10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2013

Or

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from                     to                      .

Commission File No. 000-52596

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

(Exact name of registrant as specified in its charter)

Maryland	30-0309068
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
518 Seventeenth Street, 17th Floor Denver, CO	80202
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 228-2200

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  x    No  ¨

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	x  (Do not check if a smaller reporting company)	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

As of May 8, 2013, 177,986,703 unclassified shares of common stock (referred to “Class E”), 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 166,411 shares of Class I common stock of Dividend Capital Diversified Property Fund Inc., each with a par value $0.01 per share, were outstanding.

Dividend Capital Diversified Property Fund Inc.

Form 10-Q

March 31, 2013

TABLE OF CONTENTS

	Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets		3
Condensed Consolidated Statements of Loss		4
Condensed Consolidated Statements of Comprehensive Loss		5
Condensed Consolidated Statement of Equity		6
Condensed Consolidated Statements of Cash Flows		7
Notes to Condensed Consolidated Financial Statements		8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		22
Item 3. Quantitative and Qualitative Disclosures About Market Risk		33
Item 4. Controls and Procedures		34
PART II. OTHER INFORMATION
Item 1. Legal Proceedings		35
Item 1A. Risk Factors		35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		35
Item 3. Defaults upon Senior Securities		36
Item 4. Mine Safety Disclosures		36
Item 5. Other Information		36
Item 6. Exhibits		37

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PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share and footnoted information)

	As of
	March 31, 2013			December 31, 2012
	(Unaudited)
ASSETS
Investments in real property	$	2,705,979		$	2,819,550
Accumulated depreciation and amortization		(486,489	)		(482,782	)
Total net investments in real property*		2,219,490			2,336,768
Debt related investments, net		165,469			187,321
Total net investments		2,384,959			2,524,089
Cash and cash equivalents		36,793			36,872
Restricted cash		24,920			32,968
Other assets, net		63,127			65,325
Assets held for sale		88,745			—
Total Assets	$	2,598,544		$	2,659,254
LIABILITIES AND EQUITY
Liabilities:
Mortgage notes and other secured borrowings**	$	1,192,957		$	1,319,452
Unsecured borrowings		325,000			300,000
Financing obligations		18,143			18,176
Intangible lease liabilities, net		85,521			88,331
Other liabilities		78,252			91,768
Liabilities held for sale		86,772			—
Total Liabilities		1,786,645			1,817,727
Equity:
Stockholders’ equity:
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 177,344,261*** and 178,127,559*** shares issued and outstanding, as of March 31, 2013 and December 31, 2012, respectively		1,772			1,781
Additional paid-in capital		1,605,226			1,610,996
Distributions in excess of earnings		(871,891	)		(850,885	)
Accumulated other comprehensive loss		(15,597	)		(16,196	)
Total stockholders’ equity		719,510			745,696
Noncontrolling interests		92,389			95,831
Total Equity		811,899			841,527
Total Liabilities and Equity	$	2,598,544		$	2,659,254

* Includes approximately $391.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of March 31, 2013 and December 31, 2012, respectively.

** Includes approximately $310.0 million and $419.5 million in consolidated mortgage notes in variable interest entity investments as of March 31, 2013 and December 31, 2012, respectively.

*** Includes 177,189,956 shares of Class E common stock, 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 129,555 shares of Class I common stock.

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENTS OF LOSS

(Unaudited)

(In thousands, except per share and footnoted information)

	For the Three Months Ended March 31,
	2013			2012
REVENUE:
Rental revenue	$	65,165		$	61,744
Debt related income		2,735			1,884
Total Revenue		67,900			63,628
EXPENSES:
Rental expense		16,760			13,164
Real estate depreciation and amortization expense		29,659			29,534
General and administrative expenses		2,601			1,883
Asset management and advisory fees, related party		3,684			4,912
Acquisition-related expenses		—			299
Total Operating Expenses		52,704			49,792
Other Income (Expenses):
Interest and other income		79			62
Interest expense		(20,927	)		(20,211	)
Loss on extinguishment of debt and financing commitments		(270	)		(1,421	)
Loss from continuing operations		(5,922	)		(7,734	)
Discontinued operations, net of taxes*		56			(1,605	)
Net Loss		(5,866	)		(9,339	)
Net loss attributable to noncontrolling interests		499			849
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(5,367	)	$	(8,490	)
Net income (loss) per basic and diluted common share:
Continuing operations	$	(0.03	)	$	(0.04	)
Discontinued operations		0.00			(0.01	)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	(0.03	)	$	(0.05	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		178,792			183,270
Diluted		192,927			199,419
Distributions declared per common share	$	0.0875		$	0.1250

* Includes approximately $85,000 and $33,000 paid to our Advisor for asset management fees associated with the disposition of real properties during the three months ended March 31, 2013 and 2012, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(In thousands)

	For the Three Months Ended March 31,
	2013			2012
Net Loss	$	(5,866	)	$	(9,339	)
Other Comprehensive Income (Loss):
Net unrealized change from available-for-sale securities		—			(376	)
Unrealized change from cash flow hedging derivatives		646			744
Comprehensive loss		(5,220	)		(8,971	)
Comprehensive (income) loss attributable to noncontrolling interests		452			819
COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(4,768	)	$	(8,152	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)

(In thousands)

	Stockholders’ Equity
													Accumulated
							Additional			Distributions in			Other
	Common Stock						Paid-in			Excess of			Comprehensive			Noncontrolling			Total
	Shares			Amount			Capital			Earnings			Income (Loss)			Interests			Equity
Balances, December 31, 2012		178,128		$	1,781		$	1,610,996		$	(850,885	)	$	(16,196	)	$	95,831		$	841,527
Comprehensive income (loss):
Net loss		—			—			—			(5,367	)		—			(499	)		(5,866	)
Unrealized change from cash flow hedging derivatives		—			—			—			—			599			47			646
Common stock:
Issuance of common stock, net of offering costs		937			8			6,276			—			—			—			6,284
Redemptions of common stock		(1,721	)		(17	)		(11,696	)		—			—			—			(11,713	)
Distributions on common stock		—			—			—			(15,639	)		—			—			(15,639	)
Noncontrolling interests:
Contributions of noncontrolling interests		—			—			—			—			—			131			131
Distributions to noncontrolling interests		—			—			—			—			—			(1,476	)		(1,476	)
Redemptions of noncontrolling interests		—			—			—			—			—			(1,761	)		(1,761	)
Buyout of noncontrolling interest		—			—			(350	)		—			—			116			(234	)
Balances, March 31, 2013		177,344		$	1,772		$	1,605,226		$	(871,891	)	$	(15,597	)	$	92,389		$	811,899

The accompanying notes are an integral part of these condensed consolidated financial statements.

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DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	For the Three Months Ended March 31,
	2013			2012
OPERATING ACTIVITIES:
Net loss	$	(5,866	)	$	(9,339	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Real estate depreciation and amortization expense		30,524			31,003
(Gain) loss on disposition of real property		(1,213	)		328
Loss on financing commitments		270			1,446
Other depreciation and amortization		2,135			187
Other adjustments to reconcile loss to net cash provided by operating activities		(326	)		68
Changes in operating assets and liabilities		(8,072	)		(4,390	)
Net cash provided by operating activities		17,452			19,303
INVESTING ACTIVITIES:
Capital expenditures in real property		(5,397	)		(2,818	)
Proceeds from disposition of real property		7,879			3,205
Investment in debt related investments		(3,653	)		—
Principal collections on debt related investments		15,512			1,098
Other investing activities		638			2,016
Net cash provided by (used in) investing activities		14,979			3,501
FINANCING ACTIVITIES:
Mortgage note principal repayments		(18,513	)		(64,552	)
Net proceeds from revolving line of credit borrowings		25,000			—
Repayment of other secured borrowings		(13,666	)		—
Redemption of common shares		(11,430	)		(12,556	)
Distributions to common stockholders		(10,210	)		(13,908	)
Other financing activities		(3,691	)		(2,729	)
Net cash (used in) provided by financing activities		(32,510	)		(93,745	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(79	)		(70,941	)
CASH AND CASH EQUIVALENTS, beginning of period		36,872			128,447
CASH AND CASH EQUIVALENTS, end of period	$	36,793		$	57,506
Supplemental Disclosure of Cash Flow Information:
Assumed mortgage		—		$	124,800
Amount issued pursuant to the distribution reinvestment plan	$	5,505		$	9,046
Cash paid for interest	$	19,602		$	21,375
Non-cash principal collection on debt related investments	$	9,646		$	2,809
Non-cash investment in real property		—		$	128,258

The accompanying notes are an integral part of these condensed consolidated financial statements.

7

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2013

(Unaudited)

1. ORGANIZATION

Dividend Capital Diversified Property Fund Inc. is a Maryland corporation formed on April 11, 2005 to invest in a diverse portfolio of real property and real estate related investments. As used herein, “the Company,” “we,” “our” and “us” refer to Dividend Capital Diversified Property Fund Inc. and its consolidated subsidiaries and partnerships except where the context otherwise requires.

We operate in a manner intended to qualify as a real estate investment trust (“REIT”) for federal income tax purposes and utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) organizational structure to hold all or substantially all of our assets through our operating partnership, Dividend Capital Total Realty Operating Partnership, L.P. (our “Operating Partnership”). Furthermore, our Operating Partnership wholly owns a taxable REIT subsidiary, DCTRT Leasing Corp. (the “TRS”), through which we have executed certain business transactions that might otherwise have an adverse impact on our status as a REIT if such business transactions were to occur directly or indirectly through our Operating Partnership.

We are the sole general partner of our Operating Partnership. In addition, we have contributed 100% of the proceeds received from our offerings of common stock to our Operating Partnership in exchange for partnership units (“OP Units”) representing our interest as a limited partner of the Operating Partnership. As of March 31, 2013 and December 31, 2012, we owned approximately 92.7% and 92.6%, respectively, of the limited partnership interests in our Operating Partnership, and the remaining limited partnership interests in our Operating Partnership were owned by third-party investors. Our Operating Partnership has classes of OP Units that correspond to our four classes of common stock: Class E OP Units, Class A OP Units, Class W OP Units, and Class I OP Units. The OP Units held by third parties are all Class E OP Units. As of March 31, 2013 and December 31, 2012, our Operating Partnership had issued and outstanding approximately 13.9 million and 14.2 million Class E OP Units held by third party investors, respectively, which represent limited partnership interests issued in connection with its private placement offerings.

Dividend Capital Total Advisors LLC (our “Advisor”), a related party, manages our day-to-day activities under the terms and conditions of an advisory agreement (as amended from time to time, the “Advisory Agreement”). Our Advisor and its affiliates receive various forms of compensation, reimbursements and fees for services relating to the investment and management of our real estate assets.

On July 12, 2012, the Securities and Exchange Commission (the “Commission”) declared effective our Registration Statement on Form S-11 (Registration Number 333-175989) (as amended, the “Registration Statement”). The Registration Statement applies to the offer and sale (the “Offering”) of up to $3,000,000,000 of our shares of common stock, of which $2,250,000,000 of shares are expected to be offered to the public in a primary offering and $750,000,000 of shares are expected to be offered to our stockholders pursuant to an amended and restated distribution reinvestment plan (subject to our right to reallocate such amounts). In the Offering, we are offering to the public three classes of shares: Class A shares, Class W shares and Class I shares with net asset value (“NAV”) based pricing. See Part I, Item 2 of this Quarterly Report on Form 10-Q for a description of our valuation procedures and valuation components, including important disclosure regarding real property valuations provided by Altus Group U.S., Inc., an independent valuation firm. Our independent registered public accounting firm does not audit our NAV. Selling commissions, dealer manager fees, and distribution fees are allocated to Class A shares, Class W shares, and Class I shares on a class-specific basis and differ for each class, even when the NAV of each class is the same. We are offering to sell any combination of Class A shares, Class W shares and Class I shares with a dollar value up to the maximum offering amount. We also sell shares of our unclassified common stock, which we refer to as “Class E” shares, pursuant to our distribution reinvestment plan offering registered on our Registration Statement on Form S-3 (Registration Number 333-162636). In the event of a liquidation event, such assets, or the proceeds therefrom, will be distributed ratably in proportion to the respective NAV for each class until the NAV for each class has been paid. Other than differing allocable fees and expenses and liquidation rights, Class E shares, Class A shares, Class W shares, and Class I shares have identical rights and privileges.

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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying interim condensed consolidated financial statements (herein referred to as “financial statements,” “balance sheets,” “statement of equity,” or “statements of comprehensive loss”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the Commission instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments and eliminations, consisting only of normal recurring items necessary for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of operating results for a full year. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on March 19, 2013.

Reclassifications

Certain amounts included in the accompanying financial statements for 2012 have been reclassified to conform to the 2013 financial statements presentation. Income statement amounts and certain income statement disclosure amounts for properties disposed of or classified as held for sale have been reclassified to discontinued operations for all periods presented. Balance sheet amounts and certain balance sheet disclosure amounts for properties classified as held for sale have been reclassified to assets held for sale.

New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued an accounting standard update that requires disclosure of the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount is required under GAAP to be reclassified in its entirety to net income. Additionally, the update requires disclosure of changes in each component of other comprehensive income. The disclosure requirements were retroactively effective for us beginning January 1, 2013. As this guidance only requires expanded disclosure, the adoption did not have a significant impact on our consolidated financial statements.

3. INVESTMENTS IN REAL PROPERTY

Our consolidated investments in real property consist of investments in office, industrial and retail properties. The following tables summarize our consolidated investments in real property as of March 31, 2013 and December 31, 2012 (amounts in thousands):

Real Property	Land		Building and Improvements			Intangible Lease Assets			Total Investment Amount			Intangible Lease Liabilities			Net Investment Amount
As of March 31, 2013:
Office	$	235,195	$	942,758		$	471,222		$	1,649,175		$	(65,656	)	$	1,583,519
Industrial(1)		52,598		330,818			61,967			445,383			(7,765	)		437,618
Retail		227,218		417,278			77,968			722,464			(51,059	)		671,405
Total gross book value		515,011		1,690,854			611,157			2,817,022			(124,480	)		2,692,542
Accumulated depreciation/amortization		—		(196,342	)		(317,180	)		(513,522	)		38,251			(475,271	)
Total net book value	$	515,011	$	1,494,512		$	293,977		$	2,303,500		$	(86,229	)	$	2,217,271
As of December 31, 2012:
Office	$	237,865	$	939,722		$	475,397		$	1,652,984		$	(65,788	)	$	1,587,196
Industrial		52,598		329,844			61,967			444,409			(7,765	)		436,644
Retail		227,218		416,971			77,968			722,157			(51,059	)		671,098
Total gross book value		517,681		1,686,537			615,332			2,819,550			(124,612	)		2,694,938
Accumulated depreciation/amortization		—		(189,740	)		(293,042	)		(482,782	)		36,281			(446,501	)
Total net book value	$	517,681	$	1,496,797		$	322,290		$	2,336,768		$	(88,331	)	$	2,248,437

(1) Includes $19.2 million in land, $79.1 million in building and improvements, $12.7 million in intangible lease assets, and $1.8 million in intangible lease liabilities, before accumulated depreciation of $25.9 million, related to seven industrial properties classified as held for sale in the accompanying balance sheet as of March 31, 2013.

9

Discontinued Operations

On January 13, 2013, we disposed of an office property located in the Dallas, TX market for which we recorded a net gain on the disposition. Additionally, as of March 31, 2013, we had agreed to dispose of a portfolio of seven industrial properties, of which we are not the managing partner, to our joint venture partner. The gain described above and the results of operations of these properties are included within discontinued operations.

We present the results of operations of this and all other disposed properties and their respective aggregate net gains (losses), collectively, as discontinued operations in our accompanying statements of comprehensive loss when the operations and cash flows have been (or will be) eliminated from our ongoing operations and we will not have any significant continuing involvement. Interest expense is included in discontinued operations only if it is directly attributable to these operations or properties. The following table summarizes amounts recorded as discontinued operations (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Revenues	$	1,509		$	2,732
Real estate depreciation and amortization expense		(864	)		(1,469	)
Other expenses		(1,802	)		(2,540	)
Loss from discontinued operations, net of taxes		(1,157	)		(1,277	)
Net gain on disposition, net of taxes		1,213			(328	)
Discontinued operations, net of taxes	$	56		$	(1,605	)

Rental Revenue

The following table summarizes the adjustments to rental revenue related to the amortization of above-market lease assets, below-market lease liabilities, and for straight-line rental adjustments for the three months ended March 31, 2013 and 2012. In addition, the following table includes tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Straight-line rent adjustments	$	2,968		$	1,964
Above-market lease assets		(1,926	)		(1,993	)
Below-market lease liabilities		2,102			2,461
Total increase to rental revenue	$	3,144		$	2,432
Tenant recovery income	$	8,789		$	8,307

4. DEBT RELATED INVESTMENTS

As of March 31, 2013 and December 31, 2012, we had invested in 16 and 19 debt related investments, respectively. The weighted average maturity of our debt investments as of March 31, 2013 was 2.5 years, based on our recorded net investment. The following table describes our debt related income for the three months ended March 31, 2013 and 2012 (dollar amounts in thousands):

	For the Three Months Ended				Weighted Average
	March 31,				Yield as of
Investment Type	2013		2012		March 31, 2013 (1)
Mortgage notes (2)	$	2,429	$	1,769		6.6	%
B-notes		51		115		0.0	%
Mezzanine debt		255		—		17.0	%
Total	$	2,735	$	1,884		6.9	%

(1) Weighted average yield is calculated on an unlevered basis using the amount invested, current interest rates and accretion of premiums or discounts realized upon the initial investment for each investment type as of March 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of March 31, 2013 for purposes of this table. As of March 31, 2013 we had two debt related investments with a combined net investment amount of $70.0 million that bear interest at floating rates indexed to LIBOR. All of our remaining debt related investments bear interest at fixed rates. We have assumed a yield of zero on the one debt related investments for which we have recognized a full allowance for loss as of March 31, 2013.

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(2) We had two and one debt related investments repaid in full during the three months ended March 31, 2013 and March 31, 2012, respectively. During the three months ended March 31, 2013, amounts recorded include accelerated amortization of origination fees offset by accelerated amortization of deferred due diligence costs related to these repayments. During the three months ended March 31, 2012, amounts recorded include an early prepayment fee received and accelerated amortization of origination fees, offset by accelerated amortization of deferred due diligence costs related to this repayment.

Impairment

We review each of our debt related investments individually on a quarterly basis, and more frequently when such an evaluation is warranted, to determine if impairment exists. Accordingly, we do not group our debt related investments into classes by credit quality indicator. A debt related investment is impaired when, based on current information and events (including economic, industry and geographical factors), it is probable that we will be unable to collect all amounts due, both principal and interest, according to the contractual terms of the agreement. When an investment is deemed impaired, the impairment is measured based on the expected future cash flows discounted at the investment’s effective interest rate. As a practical expedient, we may measure impairment based on the fair value of the collateral of an impaired collateral-dependent debt investment. Regardless of the measurement method, we measure impairment based on the fair value of the collateral when it is determined that foreclosure is probable. We did not record any provision for loan loss during the three months ended March 31, 2013 or 2012. During the three months ended March 31, 2013 we wrote off the provision for loan loss on debt related investments of approximately $15.0 million related to one debt investment that we wrote off. During the three months ended March 31, 2012 we wrote off the provision for loss on debt related investments of approximately $20.0 million related to a mezzanine debt investment that we foreclosed upon. The table below presents a reconciliation of the beginning and ending balances, between December 31, 2012 and March 31, 2013, of our allowance for loan loss (amounts in thousands):

	Allowance for Loan Loss
Beginning balance as of December 31, 2012:	$	18,000
Provision for loss on debt related investments		—
Direct write offs		(15,000	)
Ending balance as of March 31, 2013:	$	3,000

We had one and two B-note debt investments on non-accrual status as of March 31, 2013 and December 31, 2012, respectively. One of our B-note debt investments that was on non-accrual status as of December 31, 2012 was written off upon our borrower’s completion of a loan restructuring during the three months ended March 31, 2013. We have recorded a complete allowance for loan loss related to our remaining debt related investment on non-accrual status. When a debt investment is on non-accrual status, we record income on the investment using the cash basis of accounting. The amount of income recorded on a cash basis of accounting was not significant during the three months ended March 31, 2013 or 2012. All of our debt related investments that were past due 90 days or more were on non-accrual status as of March 31, 2013 and December 31, 2012.

As of March 31, 2013 and December 31, 2012, we had one and three impaired debt related investments with an unpaid principal balance of approximately $3.0 million and $30.1 million, respectively. The following table describes our recorded investment in debt related investments before allowance for loan loss, and the related allowance for loan loss (amounts in thousands):

	Debt Investments Individually Evaluated for
	Impairment as of
	March 31, 2013			December 31, 2012
Debt investments	$	168,469		$	205,321
Less: Allowance for loan losses		(3,000	)		(18,000	)
Total	$	165,469		$	187,321

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All impaired debt investments are subordinate debt investments. The following table describes our gross recorded investment in impaired debt related investments, the related allowance for loan loss, and the total amount of impaired loans for which we have not recorded an allowance for loan loss (amounts in thousands):

						Amount of Impaired
						Loans With No
As of:	Recorded Investment		Related Allowance			Allowance Recorded
March 31, 2013	$	3,000	$	(3,000	)	$	—
December 31, 2012	$	30,135	$	(18,000	)	$	12,135

The following table describes our average recorded net investment in the impaired debt related investments and the related interest income recorded (amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012
Average Recorded Investment	$	6,067	$	13,666
Interest Income Recognized	$	51	$	121

5. DEBT OBLIGATIONS

The following table describes our borrowings as of March 31, 2013 and December 31, 2012 (dollar amounts in thousands):

	Weighted Average Stated Interest										Gross Investment Amount
	Rate as of						Outstanding Balance as of(1)				Securing Borrowings as of(2)
	March 31,			December 31,			March 31,		December 31,		March 31,		December 31,
	2013			2012			2013		2012		2013		2012
Fixed rate mortgages (3)		5.8	%		5.8	%	$	1,156,710	$	1,160,042	$	2,064,975	$	2,061,757
Floating rate mortgages(4)		4.0	%		3.5	%		8,850		23,701		15,259		42,609
Total mortgage notes		5.8	%		5.7	%		1,165,560		1,183,743		2,080,234		2,104,366
Repurchase facilities		2.7	%		2.7	%		112,397		135,709		158,041		198,389
Total other secured borrowings		2.7	%		2.7	%		112,397		135,709		158,041		198,389
Total secured borrowings		5.5	%		5.4	%		1,277,957		1,319,452		2,238,275		2,302,755
Line of credit		2.2	%		2.2	%		55,000		30,000		N/A		N/A
Term loan		2.2	%		2.2	%		270,000		270,000		N/A		N/A
Total unsecured borrowings		2.2	%		2.2	%		325,000		300,000		N/A		N/A
Total borrowings		4.8	%		4.8	%	$	1,602,957	$	1,619,452	$	2,238,275	$	2,302,755

(1) Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $55.0 million as of March 31, 2013 and December 31, 2012, (ii) unamortized discounts to the face value of our outstanding fixed-rate mortgages of $2.4 million and $2.7 million as of March 31, 2013 and December 31, 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $911,000 and $718,000 as of March 31, 2013 and December 31, 2012, respectively.

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

(3) Includes $85.0 million classified as liabilities held for sale in the accompanying balance sheet as of March 31, 2013.

(4) As of March 31, 2013, floating-rate mortgage notes were subject to an interest rate spread of 3.75% over one-month LIBOR. As of December 31, 2012, floating-rate mortgage notes were subject to interest rates at spreads ranging from 2.9% to 3.75% over one-month LIBOR.

As of March 31, 2013, 13 mortgage notes were interest-only and 21 mortgage notes were fully amortizing with outstanding balances of approximately $425.5 million and $740.1 million, respectively. None of our mortgage notes are recourse to us.

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As of March 31, 2013, we had outstanding borrowings of $270.0 million and $55.0 million, respectively, under our term loan and revolving credit facility components of our senior unsecured term loan and revolving line of credit (collectively, the “Facility”). $125.0 million was available for us to borrow under the revolving credit facility component of the Facility. As of December 31, 2012, we had outstanding borrowings of $270.0 million and $30.0 million under the term loan and revolving credit facility components of the Facility, respectively. $150.0 million was available for us to borrow under the revolving credit facility component of the Facility.

The following table reflects our contractual debt maturities as of March 31, 2013, specifically our obligations under secured borrowings and unsecured borrowings (dollar amounts in thousands):

	As of March 31, 2013
	Mortgage Notes and Other
	Secured Borrowings				Unsecured Borrowings				Total
	Number of				Number of
	Borrowings		Outstanding		Borrowings		Outstanding		Outstanding
Year Ending December 31,	Maturing		Balance (2)		Maturing		Balance (3)		Balance  (4)(5)
2013 (1)		1	$	75,224		0	$	—	$	75,224
2014		4		150,728		0		—		150,728
2015		5		129,452		0		—		129,452
2016		14		325,443		1		55,000		380,443
2017		9		476,466		0		—		476,466
2018		0		4,999		1		270,000		274,999
2019		0		5,292		0		—		5,292
2020		1		157,944		0		—		157,944
2021		0		1,707		0		—		1,707
2022		1		1,663		0		—		1,663
Thereafter		2		7,408		0		—		7,408
Total		37	$	1,336,326		2	$	325,000	$	1,661,326

(1) One of our repurchase facilities (the “REPO Borrowings”) with an aggregate outstanding principal balance as of March 31, 2013 of approximately $62.3 million has an initial maturity before December 31, 2013. The REPO Borrowings have an extension option beyond December 31, 2013. Borrowings that are subject to extension options are also subject to certain lender covenants and restrictions that we must meet to extend the initial maturity date. We currently believe that we will qualify for and expect to exercise this extension option. However, we cannot guarantee that we will meet the requirements to extend the REPO Borrowings upon initial maturity. In the event that we do not qualify to extend the REPO Borrowings, we expect to repay them with proceeds from new borrowings.

(2) Secured borrowings presented include (i) mortgage note borrowings of approximately $1.2 billion with maturities ranging from 2014 to 2029, and (ii) REPO Borrowings of approximately $62.3 million and $50.1 million, which mature in 2013 and 2014, respectively, which are subject to four and three one-year extension options, respectively.

(3) Unsecured borrowings presented includes (i) revolving credit facility draws totaling $55.0 million which mature during 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.

(4) Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities (including the Comerica Bank Tower Mortgage balloon payment due in January 2017), and does not include (i) the fair value adjustment on mortgage notes carried at fair value of $55.0 million as of March 31, 2013, (ii) the mark-to-market adjustment on assumed debt of $2.4 million as of March 31, 2013, and (iii) the GAAP principal amortization of our restructured mortgage note of approximately $911,000 that does not reduce the contractual amount due of the related mortgage note as of March 31, 2013.

(5) As of March 31, 2013, our mortgage notes, secured borrowings, and line of credit are secured by interests in real properties and debt investments totaling approximately $2.2 billion.

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6. HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

We maintain risk management control systems to monitor interest rate risk attributable to both our outstanding and forecasted debt obligations. We generally seek to limit the impact of interest rate changes on earnings and cash flows by selectively utilizing derivative instruments to hedge exposures to changes in interest rates on loans secured by our assets. While this hedging strategy is designed to minimize the impact on our net income (loss) and cash provided by operating activities from changes in interest rates, the overall returns on our investments may be reduced. Our board of directors has established policies and procedures regarding our use of derivative instruments for hedging or other purposes to achieve these risk management objectives.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps and caps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium payment. Additionally, we have entered into and plan to enter into certain interest rate derivatives with the goal of mitigating our exposure to adverse fluctuations in the interest payments on our one-month LIBOR-indexed debt.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges under ASC Topic 815 “Derivatives and Hedging” is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the next 12 months, we estimate that approximately $2.2 million will be reclassified as an increase to interest expense related to effective forward started interest rate swaps where the hedging instrument has been terminated, and we estimate that approximately $326,000 will be reclassified as an increase to interest expense related to active effective hedges of floating rate debt issuances. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The table below presents a reconciliation of the beginning and ending balances, between December 31, 2012 and March 31, 2013, of our accumulated other comprehensive loss (“OCI”), net of amounts attributable to noncontrolling interests related to the effective portion of our cash flow hedges as presented on our financial statements, as well as amounts related to our available-for-sale securities (amounts in thousands):

							Accumulated
	Gains and Losses on			Unrealized Losses on Available-For-			Other Comprehensive
	Cash Flow Hedges			Sale Securities			Loss
Beginning balance as of December 31, 2012:	$	(14,710	)	$	(1,486	)	$	(16,196	)
Other comprehensive income:
Amortization of interest expense		645			—			645
Change in fair value		28			—			28
Amounts reclassified from accumulated other comprehensive income:
Losses reclassified into earnings upon discontinuance of cash flow hedges		(27	)		—			(27	)
Net current-period other comprehensive income		646			—			646
Attribution of OCI to noncontrolling interests		(47	)		—			(47	)
Ending balance as of March 31, 2013	$	(14,111	)	$	(1,486	)	$	(15,597	)

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Fair Values of Derivative Instruments

The table below presents the gross fair value of our derivative financial instruments as well as their classification on our accompanying balance sheet as of March 31, 2013 and December 31, 2012 (amounts in thousands):

	Asset Derivatives							Liability Derivatives
				As of		As of					As of			As of
				March 31,		December 31,					March 31,			December 31,
	Balance Sheet			2013		2012		Balance Sheet			2013			2012
	Location			Fair Value		Fair Value		Location			Fair Value			Fair Value
Derivatives designated as hedging instruments under ASC Topic 815
Interest rate contracts		Other assets, net	(1)	$	—	$	—		Other liabilities	(1)	$	(336	)	$	(403	)
Total derivatives designated as hedging instruments under ASC Topic 815					—		—					(336	)		(403	)
Derivatives not designated as hedging instruments under ASC Topic 815
Interest rate contracts		Other assets, net	(1)	$	—		—		Other liabilities	(1)		—			(13	)
Total derivatives not designated as hedging instruments under ASC Topic 815					—		—					—			(13	)
Total derivatives				$	—	$	—				$	(336	)	$	(416	)

(1) Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on the consolidated balance sheet.

The majority of the inputs used to value our derivative instruments fall within Level 2 of the fair value hierarchy. However, the credit valuation adjustments associated with our derivative instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of potential default by us and our counterparties. As of March 31, 2013, we had assessed the significance of the impact of the credit valuation adjustments and had determined that it was not significant to the overall valuation of our derivative instruments. As a result, we have determined that the significant inputs for all of our derivative valuations are classified in Level 2 of the fair value hierarchy.

Designated Hedges

As of March 31, 2013, we had two outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk, with a total notional amount of $69.1 million. As of December 31, 2012, we had two outstanding interest rate caps and two outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk, with a total notional amount of $90.0 million.

Undesignated Hedges

Derivatives not designated as hedges are not speculative and are used to hedge our exposure to interest rate movements and other identified risks but do not meet hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings and resulted in a loss of approximately $0 and $158,000 for the three months ended March 31, 2013 and 2012, respectively. As of March 31, 2013 we had two outstanding interest rate caps that were not designated as hedges with a total notional amount of approximately $232.1 million. As of December 31, 2012, we had two outstanding interest rate caps and one interest rate swap that were not designated as hedges with a total notional amount of approximately $230.4 million.

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Effect of Derivative Instruments on the Statements of Comprehensive Loss

The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Derivatives Designated as Hedging Instruments
Derivative type		Interest rate contracts			Interest rate contracts
Amount of loss recognized in OCI (effective portion)	$	(28	)	$	(73	)
Location of gain or (loss) reclassified from accumulated OCI into income (effective portion)		Interest expense			Interest expense
Amount of loss reclassified from accumulated OCI into income (effective portion)	$	(645	)	$	(671	)
Location of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)		Loss on financing commitments			Loss on financing commitments
Amount of loss recognized in income due to missed forecast (ineffective portion and amount excluded from effectiveness testing)	$	(27	)	$	(146	)
Derivatives Not Designated as Hedging Instruments
Derivative type		Interest rate contracts			Interest rate contracts
Location of gain or (loss) recognized in income		Interest and other income			Interest and other income
Amount of loss recognized in income	$	—		$	(12	)

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

We are required to disclose the fair value of our financial instruments for which it is practicable to estimate the value. The fair value of a financial instrument is the amount at which such financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. For certain of our financial instruments, fair values are not readily available since there are no active trading markets as characterized by current exchanges between willing parties. Accordingly, we derive our estimated fair value using various valuation techniques, such as computing the present value of estimated future cash flows using discount rates commensurate with the risks involved. However, the determination of estimated cash flows may be subjective and imprecise and changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In that regard, the fair value estimates may not be substantiated by comparison to independent markets, and in many cases, may not be realized in immediate settlement of the instrument.

ASC Topic 820, Fair Value Measurement and Disclosures (“ASC Topic 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

ASC Topic 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to 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, foreign exchange rates, and yield curves that

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are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liabilities, 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.

The fair values estimated below are indicative of certain interest rate and other assumptions as of March 31, 2013 and December 31, 2012, and may not take into consideration the effects of subsequent interest rate or other assumption fluctuations, or changes in the values of underlying collateral. The fair values of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses approximate their carrying values because of the short-term nature of these instruments.

The carrying amounts and estimated fair values of our other financial instruments as of March 31, 2013 and December 31, 2012 were as follows (amounts in thousands):

	As of March 31, 2013				As of December 31, 2012
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
Assets:
Investments in real estate securities	$	461	$	461	$	461	$	461
Fixed-rate debt related investments, net		96,390		99,168		108,482		110,796
Floating-rate debt related investments, net		69,079		69,015		78,839		79,803
Derivative instruments		—		—		—		—
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	$	1,034,308	$	1,091,873	$	1,037,047	$	1,091,425
Fixed-rate mortgage notes carried at fair value		122,402		122,402		122,995		122,995
Floating-rate mortgage notes		8,850		8,911		23,701		23,738
Floating-rate other secured borrowings		112,397		112,536		135,709		135,931
Floating-rate unsecured borrowings		325,000		325,000		300,000		300,000
Derivative liabilities		—		—		416		416

The methodologies used and key assumptions made to estimate fair values of the other financial instruments described in the above table are as follows:

Debt Related Investments—The fair value of our performing debt investments are estimated using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Credit spreads and market interest rates used to determine the fair value of these instruments are based on unobservable Level 3 inputs which management has determined to be its best estimate of current market values.

Mortgage Notes and Other Secured Borrowings Carried at Amortized Cost—The fair value of our mortgage notes and other secured borrowings are estimated using a discounted cash flow analysis, based on our estimate of market interest rates. Credit spreads relating to the underlying instruments are based on unobservable Level 3 inputs, which we have determined to be our best estimate of current market spreads of similar instruments.

Mortgage Note Carried at Fair Value—The only mortgage note carried at fair value is the mortgage note secured by Comerica Bank Tower (the “Comerica Bank Tower Mortgage”). Senior management, under the supervision of our Chief Executive Officer and Chief Financial Officer, are responsible for establishing and reviewing our valuation policies and procedures, and such policies and procedures are also discussed with our Audit Committee. We measured the fair value of the Comerica Bank Tower Mortgage based upon the fair value of Comerica Bank Tower, which serves as collateral for the loan. Specifically, we considered preliminary third party appraisals for Comerica Bank Tower to derive our estimate of the fair value of Comerica Bank Tower. In evaluating the information included in these third party appraisals, we considered the reasonableness of the sources of information and compared such information to our understanding of Comerica Bank Tower’s specific operating performance and its applicable capital market environment. Fluctuations in the operating performance of Comerica Bank Tower and the applicable capital market environment, will likely result in corresponding fluctuations in the fair value of the Comerica Bank Tower Mortgage, therefore we will continue to monitor these factors to analyze changes in fair value from period to period. The contractual cash flows of the Comerica Bank Tower Mortgage at a discount rate of approximately 15% resulted in a value of the note of $124.8 million at the acquisition date. A 1% increase in the discount rate would have resulted in a fair value of approximately $120.1 million, and a 1% decrease in the discount rate would have resulted in a fair value of approximately $129.7 million.

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8. RELATED PARTY TRANSACTIONS

Our day-to-day activities are managed by our Advisor, a related party, under the terms and conditions of the Advisory Agreement. Our Advisor is considered to be a related party as certain indirect owners and employees of our Advisor serve as one of our directors and/or our executive officers. As of March 31, 2013, the responsibilities of our Advisor included the selection and underwriting of our real property and debt related investments, the negotiations for these investments, the asset management and financing of these investments and the oversight of real property dispositions.

In connection with the Offering, we entered into an Eighth Amended and Restated Advisory Agreement (the “Advisory Agreement”) with our Advisor, effective July 12, 2012, which modified the fees and expense reimbursements payable to our Advisor. Per the Advisory Agreement, in consideration for asset management services performed, we pay our Advisor an advisory fee comprised of two separate components: (1) a fixed amount equal to 1.15% annually of the “Aggregate Fund NAV” (defined as the aggregate NAV of our Class E shares, Class A shares, Class W shares and Class I shares, along with the Class E OP Units held by third parties) for each day, and (2) a performance component that is based on the annual non-compounded investment return provided to holders of “Fund Interests” (defined as our Class E shares, Class A shares, Class W shares, Class I shares, and Class E OP Units held by third parties) such that the Advisor will receive 25% of the overall return in excess of 6%; provided that in no event may the performance condition exceed 10% of the overall return for such year, and subject to certain other limitations. We will also pay our Advisor a development management fee equal to 4% of the cost to develop, construct, or improve real property assets. In addition, we will pay our Advisor a fee of 1% of the sales price of individual real property assets upon disposition of such assets. Further, for a substantial amount of services in connection with the sale of a property, as determined by a majority of our independent directors, we will pay our Advisor up to 50% of the reasonable, customary and competitive commission paid for the sale of a comparable real property, provided that such amount shall not exceed 1% of the contract price of the property sold and, when added to all other real estate commissions paid to unaffiliated parties in connection with the sale, may not exceed the lesser of a competitive real estate commission or 6% of the sales price of the property.

In addition, pursuant to the Advisory Agreement, we will pay directly, or reimburse our Advisor and the Dealer Manager (defined below) if they pay on our behalf any organizational and offering expenses (other than selling commissions, the dealer manager fee, distribution fees and non-transaction based compensation allocated to sales-related activities of employees of the Dealer Manager in connection with the offering) relating to any public offerings as and when incurred. After the termination of the primary portion of the offering and again after termination of the distribution reinvestment plan portion of the offering, the Advisor has agreed to reimburse us to the extent that total cumulative organization and offering expenses (including selling commissions, the dealer manager fee and distribution fees) that we incur exceed 15% of our gross proceeds from the applicable offering.

Subject to certain limitations, we will reimburse the Advisor for all of the costs it incurs in connection with the services it provides to us, including, without limitation, our allocable share of the Advisor’s overhead, which includes but is not limited to the Advisor’s rent, utilities and personnel costs; provided, that we will not reimburse the Advisor or its affiliates for services for which the Advisor or its affiliates are entitled to compensation in the form of a separate fee.

In connection with the Offering, effective July 12, 2012, we also entered into a dealer manager agreement with Dividend Capital Securities LLC (the “Dealer Manager”), which is an entity related to our Advisor. Pursuant to this agreement, we pay (i) selling commissions up to 3% of the NAV per Class A share sold in the primary portion of the offering, (ii) a dealer manager fee which accrues daily in an amount equal to 1/365^th of 0.6% of our NAV per share of Class A and Class W shares outstanding and an amount equal to 1/365^th of 0.1% of our NAV per share of Class I shares outstanding on such day on a continuous basis, and (iii) a distribution fee which accrues daily in an amount equal to 1/365^th of 0.5% of our NAV per share of Class A shares outstanding on such day on a continuous basis. We will cease paying the dealer manager fee and distribution fee with respect to shares sold in the Offering on the earlier to occur of the following: (i) a listing of the class of such shares on a national securities exchange, (ii) following the completion of the Offering, total underwriting compensation in this offering equaling 10% of the gross proceeds from the primary portion of the Offering, or (iii) such shares no longer being outstanding. A negligible amount of dealer manager and distribution fees were incurred during the three months ended March 31, 2013 as a result of the issuance of Class A, Class W and Class I shares in a private offering on September 28, 2012.

We intend to enter into an amendment to our dealer manager agreement to provide that we will pay to the Dealer Manager a primary dealer fee in the amount of up to 4.5% of the gross proceeds raised from the sale of Class I shares in the primary offering, provided that (i) the sales are all made before July 31, 2013 (unless extended by the Company, through written notice to the Dealer Manager) and (ii) the total gross proceeds raised with respect to which the primary dealer fee will apply may not exceed $300,000,000. The Dealer Manager will reallow all of the primary dealer fee to the participating broker-dealers involved in selling such Class I shares based on the portion of the gross proceeds raised from their customers, and the primary dealer fee paid by us will be no greater than the amount reallowed to the participating broker-dealers. The Dealer Manager will consider the primary dealer fee to be underwriting compensation.

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Dividend Capital Total Advisors Group LLC, the parent of the Advisor, had been previously issued, in exchange for $1,000 in consideration, partnership units in the Operating Partnership, constituting a separate series of partnership interests with special distribution rights (the “Special Units”). The Special Units constituted a form of incentive compensation that would have value if we met certain performance thresholds. In connection with the Offering, pursuant to a Special Unit Repurchase Agreement effective July 12, 2012, we redeemed and cancelled the 200 Special Units, and paid $1,000 to Dividend Capital Total Advisors Group LLC in connection with such redemption.

As of March 31, 2013 and December 31, 2012, we owed approximately $1.3 million and $1.3 million, respectively, to our Advisor and affiliates of our Advisor for such services and reimbursement of certain expenses. Pursuant to the amended Advisory Agreement, we accrue the advisory fee on a daily basis and pay our Advisor amounts due subsequent to each month-end.

The following table summarizes fees and other amounts earned by our Advisor and its related parties in connection with services performed for us during the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012
Asset management and advisory fees	$	3,684	$	4,912
Development management fee		55		—
Other reimbursements		1,037		513
Asset management fees related to the disposition of real properties		85		33
Total	$	4,861	$	5,458

9. NET INCOME (LOSS) PER COMMON SHARE

Reconciliations of the numerator and denominator used to calculate basic net loss per common share to the numerator and denominator used to calculate diluted net loss per common share for the three months ended March 31, 2013 and 2012 are described in the following table (amounts in thousands, except per share information):

	For the Three Months Ended March 31,
	2013			2012
Numerator
Loss from continuing operations	$	(5,922	)	$	(7,734	)
Loss from continuing operations attributable to noncontrolling interests		560			760
Loss from continuing operations attributable to common stockholders		(5,362	)		(6,974	)
Dilutive noncontrolling interests share of loss from continuing operations		(424	)		(585	)
Numerator for diluted earnings per share – adjusted loss from continuing operations	$	(5,786	)	$	(7,559	)
Income (loss) from discontinued operations	$	56		$	(1,605	)
Income (loss) from discontinued operations attributable to noncontrolling interests		(61	)		89
Income (loss) from discontinued operations attributable to common stockholders		(5	)		(1,516	)
Dilutive noncontrolling interests share of discontinued operations		—			(163	)
Numerator for diluted earnings per share – adjusted loss from discontinued operations	$	(5	)	$	(1,679	)
Denominator
Weighted average shares outstanding-basic		178,792			183,270
Incremental weighted average shares effect of conversion of OP units		14,135			16,149
Weighted average shares outstanding-diluted		192,927			199,419
LOSS PER COMMON SHARE-BASIC AND DILUTED
Net loss from continuing operations	$	(0.03	)	$	(0.04	)
Net loss from discontinued operations		(0.00	)		(0.01	)
Net loss	$	(0.03	)	$	(0.05	)

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10. SEGMENT INFORMATION

We have four reportable operating segments, which include our three real property operating sectors (office, industrial, and retail) and debt related investments. We organize and analyze the operations and results of each of these segments independently, due to inherently different considerations for each segment. Such considerations include, but are not limited to, the nature and characteristics of the investment, and investment strategies and objectives. The following table sets forth revenue and the components of net operating income (“NOI”) of our segments for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	Revenues				NOI
	2013		2012		2013		2012
Real property (1)
Office	$	43,932	$	39,754	$	32,007	$	30,970
Industrial		7,166		7,119		5,915		5,968
Retail		14,067		14,871		10,483		11,642
Debt related investments		2,735		1,884		2,735		1,884
Total	$	67,900	$	63,628	$	51,140	$	50,464

(1) Excludes results of operations of real properties categorized as discontinued operations.

We consider NOI to be an appropriate supplemental financial performance measure because NOI reflects the specific operating performance of our real properties and debt related investments, and excludes certain items that are not considered to be controllable in connection with the management of each property, such as interest income, depreciation and amortization, general and administrative expenses, asset management fees, interest expense and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our financial performance as a whole, since it does exclude such items that could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance.

The following table is a reconciliation of our NOI to our reported net income (loss) attributable to common shareholders for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Net operating income	$	51,140		$	50,464
Real estate depreciation and amortization expense		(29,659	)		(29,534	)
General and administrative expenses		(2,601	)		(1,883	)
Asset management and advisory fees, related party		(3,684	)		(4,912	)
Acquisition-related expenses		—			(299	)
Interest and other income		79			62
Interest expense		(20,927	)		(20,211	)
Loss on extinguishment of debt and financing commitments		(270	)		(1,421	)
Discontinued operations, net of taxes		56			(1,605	)
Net loss attributable to noncontrolling interests		499			849
Net loss attributable to common stockholders	$	(5,367	)	$	(8,490	)

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The following table reflects our total assets by business segment as of March 31, 2013 and December 31, 2012 (amounts in thousands):

	As of March 31, 2013		As of December 31, 2012
Segment assets:
Net investments in real property
Office	$	1,343,546	$	1,369,496
Industrial		263,828		351,375
Retail		612,116		615,897
Debt related investments, net		165,469		187,321
Total segment assets, net		2,384,959		2,524,089
Non-segment assets:
Cash and cash equivalents		36,793		36,872
Other non-segment assets (1)		176,792		98,293
Total assets	$	2,598,544	$	2,659,254

(1) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable. Other non-segment assets also include real properties classified as assets held for sale in the accompanying balance sheet as of March 31, 2013.

11. SUBSEQUENT EVENTS

We have evaluated subsequent events for the period from March 31, 2013, the date of these financial statements, through the date these financial statements are issued.

Disposition of Real Property

On May 10, 2013, we disposed of seven industrial properties comprising 1.9 million net rentable square feet located in the Atlanta, Central Pennsylvania, Charlotte, Chicago, Philadelphia, and Sacramento markets, to a joint venture partner that was the managing partner of the properties. We held the properties through a joint venture wherein we owned a 96.4% interest in the properties through a consolidated subsidiary. Our consolidated subsidiary disposed of the properties, which had an aggregate basis of approximately $84.0 million (after a $5.7 million impairment charge which we recorded during the fourth quarter of 2012), to the managing partner of the joint venture for a total sales price of $85.9 million.

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

Forward-Looking Statements

This Quarterly Report on Form 10-Q includes certain statements that may be deemed to be “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Such forward-looking statements relate to, without limitation, our future capital expenditures, distributions and acquisitions (including the amount and nature thereof), other development trends of the real estate industry, business strategies, and the growth of our operations. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act and Section 21E of the Exchange Act. Such statements are subject to a number of assumptions, risks and uncertainties that may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements are generally identifiable by the use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend,” “project,” “continue,” or the negative of these words, or other similar words or terms. Readers are cautioned not to place undue reliance on these forward-looking statements. Among the factors that may cause our results to vary are general economic and business (particularly real estate and capital market) conditions being less favorable than expected, the business opportunities that may be presented to and pursued by us, changes in laws or regulations (including changes to laws governing the taxation of REITs), risk of acquisitions, availability and creditworthiness of prospective tenants, availability of capital (debt and equity), interest rate fluctuations, competition, supply and demand for properties in our current and any proposed market areas, tenants’ ability to pay rent at current or increased levels, accounting principles, policies and guidelines applicable to REITs, environmental, regulatory and/or safety requirements, tenant bankruptcies and defaults, the availability and cost of comprehensive insurance, including coverage for terrorist acts, and other factors, many of which are beyond our control. For a further discussion of these factors and other risk factors that could lead to actual results materially different from those described in the forward-looking statements, see “Risk Factors” under Item 1A of Part 1 of our Annual Report on Form 10-K filed with the Commission on March 19, 2013, and available at www.sec.gov and Part II, Item 1A of this Quarterly Report on Form 10-Q.

We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

This section of our Quarterly Report on Form 10-Q provides an overview of what management believes to be the key elements for understanding (i) our company and how we manage our business, (ii) how we measure our performance and our operating results, (iii) our liquidity and capital resources, and (iv) the financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Overview

Dividend Capital Diversified Property Fund Inc. is a Maryland corporation formed on April 11, 2005 to invest in a diverse portfolio of real property and real estate related investments.

We believe we have operated in such a manner to qualify as a REIT for federal income tax purposes, and we utilize an UPREIT organizational structure to hold all or substantially all of our assets through our Operating Partnership. Furthermore, our Operating Partnership wholly owns a taxable REIT subsidiary, DCTRT Leasing Corp. (the “TRS”), through which we execute certain business transactions that might otherwise have an adverse impact on our status as a REIT if such business transactions were to occur directly or indirectly through our Operating Partnership. We are an externally managed REIT and have no employees. Our day-to-day activities are managed by our Advisor, a related party, under the terms and conditions of the Advisory Agreement.

The primary source of our revenue and earnings include rent received under long-term operating leases of our properties, including reimbursements from customers for certain operating costs, and interest payments received from our debt related investments. Our primary expenses include rental expenses, depreciation and amortization expenses, general and administrative expenses, asset management and advisory fees, and interest expenses.

On July 12, 2012, the Securities and Exchange Commission (the “Commission”) declared effective our Registration Statement on Form S-11 (Registration Number 333-175989) (as amended, the “Registration Statement”). The Registration Statement applies to the offer and sale (the “Offering”) of up to $3,000,000,000 of our shares of common stock, of which $2,250,000,000 of shares are expected to be offered to the public in a primary offering and $750,000,000 of shares are expected to be offered to our stockholders pursuant to an amended and restated distribution reinvestment plan (subject to our right to reallocate such amounts). In the Offering, we are offering to the public three classes of shares: Class A shares, Class W shares and Class I shares with net asset value (“NAV”) based pricing. See Part I, Item 2 of this Quarterly Report on Form 10-Q for a description of our valuation procedures and valuation components, including important disclosure regarding real property valuations provided by Altus Group U.S., Inc., an independent

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valuation firm. Our independent registered public accounting firm does not audit our NAV. Selling commissions, dealer manager fees, and distribution fees are allocated to Class A shares, Class W shares, and Class I shares on a class-specific basis and differ for each class, even when the NAV of each class is the same. We are offering to sell any combination of Class A shares, Class W shares and Class I shares with a dollar value up to the maximum offering amount. We also sell shares of our unclassified common stock, which we refer to as “Class E” shares, pursuant to our distribution reinvestment plan offering registered on our Registration Statement on Form S-3 (Registration Number 333-162636). In the event of a liquidation event, such assets, or the proceeds therefrom, will be distributed ratably in proportion to the respective NAV for each class until the NAV for each class has been paid. Other than differing allocable fees and expenses and liquidation rights, Class E shares, Class A shares, Class W shares, and Class I shares have identical rights and privileges.

As of March 31, 2013, we had total investments with an estimated fair value of approximately $2.9 billion (calculated in accordance with our valuation policies), comprised of:

(1) 93 operating properties located in 31 geographic markets in the United States, aggregating approximately 19.0 million net rentable square feet. As of March 31, 2013, our real property portfolio was approximately 93.8% leased (approximately 96.2% leased, excluding Comerica Bank Tower). Our real property portfolio consists of:

• 34 office properties located in 16 geographic markets, aggregating approximately 7.8 million net rentable square feet, with an aggregate fair value amount of approximately $1.7 billion;

• 31 retail properties located in seven geographic markets, aggregating approximately 3.1 million net rentable square feet, with an aggregate fair value amount of approximately $706.5 million; and

• 28 industrial properties located in 16 geographic markets, aggregating approximately 8.1 million net rentable square feet, with an aggregate fair value amount of approximately $383.9 million.

(2) Approximately $165.5 million in net debt related investments, including (i) investments in mortgage notes of approximately $158.0 million and (ii) investments in mezzanine loans of $7.4 million.

Consistent with our investment strategy, we currently have four business segments: (i) investments in office real property, (ii) investments in industrial real property, (iii) investments in retail real property, and (iv) debt related investments. We may have additional segments in the future to the extent we enter into additional real property sectors, such as multifamily, hospitality, and other real property types. For a discussion of our business segments and the associated revenue and net operating income by segment, see Note 10 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Any future and near-term obligations are expected to be funded primarily through the use of cash on hand, cash generated from operations, proceeds from our Public Offerings, proceeds from the sale of existing investments, and the issuance and assumption of debt obligations.

• Cash on hand — As of March 31, 2013, we had approximately $36.8 million of cash and cash equivalents.

• Cash available under our line of credit — As of March 31, 2013, we had $125.0 million available for us to borrow under our revolving credit facility.

• Cash generated from operations — During the three months ended March 31, 2013, we generated approximately $17.5 million from operations of our real properties and income from debt related investments.

• Proceeds from offerings of equity securities — On July 12, 2012, we commenced the Offering, which consists of the offer and sale of up to $3,000,000,000 of our shares of common stock, of which $2,250,000,000 of shares are expected to be offered to the public in a primary offering and $750,000,000 of shares are expected to be offered to our stockholders pursuant to an amended and restated distribution reinvestment plan (subject to our right to reallocate such amounts). In the Offering, we are offering to the public three new classes of shares: Class A shares, Class W shares and Class I shares. We cannot provide assurance that this offering will be successful. Additionally, during the three months ended March 31, 2013, we received approximately $5.5 million in proceeds from the Class E DRIP Offering.

• Proceeds from sales and repayments of existing investments — During the three months ended March 31, 2013, we sold one operating property for approximately $8.5 million. In addition, during that period two of our debt related investments with aggregate principal balances of $25.0 million were repaid to us in full.

We believe that our existing cash balance, the borrowing capacity available to us under the revolving credit facility component of the Facility, cash generated from operations, proceeds from our Public Offerings and our ability to sell investments remains adequate to meet our expected capital obligations for the next twelve months. Maintaining a strong balance sheet remains critical in the current market to position us well to preserve the value of our portfolio and to take advantage of investment opportunities.

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Net Asset Value Calculation

Our board of directors, including a majority of our independent directors, has adopted valuation procedures that contain a comprehensive set of methodologies to be used in connection with the calculation of our NAV on a daily basis. The Independent Valuation Firm manages the fundamental element of the valuation process—the valuation of our real property portfolio. Our board of directors, including a majority of our independent directors, approved the Independent Valuation Firm.

The following table sets forth the components of NAV for the Company as of March 31, 2013 and December 31, 2012 (amounts in thousands except per share information). As used below, “Fund Interests” means our Class E shares, Class A shares, Class W shares, and Class I shares, along with the Class E OP Units held by third parties, and “Aggregate Fund NAV” means the NAV of all of the Fund Interests.

	NAV Figures as of			NAV Figures as of
	March 31, 2013 (1)			December 31, 2012 (1)
Real properties	$	2,741,707		$	2,734,825
Debt related investments		165,469			187,321
Cash and other assets, net of other liabilities		14,636			6,447
Debt obligations		(1,604,181	)		(1,620,482	)
Outside investor’s interests		(18,657	)		(18,740	)
Aggregate Fund NAV	$	1,298,974		$	1,289,371
Total Fund Interests outstanding		191,260			192,303
NAV per Fund Interest	$	6.79		$	6.70

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

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

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

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

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The Independent Valuation Firm provided the March 31, 2013 valuation for our real properties in accordance with our valuation procedures and using appraised values. The valuation of $2.74 billion compares to a GAAP basis of real properties (before accumulated amortization and depreciation) of $2.69 billion, representing an increase of approximately $49.2 million or 2.0%. Certain key assumptions that were used by our Independent Valuation Firm in the discounted cash flow analysis are set forth in the following table based on weighted averages by property type:

	Retail			Office			Industrial			Weighted Average Basis
Exit capitalization rate		6.80	%		7.19	%		7.34	%		7.11	%
Discount rate / internal rate of return (“IRR”)		7.27	%		7.86	%		8.09	%		7.74	%
Annual market rent growth rate		2.98	%		3.39	%		2.99	%		3.23	%
Average holding period		10.3			10.2			10.6			10.3

A change in the rates used would impact the calculation of the value of our real properties. For example, assuming all other factors remain constant, an increase in the weighted-average annual discount rate/IRR and the exit capitalization rate of 0.25% would reduce the value of our real properties by approximately 1.95% and 2.06%, respectively.

The following table sets forth the quarterly changes to the components of NAV for the company and the reconciliation of NAV changes for each class of shares (amounts in thousands, except per share information):

	Total			Class E Common Stock			Class E OP Units			Class A Common Stock			Class W Common Stock			Class I Common Stock
NAV as of December 31, 2012	$	1,289,371		$	1,194,081		$	95,041		$	83		$	83		$	83
Fund level changes to NAV
Realized/unrealized gains (losses) on net assets		14,356			13,302			1,050			1			1			2
Income accrual		22,963			21,276			1,683			1			1			2
Net dividend accrual		(16,882	)		(15,641	)		(1,237	)		(1	)		(1	)		(2	)
Asset Management and advisory fee		(3,682	)		(3,412	)		(270	)		*			*			*
Performance based fee		(1	)		(1	)		*			*			*			*
Class specific changes to NAV
Dealer Manager fee		—			—			—			*			*			*
Distribution fee		—			—			—			*			—			—
NAV as of March 31, 2013 before share sale/redemption activity	$	1,306,125		$	1,209,605		$	96,267		$	84		$	84		$	85
Share sale/redemption activity
Shares sold		6,300			5,505			—			—			—			795
Shares redeemed		(13,452	)		(11,691	)		(1,761	)		—			—			—
NAV as of March 31, 2013	$	1,298,973		$	1,203,419		$	94,506		$	84		$	84		$	880
Shares outstanding as of December 31, 2012		192,303			178,091			14,176			12			12			12
Shares sold		938			821			—			—			—			117
Shares redeemed		(1,980	)		(1,721	)		(259	)		—			—			—
Shares outstanding as of March 31, 2013		191,261			177,191			13,917			12			12			129
NAV per share share as of December 31, 2012				$	6.70		$	6.70		$	6.70		$	6.70		$	6.70
Change in NAV per share					0.09			0.09			0.09			0.09			0.09
NAV per share as of March 31, 2013				$	6.79		$	6.79		$	6.79		$	6.79		$	6.79

* Immaterial amounts less than $500 are included in this figure.

How We Measure Our Performance

Funds From Operations

FFO Definition (“FFO”)

We believe that FFO, as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), is a meaningful supplemental measure of our operating performance because historical cost accounting for real estate assets in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) implicitly assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization expense. However, since real estate values have historically risen or fallen with market and other conditions, many industry investors and analysts have considered presentation of operating results for

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real estate companies that use historical cost accounting to be insufficient. Thus, NAREIT created FFO as a supplemental measure of operating performance for real estate investment trusts that consists of net income (loss), calculated in accordance with GAAP, plus real estate-related depreciation and amortization and impairment of depreciable real estate, less gains (or losses) from dispositions of real estate held for investment purposes.

The following unaudited table presents a reconciliation of FFO to net income (loss) for the three months ended March 31, 2013 and 2012 (amounts in thousands, except per share information):

	For the Three Months Ended
	March 31,
	2013			2012
Reconciliation of net earnings to FFO:
Net income (loss) attributable to common stockholders	$	(5,367	)	$	(8,490	)
Add (deduct) NAREIT-defined adjustments:
Depreciation and amortization expense(1)		30,523			31,003
(Gain) loss on disposition of real property(1)		(1,213	)		328
Noncontrolling interests’ share of net loss		(499	)		(849	)
Noncontrolling interests’ share of FFO		(2,001	)		(2,123	)
FFO attributable to common shares-basic		21,443			19,869
FFO attributable to dilutive OP units		1,695			1,751
FFO attributable to common shares-diluted	$	23,138		$	21,620
FFO per share-basic and diluted	$	0.12		$	0.11
Weighted average number of shares outstanding
Basic		178,792			183,270
Diluted		192,927			199,419

(1) Includes amounts attributable to discontinued operations.

Company-Defined FFO

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

Our Company-Defined FFO is derived by adjusting FFO for the following items: acquisition-related expenses and gains and losses associated with extinguishment of debt and financing commitments. Historically, Management has also adjusted FFO for certain other adjustments that did not occur in any of the periods presented, and are further described in Item 7 of Part 1 of our Annual Report on Form 10-K, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—How We Measure Our Performance.” Management’s evaluation of our future operating performance excludes these items based on the following economic considerations:

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

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Gains and losses on extinguishment of debt and financing commitments — Losses on extinguishment of debt and financing commitments represent losses incurred as a result of the early retirement of debt obligations and breakage costs and fees incurred related to rate lock agreements with prospective lenders. Such losses may be due to dispositions of assets, the repayment of debt prior to its contractual maturity or the nonoccurrence of forecasted financings. Our management believes that any such losses are not related to our ongoing operations. Accordingly, we believe by excluding losses on extinguishment of debt and financing commitments, Company-Defined FFO provides useful supplemental information for management and investors when evaluating the sustainability of our operating performance.

Gains and losses on derivatives — Gains and losses on derivatives represent the gains or losses on the fair value of derivative instruments that are not accounted for as hedges of the underlying financing transactions. Such gains and losses may be due to the nonoccurrence of forecasted financings or ineffectiveness due to changes in the expected terms of financing transactions. As these gains or losses relate to underlying long-term assets and liabilities, where we are not speculating or trading assets, our management believes that any such gains or losses are not reflective of our ongoing operations. Accordingly, we believe by excluding anticipated gains or losses on derivatives, Company-Defined FFO provides useful supplemental information for management and investors when evaluating the sustainability of our operating performance.

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

The following unaudited table presents a reconciliation of Company-Defined FFO to FFO for the three months ended March 31, 2013 and 2012 (amounts in thousands, except per share information):

	For the Three Months Ended
	March 31,
	2013			2012
Reconciliation of FFO to Company-Defined FFO:
FFO attributable to common shares -basic	$	21,443		$	19,869
Add (deduct) our adjustments:
Acquisition-related expenses		—			299
Loss on financing commitments and derivatives (1)		270			1,458
Noncontrolling interests’ share of NAREIT-defined FFO		2,001			2,123
Noncontrolling interests’ share of Company-Defined FFO		(2,020	)		(2,266	)
Company-Defined FFO attributable to common shares -basic		21,694			21,483
Company-Defined FFO attributable to dilutive OP units		1,715			1,893
Company-Defined FFO attributable to common shares -diluted	$	23,409		$	23,376
Company-Defined FFO per share-basic and diluted	$	0.12		$	0.12
Weighted average number of shares outstanding
Basic		178,792			183,270
Diluted		192,927			199,419

(1) Includes amounts attributable to discontinued operations.

Limitations of FFO and Company-Defined FFO

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

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previously discussed, but we continuously evaluate our investment portfolio and the usefulness of our Company-Defined FFO measure in relation thereto. We believe that net income (loss) computed under GAAP remains the primary measure of performance and that FFO or Company-Defined FFO are only meaningful when they are used in conjunction with net income (loss) computed under GAAP. Further, we believe that our consolidated financial statements, prepared in accordance with GAAP, provide the most meaningful picture of our financial condition and operating performance.

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

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

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

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

Net Operating Income (“NOI”)

We also use NOI as a supplemental financial performance measure because NOI reflects the specific operating performance of our real properties and debt related investments and excludes certain items that are not considered to be controllable in connection with the management of each property, such as other-than-temporary impairment, losses related to provisions for losses on debt related investments, gains or losses on derivatives, acquisition-related expenses, losses on extinguishment of debt and financing commitments, interest income, depreciation and amortization, general and administrative expenses, asset management fees, interest expense and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our financial performance as a whole, since it does exclude such items that could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance. We present NOI in the tables below, and include a reconciliation to GAAP in Note 10 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

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Our Operating Results

Three Months Ended March 31, 2013 Compared to the Three Months Ended March 31, 2012

The following unaudited table illustrates the changes in rental revenue, rental expenses and net operating income for the three months ended March 31, 2013 compared to the three months ended March 31, 2012. Our same store portfolio includes all operating properties that we owned for the entirety of both the current and prior year reporting periods, and includes seven industrial properties classified as held for sale as of March 31, 2013. The same store portfolio includes 91 properties acquired prior to January 1, 2012 and owned through March 31, 2013, comprising approximately 17.4 million square feet, including properties classified as held-for-sale. The results of operations from real properties held for sale include rental revenues of approximately $1.5 million and $1.4 million and rental expenses of approximately $519,000 and $534,000, for the three months ended March 31, 2013 and 2012, respectively. A discussion of these changes follows the table (dollar amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012		$ Change			% Change
Revenue
Base rental revenue-same store (1)	$	48,682	$	50,595	$	(1,913	)		-4	%
Other rental revenue-same store		11,223		10,673		550			5	%
Total rental revenue-same store		59,905		61,268		(1,363	)		-2	%
Rental revenue-2012/2013 acquisitions and dispositions		6,768		3,200		3,568			112	%
Total rental revenue		66,673		64,468		2,205			3	%
Debt related income		2,735		1,884		851			45	%
Total revenue	$	69,408	$	66,352	$	3,056			5	%
Rental Expenses
Same store	$	13,623	$	12,700	$	923			7	%
2012/2013 acquisitions and dispositions		3,704		1,391		2,313			166	%
Total rental expenses	$	17,327	$	14,091	$	3,236			23	%
Net Operating Income (2)
Real property-same store	$	46,282	$	48,568	$	(2,286	)		-5	%
Real property-2012/2013 acquisitions and dispositions		3,064		1,809		1,255			69	%
Debt related income		2,735		1,884		851			45	%
Total net operating income	$	52,081	$	52,261	$	(180	)		0	%

(1) Base rental revenue represents contractual base rental revenue earned by us from our tenants and does not include the impact of certain GAAP adjustments to rental revenue, such as straight-line rent adjustments, amortization of above-market intangible lease assets or the amortization of below-market lease intangible liabilities. Such GAAP adjustments and other rental revenue such as expense recovery revenue are included in the line item, referred to as “other rental revenue.”

(2) For a discussion as to why we view net operating income to be an appropriate supplemental performance measure, refer to “—How We Measure Our Performance—Net Operating Income” above. See also Note 10 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Rental Revenue

Total rental revenue increased for the three months ended March 31, 2013, compared to the same period in 2012, primarily due to additional revenue from the property we acquired subsequent to December 31, 2011, partially offset by declining revenue in our same store portfolio. Our operating portfolio was approximately 93.8% leased as of March 31, 2013, compared to approximately 90.2% as of March 31, 2012.

Same store base rental revenue decreased approximately $1.9 million for the three months ended March 31, 2013, compared to the same period in 2012. The decrease comprises (i) a $1.9 million decrease in our same store office portfolio, resulting primarily from rent concessions granted to tenants as part of leasing activity, (ii) a $38,000 decrease in our same store industrial portfolio, and (iii) a $22,000 increase in our same store retail portfolio. At the total same store portfolio level, the decrease is due to a 30 basis point year-over-year decrease in our average leased square feet (from 93.7% to 93.4%), and a $0.44 year-over-year decrease in our average base rent per leased square foot (from $12.34 to $11.90).

Same store other rental revenue increased for the three months ended March 31, 2013 compared to the same period in 2012. This decrease was primarily attributable to an increase in our straight line rent adjustments across the same store portfolio resulting from large leases with initial periods of free rent incurred during the three months ended March 31, 2013.

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Debt Related Income

Debt related income increased for the three months ended March 31, 2013, compared to the same period in 2012. The increase is primarily attributable to the investments in debt-related investments of approximately $123.8 million subsequent to December 31, 2011, partially offset by the repayment of approximately $47.3 million in debt related investments subsequent to December 31, 2011.

Rental Expenses

Total rental expenses increased for the three months ended March 31, 2013, compared to the same period in 2012, primarily due to the property we acquired in 2012.

Same store rental expenses increased for the three months ended March 31, 2013, compared to the same period in 2012. More severe winter weather in geographic markets in which we have higher concentrations of real properties (New England and New Jersey) resulted in significant increases in snow removal and utilities expense.

Other Operating Expenses

General and administrative expenses: The revised fee structure pursuant to the amended Advisory Agreement in connection with the effectiveness of the NAV Offering on July 12, 2012 caused us to directly incur payroll and overhead costs associated with our acquisition activities since we no longer pay our Advisor an acquisition fee. In addition, we record fees and costs associated with estimating our daily NAV per share (appraisal, fund accounting and valuation specialist fees, etc.) to general and administrative expense. We started to incur such fees in July 2012 when we began publishing a daily NAV per share.

Asset management and advisory fees: The revised fee structure pursuant to the amended Advisory Agreement in connection with the effectiveness of the NAV Offering on July 12, 2012 significantly reduced the amount of advisory and asset management fees we pay our Advisor.

Other Income (Expenses)

Interest Expense: Interest expense increased for the three months ended March 31, 2013, compared to the same period in 2012. The $450 million senior unsecured term loan and revolving line of credit facility we entered into in December 2012 significantly changed the composition of our borrowings as we repaid senior secured mortgage notes and other secured borrowings using proceeds from this facility. Overall, interest expense increased slightly due to the mortgage note that we assumed when we acquired Comerica Bank Tower in March 2012. However, the lower cost of borrowing associated with the credit facility and other repayments of borrowings related to disposition activity offset the majority of the increase that resulted from our assumption of Comerica Bank Tower’s mortgage note. Furthermore, we incurred additional interest expense under our repurchase facility which we used to partially finance our acquisition/origination of our debt investments in 2012. The following table further describes our interest expense by debt obligation, and includes amortization of deferred financing costs, amortization related to our derivatives, and amortization of discounts and premiums (amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012
Debt Obligation
Mortgage notes (1)	$	18,682	$	20,317
Other secured borrowings		1,223		979
Unsecured borrowings		1,951		192
Financing obligations		295		299
Total interest expense	$	22,151	$	21,787

(1) Includes interest expense attributable to discontinued operations of $1.2 million and $1.6 million for the three months ended March 31, 2013 and 2012, respectively.

Loss on financing commitments: Loss on financing commitments was approximately $270,000 and $1.4 million for the three months ended March 31, 2013 and 2012, respectively. The losses in both periods resulted primarily from the accelerated recognition of deferred loan costs related to mortgage note repayments of approximately $14.5 million and $61.4 million during the three months ended March 31, 2013 and 2012, respectively, both of which were repaid prior to contractual maturity.

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Liquidity and Capital Resources

Liquidity Outlook

We believe our existing cash balance, our available credit under our line of credit, cash from operations, additional proceeds from our Public Offerings, proceeds from the sale of existing investments, and prospective debt or equity issuances will be sufficient to meet our liquidity and capital needs for the foreseeable future, including the next 12 months. Our capital requirements over the next 12 months are anticipated to include, but are not limited to, operating expenses, distribution payments, debt service payments, including debt maturities of approximately $71.1 million, of which $62.2 million are subject to certain extension options, share redemption payments, acquisitions of real property and debt related investments.

In order to maintain a reasonable level of liquidity for redemptions of Class A, Class W and Class I shares pursuant to our Class A, W and I Share Redemption Program, we intend to generally maintain under normal circumstances the following aggregate allocation to liquid assets: (1) 10% of the aggregate NAV of our outstanding Class A, Class W and Class I shares up to $1 billion of collective Class A, Class W and Class I share NAV, and (2) 5% of the aggregate NAV of our outstanding Class A, Class W and Class I shares in excess of $1 billion of collective Class A, Class W and Class I share NAV. However, our board of directors has the right to modify, suspend or terminate our share redemption program if it deems such action to be in the best interest of our stockholders. As of March 31, 2013, the aggregate NAV of our outstanding Class A, Class W and Class I shares was approximately $1.0 million.

As of March 31, 2013, we had approximately $36.8 million of cash compared to $36.9 million as of December 31, 2012. The following discussion summarizes the sources and uses of our cash during the three months ended March 31, 2013.

Operating Activities

Net cash provided by operating activities was approximately $17.5 million for the three months ended March 31, 2013, compared to $19.3 million for the same period in 2012. The decrease was primarily comprised of (i) changes related to our operating assets and liabilities due to the timing of payments made and received, and (ii) an increase in our general and administrative expenses, partially offset by (iii) an increase in our debt related investment income.

Lease Expirations

Our primary source of funding for our property-level operating expenses and debt service payments is rent collected pursuant to our tenant leases. Our properties are generally leased to tenants for terms ranging from three to ten years. As of March 31, 2013, the weighted average remaining term of our leases was approximately 7.8 years, based on contractual remaining base rent, and 4.8 years, based on square footage. As of March 31, 2013, our operating portfolio was approximately 93.8% leased (approximately 96.2% leased, excluding Comerica Bank Tower). The following is a schedule of expiring leases for our consolidated operating properties by annualized base rent and square footage as of March 31, 2013 and assuming no exercise of lease renewal options (dollar amounts and square footage in thousands):

	Lease Expirations
Year	Number of Leases Expiring		Annualized Base Rent (1)		%			Square Feet		%
2013(2)		91	$	8,389		3.7	%		1,003		5.6	%
2014		102		18,147		8.1	%		2,315		13.0	%
2015		92		18,544		8.3	%		2,230		12.5	%
2016		67		28,315		12.7	%		1,954		11.0	%
2017(3)		56		55,800		25.0	%		3,303		18.5	%
2018		49		11,880		5.3	%		2,373		13.3	%
2019		38		18,008		8.1	%		874		4.9	%
2020		32		9,164		4.1	%		515		2.9	%
2021		12		11,360		5.1	%		716		4.0	%
2022		15		7,008		3.1	%		482		2.7	%
Thereafter		49		36,824		16.6	%		2,074		11.7	%
Total		603	$	223,439		100.0	%		17,839		100.0	%

(1) Annualized base rent represents the annualized monthly base rent of leases executed as of March 31, 2013.

(2) Represents the number of leases expiring and annualized base rent for the remainder of 2013. Includes leases that are on a month-to-month basis at annualized amounts.

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(3) Includes approximately $22.5 million annualized base rent and 594,000 square feet attributable to a lease with Charles Schwab & Co., Inc. (“Charles Schwab”) at one of our office properties located in New Jersey which expires in September 2017. Charles Schwab has subleased all of this area to various other sub-tenants. Approximately $7 million and 201,000 square feet are subject to lease agreements which expire subsequent to December 31, 2017. The leases with subtenants will become our direct tenants upon expiration of our lease with Charles Schwab.

Investing Activities

Net cash provided by investing activities was approximately $15.0 million for the three months ended March 31, 2013, compared to approximately $3.5 million provided by investing activities for the same period in 2012. The difference is primarily due to the payoff of two debt related investments and the disposition of one operating property during the three months ended March 31, 2013, partially offset by an increase in capital expenditures and additional investment in debt related investments during the three months ended March 31, 2013. During the three months ended March 31, 2013 and 2012, we incurred approximately $5.6 million and $2.7 million in capital expenditures related to our real property portfolio, respectively. The increase in capital expenditures resulted primarily from the execution of large leases that required us to incur leasing costs, largely comprising commissions and fees paid to third-party leasing brokers and costs associated with the construction of tenant improvements.

Financing Activities

Net cash used in financing activities during the three months ended March 31, 2013 was approximately $32.5 million and primarily comprised (i) the repayment of mortgage note and other secured borrowings, including the repayment of mortgage borrowings of $14.5 million prior to its contractual maturity, (ii) redemptions of common shares and noncontrolling interests, and (iii) distributions to common stockholders and noncontrolling interests, partially offset by borrowings on our line of credit. Net cash used in financing activities during the same period in 2012 was approximately $93.7 million, primarily comprising (i) the repayment of mortgage notes, (ii) the redemption of common shares and noncontrolling interests, (iii) distributions to common stockholders and noncontrolling interest holders, and (iv) scheduled repayment of our mortgage notes.

We have offered and will continue to offer Class E shares of common stock through the Class E DRIP Offering. The amount raised under the Class E DRIP Offering decreased by approximately $3.5 million to approximately $5.5 million for the three months ended March 31, 2013, from approximately $9.0 million for the same period in 2012. On July 12, 2012, we commenced the Offering. As of March 31, 2013, we had not raised any proceeds in the Offering, and we cannot provide assurance that this offering will be successful. In April 2013, we raised approximately $1 million in the Offering from the sale of Class I shares to certain of our officers and directors and affiliates of our Advisor. In addition, we raised a negligible amount of proceeds from the sale of Class A, Class W, and Class I shares of common stock in connection with a private placement transaction during the year ended December 31, 2012.

Debt Maturities

One of our repurchase facilities with an aggregate outstanding principal balance as of March 31, 2013 of approximately $62.2 million has an initial maturity before January 1, 2014. The repurchase facility has extension options beyond December 31, 2013. These extension options are subject to certain lender covenants and restrictions that we must meet to extend the respective maturity dates. We currently believe that we will qualify for and expect to exercise our extension options. However, we cannot guarantee that we will meet the requirements to extend the notes or repurchase agreement upon initial maturity. In the event that we do not qualify to extend the notes or repurchase facility, we expect to repay them with proceeds from new borrowings.

For additional information on our upcoming debt maturities, see Note 5 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

Distributions

To obtain the favorable tax treatment accorded to REITs, we normally will be required each year to distribute to our stockholders at least 90% of our real estate investment trust taxable income, determined without regard to the deduction for distributions paid and by excluding net capital gains. The payment of distributions is determined by our board of directors and may be adjusted at its discretion at any time. Distribution levels are set by our board of directors at a level it believes to be appropriate and sustainable based upon a review of a variety of factors including, but not limited to, REIT requirements, the evaluation of existing assets within our portfolio, anticipated acquisitions, projected levels of additional capital to be raised, debt to be incurred in the future and the anticipated results of operations.

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The following table sets forth relationships between the amounts of distributions declared for such period and the amount reported as cash flow from operations in accordance with GAAP for the three months ended March 31, 2013 and 2012 (dollar amounts in thousands):

	For the Three Months Ended
	March 31, 2013		% of Total Distributions			March 13, 2012		% of Total Distributions
Distributions:
Common stock distributions paid in cash	$	10,252		59.9	%	$	14,064		55.6	%
Other cash distributions (1)		1,476		8.6	%		2,404		9.5	%
Total cash distributions	$	11,728		68.5	%	$	16,468		65.1	%
Common stock distributions reinvested in common shares		5,389		31.5	%		8,845		34.9	%
Total distributions	$	17,117		100.0	%	$	25,313		100.0	%
Sources of Distributions:
Cash flow from operations	$	17,117		100.0	%	$	19,303		76.3	%
Borrowings(2)	$	—		0.0	%	$	6,010		23.7	%

(1) Other cash distributions include distributions declared for OP Units for the respective period, and all distributions made during the period to our joint venture partners that are noncontrolling interest holders.

(2) For purposes of this table, we presented the amounts funded from borrowings by subtracting the amount reported for cash flow from operations in accordance with GAAP from the total amount of distributions declared for such period. Our long-term strategy is to fund the payment of quarterly distributions to investors entirely from our operations. There can be no assurance that we will achieve this strategy.

Redemptions

The following table sets forth relationships between the amount of redemption requests received by us pursuant to our Class E Share Redemption Program, the resulting pro-rata redemption caps, and actual amounts of Class E shares redeemed under the redemption program for each of the last four quarterly periods (share amounts in thousands):

Period	Total Number of Share Redemption Requests Received		Total Number of Shares Redeemed		Percentage of Redemption Requests Redeemed			Pro Rata Percentage of Redemption Requests Redeemed			Average Price Paid per Share
Q1 2013		14,978		1,721		11.5	%		8.7	%	$	6.79
Q4 2012		14,770		1,693		11.5	%		7.8	%		6.70
Q3 2012		16,745		4,223		25.2	%		20.4	%		6.64
Q2 2012		12,886		827		6.4	%		1.0	%		8.45
Total		59,379		8,464		14.3	%		10.1	%	$	6.86

We have not yet redeemed any Class A, Class W or Class I shares pursuant to the Class A, W and I Share Redemption Program. See “Part II, Item 2. Unregistered Sales of Equity Securities and Use of Proceeds” of this Quarterly Report on Form 10-Q for more information regarding redemptions of shares during the three months ended March 31, 2013.

Subsequent Events

For information regarding subsequent events, see Note 11 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

New Accounting Pronouncements and Significant Accounting Policies

For information regarding new accounting pronouncements and significant accounting policies, see Note 2 to our financial statements included in “Item 1. Financial Statements” of this Quarterly Report on Form 10-Q.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the adverse effect on the value of assets and liabilities that results from a change in the applicable market resulting from a variety of factors such as perceived risk, interest rate changes, inflation and overall general economic changes. Accordingly, we manage our market risk by matching projected cash inflows from operating, investing and financing activities with projected cash outflows for debt service, acquisitions, capital expenditures, distributions to stockholders and unit holders, and other cash requirements. Our debt related investments are our financial instruments that are most significantly and directly impacted by changes in their respective market conditions. In addition, our outstanding borrowings are also directly impacted by changes in market conditions. This impact is largely mitigated by the fact that the majority of our outstanding borrowings have fixed interest rates, which minimize our exposure to the risk that fluctuating interest rates may pose to our operating results and liquidity.

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As of March 31, 2013, the outstanding principal balance of variable rate debt investments indexed to LIBOR rates was $68.5 million. If the LIBOR rates relevant to our variable rate debt investments were to decrease 10%, we estimate that our quarterly interest income would decrease by approximately $3,000 based on the LIBOR rates and our outstanding floating-rate debt investments as of March 31, 2013.

As of March 31, 2013, the fair value of our fixed rate debt was $1,214.3 million and the carrying value of our fixed rate debt was $1,156.7 million. The fair value estimate of our fixed rate debt was estimated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated as of March 31, 2013. As we expect to hold our fixed rate instruments to maturity and the amounts due under such instruments would be limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that fluctuations in interest rates, and the resulting change in fair value of our fixed rate instruments, would have a significant impact on our operations.

As of March 31, 2013, we had approximately $446.2 million of variable rate borrowings outstanding indexed to LIBOR rates. If the LIBOR rates relevant to our remaining variable rate borrowings were to increase 10%, we estimate that our quarterly interest expense would increase by approximately $23,000 based on our outstanding floating-rate debt as of March 31, 2013.

We may seek to limit the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs by selectively utilizing derivative instruments to hedge exposures to changes in interest rates on loans secured by our assets. We maintain risk management control systems to monitor interest rate cash flow risk attributable to both our outstanding and forecasted debt obligations as well as our potential offsetting hedge positions. While this hedging strategy is designed to minimize the impact on our net income (loss) and funds from operations from changes in interest rates, the overall returns on our investments may be reduced. Our board of directors has established policies and procedures regarding our use of derivative instruments for hedging or other purposes.

In addition to the above described risks, we are subject to additional credit risk. Credit risk refers to the ability of each individual borrower under our debt related investments to make required interest and principal payments on the scheduled due dates. We seek to reduce credit risk by actively monitoring our debt related investments and the underlying credit quality of our holdings. In the event of a significant rising interest rate environment and/or economic downturn, loan and collateral defaults may continue to increase and result in further credit losses that would continue to, or more severely, adversely affect our liquidity and operating results.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of the end of the period covered by this report, management, including our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based upon, the evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures were effective as of the end of the period covered by this report to ensure that information required to be disclosed in the reports we file and submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported as and when required. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file and submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

Please also see the risk factors discussed in Item 1A of Part I of our Annual Report on Form 10-K filed with the Commission on March 19, 2013.

A conflict of interest may arise between our Class E investors and our Class A, Class W and Class I investors.

We do not intend to pursue a “Liquidity Event” with respect to our Class A, Class W and Class I shares within any period of time. A “Liquidity Event” includes, but is not limited to, (a) a listing of our common stock on a national securities exchange (or the receipt by our stockholders of securities that are listed on a national securities exchange in exchange for our common stock); (b) our sale, merger or other transaction in which our stockholders either receive, or have the option to receive, cash, securities redeemable for cash and/or securities of a publicly traded company; or (c) the sale of all or substantially all of our assets where our stockholders either receive, or have the option to receive, cash or other consideration. Although we will not be precluded from pursuing a Liquidity Event (or series thereof) if our board of directors determines that is in the best interest of our stockholders, we intend to operate as a perpetual-life REIT with respect to Class A, Class W and Class I stockholders. With respect to our Class E stockholders, our goal is to raise sufficient proceeds in this offering so as to be able to accommodate those holders of Class E shares who would like us to redeem their shares through our Class E share redemption program or through one or more tender offers. However, if we are not successful over time in generating liquidity to holders of our Class E shares through the Class E share redemption program or through one or more tender offers, we may explore additional liquidity strategies for our existing stockholders. Such liquidity strategies could, in addition to more traditional options, include launching a self tender offer for Class E shares, seeking a third party interested in making such a tender offer, or entering into a merger agreement in which the holders of our Class E shares receive cash or other consideration in exchange for their Class E shares. There can be no assurances that we will be successful in achieving liquidity strategies for our Class E stockholders within any certain time frame or at all. In any event, our board of directors will seek to act in the best interest of the Company as a whole, taking into consideration all classes of stockholders.

Our different intentions with respect to liquidity strategies for our Class A, Class W and Class I stockholders and our Class E stockholders may, in certain situations, lead to conflicts of interests between the groups of stockholders. In such situations, this may not result in the best course of action for any particular stockholder.

If you purchase shares prior to, or in, a transaction or series of transactions that entitle our dealer manager to a “primary dealer fee,” you will experience dilution in the NAV of your shares as a result of the payment of the fee.

We intend to enter into an amendment to our dealer manager agreement to provide that we will pay the dealer manager of our offering of Class A, W and I shares an additional form of underwriting compensation in the form of a “primary dealer fee” in connection with certain sales of Class I shares in the primary offering. We currently expect the maximum primary dealer fee to be up to 4.5% of up to $300 million in gross proceeds raised from the sale of Class I shares in the primary offering, or $13.5 million, although this arrangement has not been finalized and the maximum primary dealer fee could be greater than this amount. The primary dealer fee will be paid by us and will not be considered a class-specific expense. Accordingly, the expense will be allocated among all holders of Fund Interests ratably according to the NAV of their units or shares. After this primary dealer fee arrangement, we may enter into subsequent amendments to our dealer manager agreement to provide for additional primary dealer fee payments. If you purchase shares prior to, or in, a transaction or series of transactions that entitle our dealer manager to a “primary dealer fee,” you will experience dilution in the NAV of your shares as a result of the payment of the fee.

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

Share Redemption Program and other redemptions

As of March 31, 2013, no material changes had occurred to our Class E Share Redemption Program (the “Class E SRP”) or our separate Class A, W and I Share Redemption Program (the “Class AWI SRP”) as discussed in Item 5 of our Annual Report on Form 10-K filed with the Commission on March 19, 2013.

Pursuant to the Class E SRP, we will not redeem during any consecutive 12-month period more than 5% of the number of Class E shares of common stock outstanding at the beginning of such 12-month period.

35

Currently, the Class AWI SRP imposes a quarterly cap on the “net redemptions” of each of our Class A, Class W and Class I share classes equal to the amount of shares of such class with an aggregate value (based on the redemption price per share on the day the redemption is effected) of up to 5% of the NAV of such class as of the last day of the previous calendar quarter (the “Quarterly Cap”). We use the term “net redemptions” to mean, for any class and any quarter, the excess of our share redemptions (capital outflows) of such class over the share purchases net of sales commissions (capital inflows) of such class in the Offering. On any business day during a calendar quarter, the maximum amount available for redemptions of any class will be equal to (1) 5% of the NAV of such class of shares, calculated as of the last day of the previous calendar quarter, plus (2) proceeds from sales of new shares of such class in the Offering (including reinvestment of distributions but net of sales commissions) since the beginning of the current calendar quarter, less (3) proceeds paid to redeem shares of such class since the beginning of the current calendar quarter. However, for each future quarter, our board of directors reserves the right to choose whether the Quarterly Cap will be applied to “gross redemptions,” meaning, for any class and any quarter, amounts paid to redeem shares of such class since the beginning of such calendar quarter, or “net redemptions.” Additionally, our board of directors has the right to modify, suspend or terminate our share redemption programs if it deems such action to be in the best interest of our stockholders.

In aggregate, for the three months ended March 31, 2013, we redeemed approximately 1.7 million shares of common stock pursuant to the Class E SRP for approximately $11.7 million, as described further in the table below. We did not redeem any Class A, Class W or Class I shares pursuant to the Class AWI SRP during the three months ended March 31, 2013.

Period	Total Number of Shares Redeemed		Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Maximum Number of Shares that May Yet Be Purchased Pursuant to the Program (1)
January 1—January 31, 2013		7,755	$	6.70		7,755		—
February 1—February 28, 2013		—		—		—		—
March 1—March 31, 2013		1,713,674		6.79		1,713,674		—
Total		1,721,429	$	6.79		1,721,429		—

(1) Redemptions are limited under the Class E SRP and the Class AWI SRP as described above.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Revisions to Valuation Procedures

On May 3, 2013, our board of directors approved a revised set of valuation procedures for our NAV calculation, in order to make minor clarifications and to revise the subsection “Real Property Portfolio Valuation—Property Appraisals” to clarify the following regarding real property appraisals:

Periodic real property appraisals serve as the foundation of the Independent Valuation Firm’s daily real property portfolio valuation. The overarching principle of these appraisals is to produce valuations that represent fair and accurate estimates of the unencumbered values of our real estate or the prices that would be received for our real properties in arm’s-length transactions between market participants before considering underlying debt. The valuation of our real properties determined by the Independent Valuation Firm may not always reflect the value at which we would agree to buy or sell such assets and the value at which we would buy or sell such assets could materially differ from the Independent Valuation Firm’s estimate of fair value. Further, we do not undertake to disclose the value at which we would be willing to buy or sell our real properties to any prospective or existing investor. Prior to the commencement of the Offering, we obtained appraisals on each of our consolidated properties for use in our initial NAV calculation. We have now commenced ongoing appraisals pursuant to schedules prepared by the Independent Valuation Firm and our Advisor that are designed to conduct appraisals on each of our properties throughout any given calendar year. In order to provide a smooth and orderly appraisal process, we seek to have approximately 1/12th of the portfolio appraised each month, although we may have more or less appraised in a month. In no event will a calendar year pass without having each and every property valued by appraisal unless such asset is bought or sold in such calendar year. The acquisition price of newly acquired properties will serve as our appraised value, and thereafter will be part of the appraisal cycle described above such that they are appraised at least every calendar year.

36

ITEM 6. EXHIBITS

3.1	Articles of Restatement, incorporated by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K, filed March 21, 2012
3.2	Articles of Amendment, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed July 12, 2012
3.3	Articles Supplementary (Class A shares), incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K, filed July 12, 2012
3.4	Articles Supplementary (Class W shares), incorporated by reference to Exhibit 3.3 to the Company’s Current Report on Form 8-K, filed July 12, 2012
3.5	Articles Supplementary (Class I shares), incorporated by reference to Exhibit 3.4 to the Company’s Current Report on Form 8-K, filed July 12, 2012
3.6	Third Amended and Restated Bylaws, incorporated by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K, filed July 12, 2012
4.1	Fourth Amended and Restated Distribution Reinvestment Plan, incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed July 12, 2012
4.2	Class E Share Redemption Program, incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed July 12, 2012
4.3	Class A, W and I Share Redemption Program, incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed July 12, 2012
4.4	Statement regarding transfer restrictions, preferences, limitations and rights of holders of shares of common stock (to appear on stock certificate or to be sent upon request and without charge to stockholders issued shares without certificates), incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-11 (No. 333-175989), filed April 15, 2013
31.1	Rule 13a-14(a) Certification of Principal Executive Officer*
31.2	Rule 13a-14(a) Certification of Principal Financial Officer*
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
99.1	Consent of Altus Group U.S., Inc.*
101.INS	XBRL Instance Document*
101.SCH	XBRL Taxonomy Extension Schema Document*
101.CAL	XBRL Taxonomy Extension Calculation Linkbase*
101.LAB	XBRL Taxonomy Extension Label Linkbase*
101.PRE	XBRL Taxonomy Extension Presentation Linkbase*
101.DEF	XBRL Taxonomy Extension Definition Linkbase

* Filed or furnished herewith.

37

SIGNATURES

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

	DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.
Date: May 13, 2013	/s/ JEFFREY L. JOHNSON
	Jeffrey L. Johnson Chief Executive Officer
Date: May 13, 2013	/s/ M. KIRK SCOTT
	M. Kirk Scott Chief Financial Officer and Treasurer

38

EX-31.1

Exhibit 31.1

Certification of Principal Executive Officer Pursuant to

Rule 13a-14(a), Under the Securities Exchange Act of 1934, As Amended

I, Jeffrey L. Johnson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Dividend Capital Diversified Property Fund Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/S/ JEFFREY L. JOHNSON
Name:	Jeffrey L. Johnson
Title:	Chief Executive Officer

Date: May 13, 2013

EX-31.2

Exhibit 31.2

Certification of Principal Financial Officer Pursuant to

Rule 13a-14(a), Under the Securities Exchange Act of 1934, As Amended

I, M. Kirk Scott, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Dividend Capital Diversified Property Fund Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

	/s/ M. KIRK SCOTT
Name:	M. Kirk Scott
Title:	Chief Financial Officer and Treasurer

Date: May 13, 2013

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer Pursuant to

18 U.S.C. Section 1350

I, Jeffrey L. Johnson, as Chief Executive Officer of Dividend Capital Diversified Property Fund Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 13, 2013

	/S/ JEFFREY L. JOHNSON
Name:	Jeffrey L. Johnson
Title:	Chief Executive Officer

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer Pursuant to

18 U.S.C. Section 1350

I, M. Kirk Scott, as Chief Financial Officer of Dividend Capital Diversified Property Fund Inc. certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1. The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2013 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 13, 2013

	/s/ M. KIRK SCOTT
Name:	M. Kirk Scott
Title:	Chief Financial Officer and Treasurer

EX-99.1

Exhibit 99.1

CONSENT OF INDEPENDENT VALUATION FIRM

We hereby consent to the reference to our name, the description of our role and the valuation of the real properties and related assumptions provided under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Net Asset Value Calculation” in Part I, Item 2 of the Quarterly Report on Form 10-Q for the period ended March 31, 2013 of Dividend Capital Diversified Property Fund Inc., being incorporated by reference in the Registration Statement on Form S-3 (No. 333-162636) of Dividend Capital Diversified Property Fund Inc., and the related prospectus. We also hereby consent to the same information and the reference to our firm under the caption “Experts” being included in a supplement to the prospectus related to the Registration Statement on Form S-11 (File No. 333-175989) of Dividend Capital Diversified Property Fund Inc. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933.

/s/ Altus Group U.S., Inc.

Altus Group U.S., Inc.

May 13, 2013

XML

Recorded Investment in Debt Related Investments before Allowance for Loan Loss, and Related Allowance for Loan Loss (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Investment [Line Items]
Debt investments	$ 168,469	$ 205,321
Less: Allowance for loan losses	(3,000)	(18,000)
Total	$ 165,469	$ 187,321

XML

Summary of Fees and Other Amounts Earned by Advisor and Its Related Parties (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Related Party Transaction [Line Items]
Total	$ 4,861	$ 5,458
Asset Management And Advisory Fees.
Related Party Transaction [Line Items]
Total	3,684	4,912
Development Management Fees
Related Party Transaction [Line Items]
Total	55
Other Reimbursements
Related Party Transaction [Line Items]
Total	1,037	513
Asset management fees related to the disposition of real properties
Related Party Transaction [Line Items]
Total	$ 85	$ 33

XML

Reconciliation of Accumulated Other Comprehensive Loss , Net of Amounts Attributable to Noncontrolling Interests Related of Effective Portion of Cash Flow Hedges and Amounts Related to Available-For-Sale Securities (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance as of December 31, 2012:	$ (14,710)
Amortization of interest expense	645
Change in fair value	28
Losses reclassified into earnings upon discontinuance of cash flow hedges	(27)
Net current-period other comprehensive income	646
Attribution of OCI to noncontrolling interests	(47)
Ending balance as of March 31, 2013	(14,111)
Beginning balance as of December 31, 2012:	(1,486)
Amortization of interest expense
Change in fair value
Net current-period other comprehensive income
Attribution of OCI to noncontrolling interests
Ending balance as of March 31, 2013	(1,486)
Beginning balance as of December 31, 2012:	(16,196)
Amortization of interest expense	645
Change in fair value	28
Losses reclassified into earnings upon discontinuance of cash flow hedges	(27)
Net current-period other comprehensive income	646
Attribution of OCI to noncontrolling interests	(47)
Ending balance as of March 31, 2013	$ (15,597)

XML

Details of Numerator and Denominator Used to Calculate Diluted Net Loss Per Common Share (Detail) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Numerator
Loss from continuing operations	$ (5,922)		$ (7,734)
Loss from continuing operations attributable to noncontrolling interests	560		760
Loss from continuing operations attributable to common stockholders	(5,362)		(6,974)
Dilutive noncontrolling interests share of loss from continuing operations	(424)		(585)
Numerator for diluted earnings per share - adjusted loss from continuing operations	(5,786)		(7,559)
Income (loss) from discontinued operations	56	[1]	(1,605)	[1]
Income (loss) from discontinued operations attributable to noncontrolling interests	(61)		89
Income (loss) from discontinued operations attributable to common stockholders	(5)		(1,516)
Dilutive noncontrolling interests share of discontinued operations			(163)
Numerator for diluted earnings per share - adjusted loss from discontinued operations	$ (5)		$ (1,679)
Denominator
Weighted average shares outstanding-basic	178,792		183,270
Incremental weighted average shares effect of conversion of OP units	14,135		16,149
Weighted average shares outstanding-diluted	192,927		199,419
LOSS PER COMMON SHARE-BASIC AND DILUTED
Net loss from continuing operations	$ (0.03)		$ (0.04)
Net loss from discontinued operations	$ 0.00		$ (0.01)
Net loss	$ (0.03)		$ (0.05)

[1] Includes approximately $85,000 and $33,000 paid to our Advisor for asset management fees associated with the disposition of real properties during the three months ended March 31, 2013 and 2012, respectively.

XML

Summary of Borrowings Reflects Contractual Debt Maturities (Parenthetical) (Detail) (USD $)	3 Months Ended		12 Months Ended
	Mar. 31, 2013		Dec. 31, 2012
Debt Instrument [Line Items]
Secured debt	$ 1,192,957,000	[1]	$ 1,319,452,000	[1]
Outstanding Balance	1,661,326,000	[2],[3]
Adjustment to mortgages	55,000,000		55,000,000
Mark to market adjustment on assumed debt	2,400,000
Troubled debt restructuring amortization	911,000		718,000
Gross Investment Amount Securing Borrowings	2,238,275,000	[4]	2,302,755,000	[4]
Borrowings
Debt Instrument [Line Items]
Secured debt	50,100,000
Repurchase facility borrowing maturity period	2013
Repurchase agreement borrowing maturity period	2014
Unsecured Borrowings
Debt Instrument [Line Items]
Outstanding Balance	325,000,000	[5]
2016
Debt Instrument [Line Items]
Outstanding Balance	380,443,000	[2],[3]
2016 | Unsecured Borrowings
Debt Instrument [Line Items]
Outstanding Balance	55,000,000	[5]
2016 | Unsecured Borrowings | Borrowings
Debt Instrument [Line Items]
Line of Credit borrowings maturity period	2016
2018
Debt Instrument [Line Items]
Outstanding Balance	274,999,000	[2],[3]
2018 | Unsecured Borrowings
Debt Instrument [Line Items]
Outstanding Balance	270,000,000	[5]
2018 | Unsecured Borrowings | Borrowings
Debt Instrument [Line Items]
Term Loan borrowings maturity period	2018
Repurchase Facility
Debt Instrument [Line Items]
Number of borrowings maturing within one year	1
Secured debt	62,300,000
Gross Investment Amount Securing Borrowings	158,041,000	[4]	198,389,000	[4]
Mortgage Note
Debt Instrument [Line Items]
Secured debt	$ 1,200,000,000
Mortgage Note | Minimum
Debt Instrument [Line Items]
Debt instrument maturity year	2014
Mortgage Note | Maximum
Debt Instrument [Line Items]
Debt instrument maturity year	2029
Comerica Bank Tower
Debt Instrument [Line Items]
Maturity period	2017-01

[1] Includes approximately $310.0 million and $419.5 million in consolidated mortgage notes in variable interest entity investments as of March 31, 2013 and December 31, 2012, respectively.

[2] Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities (including the Comerica Bank Tower Mortgage balloon payment due in January 2017), and does not include (i) the fair value adjustment on mortgage notes carried at fair value of $55.0 million as of March 31, 2013, (ii) the mark-to-market adjustment on assumed debt of $2.4 million as of March 31, 2013, and (iii) the GAAP principal amortization of our restructured mortgage note of approximately $911,000 that does not reduce the contractual amount due of the related mortgage note as of March 31, 2013.

[3] As of March 31, 2013, our mortgage notes, secured borrowings, and line of credit are secured by interests in real properties and debt investments totaling approximately $2.2 billion.

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

[5] Unsecured borrowings presented includes (i) revolving credit facility draws totaling $55.0 million which mature during 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.

XML

Summary of Income and Expenses Attributable to Discontinued Operations (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Revenues	$ 1,509		$ 2,732
Real estate depreciation and amortization expense	(864)		(1,469)
Other expenses	(1,802)		(2,540)
Loss from discontinued operations, net of taxes	(1,157)		(1,277)
Net gain on disposition, net of taxes	1,213		(328)
Discontinued operations, net of taxes	$ 56	[1]	$ (1,605)	[1]

[1] Includes approximately $85,000 and $33,000 paid to our Advisor for asset management fees associated with the disposition of real properties during the three months ended March 31, 2013 and 2012, respectively.

XML

Reconciliation of Net Operating Income to Reported Net Income (Loss) (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Reconciliation of net operating income attributable to common shareholders
Net operating income	$ 51,140		$ 50,464
Real estate depreciation and amortization expense	(29,659)		(29,534)
General and administrative expenses	(2,601)		(1,883)
Asset management and advisory fees, related party	(3,684)		(4,912)
Acquisition-related expenses			(299)
Interest and other income	79		62
Interest expense	(20,927)		(20,211)
Loss on extinguishment of debt and financing commitments	(270)		(1,421)
Discontinued operations, net of taxes	56	[1]	(1,605)	[1]
Net loss attributable to noncontrolling interests	499		849
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (5,367)		$ (8,490)

[1] Includes approximately $85,000 and $33,000 paid to our Advisor for asset management fees associated with the disposition of real properties during the three months ended March 31, 2013 and 2012, respectively.

XML

Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Carrying Amount and Fair Values of Other Financial Instruments

The carrying amounts and estimated fair values of our other financial instruments as of March 31, 2013 and December 31, 2012 were as follows (amounts in thousands):

	As of March 31, 2013				As of December 31, 2012
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
Assets:
Investments in real estate securities	$	461	$	461	$	461	$	461
Fixed-rate debt related investments, net		96,390		99,168		108,482		110,796
Floating-rate debt related investments, net		69,079		69,015		78,839		79,803
Derivative instruments		—		—		—		—
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	$	1,034,308	$	1,091,873	$	1,037,047	$	1,091,425
Fixed-rate mortgage notes carried at fair value		122,402		122,402		122,995		122,995
Floating-rate mortgage notes		8,850		8,911		23,701		23,738
Floating-rate other secured borrowings		112,397		112,536		135,709		135,931
Floating-rate unsecured borrowings		325,000		325,000		300,000		300,000
Derivative liabilities		—		—		416		416

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Effect of Derivative Financial Instruments on Financial Statements (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Designated Hedges | Interest and other income
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss recognized in income due to missed forecast (ineffective portion and amount excluded from effectiveness testing)	$ (27,000)	$ (146,000)
Designated Hedges | Interest Rate Contract
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss recognized in OCI (effective portion)	(28,000)	(73,000)
Undesignated hedges | Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss reclassified from accumulated OCI into income (effective portion)	(645,000)	(671,000)
Undesignated hedges | Interest Rate Contract | Interest and other income
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss recognized in income		$ (12,000)

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Summary of Borrowings (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	4.80%		4.80%
Line of credit	2.20%		2.20%
Mortgage notes	$ 1,192,957	[1]	$ 1,319,452	[1]
Total secured borrowings	1,277,957	[2]	1,319,452	[2]
Line of credit	55,000	[2]	30,000	[2]
Total unsecured borrowings	325,000	[2]	300,000	[2]
Total, Outstanding Balance	1,602,957	[2]	1,619,452	[2]
Gross Investment Amount Securing Borrowings	2,238,275	[3]	2,302,755	[3]
Fixed rate secured borrowings
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	5.80%	[4]	5.80%	[4]
Mortgage notes	1,156,710	[2],[4]	1,160,042	[2],[4]
Gross Investment Amount Securing Borrowings	2,064,975	[3],[4]	2,061,757	[3],[4]
Floating-rate mortgage notes
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	4.00%	[5]	3.50%	[5]
Mortgage notes	8,850	[2],[5]	23,701	[2],[5]
Gross Investment Amount Securing Borrowings	15,259	[3],[5]	42,609	[3],[5]
Total mortgage notes
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	5.80%		5.70%
Mortgage notes	1,165,560	[2]	1,183,743	[2]
Gross Investment Amount Securing Borrowings	2,080,234	[3]	2,104,366	[3]
Repurchase Facility
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	2.70%		2.70%
Mortgage notes	62,300
Total other secured borrowings	112,397	[2]	135,709	[2]
Gross Investment Amount Securing Borrowings	158,041	[3]	198,389	[3]
Total other secured borrowings
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	2.70%		2.70%
Total other secured borrowings	112,397	[2]	135,709	[2]
Gross Investment Amount Securing Borrowings	158,041	[3]	198,389	[3]
Mortgage Notes and Other Secured Borrowings
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	5.50%		5.40%
Gross Investment Amount Securing Borrowings	2,238,275	[3]	2,302,755	[3]
Term Loan
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	2.20%		2.20%
Total unsecured borrowings	$ 270,000	[2]	$ 270,000	[2]
Unsecured Borrowings
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	2.20%		2.20%

[1] Includes approximately $310.0 million and $419.5 million in consolidated mortgage notes in variable interest entity investments as of March 31, 2013 and December 31, 2012, respectively.

[2] Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $55.0 million as of March 31, 2013 and December 31, 2012, (ii) unamortized discounts to the face value of our outstanding fixed-rate mortgages of $2.4 million and $2.7 million as of March 31, 2013 and December 31, 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $911,000 and $718,000 as of March 31, 2013 and December 31, 2012, respectively

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

[4] Includes $85.0 million classified as liabilities held for sale in the accompanying balance sheet as of March 31, 2013.

[5] As of March 31, 2013, floating-rate mortgage notes were subject to an interest rate spread of 3.75% over one-month LIBOR. As of December 31, 2012, floating-rate mortgage notes were subject to interest rates at spreads ranging from 2.9% to 3.75% over one-month LIBOR.

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Details of Debt Related Income (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Mar. 31, 2013 Investment		Mar. 31, 2012 Investment
Investment [Line Items]
Carrying amount of floating rate debt investments	$ 70.0
Number of variable interest loans receivable	2
Weighted Average Yield	6.90%	[1]
Number of debt investment repaid	2		1
Loans on Non-Accrual Status
Investment [Line Items]
Weighted Average Yield	0.00%

[1] Weighted average yield is calculated on an unlevered basis using the amount invested, current interest rates and accretion of premiums or discounts realized upon the initial investment for each investment type as of March 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of March 31, 2013 for purposes of this table. As of March 31, 2013 we had two debt related investments with a combined net investment amount of $70.0 million that bear interest at floating rates indexed to LIBOR. All of our remaining debt related investments bear interest at fixed rates. We have assumed a yield of zero on the one debt related investments for which we have recognized a full allowance for loss as of March 31, 2013.

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Fair Value Of Financial Instrument- Additional Information (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Fair Value, Option, Quantitative Disclosures [Line Items]
Discount rate	15.00%
Preliminary estimate of fair value of assumed mortgage	$ 124,800	$ 124,800
1% Increase in Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Preliminary estimate of fair value of assumed mortgage	120,100
1% Decrease in Discount Rate
Fair Value, Option, Quantitative Disclosures [Line Items]
Preliminary estimate of fair value of assumed mortgage	$ 129,700

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Hedging Activities - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012	Dec. 31, 2012
Designated Hedges
Derivative [Line Items]
Total notional amount	$ 69,100,000		$ 90,000,000
Undesignated hedges
Derivative [Line Items]
Total notional amount	232,100,000		230,400,000
Undesignated derivative instruments loss recognized in income	0	158,000
Variable Income Interest Rate
Derivative [Line Items]
Estimated increase to interest expense related to active effective hedges of floating rate debt	326,000
Interest Rate Swap
Derivative [Line Items]
Estimated increase to interest expense related to termination of hedging instrument	$ 2,200,000
Interest Rate Swap | Designated Hedges
Derivative [Line Items]
Number of outstanding derivatives	2		2
Interest Rate Swap | Undesignated hedges
Derivative [Line Items]
Number of outstanding derivatives			1
Interest Rate Cap | Designated Hedges
Derivative [Line Items]
Number of outstanding derivatives			2
Interest Rate Cap | Undesignated hedges
Derivative [Line Items]
Number of outstanding derivatives	2		2

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Organization

3 Months Ended

Mar. 31, 2013

Organization

1. ORGANIZATION

Dividend Capital Diversified Property Fund Inc. is a Maryland corporation formed on April 11, 2005 to invest in a diverse portfolio of real property and real estate related investments. As used herein, “the Company,” “we,” “our” and “us” refer to Dividend Capital Diversified Property Fund Inc. and its consolidated subsidiaries and partnerships except where the context otherwise requires.

We operate in a manner intended to qualify as a real estate investment trust (“REIT”) for federal income tax purposes and utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) organizational structure to hold all or substantially all of our assets through our operating partnership, Dividend Capital Total Realty Operating Partnership, L.P. (our “Operating Partnership”). Furthermore, our Operating Partnership wholly owns a taxable REIT subsidiary, DCTRT Leasing Corp. (the “TRS”), through which we have executed certain business transactions that might otherwise have an adverse impact on our status as a REIT if such business transactions were to occur directly or indirectly through our Operating Partnership.

We are the sole general partner of our Operating Partnership. In addition, we have contributed 100% of the proceeds received from our offerings of common stock to our Operating Partnership in exchange for partnership units (“OP Units”) representing our interest as a limited partner of the Operating Partnership. As of March 31, 2013 and December 31, 2012, we owned approximately 92.7% and 92.6%, respectively, of the limited partnership interests in our Operating Partnership, and the remaining limited partnership interests in our Operating Partnership were owned by third-party investors. Our Operating Partnership has classes of OP Units that correspond to our four classes of common stock: Class E OP Units, Class A OP Units, Class W OP Units, and Class I OP Units. The OP Units held by third parties are all Class E OP Units. As of March 31, 2013 and December 31, 2012, our Operating Partnership had issued and outstanding approximately 13.9 million and 14.2 million Class E OP Units held by third party investors, respectively, which represent limited partnership interests issued in connection with its private placement offerings.

Dividend Capital Total Advisors LLC (our “Advisor”), a related party, manages our day-to-day activities under the terms and conditions of an advisory agreement (as amended from time to time, the “Advisory Agreement”). Our Advisor and its affiliates receive various forms of compensation, reimbursements and fees for services relating to the investment and management of our real estate assets.

On July 12, 2012, the Securities and Exchange Commission (the “Commission”) declared effective our Registration Statement on Form S-11 (Registration Number 333-175989) (as amended, the “Registration Statement”). The Registration Statement applies to the offer and sale (the “Offering”) of up to $3,000,000,000 of our shares of common stock, of which $2,250,000,000 of shares are expected to be offered to the public in a primary offering and $750,000,000 of shares are expected to be offered to our stockholders pursuant to an amended and restated distribution reinvestment plan (subject to our right to reallocate such amounts). In the Offering, we are offering to the public three classes of shares: Class A shares, Class W shares and Class I shares with net asset value (“NAV”) based pricing. See Part I, Item 2 of this Quarterly Report on Form 10-Q for a description of our valuation procedures and valuation components, including important disclosure regarding real property valuations provided by Altus Group U.S., Inc., an independent valuation firm. Our independent registered public accounting firm does not audit our NAV. Selling commissions, dealer manager fees, and distribution fees are allocated to Class A shares, Class W shares, and Class I shares on a class-specific basis and differ for each class, even when the NAV of each class is the same. We are offering to sell any combination of Class A shares, Class W shares and Class I shares with a dollar value up to the maximum offering amount. We also sell shares of our unclassified common stock, which we refer to as “Class E” shares, pursuant to our distribution reinvestment plan offering registered on our Registration Statement on Form S-3 (Registration Number 333-162636). In the event of a liquidation event, such assets, or the proceeds therefrom, will be distributed ratably in proportion to the respective NAV for each class until the NAV for each class has been paid. Other than differing allocable fees and expenses and liquidation rights, Class E shares, Class A shares, Class W shares, and Class I shares have identical rights and privileges.

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Summary of Borrowings (Parenthetical) (Detail) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2013	Dec. 31, 2012
Debt Instrument [Line Items]
Adjustment to mortgages	$ 55,000,000	$ 55,000,000
Unamortized net discount at end of period on debt payable	2,400,000	2,700,000
Troubled debt restructuring amortization	911,000	718,000
Liabilities held for sale	86,772,000
3.75%
Debt Instrument [Line Items]
Outstanding borrowing spread over LIBOR	3.75%
3.75% | Maximum
Debt Instrument [Line Items]
Outstanding borrowing spread over LIBOR		3.75%
2.90% | Minimum
Debt Instrument [Line Items]
Outstanding borrowing spread over LIBOR		2.90%
Fixed rate secured borrowings
Debt Instrument [Line Items]
Liabilities held for sale	$ 85,000,000

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Organization - Additional Information (Detail) (USD $) Share data in Millions, unless otherwise specified	Mar. 31, 2013	Jul. 12, 2012	Mar. 31, 2013 Operating Partnership Units	Dec. 31, 2012 Operating Partnership Units	Mar. 31, 2013 Class E Operating Partnership Units Scenario 1	Dec. 31, 2012 Class E Operating Partnership Units Scenario 1
Organization [Line Items]
Percentage of proceeds received from public offerings of common stock contributed to our Operating Partnership	100.00%
Limited partnership interest owned in Operating Partnership			92.70%	92.60%
Operating Partnership units issued					13.9	14.2
Operating Partnership units outstanding					13.9	14.2
Maximum NAV share value total		$ 3,000,000,000
Maximum NAV share value primary offering		2,250,000,000
Maximum share value DRIP		$ 750,000,000

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Segment Information (Tables)

3 Months Ended

Mar. 31, 2013

Revenue and Components of Net Operating Income

The following table sets forth revenue and the components of net operating income (“NOI”) of our segments for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	Revenues				NOI
	2013		2012		2013		2012
Real property (1)
Office	$	43,932	$	39,754	$	32,007	$	30,970
Industrial		7,166		7,119		5,915		5,968
Retail		14,067		14,871		10,483		11,642
Debt related investments		2,735		1,884		2,735		1,884
Total	$	67,900	$	63,628	$	51,140	$	50,464

(1) Excludes results of operations of real properties categorized as discontinued operations.

Reconciliation of Net Operating Income to Reported Net Income (Loss)

The following table is a reconciliation of our NOI to our reported net income (loss) attributable to common shareholders for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Net operating income	$	51,140		$	50,464
Real estate depreciation and amortization expense		(29,659	)		(29,534	)
General and administrative expenses		(2,601	)		(1,883	)
Asset management and advisory fees, related party		(3,684	)		(4,912	)
Acquisition-related expenses		—			(299	)
Interest and other income		79			62
Interest expense		(20,927	)		(20,211	)
Loss on extinguishment of debt and financing commitments		(270	)		(1,421	)
Discontinued operations, net of taxes		56			(1,605	)
Net loss attributable to noncontrolling interests		499			849
Net loss attributable to common stockholders	$	(5,367	)	$	(8,490	)

Summary of Total Assets by Business Segment

The following table reflects our total assets by business segment as of March 31, 2013 and December 31, 2012 (amounts in thousands):

	As of March 31, 2013		As of December 31, 2012
Segment assets:
Net investments in real property
Office	$	1,343,546	$	1,369,496
Industrial		263,828		351,375
Retail		612,116		615,897
Debt related investments, net		165,469		187,321
Total segment assets, net		2,384,959		2,524,089
Non-segment assets:
Cash and cash equivalents		36,793		36,872
Other non-segment assets (1)		176,792		98,293
Total assets	$	2,598,544	$	2,659,254

(1) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable. Other non-segment assets also include real properties classified as assets held for sale in the accompanying balance sheet as of March 31, 2013.

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Revenue and Components of Net Operating Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Segment Reporting Information [Line Items]
Revenues	$ 67,900		$ 63,628
Net operating income	51,140		50,464
Segment Information
Segment Reporting Information [Line Items]
Revenues	67,900		63,628
Net operating income	51,140		50,464
Segment Information | Real property | Office
Segment Reporting Information [Line Items]
Revenues	43,932	[1]	39,754	[1]
Net operating income	32,007	[1]	30,970	[1]
Segment Information | Real property | Industrial
Segment Reporting Information [Line Items]
Revenues	7,166	[1]	7,119	[1]
Net operating income	5,915	[1]	5,968	[1]
Segment Information | Real property | Retail
Segment Reporting Information [Line Items]
Revenues	14,067	[1]	14,871	[1]
Net operating income	10,483	[1]	11,642	[1]
Segment Information | Debt Related Investments
Segment Reporting Information [Line Items]
Revenues	2,735		1,884
Net operating income	$ 2,735		$ 1,884

[1] Excludes results of operations of real properties categorized as discontinued operations.

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Debt Obligations - Additional Information (Detail) (USD $)	Mar. 31, 2013 MortgageLoan		Dec. 31, 2012
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of interest-only mortgage notes	13
Number of amortizing mortgage notes	21
Interest-only mortgage notes, outstanding balance	$ 425,500,000
Amortizing mortgage notes outstanding balance	740,100,000
Total unsecured borrowings	325,000,000	[1]	300,000,000	[1]
Line of credit	55,000,000	[1]	30,000,000	[1]
Available borrowing under revolving credit facility	125,000,000		150,000,000
Term Loan
Accounts, Notes, Loans and Financing Receivable [Line Items]
Total unsecured borrowings	$ 270,000,000	[1]	$ 270,000,000	[1]

[1] Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $55.0 million as of March 31, 2013 and December 31, 2012, (ii) unamortized discounts to the face value of our outstanding fixed-rate mortgages of $2.4 million and $2.7 million as of March 31, 2013 and December 31, 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $911,000 and $718,000 as of March 31, 2013 and December 31, 2012, respectively

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Summary of Consolidated Investments In Real Property (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Schedule of Investments [Line Items]
Land	$ 515,011		$ 517,681
Building and Improvements	1,690,854		1,686,537
Intangible Lease Assets	611,157		615,332
Investment in real property, Gross book value	2,817,022		2,819,550
Intangible lease liabilities, Gross book value	(124,480)		(124,612)
Real estate investments, Gross book value	2,692,542		2,694,938
Accumulated depreciation and amortization	(513,522)		(482,782)
Intangible lease liabilities, accumulated amortization	38,251		36,281
Accumulated depreciation/amortization	(475,271)		(446,501)
Investments in real property	2,303,500		2,336,768
Intangible lease liabilities, Net book value	(86,229)		(88,331)
Real estate investments, Net book value	2,217,271		2,248,437
Land
Schedule of Investments [Line Items]
Investments in real property	515,011		517,681
Building and Building Improvements
Schedule of Investments [Line Items]
Accumulated depreciation and amortization	(196,342)		(189,740)
Investments in real property	1,494,512		1,496,797
Intangible Lease Assets
Schedule of Investments [Line Items]
Accumulated depreciation and amortization	(317,180)		(293,042)
Investments in real property	293,977		322,290
Office
Schedule of Investments [Line Items]
Land	235,195		237,865
Building and Improvements	942,758		939,722
Intangible Lease Assets	471,222		475,397
Investment in real property, Gross book value	1,649,175		1,652,984
Intangible lease liabilities, Gross book value	(65,656)		(65,788)
Real estate investments, Gross book value	1,583,519		1,587,196
Industrial
Schedule of Investments [Line Items]
Land	52,598	[1]	52,598
Building and Improvements	330,818	[1]	329,844
Intangible Lease Assets	61,967	[1]	61,967
Investment in real property, Gross book value	445,383	[1]	444,409
Intangible lease liabilities, Gross book value	(7,765)	[1]	(7,765)
Real estate investments, Gross book value	437,618	[1]	436,644
Retail
Schedule of Investments [Line Items]
Land	227,218		227,218
Building and Improvements	417,278		416,971
Intangible Lease Assets	77,968		77,968
Investment in real property, Gross book value	722,464		722,157
Intangible lease liabilities, Gross book value	(51,059)		(51,059)
Real estate investments, Gross book value	$ 671,405		$ 671,098

[1] Includes $19.2 million in land, $79.1 million in building and improvements, $12.7 million in intangible lease assets, and $1.8 million in intangible lease liabilities, before accumulated depreciation of $25.9 million, related to seven industrial properties classified as held for sale in the accompanying balance sheet as of March 31, 2013.

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Summary of Consolidated Investments In Real Property (Parenthetical) (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Schedule of Investments [Line Items]
Land	$ 515,011	$ 517,681
Building and Improvements	1,690,854	1,686,537
Intangible Lease Assets	611,157	615,332
Intangible lease liabilities	124,480	124,612
Accumulated depreciation	513,522	482,782
Industrial Property Held For Sale
Schedule of Investments [Line Items]
Number of industrial properties classified as held for sale	7
Land	19,200
Building and Improvements	79,100
Intangible Lease Assets	12,700
Intangible lease liabilities	1,800
Accumulated depreciation	$ 25,900

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
OPERATING ACTIVITIES:
Net loss	$ (5,866)	$ (9,339)
Adjustments to reconcile net loss to net cash provided by operating activities:
Real estate depreciation and amortization expense	30,524	31,003
(Gain) loss on disposition of real property	(1,213)	328
Loss on financing commitments	270	1,446
Other depreciation and amortization	2,135	187
Other adjustments to reconcile loss to net cash provided by operating activities	(326)	68
Changes in operating assets and liabilities	(8,072)	(4,390)
Net cash provided by operating activities	17,452	19,303
INVESTING ACTIVITIES:
Capital expenditures in real property	(5,397)	(2,818)
Proceeds from disposition of real property	7,879	3,205
Investment in debt related investments	(3,653)
Principal collections on debt related investments	15,512	1,098
Other investing activities	638	2,016
Net cash provided by (used in) investing activities	14,979	3,501
FINANCING ACTIVITIES:
Net proceeds from revolving line of credit borrowings	25,000
Redemption of common shares	(11,430)	(12,556)
Distributions to common stockholders	(10,210)	(13,908)
Other financing activities	(3,691)	(2,729)
Net cash (used in) provided by financing activities	(32,510)	(93,745)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(79)	(70,941)
CASH AND CASH EQUIVALENTS, beginning of period	36,872	128,447
CASH AND CASH EQUIVALENTS, end of period	36,793	57,506
Supplemental Disclosure of Cash Flow Information:
Assumed mortgage	124,800	124,800
Amount issued pursuant to the distribution reinvestment plan	5,505	9,046
Cash paid for interest	19,602	21,375
Non-cash principal collection on debt related investments	9,646	2,809
Non-cash investment in real property		128,258
Mortgage Notes
FINANCING ACTIVITIES:
Repayments of secured debt	(18,513)	(64,552)
Other Secured Borrowings
FINANCING ACTIVITIES:
Repayments of secured debt	$ (13,666)

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Investments in Real Property - Additional Information (Detail) (Industrial)	Mar. 31, 2013 Property
Industrial
Real Estate Properties [Line Items]
Number of industrial properties classified as held for sale	7

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Gross Recorded Investment in Impaired Debt Related Investments, Related Allowance For Loan Loss, and Total Amount Of Impaired Loans (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Investment [Line Items]
Recorded Investment	$ 3,000	$ 30,135
Related Allowance	(3,000)	(18,000)
Amount of Recorded Investment With No Allowance Recorded		$ 12,135

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Related Party Transactions - Additional Information (Detail) (USD $)	3 Months Ended
	Mar. 31, 2013	Dec. 31, 2012	Jul. 12, 2012
Related Party Transaction [Line Items]
Component of Advisory fee as a percent of Operating Partnership NAV			1.15%
Component of Advisory fee as a percent of the overall return			25.00%
Percentage of return not payable to the Advisor			6.00%
Maximum annual Advisory fee performance condition as a percentage of the overall return			10.00%
Advisor development management fee			4.00%
Maximum Advisor real property disposition fee as a percentage of the sales price of real property assets			1.00%
Fee payable to the Advisor as a percentage of the sales price of real property assets	1.00%
Maximum percentage of reasonable customary and commission payable to Advisor upon disposition of a property	50.00%
Maximum commissions payable as a percent of the sales price of the property sold	6.00%
Maximum Advisor reimbursement of cumulative organization and offering costs as a percentage of gross proceeds from the Offering	15.00%
Class A Dealer Manager selling commission	3.00%
Class A and Class W Dealer Manager fee	0.60%
Class I Dealer Manager fee	0.10%
Class A distribution fee	0.50%
Maximum Dealer Manager and Distribution fees as a percent of gross proceeds from NAV Offering	10.00%
Maximum primary dealer fee as percentage of gross proceeds from sale of class I shares	4.50%
Class I shares sale transaction date	Jul. 31, 2013
Consideration exchange for partnership units in operating partnership	$ 1,000
Number of special units redeemed and cancelled	200
Payment for redemption of special units	1,000
Amount owed to Advisor	1,300,000	1,300,000
Maximum
Related Party Transaction [Line Items]
Total gross proceeds raised from sale of class I shares	$ 300,000,000

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CONDENSED CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
ASSETS
Investments in real property	$ 2,705,979		$ 2,819,550
Accumulated depreciation and amortization	(486,489)		(482,782)
Total net investments in real property	2,219,490	[1]	2,336,768	[1]
Debt related investments, net	165,469		187,321
Total net investments	2,384,959		2,524,089
Cash and cash equivalents	36,793		36,872
Restricted cash	24,920		32,968
Other assets, net	63,127		65,325
Assets held for sale	88,745
Total Assets	2,598,544		2,659,254
Liabilities:
Mortgage notes and other secured borrowings	1,192,957	[2]	1,319,452	[2]
Unsecured borrowings	325,000	[3]	300,000	[3]
Financing obligations	18,143		18,176
Intangible lease liabilities, net	85,521		88,331
Other liabilities	78,252		91,768
Liabilities held for sale	86,772
Total Liabilities	1,786,645		1,817,727
Stockholders' equity:
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 177,344,261*** and 178,127,559*** shares issued and outstanding, as of March 31, 2013 and December 31, 2012, respectively	1,772		1,781
Additional paid-in capital	1,605,226		1,610,996
Distributions in excess of earnings	(871,891)		(850,885)
Accumulated other comprehensive loss	(15,597)		(16,196)
Total stockholders' equity	719,510		745,696
Noncontrolling interests	92,389		95,831
Total Equity	811,899		841,527
Total Liabilities and Equity	$ 2,598,544		$ 2,659,254

[1] Includes approximately $391.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of March 31, 2013 and December 31, 2012, respectively.

[2] Includes approximately $310.0 million and $419.5 million in consolidated mortgage notes in variable interest entity investments as of March 31, 2013 and December 31, 2012, respectively.

[3] Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $55.0 million as of March 31, 2013 and December 31, 2012, (ii) unamortized discounts to the face value of our outstanding fixed-rate mortgages of $2.4 million and $2.7 million as of March 31, 2013 and December 31, 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $911,000 and $718,000 as of March 31, 2013 and December 31, 2012, respectively

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Summary of Borrowings Reflects Contractual Debt Maturities (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013
Debt Instrument [Line Items]
Outstanding Balance	$ 1,661,326	[1],[2]
2013
Debt Instrument [Line Items]
Outstanding Balance	75,224	[1],[2],[3]
2014
Debt Instrument [Line Items]
Outstanding Balance	150,728	[1],[2]
2015
Debt Instrument [Line Items]
Outstanding Balance	129,452	[1],[2]
2016
Debt Instrument [Line Items]
Outstanding Balance	380,443	[1],[2]
2017
Debt Instrument [Line Items]
Outstanding Balance	476,466	[1],[2]
2018
Debt Instrument [Line Items]
Outstanding Balance	274,999	[1],[2]
2019
Debt Instrument [Line Items]
Outstanding Balance	5,292	[1],[2]
2020
Debt Instrument [Line Items]
Outstanding Balance	157,944	[1],[2]
2021
Debt Instrument [Line Items]
Outstanding Balance	1,707	[1],[2]
2022
Debt Instrument [Line Items]
Outstanding Balance	1,663	[1],[2]
Thereafter
Debt Instrument [Line Items]
Outstanding Balance	7,408	[1],[2]
Mortgage Notes and Other Secured Borrowings
Debt Instrument [Line Items]
Number of Borrowings Maturing	37
Outstanding Balance	1,336,326	[4]
Mortgage Notes and Other Secured Borrowings | 2013
Debt Instrument [Line Items]
Number of Borrowings Maturing	1	[3]
Outstanding Balance	75,224	[3],[4]
Mortgage Notes and Other Secured Borrowings | 2014
Debt Instrument [Line Items]
Number of Borrowings Maturing	4
Outstanding Balance	150,728	[4]
Mortgage Notes and Other Secured Borrowings | 2015
Debt Instrument [Line Items]
Number of Borrowings Maturing	5
Outstanding Balance	129,452	[4]
Mortgage Notes and Other Secured Borrowings | 2016
Debt Instrument [Line Items]
Number of Borrowings Maturing	14
Outstanding Balance	325,443	[4]
Mortgage Notes and Other Secured Borrowings | 2017
Debt Instrument [Line Items]
Number of Borrowings Maturing	9
Outstanding Balance	476,466	[4]
Mortgage Notes and Other Secured Borrowings | 2018
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Outstanding Balance	4,999	[4]
Mortgage Notes and Other Secured Borrowings | 2019
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Outstanding Balance	5,292	[4]
Mortgage Notes and Other Secured Borrowings | 2020
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	157,944	[4]
Mortgage Notes and Other Secured Borrowings | 2021
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Outstanding Balance	1,707	[4]
Mortgage Notes and Other Secured Borrowings | 2022
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	1,663	[4]
Mortgage Notes and Other Secured Borrowings | Thereafter
Debt Instrument [Line Items]
Number of Borrowings Maturing	2
Outstanding Balance	7,408	[4]
Unsecured Borrowings
Debt Instrument [Line Items]
Number of Borrowings Maturing	2
Outstanding Balance	325,000	[5]
Unsecured Borrowings | 2013
Debt Instrument [Line Items]
Number of Borrowings Maturing	0	[3]
Unsecured Borrowings | 2014
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings | 2015
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings | 2016
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	55,000	[5]
Unsecured Borrowings | 2017
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings | 2018
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	$ 270,000	[5]
Unsecured Borrowings | 2019
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings | 2020
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings | 2021
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings | 2022
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings | Thereafter
Debt Instrument [Line Items]
Number of Borrowings Maturing	0

[1] Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities (including the Comerica Bank Tower Mortgage balloon payment due in January 2017), and does not include (i) the fair value adjustment on mortgage notes carried at fair value of $55.0 million as of March 31, 2013, (ii) the mark-to-market adjustment on assumed debt of $2.4 million as of March 31, 2013, and (iii) the GAAP principal amortization of our restructured mortgage note of approximately $911,000 that does not reduce the contractual amount due of the related mortgage note as of March 31, 2013.

[2] As of March 31, 2013, our mortgage notes, secured borrowings, and line of credit are secured by interests in real properties and debt investments totaling approximately $2.2 billion.

[3] One of our repurchase facilities (the "REPO Borrowings") with an aggregate outstanding principal balance as of March 31, 2013 of approximately $62.3 million has an initial maturity before December 31, 2013. The REPO Borrowings have an extension option beyond December 31, 2013. Borrowings that are subject to extension options are also subject to certain lender covenants and restrictions that we must meet to extend the initial maturity date. We currently believe that we will qualify for and expect to exercise this extension option. However, we cannot guarantee that we will meet the requirements to extend the REPO Borrowings upon initial maturity. In the event that we do not qualify to extend the REPO Borrowings, we expect to repay them with proceeds from new borrowings.

[4] Secured borrowings presented include (i) mortgage note borrowings of approximately $1.2 billion with maturities ranging from 2014 to 2029, and (ii) REPO Borrowings of approximately $62.3 million and $50.1 million, which mature in 2013 and 2014, respectively, which are subject to four and three one-year extension options, respectively.

[5] Unsecured borrowings presented includes (i) revolving credit facility draws totaling $55.0 million which mature during 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Net Loss	$ (5,866)	$ (9,339)
Other Comprehensive Income (Loss):
Net unrealized change from available-for-sale securities		(376)
Unrealized change from cash flow hedging derivatives	646	744
Comprehensive loss	(5,220)	(8,971)
Comprehensive (income) loss attributable to noncontrolling interests	452	819
COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (4,768)	$ (8,152)

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Subsequent Events (Detail) (Discontinued Operations, USD $) In Millions, unless otherwise specified		1 Months Ended
	Dec. 31, 2012	May 10, 2013 Subsequent Event Property sqft
Number of properties sold		7
Rentable square feet		1,900,000
Ownership interest in property		96.40%
Basis in properties		$ 84.0
Previously recorded impairment on debt investment	5.7
Disposition of properties combined sales price		$ 85.9

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Debt Related Investments - Additional Information (Detail) (USD $)	3 Months Ended	12 Months Ended	3 Months Ended
	Mar. 31, 2013 Investment Loan	Dec. 31, 2012 Investment Loan	Mar. 31, 2013 Mezzanine loan	Mar. 31, 2012 Mezzanine loan	Mar. 31, 2013 B-notes Investment	Dec. 31, 2012 B-notes Investment
Investment [Line Items]
Number of debt investments	16	19
Weighted average maturity of our debt investments	2 years 6 months
Direct write off of allowance for loan loss	$ 15,000,000		$ 15,000,000	$ 20,000,000
Number of Nonaccrual Loans Receivable					1	2
Number of days loans receivable past due	90 days	90 days
Unpaid principal balance of impaired debt investments	$ 3,000,000	$ 30,100,000
Number of impaired debt investments	1	3

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Debt Related Investments (Tables)

3 Months Ended

Mar. 31, 2013

Details of Debt Related Income

The following table describes our debt related income for the three months ended March 31, 2013 and 2012 (dollar amounts in thousands):

	For the Three Months Ended				Weighted Average
	March 31,				Yield as of
Investment Type	2013		2012		March 31, 2013 (1)
Mortgage notes (2)	$	2,429	$	1,769		6.6	%
B-notes		51		115		0.0	%
Mezzanine debt		255		—		17.0	%
Total	$	2,735	$	1,884		6.9	%

(1) Weighted average yield is calculated on an unlevered basis using the amount invested, current interest rates and accretion of premiums or discounts realized upon the initial investment for each investment type as of March 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of March 31, 2013 for purposes of this table. As of March 31, 2013 we had two debt related investments with a combined net investment amount of $70.0 million that bear interest at floating rates indexed to LIBOR. All of our remaining debt related investments bear interest at fixed rates. We have assumed a yield of zero on the one debt related investments for which we have recognized a full allowance for loss as of March 31, 2013.

(2) We had two and one debt related investments repaid in full during the three months ended March 31, 2013 and March 31, 2012, respectively. During the three months ended March 31, 2013, amounts recorded include accelerated amortization of origination fees offset by accelerated amortization of deferred due diligence costs related to these repayments. During the three months ended March 31, 2012, amounts recorded include an early prepayment fee received and accelerated amortization of origination fees, offset by accelerated amortization of deferred due diligence costs related to this repayment.

Reconciliation of Allowance for Loan Loss on Debt Related Investments

The table below presents a reconciliation of the beginning and ending balances, between December 31, 2012 and March 31, 2013, of our allowance for loan loss (amounts in thousands):

	Allowance for Loan Loss
Beginning balance as of December 31, 2012:	$	18,000
Provision for loss on debt related investments		—
Direct write offs		(15,000	)
Ending balance as of March 31, 2013:	$	3,000

Recorded Investment in Debt Related Investments before Allowance for Loan Loss, and Related Allowance for Loan Loss

The following table describes our recorded investment in debt related investments before allowance for loan loss, and the related allowance for loan loss (amounts in thousands):

	Debt Investments Individually Evaluated for
	Impairment as of
	March 31, 2013			December 31, 2012
Debt investments	$	168,469		$	205,321
Less: Allowance for loan losses		(3,000	)		(18,000	)
Total	$	165,469		$	187,321

Gross Recorded Investment in Impaired Debt Related Investments, Related Allowance For Loan Loss, and Total Amount Of Impaired Loans

The following table describes our gross recorded investment in impaired debt related investments, the related allowance for loan loss, and the total amount of impaired loans for which we have not recorded an allowance for loan loss (amounts in thousands):

						Amount of Impaired
						Loans With No
As of:	Recorded Investment		Related Allowance			Allowance Recorded
March 31, 2013	$	3,000	$	(3,000	)	$	—
December 31, 2012	$	30,135	$	(18,000	)	$	12,135

Average Recorded Net Investment in Impaired Debt Related Investments and Related Interest Income Recorded

The following table describes our average recorded net investment in the impaired debt related investments and the related interest income recorded (amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012
Average Recorded Investment	$	6,067	$	13,666
Interest Income Recognized	$	51	$	121

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Details of Debt Related Income (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
Investment [Line Items]
Debt related income	$ 2,735		$ 1,884
Weighted Average Yield	6.90%	[1]
Mortgages
Investment [Line Items]
Debt related income	2,429	[2]	1,769	[2]
Weighted Average Yield	6.60%	[1],[2]
B-notes
Investment [Line Items]
Debt related income	51		115
Weighted Average Yield	0.00%	[1]
Mezzanine loan
Investment [Line Items]
Debt related income	$ 255
Weighted Average Yield	17.00%	[1]

[1] Weighted average yield is calculated on an unlevered basis using the amount invested, current interest rates and accretion of premiums or discounts realized upon the initial investment for each investment type as of March 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of March 31, 2013 for purposes of this table. As of March 31, 2013 we had two debt related investments with a combined net investment amount of $70.0 million that bear interest at floating rates indexed to LIBOR. All of our remaining debt related investments bear interest at fixed rates. We have assumed a yield of zero on the one debt related investments for which we have recognized a full allowance for loss as of March 31, 2013.

[2] We had two and one debt related investments repaid in full during the three months ended March 31, 2013 and March 31, 2012, respectively. During the three months ended March 31, 2013, amounts recorded include accelerated amortization of origination fees offset by accelerated amortization of deferred due diligence costs related to these repayments. During the three months ended March 31, 2012, amounts recorded include an early prepayment fee received and accelerated amortization of origination fees, offset by accelerated amortization of deferred due diligence costs related to this repayment.

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Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2013

Reconciliation of Accumulated Other Comprehensive Loss

The table below presents a reconciliation of the beginning and ending balances, between December 31, 2012 and March 31, 2013, of our accumulated other comprehensive loss (“OCI”), net of amounts attributable to noncontrolling interests related to the effective portion of our cash flow hedges as presented on our financial statements, as well as amounts related to our available-for-sale securities (amounts in thousands):

							Accumulated
	Gains and Losses on			Unrealized Losses on Available-For-			Other Comprehensive
	Cash Flow Hedges			Sale Securities			Loss
Beginning balance as of December 31, 2012:	$	(14,710	)	$	(1,486	)	$	(16,196	)
Other comprehensive income:
Amortization of interest expense		645			—			645
Change in fair value		28			—			28
Amounts reclassified from accumulated other comprehensive income:
Losses reclassified into earnings upon discontinuance of cash flow hedges		(27	)		—			(27	)
Net current-period other comprehensive income		646			—			646
Attribution of OCI to noncontrolling interests		(47	)		—			(47	)
Ending balance as of March 31, 2013	$	(14,111	)	$	(1,486	)	$	(15,597	)

Gross Fair Value of Derivative Financial Instruments as Well as Their Classification

The table below presents the gross fair value of our derivative financial instruments as well as their classification on our accompanying balance sheet as of March 31, 2013 and December 31, 2012 (amounts in thousands):

	Asset Derivatives							Liability Derivatives
				As of		As of					As of			As of
				March 31,		December 31,					March 31,			December 31,
	Balance Sheet			2013		2012		Balance Sheet			2013			2012
	Location			Fair Value		Fair Value		Location			Fair Value			Fair Value
Derivatives designated as hedging instruments under ASC Topic 815
Interest rate contracts		Other assets, net	(1)	$	—	$	—		Other liabilities	(1)	$	(336	)	$	(403	)
Total derivatives designated as hedging instruments under ASC Topic 815					—		—					(336	)		(403	)
Derivatives not designated as hedging instruments under ASC Topic 815
Interest rate contracts		Other assets, net	(1)	$	—		—		Other liabilities	(1)		—			(13	)
Total derivatives not designated as hedging instruments under ASC Topic 815					—		—					—			(13	)
Total derivatives				$	—	$	—				$	(336	)	$	(416	)

(1) Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on the consolidated balance sheet.

Effect of Derivative Financial Instruments on Financial Statements

The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Derivatives Designated as Hedging Instruments
Derivative type		Interest rate contracts			Interest rate contracts
Amount of loss recognized in OCI (effective portion)	$	(28	)	$	(73	)
Location of gain or (loss) reclassified from accumulated OCI into income (effective portion)		Interest expense			Interest expense
Amount of loss reclassified from accumulated OCI into income (effective portion)	$	(645	)	$	(671	)
Location of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)		Loss on financing commitments			Loss on financing commitments
Amount of loss recognized in income due to missed forecast (ineffective portion and amount excluded from effectiveness testing)	$	(27	)	$	(146	)
Derivatives Not Designated as Hedging Instruments
Derivative type		Interest rate contracts			Interest rate contracts
Location of gain or (loss) recognized in income		Interest and other income			Interest and other income
Amount of loss recognized in income	$	—		$	(12	)

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CONDENSED CONSOLIDATED STATEMENT OF EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total		Common Stock	Additional Paid-in Capital	Distributions in Excess of Earnings	Accumulated Other Comprehensive Income (Loss)	Noncontrolling Interests
Beginning Balances at Dec. 31, 2012	$ 841,527		$ 1,781	$ 1,610,996	$ (850,885)	$ (16,196)	$ 95,831
Beginning Balances (in shares) at Dec. 31, 2012	178,127,559	[1]	178,128,000
Comprehensive income (loss):
Net loss	(5,866)				(5,367)		(499)
Unrealized change from cash flow hedging derivatives	646					599	47
Common stock:
Issuance of common stock, net of offering costs (in shares)			937,000
Issuance of common stock, net of offering costs	6,284		8	6,276
Redemptions of common stock (in shares)			(1,721,000)
Redemptions of common stock	(11,713)		(17)	(11,696)
Distributions on common stock	(15,639)				(15,639)
Noncontrolling interests:
Contributions of noncontrolling interests	131						131
Distributions to noncontrolling interests	(1,476)						(1,476)
Redemptions of noncontrolling interests	(1,761)						(1,761)
Buyout of noncontrolling interest	(234)			(350)			116
Ending Balances at Mar. 31, 2013	$ 811,899		$ 1,772	$ 1,605,226	$ (871,891)	$ (15,597)	$ 92,389
Ending Balances (in shares) at Mar. 31, 2013	177,344,261	[1]	177,344,000

[1] Includes 177,189,956 shares of Class E common stock, 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 129,555 shares of Class I common stock.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2013		Dec. 31, 2012
Common stock, par value	$ 0.01		$ 0.01
Common stock, shares authorized	1,000,000,000		1,000,000,000
Common stock, shares issued	177,344,261	[1]	178,127,559	[1]
Common stock, shares outstanding	177,344,261	[1]	178,127,559	[1]
Investment in real property	$ 2,219,490,000	[2]	$ 2,336,768,000	[2]
Class E
Common stock, shares issued	177,189,956		177,189,956
Common stock, shares outstanding	177,189,956		177,189,956
Class A
Common stock, shares issued	12,375		12,375
Common stock, shares outstanding	12,375		12,375
Class W
Common stock, shares issued	12,375		12,375
Common stock, shares outstanding	12,375		12,375
Class I
Common stock, shares issued	129,555		129,555
Common stock, shares outstanding	129,555		129,555
Variable interest entity investments
Investment in real property	391,400,000		520,300,000
Mortgage notes	$ 310,000,000		$ 419,500,000

[1] Includes 177,189,956 shares of Class E common stock, 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 129,555 shares of Class I common stock.

[2] Includes approximately $391.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of March 31, 2013 and December 31, 2012, respectively.

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Net Income (Loss) Per Common Share

3 Months Ended

Mar. 31, 2013

Net Income (Loss) Per Common Share

9. NET INCOME (LOSS) PER COMMON SHARE

Reconciliations of the numerator and denominator used to calculate basic net loss per common share to the numerator and denominator used to calculate diluted net loss per common share for the three months ended March 31, 2013 and 2012 are described in the following table (amounts in thousands, except per share information):

	For the Three Months Ended March 31,
	2013			2012
Numerator
Loss from continuing operations	$	(5,922	)	$	(7,734	)
Loss from continuing operations attributable to noncontrolling interests		560			760
Loss from continuing operations attributable to common stockholders		(5,362	)		(6,974	)
Dilutive noncontrolling interests share of loss from continuing operations		(424	)		(585	)
Numerator for diluted earnings per share – adjusted loss from continuing operations	$	(5,786	)	$	(7,559	)
Income (loss) from discontinued operations	$	56		$	(1,605	)
Income (loss) from discontinued operations attributable to noncontrolling interests		(61	)		89
Income (loss) from discontinued operations attributable to common stockholders		(5	)		(1,516	)
Dilutive noncontrolling interests share of discontinued operations		—			(163	)
Numerator for diluted earnings per share – adjusted loss from discontinued operations	$	(5	)	$	(1,679	)
Denominator
Weighted average shares outstanding-basic		178,792			183,270
Incremental weighted average shares effect of conversion of OP units		14,135			16,149
Weighted average shares outstanding-diluted		192,927			199,419
LOSS PER COMMON SHARE-BASIC AND DILUTED
Net loss from continuing operations	$	(0.03	)	$	(0.04	)
Net loss from discontinued operations		(0.00	)		(0.01	)
Net loss	$	(0.03	)	$	(0.05	)

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Document and Entity Information	3 Months Ended
	Mar. 31, 2013	May 08, 2013 Class E	May 08, 2013 Class A	May 08, 2013 Class W	May 08, 2013 Class I
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q1
Entity Registrant Name	Dividend Capital Diversified Property Fund Inc.
Entity Central Index Key	0001327978
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		177,986,703	12,375	12,375	166,411

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Segment Information

3 Months Ended

Mar. 31, 2013

Segment Information

10. SEGMENT INFORMATION

We have four reportable operating segments, which include our three real property operating sectors (office, industrial, and retail) and debt related investments. We organize and analyze the operations and results of each of these segments independently, due to inherently different considerations for each segment. Such considerations include, but are not limited to, the nature and characteristics of the investment, and investment strategies and objectives. The following table sets forth revenue and the components of net operating income (“NOI”) of our segments for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	Revenues				NOI
	2013		2012		2013		2012
Real property (1)
Office	$	43,932	$	39,754	$	32,007	$	30,970
Industrial		7,166		7,119		5,915		5,968
Retail		14,067		14,871		10,483		11,642
Debt related investments		2,735		1,884		2,735		1,884
Total	$	67,900	$	63,628	$	51,140	$	50,464

(1) Excludes results of operations of real properties categorized as discontinued operations.

We consider NOI to be an appropriate supplemental financial performance measure because NOI reflects the specific operating performance of our real properties and debt related investments, and excludes certain items that are not considered to be controllable in connection with the management of each property, such as interest income, depreciation and amortization, general and administrative expenses, asset management fees, interest expense and noncontrolling interests. However, NOI should not be viewed as an alternative measure of our financial performance as a whole, since it does exclude such items that could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies, as they may use different methodologies for calculating NOI. Therefore, we believe net income, as defined by GAAP, to be the most appropriate measure to evaluate our overall financial performance.

The following table is a reconciliation of our NOI to our reported net income (loss) attributable to common shareholders for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Net operating income	$	51,140		$	50,464
Real estate depreciation and amortization expense		(29,659	)		(29,534	)
General and administrative expenses		(2,601	)		(1,883	)
Asset management and advisory fees, related party		(3,684	)		(4,912	)
Acquisition-related expenses		—			(299	)
Interest and other income		79			62
Interest expense		(20,927	)		(20,211	)
Loss on extinguishment of debt and financing commitments		(270	)		(1,421	)
Discontinued operations, net of taxes		56			(1,605	)
Net loss attributable to noncontrolling interests		499			849
Net loss attributable to common stockholders	$	(5,367	)	$	(8,490	)

The following table reflects our total assets by business segment as of March 31, 2013 and December 31, 2012 (amounts in thousands):

	As of March 31, 2013		As of December 31, 2012
Segment assets:
Net investments in real property
Office	$	1,343,546	$	1,369,496
Industrial		263,828		351,375
Retail		612,116		615,897
Debt related investments, net		165,469		187,321
Total segment assets, net		2,384,959		2,524,089
Non-segment assets:
Cash and cash equivalents		36,793		36,872
Other non-segment assets (1)		176,792		98,293
Total assets	$	2,598,544	$	2,659,254

(1) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable. Other non-segment assets also include real properties classified as assets held for sale in the accompanying balance sheet as of March 31, 2013.

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CONDENSED CONSOLIDATED STATEMENTS OF LOSS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2013		Mar. 31, 2012
REVENUE:
Rental revenue	$ 65,165		$ 61,744
Debt related income	2,735		1,884
Total Revenue	67,900		63,628
EXPENSES:
Rental expense	16,760		13,164
Real estate depreciation and amortization expense	29,659		29,534
General and administrative expenses	2,601		1,883
Asset management and advisory fees, related party	3,684		4,912
Acquisition-related expenses			299
Total Operating Expenses	52,704		49,792
Other Income (Expenses):
Interest and other income	79		62
Interest expense	(20,927)		(20,211)
Loss on extinguishment of debt and financing commitments	(270)		(1,421)
Loss from continuing operations	(5,922)		(7,734)
Discontinued operations, net of taxes	56	[1]	(1,605)	[1]
Net Loss	(5,866)		(9,339)
Net loss attributable to noncontrolling interests	499		849
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (5,367)		$ (8,490)
Net income (loss) per basic and diluted common share:
Continuing operations	$ (0.03)		$ (0.04)
Discontinued operations	$ 0.00		$ (0.01)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$ (0.03)		$ (0.05)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic	178,792		183,270
Diluted	192,927		199,419
Distributions declared per common share	$ 0.0875		$ 0.1250

[1] Includes approximately $85,000 and $33,000 paid to our Advisor for asset management fees associated with the disposition of real properties during the three months ended March 31, 2013 and 2012, respectively.

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Debt Related Investments

3 Months Ended

Mar. 31, 2013

Debt Related Investments

4. DEBT RELATED INVESTMENTS

As of March 31, 2013 and December 31, 2012, we had invested in 16 and 19 debt related investments, respectively. The weighted average maturity of our debt investments as of March 31, 2013 was 2.5 years, based on our recorded net investment. The following table describes our debt related income for the three months ended March 31, 2013 and 2012 (dollar amounts in thousands):

	For the Three Months Ended				Weighted Average
	March 31,				Yield as of
Investment Type	2013		2012		March 31, 2013 (1)
Mortgage notes (2)	$	2,429	$	1,769		6.6	%
B-notes		51		115		0.0	%
Mezzanine debt		255		—		17.0	%
Total	$	2,735	$	1,884		6.9	%

(1) Weighted average yield is calculated on an unlevered basis using the amount invested, current interest rates and accretion of premiums or discounts realized upon the initial investment for each investment type as of March 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of March 31, 2013 for purposes of this table. As of March 31, 2013 we had two debt related investments with a combined net investment amount of $70.0 million that bear interest at floating rates indexed to LIBOR. All of our remaining debt related investments bear interest at fixed rates. We have assumed a yield of zero on the one debt related investments for which we have recognized a full allowance for loss as of March 31, 2013.

(2) We had two and one debt related investments repaid in full during the three months ended March 31, 2013 and March 31, 2012, respectively. During the three months ended March 31, 2013, amounts recorded include accelerated amortization of origination fees offset by accelerated amortization of deferred due diligence costs related to these repayments. During the three months ended March 31, 2012, amounts recorded include an early prepayment fee received and accelerated amortization of origination fees, offset by accelerated amortization of deferred due diligence costs related to this repayment.

Impairment

We review each of our debt related investments individually on a quarterly basis, and more frequently when such an evaluation is warranted, to determine if impairment exists. Accordingly, we do not group our debt related investments into classes by credit quality indicator. A debt related investment is impaired when, based on current information and events (including economic, industry and geographical factors), it is probable that we will be unable to collect all amounts due, both principal and interest, according to the contractual terms of the agreement. When an investment is deemed impaired, the impairment is measured based on the expected future cash flows discounted at the investment’s effective interest rate. As a practical expedient, we may measure impairment based on the fair value of the collateral of an impaired collateral-dependent debt investment. Regardless of the measurement method, we measure impairment based on the fair value of the collateral when it is determined that foreclosure is probable. We did not record any provision for loan loss during the three months ended March 31, 2013 or 2012. During the three months ended March 31, 2013 we wrote off the provision for loan loss on debt related investments of approximately $15.0 million related to one debt investment that we wrote off. During the three months ended March 31, 2012 we wrote off the provision for loss on debt related investments of approximately $20.0 million related to a mezzanine debt investment that we foreclosed upon. The table below presents a reconciliation of the beginning and ending balances, between December 31, 2012 and March 31, 2013, of our allowance for loan loss (amounts in thousands):

	Allowance for Loan Loss
Beginning balance as of December 31, 2012:	$	18,000
Provision for loss on debt related investments		—
Direct write offs		(15,000	)
Ending balance as of March 31, 2013:	$	3,000

We had one and two B-note debt investments on non-accrual status as of March 31, 2013 and December 31, 2012, respectively. One of our B-note debt investments that was on non-accrual status as of December 31, 2012 was written off upon our borrower’s completion of a loan restructuring during the three months ended March 31, 2013. We have recorded a complete allowance for loan loss related to our remaining debt related investment on non-accrual status. When a debt investment is on non-accrual status, we record income on the investment using the cash basis of accounting. The amount of income recorded on a cash basis of accounting was not significant during the three months ended March 31, 2013 or 2012. All of our debt related investments that were past due 90 days or more were on non-accrual status as of March 31, 2013 and December 31, 2012.

As of March 31, 2013 and December 31, 2012, we had one and three impaired debt related investments with an unpaid principal balance of approximately $3.0 million and $30.1 million, respectively. The following table describes our recorded investment in debt related investments before allowance for loan loss, and the related allowance for loan loss (amounts in thousands):

	Debt Investments Individually Evaluated for
	Impairment as of
	March 31, 2013			December 31, 2012
Debt investments	$	168,469		$	205,321
Less: Allowance for loan losses		(3,000	)		(18,000	)
Total	$	165,469		$	187,321

All impaired debt investments are subordinate debt investments. The following table describes our gross recorded investment in impaired debt related investments, the related allowance for loan loss, and the total amount of impaired loans for which we have not recorded an allowance for loan loss (amounts in thousands):

						Amount of Impaired
						Loans With No
As of:	Recorded Investment		Related Allowance			Allowance Recorded
March 31, 2013	$	3,000	$	(3,000	)	$	—
December 31, 2012	$	30,135	$	(18,000	)	$	12,135

The following table describes our average recorded net investment in the impaired debt related investments and the related interest income recorded (amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012
Average Recorded Investment	$	6,067	$	13,666
Interest Income Recognized	$	51	$	121

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Investments in Real Property

3 Months Ended

Mar. 31, 2013

Investments in Real Property

3. INVESTMENTS IN REAL PROPERTY

Our consolidated investments in real property consist of investments in office, industrial and retail properties. The following tables summarize our consolidated investments in real property as of March 31, 2013 and December 31, 2012 (amounts in thousands):

Real Property	Land		Building and Improvements			Intangible Lease Assets			Total Investment Amount			Intangible Lease Liabilities			Net Investment Amount
As of March 31, 2013:
Office	$	235,195	$	942,758		$	471,222		$	1,649,175		$	(65,656	)	$	1,583,519
Industrial(1)		52,598		330,818			61,967			445,383			(7,765	)		437,618
Retail		227,218		417,278			77,968			722,464			(51,059	)		671,405
Total gross book value		515,011		1,690,854			611,157			2,817,022			(124,480	)		2,692,542
Accumulated depreciation/amortization		—		(196,342	)		(317,180	)		(513,522	)		38,251			(475,271	)
Total net book value	$	515,011	$	1,494,512		$	293,977		$	2,303,500		$	(86,229	)	$	2,217,271
As of December 31, 2012:
Office	$	237,865	$	939,722		$	475,397		$	1,652,984		$	(65,788	)	$	1,587,196
Industrial		52,598		329,844			61,967			444,409			(7,765	)		436,644
Retail		227,218		416,971			77,968			722,157			(51,059	)		671,098
Total gross book value		517,681		1,686,537			615,332			2,819,550			(124,612	)		2,694,938
Accumulated depreciation/amortization		—		(189,740	)		(293,042	)		(482,782	)		36,281			(446,501	)
Total net book value	$	517,681	$	1,496,797		$	322,290		$	2,336,768		$	(88,331	)	$	2,248,437

(1) Includes $19.2 million in land, $79.1 million in building and improvements, $12.7 million in intangible lease assets, and $1.8 million in intangible lease liabilities, before accumulated depreciation of $25.9 million, related to seven industrial properties classified as held for sale in the accompanying balance sheet as of March 31, 2013.

Discontinued Operations

On January 13, 2013, we disposed of an office property located in the Dallas, TX market for which we recorded a net gain on the disposition. Additionally, as of March 31, 2013, we had agreed to dispose of a portfolio of seven industrial properties, of which we are not the managing partner, to our joint venture partner. The gain described above and the results of operations of these properties are included within discontinued operations.

We present the results of operations of this and all other disposed properties and their respective aggregate net gains (losses), collectively, as discontinued operations in our accompanying statements of comprehensive loss when the operations and cash flows have been (or will be) eliminated from our ongoing operations and we will not have any significant continuing involvement. Interest expense is included in discontinued operations only if it is directly attributable to these operations or properties. The following table summarizes amounts recorded as discontinued operations (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Revenues	$	1,509		$	2,732
Real estate depreciation and amortization expense		(864	)		(1,469	)
Other expenses		(1,802	)		(2,540	)
Loss from discontinued operations, net of taxes		(1,157	)		(1,277	)
Net gain on disposition, net of taxes		1,213			(328	)
Discontinued operations, net of taxes	$	56		$	(1,605	)

Rental Revenue

The following table summarizes the adjustments to rental revenue related to the amortization of above-market lease assets, below-market lease liabilities, and for straight-line rental adjustments for the three months ended March 31, 2013 and 2012. In addition, the following table includes tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Straight-line rent adjustments	$	2,968		$	1,964
Above-market lease assets		(1,926	)		(1,993	)
Below-market lease liabilities		2,102			2,461
Total increase to rental revenue	$	3,144		$	2,432
Tenant recovery income	$	8,789		$	8,307

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Debt Obligations (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Borrowings

The following table describes our borrowings as of March 31, 2013 and December 31, 2012 (dollar amounts in thousands):

	Weighted Average Stated Interest										Gross Investment Amount
	Rate as of						Outstanding Balance as of(1)				Securing Borrowings as of(2)
	March 31,			December 31,			March 31,		December 31,		March 31,		December 31,
	2013			2012			2013		2012		2013		2012
Fixed rate mortgages (3)		5.8	%		5.8	%	$	1,156,710	$	1,160,042	$	2,064,975	$	2,061,757
Floating rate mortgages(4)		4.0	%		3.5	%		8,850		23,701		15,259		42,609
Total mortgage notes		5.8	%		5.7	%		1,165,560		1,183,743		2,080,234		2,104,366
Repurchase facilities		2.7	%		2.7	%		112,397		135,709		158,041		198,389
Total other secured borrowings		2.7	%		2.7	%		112,397		135,709		158,041		198,389
Total secured borrowings		5.5	%		5.4	%		1,277,957		1,319,452		2,238,275		2,302,755
Line of credit		2.2	%		2.2	%		55,000		30,000		N/A		N/A
Term loan		2.2	%		2.2	%		270,000		270,000		N/A		N/A
Total unsecured borrowings		2.2	%		2.2	%		325,000		300,000		N/A		N/A
Total borrowings		4.8	%		4.8	%	$	1,602,957	$	1,619,452	$	2,238,275	$	2,302,755

(1) Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $55.0 million as of March 31, 2013 and December 31, 2012, (ii) unamortized discounts to the face value of our outstanding fixed-rate mortgages of $2.4 million and $2.7 million as of March 31, 2013 and December 31, 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $911,000 and $718,000 as of March 31, 2013 and December 31, 2012, respectively.

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

(3) Includes $85.0 million classified as liabilities held for sale in the accompanying balance sheet as of March 31, 2013.

(4) As of March 31, 2013, floating-rate mortgage notes were subject to an interest rate spread of 3.75% over one-month LIBOR. As of December 31, 2012, floating-rate mortgage notes were subject to interest rates at spreads ranging from 2.9% to 3.75% over one-month LIBOR.

Summary of Borrowings Reflects Contractual Debt Maturities

The following table reflects our contractual debt maturities as of March 31, 2013, specifically our obligations under secured borrowings and unsecured borrowings (dollar amounts in thousands):

	As of March 31, 2013
	Mortgage Notes and Other
	Secured Borrowings				Unsecured Borrowings				Total
	Number of				Number of
	Borrowings		Outstanding		Borrowings		Outstanding		Outstanding
Year Ending December 31,	Maturing		Balance (2)		Maturing		Balance (3)		Balance  (4)(5)
2013 (1)		1	$	75,224		0	$	—	$	75,224
2014		4		150,728		0		—		150,728
2015		5		129,452		0		—		129,452
2016		14		325,443		1		55,000		380,443
2017		9		476,466		0		—		476,466
2018		0		4,999		1		270,000		274,999
2019		0		5,292		0		—		5,292
2020		1		157,944		0		—		157,944
2021		0		1,707		0		—		1,707
2022		1		1,663		0		—		1,663
Thereafter		2		7,408		0		—		7,408
Total		37	$	1,336,326		2	$	325,000	$	1,661,326

(1) One of our repurchase facilities (the “REPO Borrowings”) with an aggregate outstanding principal balance as of March 31, 2013 of approximately $62.3 million has an initial maturity before December 31, 2013. The REPO Borrowings have an extension option beyond December 31, 2013. Borrowings that are subject to extension options are also subject to certain lender covenants and restrictions that we must meet to extend the initial maturity date. We currently believe that we will qualify for and expect to exercise this extension option. However, we cannot guarantee that we will meet the requirements to extend the REPO Borrowings upon initial maturity. In the event that we do not qualify to extend the REPO Borrowings, we expect to repay them with proceeds from new borrowings.

(2) Secured borrowings presented include (i) mortgage note borrowings of approximately $1.2 billion with maturities ranging from 2014 to 2029, and (ii) REPO Borrowings of approximately $62.3 million and $50.1 million, which mature in 2013 and 2014, respectively, which are subject to four and three one-year extension options, respectively.

(3) Unsecured borrowings presented includes (i) revolving credit facility draws totaling $55.0 million which mature during 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.

(4) Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities (including the Comerica Bank Tower Mortgage balloon payment due in January 2017), and does not include (i) the fair value adjustment on mortgage notes carried at fair value of $55.0 million as of March 31, 2013, (ii) the mark-to-market adjustment on assumed debt of $2.4 million as of March 31, 2013, and (iii) the GAAP principal amortization of our restructured mortgage note of approximately $911,000 that does not reduce the contractual amount due of the related mortgage note as of March 31, 2013.

(5) As of March 31, 2013, our mortgage notes, secured borrowings, and line of credit are secured by interests in real properties and debt investments totaling approximately $2.2 billion.

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Subsequent Events

3 Months Ended

Mar. 31, 2013

Subsequent Events

11. SUBSEQUENT EVENTS

We have evaluated subsequent events for the period from March 31, 2013, the date of these financial statements, through the date these financial statements are issued.

Disposition of Real Property

On May 10, 2013, we disposed of seven industrial properties comprising 1.9 million net rentable square feet located in the Atlanta, Central Pennsylvania, Charlotte, Chicago, Philadelphia, and Sacramento markets, to a joint venture partner that was the managing partner of the properties. We held the properties through a joint venture wherein we owned a 96.4% interest in the properties through a consolidated subsidiary. Our consolidated subsidiary disposed of the properties, which had an aggregate basis of approximately $84.0 million (after a $5.7 million impairment charge which we recorded during the fourth quarter of 2012), to the managing partner of the joint venture for a total sales price of $85.9 million.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2013

Fair Value of Financial Instruments

7. FAIR VALUE OF FINANCIAL INSTRUMENTS

We are required to disclose the fair value of our financial instruments for which it is practicable to estimate the value. The fair value of a financial instrument is the amount at which such financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. For certain of our financial instruments, fair values are not readily available since there are no active trading markets as characterized by current exchanges between willing parties. Accordingly, we derive our estimated fair value using various valuation techniques, such as computing the present value of estimated future cash flows using discount rates commensurate with the risks involved. However, the determination of estimated cash flows may be subjective and imprecise and changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. In that regard, the fair value estimates may not be substantiated by comparison to independent markets, and in many cases, may not be realized in immediate settlement of the instrument.

ASC Topic 820, Fair Value Measurement and Disclosures (“ASC Topic 820”), defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. ASC Topic 820 applies to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

ASC Topic 820 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, ASC Topic 820 establishes a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that we have the ability to 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, foreign exchange rates, and yield curves that

are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liabilities, 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.

The fair values estimated below are indicative of certain interest rate and other assumptions as of March 31, 2013 and December 31, 2012, and may not take into consideration the effects of subsequent interest rate or other assumption fluctuations, or changes in the values of underlying collateral. The fair values of cash and cash equivalents, restricted cash, accounts receivable, and accounts payable and accrued expenses approximate their carrying values because of the short-term nature of these instruments.

The carrying amounts and estimated fair values of our other financial instruments as of March 31, 2013 and December 31, 2012 were as follows (amounts in thousands):

	As of March 31, 2013				As of December 31, 2012
	Carrying		Estimated		Carrying		Estimated
	Amount		Fair Value		Amount		Fair Value
Assets:
Investments in real estate securities	$	461	$	461	$	461	$	461
Fixed-rate debt related investments, net		96,390		99,168		108,482		110,796
Floating-rate debt related investments, net		69,079		69,015		78,839		79,803
Derivative instruments		—		—		—		—
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	$	1,034,308	$	1,091,873	$	1,037,047	$	1,091,425
Fixed-rate mortgage notes carried at fair value		122,402		122,402		122,995		122,995
Floating-rate mortgage notes		8,850		8,911		23,701		23,738
Floating-rate other secured borrowings		112,397		112,536		135,709		135,931
Floating-rate unsecured borrowings		325,000		325,000		300,000		300,000
Derivative liabilities		—		—		416		416

The methodologies used and key assumptions made to estimate fair values of the other financial instruments described in the above table are as follows:

Debt Related Investments—The fair value of our performing debt investments are estimated using a discounted cash flow methodology. This method discounts estimated future cash flows using rates management determines best reflect current market interest rates that would be offered for loans with similar characteristics and credit quality. Credit spreads and market interest rates used to determine the fair value of these instruments are based on unobservable Level 3 inputs which management has determined to be its best estimate of current market values.

Mortgage Notes and Other Secured Borrowings Carried at Amortized Cost—The fair value of our mortgage notes and other secured borrowings are estimated using a discounted cash flow analysis, based on our estimate of market interest rates. Credit spreads relating to the underlying instruments are based on unobservable Level 3 inputs, which we have determined to be our best estimate of current market spreads of similar instruments.

Mortgage Note Carried at Fair Value—The only mortgage note carried at fair value is the mortgage note secured by Comerica Bank Tower (the “Comerica Bank Tower Mortgage”). Senior management, under the supervision of our Chief Executive Officer and Chief Financial Officer, are responsible for establishing and reviewing our valuation policies and procedures, and such policies and procedures are also discussed with our Audit Committee. We measured the fair value of the Comerica Bank Tower Mortgage based upon the fair value of Comerica Bank Tower, which serves as collateral for the loan. Specifically, we considered preliminary third party appraisals for Comerica Bank Tower to derive our estimate of the fair value of Comerica Bank Tower. In evaluating the information included in these third party appraisals, we considered the reasonableness of the sources of information and compared such information to our understanding of Comerica Bank Tower’s specific operating performance and its applicable capital market environment. Fluctuations in the operating performance of Comerica Bank Tower and the applicable capital market environment, will likely result in corresponding fluctuations in the fair value of the Comerica Bank Tower Mortgage, therefore we will continue to monitor these factors to analyze changes in fair value from period to period. The contractual cash flows of the Comerica Bank Tower Mortgage at a discount rate of approximately 15% resulted in a value of the note of $124.8 million at the acquisition date. A 1% increase in the discount rate would have resulted in a fair value of approximately $120.1 million, and a 1% decrease in the discount rate would have resulted in a fair value of approximately $129.7 million.

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Debt Obligations

3 Months Ended

Mar. 31, 2013

Debt Obligations

5. DEBT OBLIGATIONS

The following table describes our borrowings as of March 31, 2013 and December 31, 2012 (dollar amounts in thousands):

	Weighted Average Stated Interest										Gross Investment Amount
	Rate as of						Outstanding Balance as of(1)				Securing Borrowings as of(2)
	March 31,			December 31,			March 31,		December 31,		March 31,		December 31,
	2013			2012			2013		2012		2013		2012
Fixed rate mortgages (3)		5.8	%		5.8	%	$	1,156,710	$	1,160,042	$	2,064,975	$	2,061,757
Floating rate mortgages(4)		4.0	%		3.5	%		8,850		23,701		15,259		42,609
Total mortgage notes		5.8	%		5.7	%		1,165,560		1,183,743		2,080,234		2,104,366
Repurchase facilities		2.7	%		2.7	%		112,397		135,709		158,041		198,389
Total other secured borrowings		2.7	%		2.7	%		112,397		135,709		158,041		198,389
Total secured borrowings		5.5	%		5.4	%		1,277,957		1,319,452		2,238,275		2,302,755
Line of credit		2.2	%		2.2	%		55,000		30,000		N/A		N/A
Term loan		2.2	%		2.2	%		270,000		270,000		N/A		N/A
Total unsecured borrowings		2.2	%		2.2	%		325,000		300,000		N/A		N/A
Total borrowings		4.8	%		4.8	%	$	1,602,957	$	1,619,452	$	2,238,275	$	2,302,755

(1) Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $55.0 million as of March 31, 2013 and December 31, 2012, (ii) unamortized discounts to the face value of our outstanding fixed-rate mortgages of $2.4 million and $2.7 million as of March 31, 2013 and December 31, 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $911,000 and $718,000 as of March 31, 2013 and December 31, 2012, respectively.

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

(3) Includes $85.0 million classified as liabilities held for sale in the accompanying balance sheet as of March 31, 2013.

(4) As of March 31, 2013, floating-rate mortgage notes were subject to an interest rate spread of 3.75% over one-month LIBOR. As of December 31, 2012, floating-rate mortgage notes were subject to interest rates at spreads ranging from 2.9% to 3.75% over one-month LIBOR.

As of March 31, 2013, 13 mortgage notes were interest-only and 21 mortgage notes were fully amortizing with outstanding balances of approximately $425.5 million and $740.1 million, respectively. None of our mortgage notes are recourse to us.

As of March 31, 2013, we had outstanding borrowings of $270.0 million and $55.0 million, respectively, under our term loan and revolving credit facility components of our senior unsecured term loan and revolving line of credit (collectively, the “Facility”). $125.0 million was available for us to borrow under the revolving credit facility component of the Facility. As of December 31, 2012, we had outstanding borrowings of $270.0 million and $30.0 million under the term loan and revolving credit facility components of the Facility, respectively. $150.0 million was available for us to borrow under the revolving credit facility component of the Facility.

The following table reflects our contractual debt maturities as of March 31, 2013, specifically our obligations under secured borrowings and unsecured borrowings (dollar amounts in thousands):

	As of March 31, 2013
	Mortgage Notes and Other
	Secured Borrowings				Unsecured Borrowings				Total
	Number of				Number of
	Borrowings		Outstanding		Borrowings		Outstanding		Outstanding
Year Ending December 31,	Maturing		Balance (2)		Maturing		Balance (3)		Balance  (4)(5)
2013 (1)		1	$	75,224		0	$	—	$	75,224
2014		4		150,728		0		—		150,728
2015		5		129,452		0		—		129,452
2016		14		325,443		1		55,000		380,443
2017		9		476,466		0		—		476,466
2018		0		4,999		1		270,000		274,999
2019		0		5,292		0		—		5,292
2020		1		157,944		0		—		157,944
2021		0		1,707		0		—		1,707
2022		1		1,663		0		—		1,663
Thereafter		2		7,408		0		—		7,408
Total		37	$	1,336,326		2	$	325,000	$	1,661,326

(1) One of our repurchase facilities (the “REPO Borrowings”) with an aggregate outstanding principal balance as of March 31, 2013 of approximately $62.3 million has an initial maturity before December 31, 2013. The REPO Borrowings have an extension option beyond December 31, 2013. Borrowings that are subject to extension options are also subject to certain lender covenants and restrictions that we must meet to extend the initial maturity date. We currently believe that we will qualify for and expect to exercise this extension option. However, we cannot guarantee that we will meet the requirements to extend the REPO Borrowings upon initial maturity. In the event that we do not qualify to extend the REPO Borrowings, we expect to repay them with proceeds from new borrowings.

(2) Secured borrowings presented include (i) mortgage note borrowings of approximately $1.2 billion with maturities ranging from 2014 to 2029, and (ii) REPO Borrowings of approximately $62.3 million and $50.1 million, which mature in 2013 and 2014, respectively, which are subject to four and three one-year extension options, respectively.

(3) Unsecured borrowings presented includes (i) revolving credit facility draws totaling $55.0 million which mature during 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.

(4) Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities (including the Comerica Bank Tower Mortgage balloon payment due in January 2017), and does not include (i) the fair value adjustment on mortgage notes carried at fair value of $55.0 million as of March 31, 2013, (ii) the mark-to-market adjustment on assumed debt of $2.4 million as of March 31, 2013, and (iii) the GAAP principal amortization of our restructured mortgage note of approximately $911,000 that does not reduce the contractual amount due of the related mortgage note as of March 31, 2013.

(5) As of March 31, 2013, our mortgage notes, secured borrowings, and line of credit are secured by interests in real properties and debt investments totaling approximately $2.2 billion.

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Hedging Activities

3 Months Ended

Mar. 31, 2013

Hedging Activities

6. HEDGING ACTIVITIES

Risk Management Objective of Using Derivatives

We maintain risk management control systems to monitor interest rate risk attributable to both our outstanding and forecasted debt obligations. We generally seek to limit the impact of interest rate changes on earnings and cash flows by selectively utilizing derivative instruments to hedge exposures to changes in interest rates on loans secured by our assets. While this hedging strategy is designed to minimize the impact on our net income (loss) and cash provided by operating activities from changes in interest rates, the overall returns on our investments may be reduced. Our board of directors has established policies and procedures regarding our use of derivative instruments for hedging or other purposes to achieve these risk management objectives.

Cash Flow Hedges of Interest Rate Risk

Our objectives in using interest rate derivatives are to add stability to interest expense and to manage our exposure to interest rate movements. To accomplish this objective, we primarily use interest rate swaps and caps as part of our interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. Interest rate caps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium payment. Additionally, we have entered into and plan to enter into certain interest rate derivatives with the goal of mitigating our exposure to adverse fluctuations in the interest payments on our one-month LIBOR-indexed debt.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges under ASC Topic 815 “Derivatives and Hedging” is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. During the next 12 months, we estimate that approximately $2.2 million will be reclassified as an increase to interest expense related to effective forward started interest rate swaps where the hedging instrument has been terminated, and we estimate that approximately $326,000 will be reclassified as an increase to interest expense related to active effective hedges of floating rate debt issuances. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The table below presents a reconciliation of the beginning and ending balances, between December 31, 2012 and March 31, 2013, of our accumulated other comprehensive loss (“OCI”), net of amounts attributable to noncontrolling interests related to the effective portion of our cash flow hedges as presented on our financial statements, as well as amounts related to our available-for-sale securities (amounts in thousands):

							Accumulated
	Gains and Losses on			Unrealized Losses on Available-For-			Other Comprehensive
	Cash Flow Hedges			Sale Securities			Loss
Beginning balance as of December 31, 2012:	$	(14,710	)	$	(1,486	)	$	(16,196	)
Other comprehensive income:
Amortization of interest expense		645			—			645
Change in fair value		28			—			28
Amounts reclassified from accumulated other comprehensive income:
Losses reclassified into earnings upon discontinuance of cash flow hedges		(27	)		—			(27	)
Net current-period other comprehensive income		646			—			646
Attribution of OCI to noncontrolling interests		(47	)		—			(47	)
Ending balance as of March 31, 2013	$	(14,111	)	$	(1,486	)	$	(15,597	)

Fair Values of Derivative Instruments

The table below presents the gross fair value of our derivative financial instruments as well as their classification on our accompanying balance sheet as of March 31, 2013 and December 31, 2012 (amounts in thousands):

	Asset Derivatives							Liability Derivatives
				As of		As of					As of			As of
				March 31,		December 31,					March 31,			December 31,
	Balance Sheet			2013		2012		Balance Sheet			2013			2012
	Location			Fair Value		Fair Value		Location			Fair Value			Fair Value
Derivatives designated as hedging instruments under ASC Topic 815
Interest rate contracts		Other assets, net	(1)	$	—	$	—		Other liabilities	(1)	$	(336	)	$	(403	)
Total derivatives designated as hedging instruments under ASC Topic 815					—		—					(336	)		(403	)
Derivatives not designated as hedging instruments under ASC Topic 815
Interest rate contracts		Other assets, net	(1)	$	—		—		Other liabilities	(1)		—			(13	)
Total derivatives not designated as hedging instruments under ASC Topic 815					—		—					—			(13	)
Total derivatives				$	—	$	—				$	(336	)	$	(416	)

(1) Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on the consolidated balance sheet.

The majority of the inputs used to value our derivative instruments fall within Level 2 of the fair value hierarchy. However, the credit valuation adjustments associated with our derivative instruments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of potential default by us and our counterparties. As of March 31, 2013, we had assessed the significance of the impact of the credit valuation adjustments and had determined that it was not significant to the overall valuation of our derivative instruments. As a result, we have determined that the significant inputs for all of our derivative valuations are classified in Level 2 of the fair value hierarchy.

Designated Hedges

As of March 31, 2013, we had two outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk, with a total notional amount of $69.1 million. As of December 31, 2012, we had two outstanding interest rate caps and two outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk, with a total notional amount of $90.0 million.

Undesignated Hedges

Derivatives not designated as hedges are not speculative and are used to hedge our exposure to interest rate movements and other identified risks but do not meet hedge accounting requirements. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in earnings and resulted in a loss of approximately $0 and $158,000 for the three months ended March 31, 2013 and 2012, respectively. As of March 31, 2013 we had two outstanding interest rate caps that were not designated as hedges with a total notional amount of approximately $232.1 million. As of December 31, 2012, we had two outstanding interest rate caps and one interest rate swap that were not designated as hedges with a total notional amount of approximately $230.4 million.

Effect of Derivative Instruments on the Statements of Comprehensive Loss

The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Derivatives Designated as Hedging Instruments
Derivative type		Interest rate contracts			Interest rate contracts
Amount of loss recognized in OCI (effective portion)	$	(28	)	$	(73	)
Location of gain or (loss) reclassified from accumulated OCI into income (effective portion)		Interest expense			Interest expense
Amount of loss reclassified from accumulated OCI into income (effective portion)	$	(645	)	$	(671	)
Location of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)		Loss on financing commitments			Loss on financing commitments
Amount of loss recognized in income due to missed forecast (ineffective portion and amount excluded from effectiveness testing)	$	(27	)	$	(146	)
Derivatives Not Designated as Hedging Instruments
Derivative type		Interest rate contracts			Interest rate contracts
Location of gain or (loss) recognized in income		Interest and other income			Interest and other income
Amount of loss recognized in income	$	—		$	(12	)

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Related Party Transactions

3 Months Ended

Mar. 31, 2013

Related Party Transactions

8. RELATED PARTY TRANSACTIONS

Our day-to-day activities are managed by our Advisor, a related party, under the terms and conditions of the Advisory Agreement. Our Advisor is considered to be a related party as certain indirect owners and employees of our Advisor serve as one of our directors and/or our executive officers. As of March 31, 2013, the responsibilities of our Advisor included the selection and underwriting of our real property and debt related investments, the negotiations for these investments, the asset management and financing of these investments and the oversight of real property dispositions.

In connection with the Offering, we entered into an Eighth Amended and Restated Advisory Agreement (the “Advisory Agreement”) with our Advisor, effective July 12, 2012, which modified the fees and expense reimbursements payable to our Advisor. Per the Advisory Agreement, in consideration for asset management services performed, we pay our Advisor an advisory fee comprised of two separate components: (1) a fixed amount equal to 1.15% annually of the “Aggregate Fund NAV” (defined as the aggregate NAV of our Class E shares, Class A shares, Class W shares and Class I shares, along with the Class E OP Units held by third parties) for each day, and (2) a performance component that is based on the annual non-compounded investment return provided to holders of “Fund Interests” (defined as our Class E shares, Class A shares, Class W shares, Class I shares, and Class E OP Units held by third parties) such that the Advisor will receive 25% of the overall return in excess of 6%; provided that in no event may the performance condition exceed 10% of the overall return for such year, and subject to certain other limitations. We will also pay our Advisor a development management fee equal to 4% of the cost to develop, construct, or improve real property assets. In addition, we will pay our Advisor a fee of 1% of the sales price of individual real property assets upon disposition of such assets. Further, for a substantial amount of services in connection with the sale of a property, as determined by a majority of our independent directors, we will pay our Advisor up to 50% of the reasonable, customary and competitive commission paid for the sale of a comparable real property, provided that such amount shall not exceed 1% of the contract price of the property sold and, when added to all other real estate commissions paid to unaffiliated parties in connection with the sale, may not exceed the lesser of a competitive real estate commission or 6% of the sales price of the property.

In addition, pursuant to the Advisory Agreement, we will pay directly, or reimburse our Advisor and the Dealer Manager (defined below) if they pay on our behalf any organizational and offering expenses (other than selling commissions, the dealer manager fee, distribution fees and non-transaction based compensation allocated to sales-related activities of employees of the Dealer Manager in connection with the offering) relating to any public offerings as and when incurred. After the termination of the primary portion of the offering and again after termination of the distribution reinvestment plan portion of the offering, the Advisor has agreed to reimburse us to the extent that total cumulative organization and offering expenses (including selling commissions, the dealer manager fee and distribution fees) that we incur exceed 15% of our gross proceeds from the applicable offering.

Subject to certain limitations, we will reimburse the Advisor for all of the costs it incurs in connection with the services it provides to us, including, without limitation, our allocable share of the Advisor’s overhead, which includes but is not limited to the Advisor’s rent, utilities and personnel costs; provided, that we will not reimburse the Advisor or its affiliates for services for which the Advisor or its affiliates are entitled to compensation in the form of a separate fee.

In connection with the Offering, effective July 12, 2012, we also entered into a dealer manager agreement with Dividend Capital Securities LLC (the “Dealer Manager”), which is an entity related to our Advisor. Pursuant to this agreement, we pay (i) selling commissions up to 3% of the NAV per Class A share sold in the primary portion of the offering, (ii) a dealer manager fee which accrues daily in an amount equal to 1/365^th of 0.6% of our NAV per share of Class A and Class W shares outstanding and an amount equal to 1/365^th of 0.1% of our NAV per share of Class I shares outstanding on such day on a continuous basis, and (iii) a distribution fee which accrues daily in an amount equal to 1/365^th of 0.5% of our NAV per share of Class A shares outstanding on such day on a continuous basis. We will cease paying the dealer manager fee and distribution fee with respect to shares sold in the Offering on the earlier to occur of the following: (i) a listing of the class of such shares on a national securities exchange, (ii) following the completion of the Offering, total underwriting compensation in this offering equaling 10% of the gross proceeds from the primary portion of the Offering, or (iii) such shares no longer being outstanding. A negligible amount of dealer manager and distribution fees were incurred during the three months ended March 31, 2013 as a result of the issuance of Class A, Class W and Class I shares in a private offering on September 28, 2012.

We intend to enter into an amendment to our dealer manager agreement to provide that we will pay to the Dealer Manager a primary dealer fee in the amount of up to 4.5% of the gross proceeds raised from the sale of Class I shares in the primary offering, provided that (i) the sales are all made before July 31, 2013 (unless extended by the Company, through written notice to the Dealer Manager) and (ii) the total gross proceeds raised with respect to which the primary dealer fee will apply may not exceed $300,000,000. The Dealer Manager will reallow all of the primary dealer fee to the participating broker-dealers involved in selling such Class I shares based on the portion of the gross proceeds raised from their customers, and the primary dealer fee paid by us will be no greater than the amount reallowed to the participating broker-dealers. The Dealer Manager will consider the primary dealer fee to be underwriting compensation.

Dividend Capital Total Advisors Group LLC, the parent of the Advisor, had been previously issued, in exchange for $1,000 in consideration, partnership units in the Operating Partnership, constituting a separate series of partnership interests with special distribution rights (the “Special Units”). The Special Units constituted a form of incentive compensation that would have value if we met certain performance thresholds. In connection with the Offering, pursuant to a Special Unit Repurchase Agreement effective July 12, 2012, we redeemed and cancelled the 200 Special Units, and paid $1,000 to Dividend Capital Total Advisors Group LLC in connection with such redemption.

As of March 31, 2013 and December 31, 2012, we owed approximately $1.3 million and $1.3 million, respectively, to our Advisor and affiliates of our Advisor for such services and reimbursement of certain expenses. Pursuant to the amended Advisory Agreement, we accrue the advisory fee on a daily basis and pay our Advisor amounts due subsequent to each month-end.

The following table summarizes fees and other amounts earned by our Advisor and its related parties in connection with services performed for us during the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012
Asset management and advisory fees	$	3,684	$	4,912
Development management fee		55		—
Other reimbursements		1,037		513
Asset management fees related to the disposition of real properties		85		33
Total	$	4,861	$	5,458

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Summary of Adjustments to Rental Revenue Related to Amortization of Above-Market Lease Assets, Below-Market Lease Liabilities, and for Straight-Line Rental Adjustments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Rental Income [Line Items]
Straight-line rent adjustments	$ 2,968	$ 1,964
Amortization of above-market lease assets	(1,926)	(1,993)
Amortization of below-market lease liabilities	2,102	2,461
Total increase to rental revenue	3,144	2,432
Tenant recovery income	$ 8,789	$ 8,307

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Summary of Carrying Amount and Fair Values of Other Financial Instruments (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013	Dec. 31, 2012
Carrying (Reported) Amount, Fair Value Disclosure
Assets:
Derivative instruments
Liabilities:
Derivative liabilities		416
Carrying (Reported) Amount, Fair Value Disclosure | Real Estate Securities
Assets:
Investments in real estate securities	461	461
Carrying (Reported) Amount, Fair Value Disclosure | Fixed-rate debt related investments, net
Assets:
Fixed-rate debt related investments, net	96,390	108,482
Carrying (Reported) Amount, Fair Value Disclosure | Floating-rate debt related investments, net
Assets:
Floating-rate debt related investments, net	69,079	78,839
Carrying (Reported) Amount, Fair Value Disclosure | Fixed rate secured borrowings
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	1,034,308	1,037,047
Fixed-rate mortgage notes carried at fair value	122,402	122,995
Carrying (Reported) Amount, Fair Value Disclosure | Floating-rate mortgage notes
Liabilities:
Floating-rate mortgage notes	8,850	23,701
Carrying (Reported) Amount, Fair Value Disclosure | Floating rate mortgages
Liabilities:
Floating-rate other secured borrowings	112,397	135,709
Carrying (Reported) Amount, Fair Value Disclosure | Floating Rate Un-Secured Borrowings
Liabilities:
Floating-rate unsecured borrowings	325,000	300,000
Estimate of Fair Value, Fair Value Disclosure
Assets:
Derivative instruments
Liabilities:
Derivative liabilities		416
Estimate of Fair Value, Fair Value Disclosure | Real Estate Securities
Assets:
Investments in real estate securities	461	461
Estimate of Fair Value, Fair Value Disclosure | Fixed-rate debt related investments, net
Assets:
Fixed-rate debt related investments, net	99,168	110,796
Estimate of Fair Value, Fair Value Disclosure | Floating-rate debt related investments, net
Assets:
Floating-rate debt related investments, net	69,015	79,803
Estimate of Fair Value, Fair Value Disclosure | Fixed rate secured borrowings
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	1,091,873	1,091,425
Fixed-rate mortgage notes carried at fair value	122,402	122,995
Estimate of Fair Value, Fair Value Disclosure | Floating-rate mortgage notes
Liabilities:
Floating-rate mortgage notes	8,911	23,738
Estimate of Fair Value, Fair Value Disclosure | Floating rate mortgages
Liabilities:
Floating-rate other secured borrowings	112,536	135,931
Estimate of Fair Value, Fair Value Disclosure | Floating Rate Un-Secured Borrowings
Liabilities:
Floating-rate unsecured borrowings	$ 325,000	$ 300,000

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Investments in Real Property (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Consolidated Investments In Real Property

The following tables summarize our consolidated investments in real property as of March 31, 2013 and December 31, 2012 (amounts in thousands):

Real Property	Land		Building and Improvements			Intangible Lease Assets			Total Investment Amount			Intangible Lease Liabilities			Net Investment Amount
As of March 31, 2013:
Office	$	235,195	$	942,758		$	471,222		$	1,649,175		$	(65,656	)	$	1,583,519
Industrial(1)		52,598		330,818			61,967			445,383			(7,765	)		437,618
Retail		227,218		417,278			77,968			722,464			(51,059	)		671,405
Total gross book value		515,011		1,690,854			611,157			2,817,022			(124,480	)		2,692,542
Accumulated depreciation/amortization		—		(196,342	)		(317,180	)		(513,522	)		38,251			(475,271	)
Total net book value	$	515,011	$	1,494,512		$	293,977		$	2,303,500		$	(86,229	)	$	2,217,271
As of December 31, 2012:
Office	$	237,865	$	939,722		$	475,397		$	1,652,984		$	(65,788	)	$	1,587,196
Industrial		52,598		329,844			61,967			444,409			(7,765	)		436,644
Retail		227,218		416,971			77,968			722,157			(51,059	)		671,098
Total gross book value		517,681		1,686,537			615,332			2,819,550			(124,612	)		2,694,938
Accumulated depreciation/amortization		—		(189,740	)		(293,042	)		(482,782	)		36,281			(446,501	)
Total net book value	$	517,681	$	1,496,797		$	322,290		$	2,336,768		$	(88,331	)	$	2,248,437

(1) Includes $19.2 million in land, $79.1 million in building and improvements, $12.7 million in intangible lease assets, and $1.8 million in intangible lease liabilities, before accumulated depreciation of $25.9 million, related to seven industrial properties classified as held for sale in the accompanying balance sheet as of March 31, 2013.

Summary of Amounts Recorded as Discontinued Operations

The following table summarizes amounts recorded as discontinued operations (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Revenues	$	1,509		$	2,732
Real estate depreciation and amortization expense		(864	)		(1,469	)
Other expenses		(1,802	)		(2,540	)
Loss from discontinued operations, net of taxes		(1,157	)		(1,277	)
Net gain on disposition, net of taxes		1,213			(328	)
Discontinued operations, net of taxes	$	56		$	(1,605	)

Summary of Adjustments to Rental Revenue Related to Amortization of Above-Market Lease Assets, Below-Market Lease Liabilities, and for Straight-Line Rental Adjustments

The following table summarizes the adjustments to rental revenue related to the amortization of above-market lease assets, below-market lease liabilities, and for straight-line rental adjustments for the three months ended March 31, 2013 and 2012. In addition, the following table includes tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue (amounts in thousands):

	For the Three Months Ended March 31,
	2013			2012
Straight-line rent adjustments	$	2,968		$	1,964
Above-market lease assets		(1,926	)		(1,993	)
Below-market lease liabilities		2,102			2,461
Total increase to rental revenue	$	3,144		$	2,432
Tenant recovery income	$	8,789		$	8,307

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2013

Summary of Fees and Other Amounts Earned by Advisor

The following table summarizes fees and other amounts earned by our Advisor and its related parties in connection with services performed for us during the three months ended March 31, 2013 and 2012 (amounts in thousands):

	For the Three Months Ended March 31,
	2013		2012
Asset management and advisory fees	$	3,684	$	4,912
Development management fee		55		—
Other reimbursements		1,037		513
Asset management fees related to the disposition of real properties		85		33
Total	$	4,861	$	5,458

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Gross Fair Value of Derivative Financial Instruments as Well as Their Classification (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair value, Gross asset
Liability Derivatives, Fair value, Gross liability	(336)		(416)
Designated Hedges
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair value, Gross asset
Liability Derivatives, Fair value, Gross liability	(336)		(403)
Designated Hedges | Interest Rate Contract | Other Liabilities
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair value, Gross liability	(336)	[1]	(403)	[1]
Designated Hedges | Interest Rate Contract | Other Assets
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair value, Gross asset		[1]		[1]
Undesignated hedges
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair value, Gross asset
Liability Derivatives, Fair value, Gross liability			(13)
Undesignated hedges | Interest Rate Contract | Other Liabilities
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair value, Gross liability			(13)	[1]
Undesignated hedges | Interest Rate Contract | Other Assets
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair value, Gross asset		[1]		[1]

[1] Although our derivative contracts are subject to master netting arrangements which serve as credit mitigants to both us and our counterparties under certain situations, we do not net our derivative fair values or any existing rights or obligations to cash collateral on the consolidated balance sheet.

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Average Recorded Net Investment in Impaired Debt Related Investments and Related Interest Income Recorded (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Investment [Line Items]
Average Recorded Investment	$ 6,067	$ 13,666
Interest Income Recognized	$ 51	$ 121

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CONDENSED CONSOLIDATED STATEMENTS OF LOSS (Parenthetical) (Paid to Advisor, USD $)	3 Months Ended
	Mar. 31, 2013	Mar. 31, 2012
Paid to Advisor
Acquisition fees paid to the Advisor	$ 85,000	$ 33,000

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2013

Summary of Significant Accounting Policies

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Interim Financial Statements

The accompanying interim condensed consolidated financial statements (herein referred to as “financial statements,” “balance sheets,” “statement of equity,” or “statements of comprehensive loss”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the Commission instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments and eliminations, consisting only of normal recurring items necessary for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of operating results for a full year. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on March 19, 2013.

Reclassifications

Certain amounts included in the accompanying financial statements for 2012 have been reclassified to conform to the 2013 financial statements presentation. Income statement amounts and certain income statement disclosure amounts for properties disposed of or classified as held for sale have been reclassified to discontinued operations for all periods presented. Balance sheet amounts and certain balance sheet disclosure amounts for properties classified as held for sale have been reclassified to assets held for sale.

New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued an accounting standard update that requires disclosure of the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount is required under GAAP to be reclassified in its entirety to net income. Additionally, the update requires disclosure of changes in each component of other comprehensive income. The disclosure requirements were retroactively effective for us beginning January 1, 2013. As this guidance only requires expanded disclosure, the adoption did not have a significant impact on our consolidated financial statements.

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Summary of Total Assets by Business Segment (Detail) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2013		Dec. 31, 2012		Mar. 31, 2012	Dec. 31, 2011
Segment assets:
Net investments in real property	$ 2,219,490	[1]	$ 2,336,768	[1]
Debt related investments, net	165,469		187,321
Total segment assets, net	2,384,959		2,524,089
Non-segment assets:
Cash and cash equivalents	36,793		36,872		57,506	128,447
Other non-segment assets	176,792	[2]	98,293	[2]
Total Assets	2,598,544		2,659,254
Office
Segment assets:
Net investments in real property	1,343,546		1,369,496
Industrial
Segment assets:
Net investments in real property	263,828		351,375
Retail
Segment assets:
Net investments in real property	612,116		615,897
Debt Related Investments
Segment assets:
Debt related investments, net	$ 165,469		$ 187,321

[1] Includes approximately $391.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of March 31, 2013 and December 31, 2012, respectively.

[2] Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable. Other non-segment assets also include real properties classified as assets held for sale in the accompanying balance sheet as of March 31, 2013.

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Net Income (Loss) Per Common Share (Tables)

3 Months Ended

Mar. 31, 2013

Details of Numerator and Denominator Used to Calculate Diluted Net Loss Per Common Share

Reconciliations of the numerator and denominator used to calculate basic net loss per common share to the numerator and denominator used to calculate diluted net loss per common share for the three months ended March 31, 2013 and 2012 are described in the following table (amounts in thousands, except per share information):

	For the Three Months Ended March 31,
	2013			2012
Numerator
Loss from continuing operations	$	(5,922	)	$	(7,734	)
Loss from continuing operations attributable to noncontrolling interests		560			760
Loss from continuing operations attributable to common stockholders		(5,362	)		(6,974	)
Dilutive noncontrolling interests share of loss from continuing operations		(424	)		(585	)
Numerator for diluted earnings per share – adjusted loss from continuing operations	$	(5,786	)	$	(7,559	)
Income (loss) from discontinued operations	$	56		$	(1,605	)
Income (loss) from discontinued operations attributable to noncontrolling interests		(61	)		89
Income (loss) from discontinued operations attributable to common stockholders		(5	)		(1,516	)
Dilutive noncontrolling interests share of discontinued operations		—			(163	)
Numerator for diluted earnings per share – adjusted loss from discontinued operations	$	(5	)	$	(1,679	)
Denominator
Weighted average shares outstanding-basic		178,792			183,270
Incremental weighted average shares effect of conversion of OP units		14,135			16,149
Weighted average shares outstanding-diluted		192,927			199,419
LOSS PER COMMON SHARE-BASIC AND DILUTED
Net loss from continuing operations	$	(0.03	)	$	(0.04	)
Net loss from discontinued operations		(0.00	)		(0.01	)
Net loss	$	(0.03	)	$	(0.05	)

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Reconciliation of Allowance for Loan Loss on Debt Related Investments (Detail) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2013
Investment [Line Items]
Beginning balance as of December 31, 2012:	$ 18,000
Provision for loss on debt related investments
Direct write offs	(15,000)
Ending balance as of March 31, 2013:	$ 3,000

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2013

Interim Financial Statements

Interim Financial Statements

The accompanying interim condensed consolidated financial statements (herein referred to as “financial statements,” “balance sheets,” “statement of equity,” or “statements of comprehensive loss”) have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) and with the Commission instructions to Form 10-Q and Rule 10-01 of Regulation S-X for interim financial statements. Accordingly, these statements do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, the accompanying financial statements include all adjustments and eliminations, consisting only of normal recurring items necessary for their fair presentation in conformity with GAAP. Interim results are not necessarily indicative of operating results for a full year. The unaudited information included in this Quarterly Report on Form 10-Q should be read in conjunction with our audited financial statements and notes thereto, included in our Annual Report on Form 10-K for the year ended December 31, 2012, filed with the Commission on March 19, 2013.

Reclassifications

Reclassifications

Certain amounts included in the accompanying financial statements for 2012 have been reclassified to conform to the 2013 financial statements presentation. Income statement amounts and certain income statement disclosure amounts for properties disposed of or classified as held for sale have been reclassified to discontinued operations for all periods presented. Balance sheet amounts and certain balance sheet disclosure amounts for properties classified as held for sale have been reclassified to assets held for sale.

New Accounting Pronouncements

New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued an accounting standard update that requires disclosure of the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount is required under GAAP to be reclassified in its entirety to net income. Additionally, the update requires disclosure of changes in each component of other comprehensive income. The disclosure requirements were retroactively effective for us beginning January 1, 2013. As this guidance only requires expanded disclosure, the adoption did not have a significant impact on our consolidated financial statements.