	Carol Stream IV	Industrial		11,977		3,204		14,869		1,289		3,204		16,158		19,362		4,288		2004		2003
Carol Stream Business Park	Carol Stream I	Industrial		-		1,095		3,438		-		1,095		3,438		4,533		89		1998		2010
Carol Stream Business Park	Carol Stream III	Industrial		-		1,556		6,256		-		1,556		6,256		7,812		120		2002		2010

Cary, North Carolina
Regency Forest	200 Regency Forest Drive	Office		-		1,230		12,014		2,460		1,307		14,397		15,704		4,132		1999		1999
Regency Forest	100 Regency Forest Drive	Office		-		1,538		9,385		2,438		1,644		11,717		13,361		3,376		1997		1999
Weston Parkway	6501 Weston Parkway	Office		-		1,775		9,641		1,724		1,775		11,365		13,140		3,359		1996		1999

Celebration, Florida
Celebration Business Center	Celebration Business Center I	Office		-		1,102		4,641		573		1,308		5,008		6,316		1,655		1997		1999
Celebration Business Center	Celebration Business Center II	Office		-		771		3,587		345		961		3,742		4,703		1,332		1997		1999
Celebration Office Center	Celebration Office Center I	Office		-		1,382		5,762		785		1,382		6,547		7,929		2,112		2000		2000
Celebration Office Center	Celebration Office Center II	Office		-		1,382		3,819		2,866		1,634		6,433		8,067		2,161		2001		2001

Chantilly, Virginia
Northridge at Westfields	15002 Northridge Dr.	Office		-		2,082		1,663		1,427		2,082		3,090		5,172		403		2007		2007
Northridge at Westfields	15004 Northridge Dr.	Office		-		2,366		1,920		466		2,366		2,386		4,752		401		2007		2007
Northridge at Westfields	15006 Northridge Dr.	Office		-		2,920		2,276		1,059		2,920		3,335		6,255		691		2007		2007

Charlotte, North Carolina
Not Applicable	Morehead Medical Plaza I	Medical Office		33,237		191		39,040		-		191		39,040		39,231		-		2006		2010

Chillicothe, Ohio
Adena Health Pavilion	Adena Health Pavilion	Medical Office		-		-		14,428		61		-		14,489		14,489		3,006		2006		2007

Cincinnati, Ohio
311 Elm	311 Elm	Office		-		339		5,702		1,259		-		7,300		7,300		4,736		1986		1993
312 Elm	312 Elm	Office		-		4,750		46,172		5,611		5,428		51,105		56,533		23,332		1992		1993
312 Plum	312 Plum	Office		-		2,539		23,129		4,621		2,590		27,699		30,289		12,189		1987		1993
Blue Ash Office Center	Blue Ash Office Center VI	Office		-		518		2,565		680		518		3,245		3,763		1,218		1989		1997
Towers of Kenwood	Towers of Kenwood	Office		-		4,891		41,900		3,413		4,891		45,313		50,204		11,111		1989		2003
Governors Hill	8790 Governor’s Hill	Office		-		400		4,377		1,348		408		5,717		6,125		2,618		1985		1993
Governors Hill	8800 Governor’s Hill	Office		-		225		2,293		641		231		2,928		3,159		1,771		1985		1993
Governors Hill	8600/8650 Governor’s Hill Dr.	Office		-		1,220		17,577		6,479		1,245		24,031		25,276		11,478		1986		1993
Kenwood Executive Center	Kenwood Executive Center	Office		-		606		3,677		1,031		664		4,650		5,314		1,745		1981		1997
Kenwood Commons	8230 Kenwood Commons	Office		2,818		638		4,016		1,017		638		5,033		5,671		3,164		1986		1993
Kenwood Commons	8280 Kenwood Commons	Office		1,782		638		2,782		687		638		3,469		4,107		1,846		1986		1993
Kenwood Medical Office Bldg.	Kenwood Medical Office Bldg.	Office		-		-		7,663		100		-		7,763		7,763		2,375		1999		1999
Pfeiffer Place	Pfeiffer Place	Office		-		3,608		11,455		2,420		3,608		13,875		17,483		3,748		2001		2001
Pfeiffer Woods	Pfeiffer Woods	Office		-		1,450		12,033		1,817		2,131		13,169		15,300		4,360		1998		1999
Remington Office Park	Remington Park Building A	Office		-		560		1,442		222		560		1,664		2,224		998		1982		1997
Remington Office Park	Remington Park Building B	Office		-		560		1,121		393		560		1,514		2,074		814		1982		1997
Triangle Office Park	Triangle Office Park	Office		2,230		1,018		10,326		2,051		1,018		12,377		13,395		7,506		1985		1993
World Park	World Park Bldg 8	Industrial		-		1,095		2,641		-		1,095		2,641		3,736		64		1989		2010
World Park	World Park Bldg 9	Industrial		-		335		1,673		-		335		1,673		2,008		41		1989		2010
World Park	World Park Building 11	Industrial		-		674		2,032		-		674		2,032		2,706		44		1989		2010
World Park	World Park Building 14	Industrial		-		668		3,267		-		668		3,267		3,935		121		1989		2010
World Park	World Park Building 15	Industrial		-		488		1,991		-		488		1,991		2,479		72		1990		2010
World Park	World Park Building 16	Industrial		-		525		1,944		-		525		1,944		2,469		43		1989		2010
World Park	World Park Bldg 17	Industrial		6,870		1,133		5,668		-		1,133		5,668		6,801		127		1994		2010
World Park	World Park Building 18	Industrial		-		1,268		5,200		-		1,268		5,200		6,468		109		1997		2010
World Park	World Park Building 28	Industrial		-		870		5,316		-		870		5,316		6,186		106		1998		2010
World Park	World Park Building 29	Industrial		12,228		1,605		10,050		-		1,605		10,050		11,655		193		1998		2010
World Park	World Park Bldg 30	Industrial		14,113		2,492		11,628		-		2,492		11,628		14,120		247		1999		2010
World Park	World Park Building 31	Industrial		-		533		2,511		-		533		2,511		3,044		50		1998		2010
Good Samaritan W. Ridge MOB	Western Ridge	Medical Office		-		1,894		7,985		-		1,894		7,985		9,879		108		2010		2010

Clayton, Missouri
101 South Hanley	101 South Hanley	Office		-		6,150		41,443		3,710		6,150		45,153		51,303		12,207		1986		2002

100


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Columbus, Ohio
Easton	One Easton Oval	Office		-		2,789		9,534		1,146		2,789		10,680		13,469		3,686		1999		1999
Easton	Two Easton Oval	Office		-		2,489		15,912		2,804		2,489		18,716		21,205		6,141		1996		1998
Easton	Easton Way One	Office		-		1,874		8,791		728		1,874		9,519		11,393		3,497		2000		2000
Easton	Easton Way Two	Office		-		2,005		6,808		836		2,005		7,644		9,649		1,843		2001		2001
Easton	Easton Way Three	Office		-		2,768		8,350		172		2,693		8,597		11,290		1,893		2003		2003
Easton	4400 Easton Commons	Office		-		1,886		7,779		1,350		1,886		9,129		11,015		2,998		2006		2006
Easton	4343 Easton Commons	Office		-		3,059		7,248		3,462		3,083		10,686		13,769		1,497		2007		2007

Coppell, Texas
Freeport North	Freeport X	Industrial		17,718		8,198		16,900		3,044		8,198		19,944		28,142		7,421		2004		2004
Point West Industrial	Point West VI	Industrial		11,209		10,181		17,905		4,127		10,181		22,032		32,213		3,466		2008		2008
Point West Industrial	Point West VII	Industrial		9,938		6,785		13,668		6,488		7,201		19,740		26,941		2,835		2008		2008
Point West Industrial	Samsung Pkg Lot-PWT7	Grounds		-		306		-		11		317		-		317		43		n/a		2009

Dallas, Texas
Not Applicable	Baylor Administration Building	Medical Office		-		50		14,435		100		150		14,435		14,585		810		2009		2009

Davenport, Florida
Park 27 Distribution Center	Park 27 Distribution Center I	Industrial		-		2,449		6,107		33		2,449		6,140		8,589		2,341		2003		2003
Park 27 Distribution Center	Park 27 Distribution Center II	Industrial		-		4,374		8,218		4,697		4,415		12,874		17,289		2,316		2007		2007

Deerfield Township, Ohio
Deerfield Crossing	Deerfield Crossing A	Office		-		1,493		11,168		1,639		1,493		12,807		14,300		3,985		1999		1999
Deerfield Crossing	Deerfield Crossing B	Office		-		1,069		13,200		534		1,069		13,734		14,803		6,094		2001		2001
Governors Pointe	Governor’s Pointe 4770	Office		-		586		7,516		1,111		596		8,617		9,213		4,738		1986		1993
Governors Pointe	Governor’s Pointe 4705	Office		-		719		6,046		3,847		987		9,625		10,612		4,732		1988		1993
Governors Pointe	Governor’s Pointe 4605	Office		-		630		16,600		4,496		909		20,817		21,726		9,730		1990		1993
Governors Pointe	Governor’s Pointe 4660	Office		-		385		4,095		417		529		4,368		4,897		1,761		1997		1997
Governors Pointe	Governor’s Pointe 4680	Office		-		1,115		6,299		1,378		1,115		7,677		8,792		2,756		1998		1998

Des Plaines, Illinois
2180 South Wolf Road	2180 South Wolf Road	Industrial		-		179		1,515		548		179		2,063		2,242		740		1969		1998

Downers Grove, Illinois
Executive Towers	Executive Towers I	Office		-		2,652		22,254		7,721		2,652		29,975		32,627		11,292		1983		1997
Executive Towers	Executive Towers II	Office		-		3,386		26,745		10,883		3,386		37,628		41,014		13,606		1984		1997
Executive Towers	Executive Towers III	Office		-		3,512		31,014		7,211		3,512		38,225		41,737		14,739		1987		1997

Dublin, Ohio
Scioto Corporate Center	Scioto Corporate Center	Office		-		1,100		2,716		1,628		1,100		4,344		5,444		1,793		1987		1996
Tuttle Crossing	Qwest	Office		-		2,618		18,317		1,953		2,670		20,218		22,888		9,094		1990		1993
Tuttle Crossing	4700 Lakehurst Court	Office		-		717		2,318		955		717		3,273		3,990		1,583		1994		1994
Tuttle Crossing	5500 Glendon Court	Office		-		1,066		6,948		1,347		1,066		8,295		9,361		3,609		1995		1995
Tuttle Crossing	5555 Glendon Court	Office		-		1,600		6,752		1,898		1,789		8,461		10,250		3,826		1995		1995
Tuttle Crossing	Compmanagement	Office		-		867		4,388		762		867		5,150		6,017		2,362		1997		1997
Tuttle Crossing	5555 Parkcenter Circle	Office		-		1,580		8,908		1,124		1,580		10,032		11,612		4,422		1992		1994
Tuttle Crossing	Parkwood Place	Office		-		1,690		11,507		1,097		1,690		12,604		14,294		6,274		1997		1997
Tuttle Crossing	Nationwide	Office		-		4,815		15,345		895		4,815		16,240		21,055		6,488		1996		1996
Tuttle Crossing	Emerald II	Office		-		495		2,525		252		495		2,777		3,272		916		1998		1998
Tuttle Crossing	Atrium II, South Tower	Office		-		1,649		8,707		1,260		1,649		9,967		11,616		3,331		1998		1998
Tuttle Crossing	Atrium II, North Tower	Office		-		1,597		7,747		1,599		1,597		9,346		10,943		2,936		1999		1999
Tuttle Crossing	Blazer I	Office		-		904		3,887		596		904		4,483		5,387		1,308		1999		1999
Tuttle Crossing	Parkwood II	Office		-		1,848		11,389		823		2,400		11,660		14,060		3,446		2000		2000
Tuttle Crossing	Blazer II	Office		-		1,016		5,032		1,190		1,016		6,222		7,238		1,846		2000		2000
Tuttle Crossing	Emerald III	Office		-		1,685		7,130		1,976		1,694		9,097		10,791		2,995		2001		2001

Duluth, Georgia
Crestwood Pointe	3805 Crestwood Parkway	Office		-		877		14,158		2,132		877		16,290		17,167		4,775		1997		1999
Crestwood Pointe	3885 Crestwood Parkway	Office		-		878		13,484		1,395		878		14,879		15,757		4,338		1998		1999
Hampton Green	Hampton Green Office I	Office		-		1,388		9,921		840		1,388		10,761		12,149		2,939		2000		2000
Business Park At Sugarloaf	2775 Premiere Parkway	Industrial		6,663		560		4,522		354		565		4,871		5,436		1,434		1997		1999
Business Park At Sugarloaf	3079 Premiere Parkway	Industrial		10,863		776		5,332		2,258		783		7,583		8,366		2,467		1998		1999
Business Park At Sugarloaf	Sugarloaf Office I	Office		-		1,042		8,133		769		1,042		8,902		9,944		2,619		1998		1999
Business Park At Sugarloaf	2850 Premiere Parkway	Office		8,179		621		4,621		1,017		627		5,632		6,259		1,181		1997		2002
Business Park At Sugarloaf	Sugarloaf Office II (3039)	Office		-		972		3,784		638		1,006		4,388		5,394		1,083		1999		2002
Business Park At Sugarloaf	Sugarloaf Office III (2810)	Office		-		696		3,565		543		696		4,108		4,804		973		1999		2002
Business Park At Sugarloaf	2855 Premiere Parkway	Industrial		5,775		765		3,297		601		770		3,893		4,663		1,166		1999		1999

101


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired
Business Park At Sugarloaf	6655 Sugarloaf	Industrial		12,723		1,651		6,985		972		1,659		7,949		9,608		1,709		1998		2001
Business Park At Sugarloaf	Sugarloaf Office IV	Office		-		623		2,336		698		623		3,034		3,657		863		2000		2000
Business Park At Sugarloaf	Sugarloaf Office V	Office		-		744		1,968		789		744		2,757		3,501		763		2001		2001
Business Park At Sugarloaf	Sugarloaf VI	Office		-		1,589		5,437		1,419		1,589		6,856		8,445		2,152		2005		2005
Business Park At Sugarloaf	Sugarloaf VII	Office		-		1,722		5,055		2,658		1,726		7,709		9,435		1,660		2006		2006
Meadowbrook	2450 Meadowbrook Parkway	Industrial		-		383		1,625		-		383		1,625		2,008		36		1989		2010
Meadowbrook	2500 Meadowbrook Parkway	Industrial		-		405		1,930		-		405		1,930		2,335		50		1987		2010
Pinebrook	2625 Pinemeadow Court	Industrial		-		861		4,021		-		861		4,021		4,882		166		1994		2010
Pinebrook	2660 Pinemeadow Court	Industrial		-		540		2,277		-		540		2,277		2,817		64		1996		2010
Pinebrook	2450 Satellite Boulevard	Industrial		-		556		2,422		-		556		2,422		2,978		69		1994		2010

Eagan, Minnesota
Apollo Industrial Center	Apollo Industrial Ctr I	Industrial		3,977		866		4,300		1,472		882		5,756		6,638		2,160		1997		1997
Apollo Industrial Center	Apollo Industrial Ctr II	Industrial		1,881		474		2,455		167		474		2,622		3,096		810		2000		2000
Apollo Industrial Center	Apollo Industrial Ctr III	Industrial		5,054		1,432		6,316		25		1,432		6,341		7,773		1,896		2000		2000
Silver Bell Commons	Silver Bell Commons	Industrial		-		1,807		5,757		1,760		1,908		7,416		9,324		2,690		1999		1999
Trapp Road Commerce Center	Trapp Road Commerce Center I	Industrial		2,689		671		3,847		462		700		4,280		4,980		1,450		1996		1998
Trapp Road Commerce Center	Trapp Road Commerce Center II	Industrial		4,697		1,250		6,444		1,154		1,266		7,582		8,848		2,659		1998		1998

Earth City, Missouri
Earth City	Rider Trail	Office		-		2,615		9,807		2,429		2,615		12,236		14,851		4,496		1987		1997
Earth City	3300 Pointe 70	Office		-		1,186		6,055		2,805		1,186		8,860		10,046		3,270		1989		1997
Earth City	Corporate Center, Earth City	Industrial		-		783		2,161		1,861		783		4,022		4,805		1,774		2000		2000
Earth City	Corporate Trail Distribution	Industrial		-		2,850		6,163		1,789		2,875		7,927		10,802		1,709		2006		2006

East Point, Georgia
Camp Creek	Camp Creek Bldg 1400	Office		5,339		561		2,523		1,209		573		3,720		4,293		996		1988		2001
Camp Creek	Camp Creek Bldg 1800	Office		4,400		462		2,536		460		471		2,987		3,458		789		1989		2001
Camp Creek	Camp Creek Bldg 2000	Office		5,023		395		2,285		1,098		470		3,308		3,778		645		1989		2001
Camp Creek	Camp Creek Bldg 2400	Industrial		3,133		296		1,513		701		308		2,202		2,510		639		1988		2001
Camp Creek	Camp Creek Bldg 2600	Industrial		3,330		364		2,014		236		375		2,239		2,614		588		1990		2001
Camp Creek	3201 Centre Parkway	Industrial		19,254		4,406		9,512		723		4,944		9,697		14,641		2,835		2004		2004
Camp Creek	Camp Creek Building 1200	Office		-		1,334		2,246		1,084		1,344		3,320		4,664		1,963		2005		2005
Camp Creek	3900 North Commerce	Industrial		5,288		1,059		2,966		22		1,081		2,966		4,047		711		2005		2005
Camp Creek	3909 North Commerce	Industrial		-		5,687		10,192		12,465		8,944		19,400		28,344		5,334		2006		2006
Camp Creek	4200 N. Commerce-Hartsfield WH	Industrial		11,867		2,065		7,076		122		2,116		7,147		9,263		1,243		2006		2006
Camp Creek	Camp Creek Building 1000	Office		-		1,537		2,459		1,135		1,549		3,582		5,131		1,380		2006		2006
Camp Creek	3000 Centre Parkway	Industrial		-		1,163		1,884		1,127		1,182		2,992		4,174		788		2007		2007
Camp Creek	1500 Centre Parkway	Office		-		1,683		5,564		3,338		1,716		8,869		10,585		1,609		2008		2008
Camp Creek	1100 Centre Parkway	Office		-		1,309		4,881		318		1,336		5,172		6,508		616		2008		2008
Camp Creek	4800 N. Commerce Dr. (Site Q)	Industrial		-		2,476		4,650		753		2,512		5,367		7,879		546		2008		2008

Ellabell, Georgia
Crossroads (Savannah)	1086 Orafold Pkwy	Industrial		10,525		2,042		13,104		190		2,046		13,290		15,336		1,538		2006		2008

Evansville, Indiana
St. Mary’s Heart Institute	St. Mary’s Heart Institute	Medical Office		-		-		20,946		1,559		-		22,505		22,505		3,878		2006		2007

Fairfield, Ohio
Thunderbird Building 1	Thunderbird Building 1	Industrial		-		248		1,617		344		248		1,961		2,209		855		1991		1995
Union Centre Industrial Park	Union Centre Industrial Park 2	Industrial		-		5,635		8,709		819		5,635		9,528		15,163		1,285		2008		2008

Fishers, Indiana
Exit 5	Exit 5 Building 1	Industrial		-		822		2,636		443		822		3,079		3,901		1,026		1999		1999
Exit 5	Exit 5 Building 2	Industrial		-		749		3,825		442		749		4,267		5,016		2,011		2000		2000
St. Vincent Northeast MOB	St. Vincent Northeast MOB	Medical Office		-		-		23,101		4,292		4,235		23,158		27,393		3,727		2008		2008

Florence, Kentucky
Empire Commerce Center	Empire Commerce Center	Industrial		-		813		878		-		813		878		1,691		39		1980		2010
Kentucky Drive	7910 Kentucky Drive	Industrial		-		265		451		-		265		451		716		19		1980		2010
Kentucky Drive	7920 Kentucky Drive	Industrial		-		653		850		-		653		850		1,503		41		1974		2010

102


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Franklin, Tennessee
Aspen Grove Industrial	Aspen Grove Business Ctr I	Industrial		-		936		6,066		2,993		936		9,059		9,995		3,479		1996		1999
Aspen Grove Industrial	Aspen Grove Business Ctr II	Industrial		-		1,151		6,410		797		1,151		7,207		8,358		2,201		1996		1999
Aspen Grove Industrial	Aspen Grove Business Ctr III	Industrial		-		970		5,367		490		970		5,857		6,827		1,672		1998		1999
Aspen Grove Industrial	Aspen Grove Business Center IV	Industrial		-		492		2,249		59		492		2,308		2,800		499		2002		2002
Aspen Grove Industrial	Aspen Grove Business Ctr V	Industrial		-		943		5,163		2,556		943		7,719		8,662		2,665		1996		1999
Aspen Grove Industrial	Aspen Grove Flex Center II	Industrial		-		240		1,163		450		240		1,613		1,853		176		1999		1999
Aspen Grove Office	Aspen Grove Office Center I	Office		-		950		5,709		2,635		950		8,344		9,294		2,459		1999		1999
Aspen Grove Industrial	Aspen Grove Flex Center I	Industrial		-		301		1,061		686		301		1,747		2,048		479		1999		1999
Aspen Grove Industrial	Aspen Grove Flex Center III	Industrial		-		327		1,121		1,001		327		2,122		2,449		643		2001		2001
Aspen Grove Industrial	Aspen Grove Flex Center IV	Industrial		-		205		861		210		205		1,071		1,276		270		2001		2001
Aspen Grove Office	Aspen Corporate Center 100	Office		-		723		2,904		94		723		2,998		3,721		875		2004		2004
Aspen Grove Office	Aspen Corporate Center 200	Office		-		1,306		1,870		1,655		1,306		3,525		4,831		1,233		2006		2006
Aspen Grove Office	Aspen Corporate Center 300	Office		-		1,451		2,050		1,607		1,460		3,648		5,108		384		2008		2008
Aspen Grove Office	Aspen Corporate Center 400	Office		-		1,833		2,621		2,514		1,833		5,135		6,968		1,084		2007		2007
Aspen Grove Office	Aspen Grove Office Center II	Office		-		2,320		8,177		3,755		2,320		11,932		14,252		2,886		2007		2007
Brentwood South Bus. Center	Brentwood South Bus Ctr IV	Industrial		-		569		2,406		1,122		705		3,392		4,097		1,227		1990		1999
Brentwood South Bus. Center	Brentwood South Bus Ctr V	Industrial		-		445		1,907		161		445		2,068		2,513		622		1990		1999
Brentwood South Bus. Center	Brentwood South Bus Ctr VI	Industrial		1,279		489		1,232		631		489		1,863		2,352		614		1990		1999

Franklin Park, Illinois
O’Hare Distribution Center	O’Hare Distribution Ctr	Industrial		-		3,900		3,013		1,068		3,900		4,081		7,981		553		2007		2007

Frisco, Texas
Duke Bridges	Duke Bridges III	Office		-		4,647		7,546		7,056		4,647		14,602		19,249		2,166		2007		2007

Ft. Wayne, Indiana
Parkview Ambulatory Svcs - MOB	Parkview Ambulatory Svcs - MOB	Medical Office		-		937		10,661		4,381		937		15,042		15,979		1,642		2007		2007

Garden City, Georgia
Aviation Court	Aviation Court Land	Grounds		-		1,509		-		-		1,509		-		1,509		94		n/a		2006

Goodyear, Arizona
Goodyear Crossing Ind. Park	Goodyear One	Industrial		-		5,142		4,942		1,873		5,142		6,815		11,957		1,125		2008		2008

Grand Prairie, Texas
Grand Lakes	Grand Lakes I	Industrial		-		8,106		12,021		308		8,040		12,395		20,435		3,070		2006		2006
Grand Lakes	Grand Lakes II	Industrial		-		11,853		16,714		8,302		11,853		25,016		36,869		4,341		2008		2008

Grove City, Ohio
SouthPointe Business Park	SouthPointe Building A	Industrial		-		844		5,509		-		844		5,509		6,353		128		1995		2010
SouthPointe Business Park	SouthPointe Building B	Industrial		-		790		5,284		-		790		5,284		6,074		128		1996		2010
SouthPointe Business Park	SouthPointe Building C	Industrial		-		754		6,337		-		754		6,337		7,091		122		1996		2010

Groveport, Ohio
6600 Port Road	6600 Port Road	Industrial		-		2,725		23,104		2,124		3,213		24,740		27,953		9,107		1998		1997
Groveport Commerce Center	Groveport Commerce Center #437	Industrial		3,233		1,049		6,759		1,305		1,065		8,048		9,113		2,463		1999		1999
Groveport Commerce Center	Groveport Commerce Center #168	Industrial		1,782		510		3,137		1,257		510		4,394		4,904		1,405		2000		2000
Groveport Commerce Center	Groveport Commerce Center #345	Industrial		3,111		1,045		6,123		1,216		1,045		7,339		8,384		2,244		2000		2000
Groveport Commerce Center	Groveport Commerce Center #667	Industrial		6,848		4,420		14,172		360		4,420		14,532		18,952		4,729		2005		2005
Rickenbacker Park	Rickenbacker 936	Industrial		-		5,680		23,616		-		5,680		23,616		29,296		244		2008		2010

Hazelwood, Missouri
Hazelwood	Lindbergh Distribution Center	Industrial		-		8,200		10,305		3,407		8,491		13,421		21,912		2,105		2007		2007

Hebron, Kentucky
Southpark	Southpark Building 4	Industrial		-		779		3,189		347		779		3,536		4,315		1,568		1994		1994
Southpark	CR Services	Industrial		-		1,085		4,119		1,410		1,085		5,529		6,614		2,358		1994		1994
Hebron Industrial Park	Hebron Building 1	Industrial		-		8,855		11,527		227		8,855		11,754		20,609		3,397		2006		2006
Hebron Industrial Park	Hebron Building 2	Industrial		-		6,790		9,039		3,629		6,812		12,646		19,458		1,842		2007		2007
Skyport	Skyport Building 1	Industrial		-		1,057		6,219		-		1,057		6,219		7,276		167		1997		2010
Skyport	Skyport Building 2	Industrial		-		1,400		9,084		-		1,400		9,084		10,484		208		1998		2010
Skyport	Skyport Building 3	Industrial		-		2,016		9,114		-		2,016		9,114		11,130		251		2000		2010
Skyport	Skyport Building 4	Industrial		-		473		2,957		-		473		2,957		3,430		120		1999		2010
Skyport	Skyport Building 5	Industrial		-		2,878		7,408		-		2,878		7,408		10,286		266		2006		2010
Southpark	Southpark Building 1	Industrial		-		553		1,607		-		553		1,607		2,160		55		1990		2010
Southpark	Southpark Building 3	Industrial		-		755		3,611		-		755		3,611		4,366		80		1991		2010

103


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building				Initial Cost				Cost Capitalized Subsequent to Development			Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type		Encumbrances		Land		Buildings		or Acquisition			Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Hopkins, Minnesota
Cornerstone BusinessCenter	Cornerstone Business Center		Industrial		3,413		1,469		8,360		725			1,543		9,011		10,554		3,151		1996		1997

Houston, Texas
Point North Cargo Park	Point North One		Industrial		-		3,125		3,420		2,168			3,125		5,588		8,713		971		2008		2008
Westland Business Park	Westland I		Industrial		-		4,183		5,200		2,919			4,233		8,069		12,302		1,737		2008		2008

Hutchins, Texas
Duke Intermodal Park	Duke Intermodal I		Industrial		-		5,290		9,242		2,416			5,290		11,658		16,948		1,972		2006		2006

Independence, Ohio
Corporate Plaza	Corporate Plaza I		Office		-		2,116		13,453		(1,913	)		2,116		11,540		13,656		6,371		1989		1996
Corporate Plaza	Corporate Plaza II		Office		-		1,841		11,642		500			1,841		12,142		13,983		5,950		1991		1996
Freedom Square	Freedom Square I		Office		-		595		3,635		(1,604	)		607		2,019		2,626		1,810		1980		1996
Freedom Square	Freedom Square II		Office		-		1,746		11,403		(1,522	)		1,746		9,881		11,627		5,309		1987		1996
Freedom Square	Freedom Square III		Office		-		701		5,561		(1,170	)		701		4,391		5,092		2,212		1997		1997
Oak Tree Place	Oak Tree Place		Office		-		703		4,501		978			703		5,479		6,182		2,065		1995		1997
Park Center Plaza	Park Center Plaza I		Office		-		2,193		10,882		2,542			2,193		13,424		15,617		4,574		1998		1998
Park Center Plaza	Park Center Plaza II		Office		-		2,190		10,898		1,737			2,190		12,635		14,825		4,068		1999		1999
Park Center Plaza	Park Center Plaza III		Office		-		2,190		10,623		3,390			2,190		14,013		16,203		4,584		2000		2000

Indianapolis, Indiana
Park 100	Park 465		Industrial		-		124		759		177			124		936		1,060		158		1983		2005
Franklin Road Business Park	Franklin Road Business Center		Industrial		-		594		8,765		1,822			594		10,587		11,181		4,661		1998		1995
6061 Guion Road	6061 Guion Rd		Industrial		-		274		1,770		365			274		2,135		2,409		863		1974		1995
Hillsdale	Hillsdale Technecenter 4		Industrial		-		366		4,724		1,654			366		6,378		6,744		2,905		1987		1993
Hillsdale	Hillsdale Technecenter 5		Industrial		-		251		2,816		1,239			251		4,055		4,306		1,791		1987		1993
Hillsdale	Hillsdale Technecenter 6		Industrial		-		315		2,962		2,313			315		5,275		5,590		2,373		1987		1993
8071 Township Line Road	8071 Township Line Road		Medical Office		-		-		2,319		944			-		3,263		3,263		373		2007		2007
St. Francis Franklin Township	Franklin Township POB		Medical Office		-		-		3,197		55			10		3,242		3,252		219		2009		2009
St. Francis US31 & Southport	St. Francis US31 &Southport Rd		Medical Office		-		-		3,547		37			11		3,573		3,584		251		2009		2009
Park 100	Park 100 Bldg 31		Industrial		-		64		354		152			64		506		570		79		1978		2005
Park 100	Park 100 Building 96		Industrial		-		1,171		13,804		113			1,424		13,664		15,088		5,640		1997		1995
Park 100	Park 100 Building 98		Industrial		-		273		7,618		2,420			273		10,038		10,311		4,775		1995		1994
Park 100	Park 100 Building 100		Industrial		-		103		1,931		823			103		2,754		2,857		1,140		1995		1995
Park 100	Park 100 Building 102		Office		-		182		1,108		356			182		1,464		1,646		274		1982		2005
Park 100	Park 100 Building 107		Industrial		-		99		1,698		379			99		2,077		2,176		931		1984		1995
Park 100	Park 100 Building 109		Industrial		-		240		1,659		433			246		2,086		2,332		1,279		1985		1986
Park 100	Park 100 Building 116		Office		-		341		2,871		555			348		3,419		3,767		1,859		1988		1988
Park 100	Park 100 Building 118		Office		-		226		1,962		993			230		2,951		3,181		1,320		1988		1993
Park 100	Park 100 Building 119		Office		-		283		2,601		1,576			395		4,065		4,460		1,785		1989		1993
Park 100	Park 100 Building 122		Industrial		-		284		3,442		1,098			290		4,534		4,824		2,225		1990		1993
Park 100	Park 100 Building 124		Office		-		227		2,496		444			227		2,940		3,167		815		1992		2002
Park 100	Park 100 Building 127		Industrial		-		96		1,654		629			96		2,283		2,379		951		1995		1995
Park 100	Park 100 Building 141		Industrial		-		1,120		2,939		101			1,120		3,040		4,160		847		2005		2005
Park 100	UPS Parking		Grounds		-		270		-		-			270		-		270		123		n/a		1997
Park 100	Bldg 111 Parking Lot		Grounds		-		114		-		-			114		-		114		-		n/a		1994
Park 100	3.58 acres on Allison Avenue		Grounds		-		242		-		-			242		-		242		61		n/a		2000
Park 100	Hewlett-Packard Land Lease		Grounds		-		252		-		-			252		-		252		49		n/a		2003
Park 100	Park 100 Bldg 121 Land Lease		Grounds		-		5		-		-			5		-		5		1		n/a		2003
Park 100	Hewlett Packard Land Lse-62		Grounds		-		45		-		-			45		-		45		9		n/a		2003
Park 100	West 79th St. Parking Lot LL		Grounds		-		350		-		699			1,049		-		1,049		192		n/a		2006
Park Fletcher	Park Fletcher Building 33		Industrial		-		1,237		5,264		17			1,237		5,281		6,518		998		1997		2006
Park Fletcher	Park Fletcher Building 34		Industrial		-		1,331		5,427		519			1,331		5,946		7,277		1,088		1997		2006
Park Fletcher	Park Fletcher Building 35		Industrial		-		380		1,464		38			380		1,502		1,882		326		1997		2006
Park Fletcher	Park Fletcher Building 36		Industrial		-		476		2,355		59			476		2,414		2,890		449		1997		2006
Park Fletcher	Park Fletcher Building 37		Industrial		-		286		653		9			286		662		948		150		1998		2006
Park Fletcher	Park Fletcher Building 38		Industrial		-		1,428		5,957		68			1,428		6,025		7,453		1,079		1999		2006
Park Fletcher	Park Fletcher Building 39		Industrial		-		570		2,130		249			570		2,379		2,949		478		1999		2006
Park Fletcher	Park Fletcher Building 40		Industrial		-		761		3,363		408			761		3,771		4,532		835		1999		2006
Park Fletcher	Park Fletcher Building 41		Industrial		-		952		4,290		78			952		4,368		5,320		786		2001		2006
Park Fletcher	Park Fletcher Building 42		Industrial		-		2,095		8,273		49			2,095		8,322		10,417		1,280		2001		2006
Parkwood Crossing	One Parkwood Crossing		Office		-		1,018		9,273		1,723			1,028		10,986		12,014		4,256		1989		1995
Parkwood Crossing	Three Parkwood Crossing		Office		-		1,377		7,530		1,418			1,387		8,938		10,325		3,365		1997		1997
Parkwood Crossing	Four Parkwood Crossing		Office		-		1,489		10,887		1,018			1,537		11,857		13,394		4,216		1998		1998
Parkwood Crossing	Five Parkwood Crossing		Office		-		1,485		10,237		1,133			1,528		11,327		12,855		3,057		1999		1999
Parkwood Crossing	Six Parkwood Crossing		Office		-		1,960		13,843		1,290			1,960		15,133		17,093		4,811		2000		2000
Parkwood Crossing	Eight Parkwood Crossing		Office		-		6,435		15,399		741			6,435		16,140		22,575		5,399		2003		2003

104

Duke Realty Limited Partnership

Real Estate and Accumulated Depreciation

December 31, 2010

(in thousands)

Schedule III


			Building				Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name		Type		Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired
Parkwood Crossing		Nine Parkwood Crossing		Office		-		6,046		15,991		1,210		6,047		17,200		23,247		5,143		2005		2005
Parkwood West		One West		Office		14,730		5,361		16,182		4,615		5,361		20,797		26,158		2,414		2007		2007
Parkwood Crossing		PWW Granite City Lease		Grounds		-		1,846		856		-		1,846		856		2,702		177		2008		2009
River Road - Indianapolis		River Road Building I		Office		-		856		6,789		2,029		856		8,818		9,674		4,290		1998		1998
River Road - Indianapolis		River Road Building II		Office		-		1,827		8,416		2,499		1,886		10,856		12,742		1,223		2008		2008
Woodland Corporate Park		Woodland Corporate Park I		Office		-		290		3,422		928		320		4,320		4,640		1,520		1998		1998
Woodland Corporate Park		Woodland Corporate Park II		Office		-		271		2,958		1,108		297		4,040		4,337		1,222		1999		1999
Woodland Corporate Park		Woodland Corporate Park III		Office		-		1,227		3,559		358		1,227		3,917		5,144		1,190		2000		2000
Woodland Corporate Park		Woodland Corporate Park V		Office		-		768		10,000		332		768		10,332		11,100		2,941		2003		2003
Woodland Corporate Park		Woodland Corporate Park VI		Office		-		2,145		10,165		4,064		2,145		14,229		16,374		1,964		2008		2008
3200 North Elizabeth		3200 North Elizabeth		Industrial		-		360		787		-		360		787		1,147		20		1973		2010
Park 100		Georgetown Rd. Bldg 1		Industrial		-		468		1,959		-		468		1,959		2,427		43		1987		2010
Park 100		Georgetown Rd. Bldg 2		Industrial		-		465		2,219		-		465		2,219		2,684		52		1987		2010
Park 100		Georgetown Rd. Bldg 3		Industrial		-		408		957		-		408		957		1,365		34		1987		2010
Hillsdale		Hillsdale Technecenter 1		Industrial		3,359		733		2,679		-		733		2,679		3,412		105		1986		2010
Hillsdale		Hillsdale Technecenter 2		Industrial		2,408		440		2,141		-		440		2,141		2,581		50		1986		2010
Hillsdale		Hillsdale Technecenter 3		Industrial		2,374		440		2,134		-		440		2,134		2,574		64		1987		2010
North Airport Park		North Airport Park Bldg 2		Industrial		-		1,800		4,953		-		1,800		4,953		6,753		108		1997		2010
Park 100		Park 100 Building 39		Industrial		-		628		2,284		-		628		2,284		2,912		55		1987		2010
Park 100		Park 100 Building 48		Industrial		2,113		690		1,730		-		690		1,730		2,420		33		1984		2010
Park 100		Park 100 Building 49		Industrial		1,927		364		1,644		-		364		1,644		2,008		33		1982		2010
Park 100		Park 100 Building 50		Industrial		1,045		327		700		-		327		700		1,027		18		1982		2010
Park 100		Park 100 Building 52		Industrial		541		216		189		-		216		189		405		5		1983		2010
Park 100		Park 100 Building 53		Industrial		1,865		338		1,513		-		338		1,513		1,851		34		1984		2010
Park 100		Park 100 Building 54		Industrial		1,633		354		1,413		-		354		1,413		1,767		28		1984		2010
Park 100		Park 100 Building 56		Industrial		3,397		1,275		1,561		-		1,275		1,561		2,836		32		1984		2010
Park 100		Park 100 Building 57		Industrial		2,154		616		1,319		-		616		1,319		1,935		53		1984		2010
Park 100		Park 100 Building 58		Industrial		2,214		642		2,129		-		642		2,129		2,771		43		1984		2010
Park 100		Park 100 Building 59		Industrial		1,653		411		1,539		-		411		1,539		1,950		35		1985		2010
Park 100		Park 100 Building 60		Industrial		1,861		382		1,542		-		382		1,542		1,924		45		1985		2010
Park 100		Park 100 Building 62		Industrial		1,809		616		707		-		616		707		1,323		50		1986		2010
Park 100		Park 100 Building 63		Industrial		-		388		967		-		388		967		1,355		22		1987		2010
Park 100		Park 100 Building 64		Industrial		-		389		978		-		389		978		1,367		22		1987		2010
Park 100		Park 100 Building 66		Industrial		-		424		1,324		-		424		1,324		1,748		45		1987		2010
Park 100		Park 100 Building 67		Industrial		919		338		692		-		338		692		1,030		15		1987		2010
Park 100		Park 100 Building 68		Industrial		1,643		338		1,200		-		338		1,200		1,538		26		1987		2010
Park 100		Park 100 Building 79		Industrial		-		358		1,768		-		358		1,768		2,126		41		1988		2010
Park 100		Park 100 Building 80		Industrial		-		358		1,919		-		358		1,919		2,277		55		1988		2010
Park 100		Park 100 Building 83		Industrial		-		427		1,122		-		427		1,122		1,549		46		1989		2010
Park 100		Park 100 Building 84		Industrial		-		427		1,874		-		427		1,874		2,301		61		1989		2010
Park 100		Park 100 Building 87		Industrial		-		1,136		6,374		-		1,136		6,374		7,510		139		1989		2010
Park 100		Park 100 Building 97		Industrial		-		1,070		4,994		-		1,070		4,994		6,064		95		1994		2010
Park 100		Park 100 Building 110		Office		-		376		1,653		-		376		1,653		2,029		31		1987		2010
Park 100		Park 100 Building 111		Industrial		-		633		3,122		-		633		3,122		3,755		91		1987		2010
Park 100		Park 100 Building 112		Industrial		-		356		831		-		356		831		1,187		22		1987		2010
Park 100		Park 100 Building 128		Industrial		-		1,152		16,380		-		1,152		16,380		17,532		570		1996		2010
Park 100		Park 100 Building 129		Industrial		-		1,280		9,447		-		1,280		9,447		10,727		290		2000		2010
Park 100		Park 100 Building 131		Industrial		-		1,680		10,874		-		1,680		10,874		12,554		204		1997		2010
Park 100		Park 100 Building 133		Industrial		-		104		1,157		-		104		1,157		1,261		20		1997		2010

Kyle, Texas
Seton Hays		Seton Hays MOB I		Medical Office		-		165		11,736		2,837		165		14,573		14,738		418		2009		2009

Lafayette, Indiana
St. Elizabeth Regional Health		St. Elizabeth 3920 Building A		Medical Office		-		165		8,968		394		165		9,362		9,527		252		2009		2009
St. Elizabeth Regional Health		St. Elizabeth 3900 Building B		Medical Office		-		146		10,070		1,161		146		11,231		11,377		319		2009		2009

Lake Forest, Illinois
Bradley Business Center		13825 West Laurel Drive		Industrial		-		750		1,383		906		750		2,289		3,039		1,002		1985		1999
Conway Park		One Conway Park		Office		-		1,901		16,361		3,349		1,901		19,710		21,611		6,580		1989		1998
Conway Park		West Lake at Conway		Office		-		4,218		10,461		3,264		4,230		13,713		17,943		1,360		2008		2008

Lake Mary, Florida
Northpoint		Northpoint I		Office		-		1,087		9,750		1,969		1,087		11,719		12,806		3,622		1998		2001
Northpoint		Northpoint II		Office		-		1,202		8,958		1,089		1,202		10,047		11,249		3,051		1999		2001
Northpoint		Northpoint IV		Office		-		1,605		8,157		4,747		1,605		12,904		14,509		4,697		2002		2002

LaPorte, Texas
Bayport North Industrial Park		Bayport Container Lot		Grounds		-		3,334		-		-		3,334		-		3,334		-		n/a		2010

105


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Lawrenceville, Georgia
Hillside at Huntcrest	Huntcrest I	Office		-		1,193		10,788		2,867		1,193		13,655		14,848		4,616		2000		2001
Hillside at Huntcrest	Huntcrest II	Office		-		927		9,439		1,269		927		10,708		11,635		2,722		2000		2001
Hillside at Huntcrest	Huntcrest III	Office		-		1,358		12,160		894		1,358		13,054		14,412		3,838		2001		2002
Hillside at Huntcrest	Huntcrest IV	Office		-		1,295		5,742		497		1,306		6,228		7,534		1,457		2004		2004
Other Northeast I85 Properties	Weyerhaeuser BTS	Industrial		9,188		3,974		3,101		22		3,982		3,115		7,097		1,556		2004		2004

Lebanon, Indiana
Lebanon Business Park	Lebanon Building 4	Industrial		11,486		305		9,012		241		305		9,253		9,558		3,081		2000		1997
Lebanon Business Park	Lebanon Building 9	Industrial		10,252		554		6,871		770		554		7,641		8,195		2,506		1999		1999
Lebanon Business Park	Lebanon Building 12	Industrial		24,418		5,163		12,851		394		5,163		13,245		18,408		4,787		2003		2003
Lebanon Business Park	Lebanon Building 13	Industrial		9,358		561		6,473		83		1,901		5,216		7,117		2,197		2003		2003
Lebanon Business Park	Lebanon Building 14	Industrial		19,178		2,813		11,496		811		2,813		12,307		15,120		2,599		2005		2005
Lebanon Business Park	Lebanon Building 1(Amer Air)	Industrial		3,495		312		3,526		-		312		3,526		3,838		71		1996		2010
Lebanon Business Park	Lebanon Building 2	Industrial		18,922		948		19,093		-		948		19,093		20,041		343		2007		2010
Lebanon Business Park	Lebanon Building 6	Industrial		-		699		7,611		-		699		7,611		8,310		179		1998		2010

Lebanon, Tennessee
Park 840 Logistics Center	Pk 840 Logistics Cnt. Bldg 653	Industrial		-		6,776		10,954		1,788		6,776		12,742		19,518		2,561		2006		2006

Lisle, Illinois
Corporate Lakes Business Park	2275 Cabot Drive	Office		6,390		3,355		6,971		20		3,355		6,991		10,346		1,667		1996		2004

Maryland Heights, Missouri
Riverport Business Park	Riverport Tower	Office		-		3,549		27,727		8,392		3,954		35,714		39,668		13,962		1991		1997
Riverport Business Park	Riverport Distribution	Industrial		-		242		2,217		1,132		242		3,349		3,591		1,210		1990		1997
Riverport Business Park	Express Scripts Service Center	Industrial		-		1,197		8,590		427		1,197		9,017		10,214		3,304		1992		1997
Riverport Business Park	13900 Riverport Drive	Office		-		2,285		9,473		721		2,285		10,194		12,479		3,446		1999		1999
Riverport Business Park	Riverport 1	Industrial		-		900		2,588		396		900		2,984		3,884		1,165		1999		1999
Riverport Business Park	Riverport 2	Industrial		-		1,238		4,152		70		1,238		4,222		5,460		1,539		2000		2000
Riverport Business Park	Riverport III	Industrial		-		1,269		1,982		2,223		1,269		4,205		5,474		1,392		2001		2001
Riverport Business Park	Riverport IV	Industrial		-		1,864		3,362		1,586		1,864		4,948		6,812		898		2007		2007

McDonough, Georgia
Liberty Distribution Center	120 Declaration Drive	Industrial		-		615		8,377		350		615		8,727		9,342		2,513		1997		1999
Liberty Distribution Center	250 Declaration Drive	Industrial		22,248		2,273		13,225		2,438		2,312		15,624		17,936		4,854		2001		2001

Melrose Park, Illinois
O’Hare International Ctr	Melrose Business Center	Industrial		-		5,907		17,398		-		5,907		17,398		23,305		112		2000		2010

Mendota Heights, Minnesota
Enterprise Industrial Center	Enterprise Industrial Center	Industrial		337		864		4,924		697		888		5,597		6,485		1,961		1979		1997

Mishawaka, Indiana
SJRMC Edison Lakes MOB	SJRMC Edison Lakes MOB	Medical Office		-		-		31,955		2,860		42		34,773		34,815		1,428		2009		2009

Moosic, Pennsylvania
Not Applicable	Shoppes at Montage	Retail		-		21,347		39,006		306		21,347		39,312		60,659		7,398		2007		2009

Morgans Point, Texas
Not Applicable	Barbours Cut I	Industrial		-		1,482		8,209		-		1,482		8,209		9,691		-		2004		2010
Not Applicable	Barbours Cut II	Industrial		-		1,447		8,471		-		1,447		8,471		9,918		-		2005		2010

Morrisville, North Carolina
Perimeter Park	507 Airport Blvd	Industrial		-		1,327		7,353		1,778		1,351		9,107		10,458		2,751		1993		1999
Perimeter Park	5151 McCrimmon Pkwy	Office		-		1,318		7,090		2,065		1,342		9,131		10,473		2,815		1995		1999
Perimeter Park	2600 Perimeter Park Dr	Industrial		-		975		5,177		1,143		991		6,304		7,295		1,975		1997		1999
Perimeter Park	5150 McCrimmon Pkwy	Industrial		-		1,739		12,130		1,698		1,773		13,794		15,567		4,070		1998		1999
Perimeter Park	2400 Perimeter Park Drive	Office		-		760		5,512		1,314		778		6,808		7,586		2,046		1999		1999
Perimeter Park	3000 Perimeter Park Dr (Met 1)	Industrial		205		482		2,466		1,330		491		3,787		4,278		1,163		1989		1999
Perimeter Park	2900 Perimeter Park Dr (Met 2)	Industrial		163		235		1,882		1,280		264		3,133		3,397		1,017		1990		1999
Perimeter Park	2800 Perimeter Park Dr (Met 3)	Industrial		316		777		4,720		1,047		843		5,701		6,544		1,789		1992		1999
Perimeter Park	1100 Perimeter Park Drive	Industrial		-		777		5,581		1,322		794		6,886		7,680		2,073		1990		1999
Perimeter Park	1500 Perimeter Park Drive	Office		-		1,148		10,086		1,121		1,177		11,178		12,355		3,101		1996		1999
Perimeter Park	1600 Perimeter Park Drive	Office		-		1,463		9,463		2,310		1,513		11,723		13,236		3,858		1994		1999
Perimeter Park	1800 Perimeter Park Drive	Office		-		907		5,513		1,750		993		7,177		8,170		2,321		1994		1999
Perimeter Park	2000 Perimeter Park Drive	Office		-		788		5,293		1,081		842		6,320		7,162		2,186		1997		1999
Perimeter Park	1700 Perimeter Park Drive	Office		-		1,230		10,754		2,819		1,260		13,543		14,803		4,642		1997		1999

106


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development			Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition			Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired
Perimeter Park	5200 East Paramount	Office		-		1,748		14,291		1,320			1,797		15,562		17,359		4,432		1999		1999
Perimeter Park	2700 Perimeter Park	Industrial		-		662		1,831		1,894			662		3,725		4,387		1,144		2001		2001
Perimeter Park	5200 West Paramount	Office		-		1,831		12,608		1,503			1,831		14,111		15,942		4,725		2001		2001
Perimeter Park	2450 Perimeter Park Drive	Office		-		669		2,259		3			669		2,262		2,931		514		2002		2002
Perimeter Park	3800 Paramount Parkway	Office		-		2,657		7,271		3,240			2,657		10,511		13,168		3,025		2006		2006
Perimeter Park	Lenovo BTS I	Office		-		1,439		16,961		1,509			1,439		18,470		19,909		3,612		2006		2006
Perimeter Park	Lenovo BTS II	Office		-		1,725		16,809		1,989			1,725		18,798		20,523		3,277		2007		2007
Perimeter Park	5221 Paramount Parkway	Office		-		1,661		14,086		2,172			1,661		16,258		17,919		1,503		2008		2008
Perimeter Park	2250 Perimeter Park	Office		-		2,290		6,981		2,431			2,290		9,412		11,702		1,532		2008		2008
Perimeter Park	Perimeter One	Office		-		5,880		13,605		9,253			5,880		22,858		28,738		4,883		2007		2007
Perimeter Park	Market at Perimeter Park-Bld A	Retail		-		1,149		1,708		155			1,149		1,863		3,012		155		2009		2009
Woodlake Center	100 Innovation Avenue (Woodlk)	Industrial		-		633		3,748		656			633		4,404		5,037		1,322		1994		1999
Woodlake Center	101 Innovation Ave(Woodlk III)	Industrial		-		615		3,971		148			615		4,119		4,734		1,187		1997		1999
Woodlake Center	200 Innovation Drive	Industrial		-		357		4,121		146			357		4,267		4,624		1,294		1999		1999
Woodlake Center	501 Innovation Ave.	Industrial		-		640		5,589		176			640		5,765		6,405		1,640		1999		1999
Woodlake Center	1000 Innovation (Woodlk 6)	Industrial		-		514		2,927		174			514		3,101		3,615		693		1996		2002
Woodlake Center	1200 Innovation (Woodlk 7)	Industrial		-		740		4,416		265			740		4,681		5,421		1,040		1996		2002
Woodlake Center	Woodlake VIII	Industrial		-		908		1,517		339			908		1,856		2,764		824		2004		2004

Murfreesboro, Tennessee
Middle Tenn Med Ctr - MOB	Middle Tenn Med Ctr - MOB	Medical Office		-		-		20,564		3,994			7		24,551		24,558		1,947		2008		2008

Naperville, Illinois
Meridian Business Campus	1835 Jefferson	Industrial		-		3,180		7,959		5			3,184		7,960		11,144		1,793		2005		2003
I-88 West Suburban	175 Ambassador Drive	Industrial		-		4,778		11,252		-			4,778		11,252		16,030		-		2006		2010

Nashville, Tennessee
Airpark East	Airpark East-800 Commerce Dr.	Industrial		2,707		1,564		2,617		947			1,564		3,564		5,128		804		2002		2002
Lakeview Place	Three Lakeview	Office		-		2,126		11,248		3,442			2,126		14,690		16,816		4,652		1999		1999
Lakeview Place	One Lakeview Place	Office		-		2,046		10,755		(3,048	)		2,123		7,630		9,753		4,022		1986		1998
Lakeview Place	Two Lakeview Place	Office		-		2,046		11,375		(3,457	)		2,046		7,918		9,964		4,468		1988		1998
Riverview Business Center	Riverview Office Building	Office		-		847		5,431		1,712			847		7,143		7,990		2,325		1983		1999
Nashville Business Center	Nashville Business Center I	Industrial		-		936		5,943		1,224			936		7,167		8,103		2,096		1997		1999
Nashville Business Center	Nashville Business Center II	Industrial		-		5,659		10,206		845			5,659		11,051		16,710		2,864		2005		2005
Four-Forty Business Center	Four-Forty Business Center I	Industrial		-		938		6,454		115			938		6,569		7,507		1,894		1997		1999
Four-Forty Business Center	Four-Forty Business Center III	Industrial		-		1,812		7,325		1,208			1,812		8,533		10,345		2,405		1998		1999
Four-Forty Business Center	Four-Forty Business Center IV	Industrial		-		1,522		5,365		615			1,522		5,980		7,502		1,770		1997		1999
Four-Forty Business Center	Four-Forty Business Center V	Industrial		-		471		2,335		699			471		3,034		3,505		885		1999		1999
Four-Forty Business Center	Four-Forty Business Center II	Industrial		3,193		1,108		4,829		-			1,108		4,829		5,937		-		1996		2010

New Albany, Ohio
New Albany	6525 West Campus Oval	Office		-		842		3,572		2,460			881		5,993		6,874		1,853		1999		1999

Niles, Illinois
Howard 220	Howard 220	Industrial		9,544		4,920		3,400		9,616			7,761		10,175		17,936		2,230		2008		2004

Norcross, Georgia
Gwinnett Park	1835 Shackleford Court	Office		-		29		5,591		(1,708	)		29		3,883		3,912		1,901		1990		1999

Norfolk, Virginia
Norfolk Industrial Park	1400 Sewells Point Road	Industrial		2,432		1,463		5,723		417			1,463		6,140		7,603		654		1983		2007

Northlake, Illinois
Northlake 1 Park	Northlake I	Industrial		10,318		5,721		9,963		835			5,721		10,798		16,519		2,586		2002		2002
Northlake Distribution Park	Northlake III-Grnd Whse	Industrial		6,982		5,382		5,708		253			5,382		5,961		11,343		1,330		2006		2006

North Olmsted, Ohio
Great Northern Corporate Ctr.	Great Northern Corp Center I	Office		-		1,048		6,457		2,859			1,040		9,324		10,364		3,470		1985		1996
Great Northern Corporate Ctr.	Great Northern Corp Center II	Office		-		1,048		6,447		3,033			1,048		9,480		10,528		3,529		1987		1996
Great Northern Corporate Ctr.	Great Northern Corp Center III	Office		-		604		4,668		822			604		5,490		6,094		1,679		1999		1999

Oak Brook, Illinois
2000 York Road	2000 York Road	Office		-		2,625		15,825		377			2,625		16,202		18,827		11,783		1986		2005

107


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Orlando, Florida
Liberty Park at Southcenter	Southcenter I-Brede/Allied BTS	Industrial		-		3,094		3,867		29		3,094		3,896		6,990		1,456		2003		2003
Parksouth Distribution Center	Parksouth Distribution Ctr. B	Industrial		-		565		4,871		550		570		5,416		5,986		1,803		1996		1999
Parksouth Distribution Center	Parksouth Distribution Ctr. A	Industrial		-		493		4,340		275		498		4,610		5,108		1,321		1997		1999
Parksouth Distribution Center	Parksouth Distribution Ctr. D	Industrial		-		593		4,075		549		597		4,620		5,217		1,343		1998		1999
Parksouth Distribution Center	Parksouth Distribution Ctr. E	Industrial		-		649		4,433		623		677		5,028		5,705		1,454		1997		1999
Parksouth Distribution Center	Parksouth Distribution Ctr. F	Industrial		-		1,030		4,767		1,529		1,232		6,094		7,326		1,865		1999		1999
Parksouth Distribution Center	Parksouth Distribution Ctr. H	Industrial		-		725		3,109		225		754		3,305		4,059		911		2000		2000
Parksouth Distribution Center	Parksouth Distribution Ctr. C	Industrial		-		598		1,769		1,685		674		3,378		4,052		778		2003		2001
Parksouth Distribution Center	Parksouth-Benjamin Moore BTS	Industrial		-		708		2,070		27		1,129		1,676		2,805		582		2003		2003
Crossroads Business Park	Crossroads VII	Industrial		-		2,803		5,891		3,212		2,803		9,103		11,906		2,236		2006		2006
Crossroads Business Park	Crossroads VIII	Industrial		-		2,701		4,817		1,423		2,701		6,240		8,941		999		2007		2007

Otsego, Minnesota
Gateway North Business Center	Gateway North 1	Industrial		-		2,243		3,959		1,244		2,287		5,159		7,446		799		2007		2007

Pembroke Pines, Florida
Pembroke Pines	Pembroke Gardens	Retail		-		26,067		88,640		1,828		24,858		91,677		116,535		11,944		2007		2009

Phoenix, Arizona
Not Applicable	Estrella Buckeye	Industrial		4,475		1,796		5,778		-		1,796		5,778		7,574		291		1996		2010

Plainfield, Illinois
Edward Plainfield MOB I	Edward Plainfield MOB I	Medical Office		-		-		9,483		1,265		-		10,748		10,748		2,442		2006		2007

Plainfield, Indiana
Plainfield Business Park	Plainfield Building 1	Industrial		15,912		1,104		11,151		425		1,104		11,576		12,680		3,385		2000		2000
Plainfield Business Park	Plainfield Building 2	Industrial		17,522		1,387		8,874		3,099		2,868		10,492		13,360		4,461		2000		2000
Plainfield Business Park	Plainfield Building 3	Industrial		17,610		2,016		9,151		2,560		2,016		11,711		13,727		2,308		2002		2002
Plainfield Business Park	Plainfield Building 5	Industrial		11,794		2,726		6,488		444		2,726		6,932		9,658		1,714		2004		2004
Plainfield Business Park	Plainfield Building 8	Industrial		21,413		4,527		11,570		1,016		4,527		12,586		17,113		2,537		2006		2006

Plano, Texas
5556 & 5560 Tennyson Parkway	5560 Tennyson Parkway	Office		-		1,527		5,408		789		1,527		6,197		7,724		1,760		1997		1999
5556 & 5560 Tennyson Parkway	5556 Tennyson Parkway	Office		-		1,181		9,654		1,172		1,181		10,826		12,007		2,869		1999		1999
Baylor Plano MOB	Baylor Plano MOB	Medical Office		-		16		28,375		966		49		29,308		29,357		1,218		2009		2009

Plantation, Florida
South Pointe - Broward	Royal Palm I	Office		-		10,209		30,034		-		10,209		30,034		40,243		925		2001		2010
South Pointe - Broward	Royal Palm II	Office		-		8,935		29,368		-		8,935		29,368		38,303		787		2007		2010

Plymouth, Minnesota
Medicine Lake Indust Ctr	Medicine Lake Indus. Center	Industrial		615		1,145		5,944		1,827		1,145		7,771		8,916		2,642		1970		1997

Pompano Beach, Florida
Atlantic Business Center	Atlantic Business Center 1	Industrial		6,806		2,181		8,997		-		2,181		8,997		11,178		-		2000		2010
Atlantic Business Center	Atlantic Business Center 2	Industrial		5,781		1,959		8,082		-		1,959		8,082		10,041		-		2001		2010
Atlantic Business Center	Atlantic Business Center 3	Industrial		6,125		2,076		8,563		-		2,076		8,563		10,639		-		2001		2010
Atlantic Business Center	Atlantic Business Center 4A	Industrial		4,113		1,325		5,464		-		1,325		5,464		6,789		-		2002		2010
Atlantic Business Center	Atlantic Business Center 4B	Industrial		4,696		1,356		5,595		-		1,356		5,595		6,951		-		2002		2010
Atlantic Business Center	Atlantic Business Center 5A	Industrial		4,623		1,489		6,141		-		1,489		6,141		7,630		-		2002		2010
Atlantic Business Center	Atlantic Business Center 5B	Industrial		4,821		1,552		6,404		-		1,552		6,404		7,956		-		2004		2010
Atlantic Business Center	Atlantic Business Center 6A	Industrial		4,672		1,505		6,206		-		1,505		6,206		7,711		-		2004		2010
Atlantic Business Center	Atlantic Business Center 6B	Industrial		4,730		1,523		6,283		-		1,523		6,283		7,806		-		2002		2010
Atlantic Business Center	Atlantic Business Center 7A	Industrial		3,541		1,200		4,950		-		1,200		4,950		6,150		-		2005		2010
Atlantic Business Center	Atlantic Business Center 7B	Industrial		4,582		1,553		6,406		-		1,553		6,406		7,959		-		2004		2010
Atlantic Business Center	Atlantic Business Center 8	Industrial		4,870		958		3,952		-		958		3,952		4,910		-		2005		2010
Atlantic Business Center	Atlantic Business Center 9	Industrial		3,183		627		2,585		-		627		2,585		3,212		-		2006		2010
Park Central Industrial	Copans Business Park 3	Industrial		4,786		1,072		4,499		-		1,072		4,499		5,571		-		1989		2010
Park Central Industrial	Copans Business Park 4	Industrial		4,115		933		3,847		-		933		3,847		4,780		-		1989		2010
Park Central Industrial	Park Central Business Park 1	Office		5,983		1,103		4,550		-		1,103		4,550		5,653		-		1985		2010
Park Central Industrial	Park Central Business Park 2	Industrial		1,258		229		963		-		229		963		1,192		-		1982		2010
Park Central Industrial	Park Central Business Park 3	Industrial		1,613		297		1,227		-		297		1,227		1,524		-		1982		2010
Park Central Industrial	Park Central Business Park 4	Industrial		1,940		358		1,475		-		358		1,475		1,833		-		1985		2010
Park Central Industrial	Park Central Business Park 5	Industrial		2,550		470		1,939		-		470		1,939		2,409		-		1986		2010
Park Central Industrial	Park Central Business Park 6	Industrial		2,175		401		1,654		-		401		1,654		2,055		-		1986		2010
Park Central Industrial	Park Central Business Park 7	Industrial		2,161		398		1,643		-		398		1,643		2,041		-		1986		2010
Park Central Industrial	Park Central Business Park 10	Industrial		3,544		673		2,776		-		673		2,776		3,449		-		1999		2010

108


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired
Park Central Industrial	Park Central Business Park 11	Industrial		6,539		1,242		5,123		-		1,242		5,123		6,365		-		1995		2010
Pompano Commerce Center	Pompano Commerce Ctr I	Industrial		-		3,250		4,384		-		3,250		4,384		7,634		148		2010		2010
Pompano Commerce Center	Pompano Commerce Ctr III	Industrial		-		3,250		4,384		-		3,250		4,384		7,634		148		2010		2010
Sample 95	Sample 95 Business Park 1	Industrial		7,458		1,811		7,472		-		1,811		7,472		9,283		-		1999		2010
Sample 95	Sample 95 Business Park 4	Industrial		-		1,198		4,940		-		1,198		4,940		6,138		-		1999		2010
Atlantic Business Center	Atlantic Business Ctr. 10-KFC	Grounds		-		772		-		-		772		-		772		-		n/a		2010

Port Wentworth, Georgia
Grange Road	318 Grange Road	Industrial		2,059		957		4,231		58		957		4,289		5,246		635		2001		2006
Grange Road	246 Grange Road	Industrial		5,572		1,191		8,294		7		1,191		8,301		9,492		1,363		2006		2006
Crossroads (Savannah)	100 Ocean Link Way-Godley Rd	Industrial		10,023		2,306		13,389		81		2,336		13,440		15,776		2,019		2006		2006
Crossroads (Savannah)	500 Expansion Blvd	Industrial		4,266		649		6,282		17		649		6,299		6,948		558		2006		2008
Crossroads (Savannah)	400 Expansion Blvd	Industrial		9,682		1,636		14,506		9		1,636		14,515		16,151		1,271		2007		2008
Crossroads (Savannah)	605 Expansion Blvd	Industrial		5,705		1,615		7,456		25		1,615		7,481		9,096		679		2007		2008
Crossroads (Savannah)	405 Expansion Blvd	Industrial		2,145		535		3,543		-		535		3,543		4,078		286		2008		2009
Crossroads (Savannah)	600 Expansion Blvd	Industrial		6,141		1,248		10,387		-		1,248		10,387		11,635		817		2008		2009
Crossroads (Savannah)	602 Expansion Blvd	Industrial		-		1,840		12,181		8		1,840		12,189		14,029		733		2009		2009

Raleigh, North Carolina
Brook Forest	Brook Forest I	Office		-		1,242		4,644		1,258		1,242		5,902		7,144		1,633		2000		2000
Centerview	5540 Centerview Drive	Office		-		773		5,909		1,580		773		7,489		8,262		1,987		1986		2003
Centerview	5565 Centerview Drive	Office		-		513		4,610		789		513		5,399		5,912		1,342		1999		2003
Crabtree Overlook	Crabtree Overlook	Office		-		2,164		15,288		424		2,164		15,712		17,876		3,774		2001		2001
Interchange Plaza	801 Jones Franklin Road	Office		-		1,351		7,477		1,023		1,351		8,500		9,851		2,723		1995		1999
Interchange Plaza	5520 Capital Center Drive	Office		-		842		3,824		725		842		4,549		5,391		1,314		1993		1999
Walnut Creek	Walnut Creek Business Park #1	Industrial		-		419		2,084		582		442		2,643		3,085		857		2001		2001
Walnut Creek	Walnut Creek Business Park #2	Industrial		-		456		3,143		312		487		3,424		3,911		1,403		2001		2001
Walnut Creek	Walnut Creek Business Park #3	Industrial		-		679		3,284		1,244		719		4,488		5,207		1,150		2001		2001
Walnut Creek	Walnut Creek IV	Industrial		-		2,038		2,152		1,452		2,083		3,559		5,642		1,431		2004		2004
Walnut Creek	Walnut Creek V	Industrial		-		1,718		3,302		602		1,718		3,904		5,622		642		2008		2008

Romeoville, Illinois
Park 55	Park 55 Bldg. 1	Industrial		9,647		6,433		8,408		949		6,433		9,357		15,790		2,659		2005		2005
Crossroads Business Park	Crossroads 2	Industrial		-		2,938		9,578		-		2,938		9,578		12,516		195		1999		2010
Crossroads Business Park	Crossroads 5	Industrial		-		5,296		6,403		-		5,296		6,403		11,699		328		2009		2010

Rosemont, Illinois
O’Hare International Ctr	O’Hare International Ctr I	Office		-		7,700		23,672		1,384		7,700		25,056		32,756		4,818		1984		2005
O’Hare International Ctr	O’Hare International Ctr II	Office		-		8,103		31,844		4,134		8,103		35,978		44,081		12,647		1987		2005
Riverway	Riverway East	Office		15,552		13,853		25,400		2,689		13,853		28,089		41,942		6,127		1987		2005
Riverway	Riverway West	Office		19,217		3,294		39,063		5,800		3,294		44,863		48,157		13,599		1989		2005
Riverway	Riverway Central	Office		29,786		4,229		66,544		8,979		4,229		75,523		79,752		18,530		1989		2005
Riverway	Riverway MW II (Ground Lease)	Grounds		-		586		-		-		586		-		586		-		n/a		2007

Sandy Springs, Georgia
Center Pointe Medical I and II	Center Pointe I and II	Medical Office		-		9,697		29,098		17,676		9,697		46,774		56,471		13,921		2010		2007

Savannah, Georgia
Gulfstream Road	198 Gulfstream	Industrial		5,559		549		3,805		154		549		3,959		4,508		514		1997		2006
Gulfstream Road	194 Gulfstream	Industrial		522		412		2,514		15		412		2,529		2,941		335		1998		2006
Gulfstream Road	190 Gulfstream	Industrial		1,355		689		4,916		-		689		4,916		5,605		880		1999		2006
Grange Road	250 Grange Road	Industrial		3,533		928		8,648		7		928		8,655		9,583		1,386		2002		2006
Grange Road	248 Grange Road	Industrial		1,505		664		3,496		8		664		3,504		4,168		567		2002		2006
SPA Park	80 Coleman Blvd.	Industrial		1,526		782		2,962		-		782		2,962		3,744		403		2002		2006
Crossroads (Savannah)	163 Portside Court	Industrial		21,201		8,433		8,366		20		8,433		8,386		16,819		2,384		2004		2006
Crossroads (Savannah)	151 Portside Court	Industrial		2,911		966		7,155		35		966		7,190		8,156		910		2003		2006
Crossroads (Savannah)	175 Portside Court	Industrial		12,443		4,300		15,696		61		4,301		15,756		20,057		2,905		2005		2006
Crossroads (Savannah)	150 Portside Court	Industrial		7,834		3,071		23,001		788		3,071		23,789		26,860		4,005		2001		2006
Crossroads (Savannah)	235 Jimmy Deloach Parkway	Industrial		2,855		1,074		8,442		37		1,074		8,479		9,553		1,361		2001		2006
Crossroads (Savannah)	239 Jimmy Deloach Parkway	Industrial		2,468		1,074		7,141		37		1,074		7,178		8,252		1,165		2001		2006
Crossroads (Savannah)	246 Jimmy Deloach Parkway	Industrial		3,386		992		5,383		14		992		5,397		6,389		887		2006		2006
Port of Savannah	276 Jimmy Deloach Land	Grounds		-		2,267		-		-		2,267		-		2,267		220		n/a		2006
Crossroads (Savannah)	200 Ocean Link Way	Industrial		6,453		878		10,021		14		883		10,030		10,913		1,018		2006		2008

Sea Brook, Texas
Not Applicable	Bayport Logistics Center	Industrial		-		2,629		13,284		-		2,629		13,284		15,913		-		2009		2010

109


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development			Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition			Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Seven Hills, Ohio
Rock Run Business Campus	Rock Run North	Office		-		837		5,307		(2,192	)		960		2,992		3,952		2,345		1984		1996
Rock Run Business Campus	Rock Run Center	Office		-		1,046		6,533		(2,955	)		1,169		3,455		4,624		2,913		1985		1996

Sharonville, Ohio
Mosteller Distribution Center	Mosteller Distribution Ctr. I	Industrial		-		1,275		5,209		3,550			1,275		8,759		10,034		3,906		1996		1996
Mosteller Distribution Center	Mosteller Distribution Ctr. II	Industrial		-		828		4,060		1,598			828		5,658		6,486		2,602		1997		1997

St. Louis Park, Minnesota
The West End	1600 Tower	Office		-		2,321		26,928		6,867			2,516		33,600		36,116		9,803		2000		2000
The West End	MoneyGram Tower	Office		-		3,039		34,757		7,080			3,033		41,843		44,876		13,035		1987		1999
Minneapolis West	Chilies Ground Lease	Grounds		-		921		-		157			1,078		-		1,078		53		n/a		1998
Minneapolis West	Olive Garden Ground Lease	Grounds		-		921		-		114			1,035		-		1,035		61		n/a		1998

St. Louis, Missouri
Lakeside Crossing	Lakeside Crossing Building One	Industrial		-		596		1,572		527			480		2,215		2,695		915		2002		2002
Lakeside Crossing	Lakeside Crossing Building II	Industrial		-		783		1,964		20			782		1,985		2,767		1,019		2003		2003
Lakeside Crossing	Lakeside Crossing Building III	Industrial		-		1,905		3,986		360			1,623		4,628		6,251		1,408		2002		2002
Lakeside Crossing	Lakeside Crossing V	Office		-		750		1,130		17			750		1,147		1,897		351		2004		2004
Lakeside Crossing	Lakeside Crossing Building VI	Industrial		-		1,079		2,125		2,298			1,333		4,169		5,502		2,132		2002		2002
Laumeier Office Park	Laumeier I	Office		-		1,384		8,326		4,603			1,220		13,093		14,313		4,962		1987		1995
Laumeier Office Park	Laumeier II	Office		-		1,421		9,065		2,506			1,258		11,734		12,992		5,127		1988		1995
Laumeier Office Park	Laumeier IV	Office		-		1,029		6,493		1,489			1,029		7,982		9,011		2,832		1987		1998
Maryville Center	530 Maryville Centre	Office		-		2,219		14,214		3,105			2,219		17,319		19,538		6,069		1990		1997
Maryville Center	550 Maryville Centre	Office		-		1,996		12,447		2,338			1,996		14,785		16,781		5,627		1988		1997
Maryville Center	635-645 Maryville Centre	Office		-		3,048		17,522		3,042			3,048		20,564		23,612		7,348		1987		1997
Maryville Center	655 Maryville Centre	Office		-		1,860		13,067		2,319			1,860		15,386		17,246		5,265		1994		1997
Maryville Center	540 Maryville Centre	Office		-		2,219		13,842		2,347			2,219		16,189		18,408		6,003		1990		1997
Maryville Center	520 Maryville Centre	Office		-		2,404		14,004		1,395			2,404		15,399		17,803		4,872		1999		1999
Maryville Center	625 Maryville Centre	Office		-		2,509		10,956		618			2,509		11,574		14,083		3,370		1996		2002
Westport Place	Westport Center I	Industrial		-		1,707		5,040		920			1,707		5,960		7,667		2,618		1998		1998
Westport Place	Westport Center II	Industrial		-		914		1,924		425			914		2,349		3,263		967		1998		1998
Westport Place	Westport Center III	Industrial		-		1,206		2,651		841			1,206		3,492		4,698		1,248		1999		1999
Westport Place	Westport Center V	Industrial		-		493		1,274		74			493		1,348		1,841		456		2000		2000
Westport Place	Westport Place	Office		-		1,990		5,478		2,138			1,990		7,616		9,606		3,108		2000		2000
Westmark	Westmark	Office		-		1,497		9,173		2,409			1,342		11,737		13,079		4,747		1987		1995
Westview Place	Westview Place	Office		-		669		7,544		4,276			669		11,820		12,489		5,073		1988		1995
Woodsmill Commons	Woodsmill Commons II (400)	Office		-		1,718		7,663		852			1,718		8,515		10,233		2,256		1985		2003
Woodsmill Commons	Woodsmill Commons I (424)	Office		-		1,836		7,109		1,276			1,836		8,385		10,221		2,096		1985		2003

Stafford, Texas
Stafford	Stafford Distribution Center	Industrial		-		3,502		5,433		2,954			3,502		8,387		11,889		1,403		2008		2008

Sterling, Virginia
TransDulles Centre	22800 Davis Drive	Office		-		2,550		11,250		110			2,550		11,360		13,910		1,574		1989		2006
TransDulles Centre	22714 Glenn Drive	Industrial		-		3,973		4,422		1,015			3,973		5,437		9,410		976		2007		2007

Suffolk, Virginia
Northgate Commerce Park	101 Industrial Drive, Bldg. A	Industrial		-		1,558		8,230		(21	)		1,558		8,209		9,767		713		2007		2007
Northgate Commerce Park	103 Industrial Drive	Industrial		-		1,558		8,230		-			1,558		8,230		9,788		714		2007		2007

Sumner, Washington
Not Applicable	Sumner Transit	Industrial		17,117		16,032		5,935		276			16,032		6,211		22,243		1,330		2005		2007

Sunrise, Florida
Sawgrass Pointe	Sawgrass - Building B	Office		-		1,211		4,693		1,394			1,211		6,087		7,298		1,947		1999		2001
Sawgrass Pointe	Sawgrass - Building A	Office		-		1,147		3,875		165			1,147		4,040		5,187		1,027		2000		2001
Sawgrass Pointe	Sawgrass Pointe I	Office		-		3,484		21,132		8,479			3,484		29,611		33,095		9,369		2002		2002
Sawgrass Pointe	Sawgrass Pointe II	Office		-		3,481		11,973		(85	)		3,481		11,888		15,369		1,698		2009		2009

110


Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development			Gross Book Value 12/31/10						Accumulated		Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition			Land/Land Imp		Bldgs/TI		Total(1)		Depreciation (2)		Renovated		Acquired

Suwanee, Georgia
Horizon Business Center	90 Horizon Drive	Industrial		-		180		1,247		-			180		1,247		1,427		24		2001		2010
Horizon Business Center	225 Horizon Drive	Industrial		-		457		2,077		-			457		2,077		2,534		43		1990		2010
Horizon Business Center	250 Horizon Drive	Industrial		-		1,625		5,870		-			1,625		5,870		7,495		161		1997		2010
Horizon Business Center	70 Crestridge Drive	Industrial		-		956		3,600		-			956		3,600		4,556		91		1998		2010
Horizon Business Center	2780 Horizon Ridge	Industrial		-		1,143		5,723		-			1,143		5,723		6,866		126		1997		2010
Horizon Business Center	2800 Vista Ridge Drive	Industrial		-		1,557		2,625		-			1,557		2,625		4,182		108		1995		2010
Horizon Business Center	25 Crestridge Drive	Industrial		-		723		2,439		-			723		2,439		3,162		52		1999		2010
Horizon Business Center	Genera Corp. BTS	Industrial		-		1,505		4,952		-			1,505		4,952		6,457		121		2006		2010
Northbrook	1000 Northbrook Parkway	Industrial		-		756		3,322		-			756		3,322		4,078		76		1986		2010

Tampa, Florida
Fairfield Distribution Center	Fairfield Distribution Ctr I	Industrial		-		483		2,621		124			487		2,741		3,228		834		1998		1999
Fairfield Distribution Center	Fairfield Distribution Ctr II	Industrial		-		530		4,900		124			534		5,020		5,554		1,490		1998		1999
Fairfield Distribution Center	Fairfield Distribution Ctr III	Industrial		-		334		2,745		134			338		2,875		3,213		819		1999		1999
Fairfield Distribution Center	Fairfield Distribution Ctr IV	Industrial		-		600		1,711		1,274			604		2,981		3,585		952		1999		1999
Fairfield Distribution Center	Fairfield Distribution Ctr V	Industrial		-		488		2,635		263			488		2,898		3,386		792		2000		2000
Fairfield Distribution Center	Fairfield Distribution Ctr VI	Industrial		-		555		3,762		758			555		4,520		5,075		1,160		2001		2001
Fairfield Distribution Center	Fairfield Distribution Ctr VII	Industrial		-		394		1,857		758			394		2,615		3,009		623		2001		2001
Fairfield Distribution Center	Fairfield Distrib. Ctr. VIII	Industrial		-		1,082		2,071		412			1,082		2,483		3,565		636		2004		2004
Eagle Creek Business Center	Eagle Creek Business Ctr. I	Industrial		-		3,705		3,072		1,034			3,705		4,106		7,811		1,469		2006		2006
Eagle Creek Business Center	Eagle Creek Business Ctr. II	Industrial		-		2,354		2,272		969			2,354		3,241		5,595		988		2007		2007
Eagle Creek Business Center	Eagle Creek Business Ctr. III	Industrial		-		2,332		2,237		1,430			2,332		3,667		5,999		801		2007		2007
Highland Oaks	Highland Oaks I	Office		-		1,525		11,906		1,886			1,525		13,792		15,317		3,970		1999		1999
Highland Oaks	Highland Oaks II	Office		-		1,605		10,762		3,847			1,605		14,609		16,214		5,806		1999		1999
Highland Oaks	Highland Oaks III	Office		-		2,882		8,871		689			2,522		9,920		12,442		2,094		2007		2007
Highland Oaks	Highland Oaks IV	Office		-		3,068		9,962		4,066			3,068		14,028		17,096		1,286		2008		2008
Highland Oaks	Highland Oaks V	Office		-		2,412		6,524		3,421			2,412		9,945		12,357		2,437		2007		2007

Titusville, Florida
Retail Development	Crossroads Marketplace	Retail		-		12,678		4,451		(3,034	)		11,922		2,173		14,095		2,326		2007		2007

West Chester, Ohio
Centre Pointe Office Park	Centre Pointe I	Office		-		2,501		7,554		725			2,501		8,279		10,780		1,733		2000		2004
Centre Pointe Office Park	Centre Pointe II	Office		-		2,056		8,186		305			2,056		8,491		10,547		1,718		2001		2004
Centre Pointe Office Park	Centre Pointe III	Office		-		2,048		8,089		1,247			2,048		9,336		11,384		2,134		2002		2004
Centre Pointe Office Park	Centre Pointe IV	Office		-		2,013		9,017		1,540			2,932		9,638		12,570		2,646		2005		2005
Centre Pointe Office Park	Centre Pointe VI	Office		-		2,759		8,266		3,179			2,759		11,445		14,204		1,574		2008		2008
World Park at Union Centre	World Park at Union Centre 10	Industrial		-		2,150		5,503		7,408			2,151		12,910		15,061		3,290		2006		2006
World Park at Union Centre	World Park at Union Centre 11	Industrial		-		2,592		6,936		27			2,592		6,963		9,555		2,374		2004		2004
World Park at Union Centre	World Park at Union Centre 1	Industrial		-		300		2,902		-			300		2,902		3,202		88		1998		2010
World Park at Union Centre	World Park at Union Centre 2	Industrial		-		287		2,394		-			287		2,394		2,681		63		1999		2010
World Park at Union Centre	World Park at Union Centre 3	Industrial		-		1,125		6,042		-			1,125		6,042		7,167		121		1998		2010
World Park at Union Centre	World Park at Union Centre 4	Industrial		-		335		2,085		-			335		2,085		2,420		51		1999		2010
World Park at Union Centre	World Park at Union Centre 5	Industrial		-		482		2,415		-			482		2,415		2,897		52		1999		2010
World Park at Union Centre	World Park at Union Centre 6	Industrial		-		1,219		6,268		-			1,219		6,268		7,487		124		1999		2010
World Park at Union Centre	World Park at Union Centre 7	Industrial		-		1,918		5,208		-			1,918		5,208		7,126		145		2005		2010
World Park at Union Centre	World Park at Union Centre 8	Industrial		-		1,160		6,111		-			1,160		6,111		7,271		136		1999		2010
World Park at Union Centre	World Park at Union Centre 9	Industrial		-		1,189		5,924		-			1,189		5,924		7,113		146		2001		2010
North Pointe at Union Centre	North Pointe at Union Centre I	Office		-		2,878		17,467		426			2,878		17,893		20,771		822		2010		2010
North Pointe at Union Centre	North Pointe at Union Ctr II	Office		-		2,904		16,861		286			2,904		17,147		20,051		657		2010		2010

West Jefferson, Ohio
Park 70 at West Jefferson	Restoration Hardware BTS	Industrial		-		6,454		24,812		2,443			6,510		27,199		33,709		2,922		2008		2008

West Palm Beach, Florida
Duke Realty Park of Commerce	Park of Commerce 1	Industrial		-		626		2,583		-			626		2,583		3,209		-		2010		2010
Duke Realty Park of Commerce	Park of Commerce 3	Industrial		-		1,085		4,475		-			1,085		4,475		5,560		-		2010		2010
Duke Realty Airport Center	Airport Center 1	Industrial		5,527		1,595		6,580		-			1,595		6,580		8,175		-		2002		2010
Duke Realty Airport Center	Airport Center 2	Industrial		3,966		1,166		4,809		-			1,166		4,809		5,975		-		2002		2010
Duke Realty Airport Center	Airport Center 3	Industrial		3,988		1,136		4,685		-			1,136		4,685		5,821		-		2002		2010

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Duke Realty Limited Partnership		Schedule III
Real Estate and Accumulated Depreciation
December 31, 2010
(in thousands)


		Building			Initial Cost				Cost Capitalized Subsequent to Development		Gross Book Value 12/31/10							Accumulated			Year Constructed/		Year
Development	Name	Type	Encumbrances		Land		Buildings		or Acquisition		Land/Land Imp		Bldgs/TI			Total(1)		Depreciation (2)			Renovated		Acquired

Westmont, Illinois
Oakmont Corporate Center	Oakmont Tech Center	Office		-		1,501		8,554		2,535		1,703		10,887			12,590		4,079			1989		1998

Weston, Florida
Weston Pointe	Weston Pointe I	Office		-		2,580		9,431		2,058		2,580		11,489			14,069		2,634			1999		2003
Weston Pointe	Weston Pointe II	Office		-		2,183		10,752		2,110		2,183		12,862			15,045		3,111			2000		2003
Weston Pointe	Weston Pointe III	Office		-		2,183		11,531		757		2,183		12,288			14,471		2,715			2001		2003
Weston Pointe	Weston Pointe IV	Office		-		3,349		10,686		3,210		3,349		13,896			17,245		3,951			2006		2006

Zionsville, Indiana
Anson	Marketplace at Anson	Retail		-		2,147		2,727		2,078		2,147		4,805			6,952		755			2007		2007
	Accum. Depr. on Improvements of Undeveloped Land																		9,273
	Eliminations									240		1,009		(769	)		240		(1,988	)

				1,065,628		1,208,036		5,051,925		772,928		1,234,124		5,798,765			7,032,889		1,406,437

(1)	The tax basis (in thousands) of our real estate assets at 12/31/10 was approximately $7,208,536 for federal income tax purposes.

(2)

Depreciation of real estate is computed using the straight-line method over 40 years for buildings and 15 years for land improvements for properties that we develop, 30 years for buildings and 10 years for land improvements for properties that we acquire, and shorter periods based on lease terms (generally 3 to 10 years) for tenant improvements.


	Real Estate Assets									Accumulated Depreciation
	2010			2009			2008			2010			2009			2008
Balance at beginning of year	$	6,390,119		$	6,297,922		$	5,765,747		$	1,311,733		$	1,167,113		$	990,280
Acquisitions		449,530			29,726			56,304			-			-			-
Construction costs and tenant improvements		162,301			307,157			812,084			-			-			-
Depreciation expense		-			-			-			271,058			266,803			246,440
Consolidation of previously unconsolidated properties		530,573			176,038			85,201			-			-			-

		7,532,523			6,810,843			6,719,336			1,582,791			1,433,916			1,236,720
Deductions during year:
Cost of real estate sold or contributed		(421,325	)		(258,854	)		(367,922	)		(97,699	)		(32,087	)		(16,115	)
Impairment Allowance		-			(71,774	)		-			-			-			-
Write-off of fully amortized assets		(78,309	)		(90,096	)		(53,492	)		(78,655	)		(90,096	)		(53,492	)

Balance at end of year	$	7,032,889		$	6,390,119		$	6,297,922		$	1,406,437		$	1,311,733		$	1,167,113

112

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	DUKE REALTY LIMITED PARTNERSHIP

March 4, 2011	By:	/s/ Dennis D. Oklak
		Dennis D. Oklak
		Chairman and Chief Executive Officer of the General Partner

	By:	/s/ Christie B. Kelly
		Christie B. Kelly
		Executive Vice President and Chief Financial Officer of the General Partner

	By:	/s/ Mark A. Denien
		Mark A. Denien
		Senior Vice President and Chief Accounting Officer of the General Partner

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Date	Title

/s/ Thomas J. Baltimore, Jr.*	1/26/11	Director of the General Partner
Thomas J. Baltimore, Jr.

/s/ Barrington H. Branch*	1/26/11	Director of the General Partner
Barrington H. Branch

/s/ Geoffrey Button *	1/26/11	Director of the General Partner
Geoffrey Button

/s/ William Cavanaugh III*	1/26/11	Director of the General Partner
William Cavanaugh III

/s/ Ngaire E. Cuneo *	1/26/11	Director of the General Partner
Ngaire E. Cuneo

/s/ Charles R. Eitel*	1/26/11	Director of the General Partner
Charles R. Eitel

/s/ Dr. Martin C. Jischke*	1/26/11	Director of the General Partner
Dr. Martin C. Jischke

/s/ Jack R. Shaw *	1/26/11	Director of the General Partner
Jack R. Shaw

113



/s/ Lynn C. Thurber *	1/26/11	Director of the General Partner
Lynn C. Thurber

/s/ Robert J. Woodward, Jr. *	1/26/11	Director of the General Partner
Robert J. Woodward, Jr.


* By Dennis D. Oklak, Attorney-in-Fact /s/ Dennis D. Oklak

114