10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2013

OR

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

Commission file number: 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)

(303) 228-2200

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Title of each class

Unclassified Shares of Common Stock, $0.01 par value

Class A Shares of Common Stock, $0.01 par value

Class W Shares of Common Stock, $0.01 par value

Class I Shares of Common Stock, $0.01 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  ¨    No  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.  x

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 the 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

There is no established market for the Registrant’s shares of common stock. The Registrant publishes a daily net asset value (“NAV”), based on procedures and methodologies established by its board of directors, with an NAV on June 28, 2013, the last business day of the Registrant’s most recently completed second fiscal quarter, of $6.83 per share for its unclassified shares of common stock (referred to as “Class E” shares) and each of its Class A, Class W and Class I classes of common stock. As of December 31, 2013, the daily NAV was $6.93 per share for each of its Class E, Class A, Class W and Class I classes of common stock.

There were approximately 173,822,809 outstanding shares of Class E common stock, 12,375 outstanding shares of Class A common stock, 12,375 outstanding shares of Class W common stock, and 1,556,036 outstanding shares of Class I common stock, held by non-affiliates, as of June 28, 2013, the last business day of the Registrant’s most recently completed second fiscal quarter.

As of February 28, 2014, 171,984,070 shares of Class E common stock, 457,206 shares of Class A common stock, 324,525 shares of Class W common stock, and 4,341,011 shares of Class I common stock of the Registrant, each with a par value $0.01 per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: Portions of the Registrant’s Proxy Statement for the 2014 Annual Meeting of Stockholders, which we will file no later than April 30, 2014, are incorporated by reference in Part III.

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

ANNUAL REPORT ON FORM 10-K

For the Year Ended December 31, 2013

TABLE OF CONTENTS

PART I
Item 1.	Business	4
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	55
Item 2.	Properties	55
Item 3.	Legal Proceedings	57
Item 4.	Mine Safety Disclosures	57
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	58
Item 6.	Selected Financial Data	68
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	70
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	95
Item 8.	Financial Statements and Supplementary Data	96
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	96
Item 9A.	Controls and Procedures	97
Item 9B.	Other Information	97
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	98
Item 11.	Executive Compensation	98
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	98
Item 13.	Certain Relationships and Related Transactions, and Director Independence	98
Item 14.	Principal Accountant Fees and Services	98
PART IV
Item 15.	Exhibits and Financial Statement Schedules	99

- 2 -

Cautionary Statement Regarding Forward-Looking Statements

This Annual Report on Form 10-K 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 developments and trends of the real estate industry, business strategies, and the expansion and 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 which 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.

Some of the risks and uncertainties that may cause our actual results, performance or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

• the impact of macroeconomic trends, such as the unemployment rate and availability of credit, which may have a negative effect on the following, among other things:

• the fundamentals of our business, including overall market occupancy, tenant space utilization, and rental rates;

• the financial condition of our tenants, some of which are financial, legal and other professional firms, our lenders, and institutions that hold our cash balances and short-term investments, which may expose us to increased risks of breach or default by these parties; and

• the value of our real estate assets, which may limit our ability to dispose of assets at attractive prices or obtain or maintain debt financing secured by our properties or on an unsecured basis;

• general risks affecting the real estate industry (including, without limitation, the inability to enter into or renew leases, dependence on tenants’ financial condition, and competition from other developers, owners and operators of real estate);

• our ability to effectively raise and deploy proceeds from our ongoing public offering of Class A, Class W and Class I shares;

• risks associated with the availability and terms of debt and equity financing and the use of debt to fund acquisitions and developments, including the risk associated with interest rates impacting the cost and/or availability of financing;

• the business opportunities that may be presented to and pursued by us, changes in laws or regulations (including changes to laws governing the taxation of real estate investment trusts (“REITs”));

• conflicts of interest arising out of our relationships with Dividend Capital Total Advisors Group LLC (the “Sponsor”), Dividend Capital Total Advisors LLC (the “Advisor”), and their affiliates;

• changes in accounting principles, policies and guidelines applicable to REITs;

• environmental, regulatory and/or safety requirements; and

• the availability and cost of comprehensive insurance, including coverage for terrorist acts.

For further discussion of these and other factors, see “Item 1A. Risk Factors” in this Annual Report on Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of future events, new information or otherwise.

- 3 -

PART I

ITEM 1. BUSINESS

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. 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 believe we have operated in such a manner to qualify as a real estate investment trust (“REIT”) for federal income tax purposes, commencing with the taxable year ended December 31, 2006, when we first elected REIT status. We 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, LP (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.

Our Advisor

We are managed by the Advisor, which is wholly owned by our Sponsor. Our Advisor was formed as a Delaware limited liability company in April 2005. Subject to oversight by our board of directors, we rely on our Advisor to manage our day-to-day activities and to implement our investment strategy. In addition, subject to the oversight, review and approval of our board of directors, our Advisor undertakes to, among other things, research, identify, review and make investments in and dispositions of real property and real estate-related investments on our behalf consistent with our investment policies and objectives. Our Advisor performs its duties and responsibilities under an advisory agreement with us (the “Advisory Agreement”) as a fiduciary of ours and our stockholders. The term of the Advisory Agreement is for one year, subject to renewals by our board of directors for an unlimited number of successive one-year periods. The current term of the Advisory Agreement expires on June 30, 2014. Our officers and our two interested directors are all employees of an affiliate of our Advisor.

Our Offerings

On July 12, 2012, we commenced an ongoing public offering of Class A, Class W and Class I shares of our common stock. Immediately thereafter, we changed our name from Dividend Capital Total Realty Trust Inc. to Dividend Capital Diversified Property Fund Inc. The Registration Statement applies to 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 classes of shares: Class A shares, Class W shares and Class I shares with net asset value (“NAV”) based pricing. 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.

Dividend Capital Securities LLC, which we refer to as the “Dealer Manager,” is distributing the shares of our common stock in the Class A, Class W and Class I offering on a “best efforts” basis. The Dealer Manager is an entity related to the Advisor and is a member of the Financial Industry Regulatory Authority, Inc., or FINRA. The Dealer Manager coordinates our distribution effort and manages our relationships with participating broker-dealers and financial advisors and provides assistance in connection with compliance matters relating to marketing the offering.

- 4 -

We also continue to sell shares of our unclassified common stock, which we refer to as “Class E” shares, pursuant to our distribution reinvestment plan offering.

Since commencing formal business operations on April 3, 2006, through December 31, 2013, we had raised approximately $1.7 billion in net proceeds from public and private offerings of common stock and OP Units (defined below). As of December 31, 2013, we had approximately 171,254,036 Class E shares, 216,745 Class A shares, 208,889 Class W shares, and 4,327,085 Class I shares outstanding, and our Operating Partnership had outstanding OP Units held by third-party investors representing approximately a 7.0% limited partnership interest.

Our Classes of Common Stock

We have four classes of common stock: Class E, Class A, Class W and Class I shares. The payment of class-specific expenses results in different amounts of distributions being paid with respect to each class of shares. In addition, as a result of the different ongoing fees and expenses allocable to each share class, each share class could have a different NAV per share. If the NAV of our classes are different, then changes to our assets and liabilities that are allocable based on NAV may also be different for each class. Our four classes of common stock also have different rights upon liquidation to the extent that their NAV per share differs. In the event of a liquidation event, our 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.

Our Operating Partnership

We own all of our interests in our investments through our Operating Partnership or its subsidiaries. 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 representing our interest as a limited partner of the Operating Partnership. As of December 31, 2013, we had invested approximately $1.6 billion in the Operating Partnership in exchange for a 93.0% limited partnership interest. We refer to partnership units in the Operating Partnership as “OP Units.” As of December 31, 2013, our Operating Partnership had outstanding OP Units held by third-party investors representing approximately a 7.0% limited partnership interest. These units were issued by the Operating Partnership in connection with its exercise of options to acquire certain tenancy-in-common interests sold to such investors pursuant to private placements previously conducted by the Operating Partnership. The holders of OP Units (other than us) generally have the right to cause the Operating Partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both.

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 and are economically equivalent to our Class E shares. Accordingly, for purposes of our NAV procedures described below and the calculation of certain fees to the Advisor, we sometimes consider the OP Units held by third parties as a fifth class of security issued by us. We sometimes refer to 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, collectively as “Fund Interests” because they all represent interests held by investors in our Operating Partnership, through which we own all of our investments and conduct all of our operations. We sometimes refer to the NAV of all of the Fund Interests as the “Aggregate Fund NAV.”

Net Asset Value Calculation and Valuation Procedures

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.

- 5 -

One fundamental element of the valuation process, the valuation of our real property portfolio, is managed by Altus Group U.S., Inc., an independent valuation firm approved by our board of directors, including a majority of our independent directors (the “Independent Valuation Firm”). Altus Group is a multidisciplinary provider of independent, commercial real estate consulting and advisory services in multiple offices around the world, including Canada, the U.K., Australia, the United States and Asia Pacific. Altus Group is engaged in the business of valuing commercial real estate properties and is not affiliated with us or the Advisor.

Our NAV is calculated for each of our share classes after the end of each business day that the New York Stock Exchange is open for unrestricted trading by ALPS Fund Services Inc., a third-party firm approved by our board of directors, including a majority of our independent directors (our “NAV Accountant”). Our NAV is not audited by our independent registered public accounting firm. See Part II, Item 5 and Exhibit 99.1 of this Annual Report on Form 10-K for a more detailed description of our valuation procedures and valuation components, and our NAV as of December 31, 2013.

Our Portfolio

We are currently invested in a diverse portfolio of real properties and, to a lesser extent, real estate-related debt investments. Our investment in real property consists of office, industrial, and retail properties located in North America. As of December 31, 2013, our real property portfolio was approximately 93.6% leased. Additionally, we are invested in certain real estate-related debt investments, including originating and participating in mortgage loans secured by real estate, junior portions of first mortgages on commercial properties (“B-notes”), and mezzanine debt (herein referred to as “debt related investments”).

As of December 31, 2013, we had total gross investments with an estimated fair value of approximately $2.6 billion (calculated in accordance with our valuation procedures), comprised of approximately $2.5 billion in gross investments in real property and approximately $123.9 million in net debt related investments.

As of December 31, 2013, we had four reportable operating segments: office property, industrial property, retail property and debt related investments. Operating results from our business segments are discussed further in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Note 13 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Whenever we refer to the “fair value” of our real estate investments in this Annual Report on Form 10-K, we are referring to the fair value as determined pursuant to our valuation procedures, unless stated otherwise.

Investment Objectives

Our primary investment objectives are:

• providing current income to our stockholders in the form of quarterly cash distributions;

• preserving and protecting our stockholders’ capital investments;

• realizing capital appreciation in our share price from active investment management and asset management; and

• providing portfolio diversification in the form of multi-asset class investing in direct real estate.

There is no assurance that we will attain our investment objectives. Our charter places numerous limitations on us with respect to the manner in which we may invest our funds. In most cases these limitations cannot be changed unless our charter is amended, with the approval of our stockholders.

- 6 -

Investment Strategy

Our investment strategy is designed to focus first on generating income to support the quarterly dividend, second, to focus on protecting capital and third to grow net asset value over time. We seek to leverage our extensive knowledge of targeted real estate markets and property types to capitalize on opportunities where there is a disconnect between our assessment of an investment’s intrinsic value relative to market value. In addition, we seek to optimize the value of our portfolio through strategic financing, diligent asset management and selective asset disposition.

We believe that the more opportunities we see to invest our capital, the more selective we can be in choosing strategic and accretive investments, which we believe may result in attractive total returns for our stockholders. Seeing more opportunities may also allow us to be consistent and meaningful investors throughout different cycles. We invest across multiple markets, so when we believe one market is overvalued we patiently wait and focus on another market that we believe is overlooked.

We also believe that value is based on the investment’s ability to produce cash flow and not what the next buyer will pay at any point in time. We focus on select, targeted markets that exhibit characteristics of being supply-constrained with strong demand from tenants seeking quality space.

We primarily target direct investments, through equity interests and/or joint ventures, in our four target property categories of office, industrial, retail and multifamily. Although we do not currently own multifamily investments, we will consider multifamily investment opportunities going forward. To a lesser extent we may invest in other types of real estate including, but not limited to, hospitality, medical offices, student housing and unimproved land. We anticipate that the majority of our real property investments will be made in the United States, although we may also invest in Canada and Mexico, and potentially elsewhere on a limited basis, to the extent that opportunities exist that may help us meet our investment objectives.

To provide diversification to our portfolio, we have and may continue to invest in real estate-related debt, which will generally include originating and participating in mortgage loans secured by real estate, mezzanine debt and other related investments. Any investments in real estate-related securities will generally focus on debt and equity issued by public and private real estate companies and certain other securities, with the primary goal of such investments being the preservation of liquidity in support of our share redemption program.

Diversification Across Real Estate Investment Types

Our objective is to build a high-quality, diversified real estate portfolio. Although there can be no assurance that we will achieve this objective, we intend to diversify our portfolio by key portfolio attributes including, but not limited to, (1) property type, (2) target market, with consideration given to geographic concentrations, (3) average lease terms and portfolio occupancy expectations, (4) tenant concentrations, including credit and exposure to particular businesses or industries and (5) debt profile with the goal of maximizing flexibility while seeking to minimize cost and mitigate the risks associated with changes in interest rates and debt maturities.

As of December 31, 2013, our real estate portfolio primarily consists of investments in real property and debt related investments, which comprise approximately 95% and 5%, respectively, of the fair value of our real estate investments.

Real Property

We generally utilize a long-term hold strategy for strategic investments within our portfolio of real estate assets. The majority of our current portfolio consists of primarily “core” or “core-plus” properties that have significant operating histories and existing leases whereby a significant portion of the total investment return is expected to be derived from current income. In addition, we have invested in a relatively smaller proportion of “value added” opportunities that have arisen in circumstances where we have determined that a real property may

- 7 -

be situationally undervalued or where product re-positioning, capital expenditures and/or improved property management may increase cash flows, and where the total investment return is generally expected to have a relatively larger component derived from capital appreciation. As of December 31, 2013, we had invested in a total of 82 operating properties located in 30 geographic markets throughout the United States at a total gross investment amount of approximately $2.6 billion aggregating approximately 15.3 million net rentable square feet. Furthermore, we have also invested in a small number of “opportunistic” real property investments that are either in various stages of development or that have a significant portion of the total investment return derived from capital appreciation.

Debt Related Investments

To date, our debt related investments have consisted primarily of (i) originations of and participations in commercial mortgage loans secured by real estate, (ii) B-notes, and (iii) mezzanine debt and other related investments secured by equity interests in entities that indirectly own real properties. As of December 31, 2013, we had 14 distinct debt related investments secured by real properties (or by equity interests in entities that indirectly own real properties) located in 12 geographic markets with a total net investment amount of approximately $123.9 million.

Diversification Across Real Property Sectors

Through our investments in real properties and debt related investments, we made direct investments, via equity interests and/or joint ventures, in real properties in multiple sectors, including office, industrial, and retail. In the future, we may also invest in multifamily, hospitality, and other real property types.

The chart below describes the diversification of our investment portfolio across real property type. Percentages in the chart correspond to the fair value as of December 31, 2013.

- 8 -

Diversification Across Geographic Regions

Through our investments in real property and debt related investments, we also seek diversification across multiple geographic regions primarily located in the United States. The chart below shows the current allocations of our investments across geographic regions within the continental United States, as defined by the National Council of Real Estate Investment Fiduciaries (“NCREIF”), for our operating real property and debt related investments. Percentages in the chart correspond to our fair value as of December 31, 2013. As of December 31, 2013, our real property investments were geographically diversified across 30 markets throughout eight regions. Our debt related investments are located in six additional markets resulting in a combined portfolio allocation across 36 markets and eight regions.

To date, and for the foreseeable future, the majority of our real property investments will be made in the United States, although we may also invest in Canada and Mexico, and potentially elsewhere on a limited basis, to the extent opportunities exist that may help us meet our investment objectives.

- 9 -

Diversification Across Tenant Profiles and Lease Terms

We believe that the tenant base that occupies our real property assets is generally stable and well-diversified. As of December 31, 2013, our consolidated operating real properties had leases with approximately 450 tenants. We intend to maintain a well-diversified mix of tenants to limit our exposure to any single tenant or industry. Our diversified investment strategy inherently provides for tenant diversity, and we continue to monitor our exposure relative to our larger tenant industry sectors. The following table describes our top ten tenant industry sectors based on annualized base rent as of December 31, 2013.

Industry Sector	Number of Leases		Annualized Base Rent (1)		% of Annualized Base Rent			Occupied Square Feet		% of Occupied Square Feet
Professional, Scientific and Technical Services		68	$	27,534		13.9	%		1,292		9.1	%
Securities, Commodities, Fin. Inv./Rel. Activites		22		25,349		12.8	%		683		4.8	%
Food and Beverage Stores		34		22,440		11.4	%		1,499		10.5	%
Publishing Information (except Internet)		3		17,479		8.8	%		410		2.9	%
Computer and Electronic Product Manufacturing		10		6,801		3.4	%		609		4.3	%
Administrative and Support Services		23		6,468		3.3	%		332		2.3	%
Insurance Carriers and Related Activities		12		5,977		3.0	%		449		3.1	%
Truck Transportation		5		5,874		3.0	%		973		6.8	%
Miscellaneous Store Retailers		18		5,722		2.9	%		955		6.7	%
Chemical Manufacturing		6		5,545		2.8	%		503		3.5	%
Other (2)		351		68,324		34.7	%		6,565		46.0	%
Total		552	$	197,513		100.0	%		14,270		100.0	%

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

(2) Other industry sectors include 49 additional sectors.

Our properties are generally leased to tenants for the longer term and as of December 31, 2013, the weighted average remaining term of our leases was approximately 7.1 years, based on contractual remaining base rent, and 4.7 years, based on leased square footage. See Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for a schedule of expiring leases for our consolidated operating properties by annualized base rent and square footage as of December 31, 2013.

Tenant Concentration

Revenue from our lease with Charles Schwab & Co., Inc, as master tenant of one of our office properties, represented approximately 11.7% of our total revenue from continuing operations for the year ended December 31, 2013. For the year ended December 31, 2013, with respect to our entire real property and debt related investment portfolio, we did not earn revenues from any other single tenant or borrower in excess of 10% of our total revenue. See “Concentration of Credit Risk” in Note 3 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K for information regarding the top five tenants as a percentage of consolidated annual base rent and occupied square feet.

Leverage

We use financial leverage to provide additional funds to support our investment activities. We calculate our leverage for reporting purposes as our total borrowings, calculated on the basis of accounting principles generally accepted in the United States (“GAAP”), divided by the fair value of our real property and debt related

- 10 -

investments. Based on this methodology, as of December 31, 2013, our leverage was 50%. There are other methods of calculating our overall leverage ratio that may differ from this methodology, such as the methodology used in determining our compliance with corporate borrowing covenants. Our current leverage target is between 40-60%. Although we will generally work to maintain the targeted leverage ratio over the near term, we may change our targeted leverage ratio from time to time. In addition, we may vary from our target leverage ratio from time to time, and there are no assurances that we will maintain the targeted range disclosed above or achieve any other leverage ratio that we may target in the future. Our board of directors may from time to time modify our borrowing policy in light of then-current economic conditions, the relative costs of debt and equity capital, the fair values of our properties, general conditions in the market for debt and equity securities, growth and acquisition opportunities or other factors.

Competition

We believe that the current market for investing in real property and debt related investments is extremely competitive and we continue to see a flight to quality for both equity and debt capital. Higher quality investments located in desirable markets are subject to strong competition. We compete with many different types of companies engaged in real estate investment activities, including other REITs, pension funds and their advisors, foreign investors, bank and insurance company investment accounts, real estate limited partnerships, various forms of banks and specialty finance companies, mutual funds, private equity funds, hedge funds, individuals and other entities. Some of these competitors, including larger REITs, have substantially greater financial and other resources than we do and generally may be able to accept more risk and leverage. They may also possess significant competitive advantages that result from, among other things, a lower cost of capital and enhanced operating efficiencies.

In addition to competing for attractive investment opportunities, the current leasing and operating environment is also extremely competitive. While real estate fundamentals, such as vacancy and rental rates, are showing signs of improvement, it is still generally considered a “tenant’s market” as supply still exceeds demand for commercial real estate in most geographical markets. We continue to compete with similar owners and operators of commercial real estate and, as a result, we may have to provide free rent, incur charges for tenant improvements or offer other inducements in order to compete, all of which may have an adverse impact on our results of operations.

Conflicts of Interest

We are subject to various conflicts of interest arising out of our relationship with the Advisor and other affiliates, including: (i) conflicts related to the compensation arrangements between the Advisor, certain affiliates and us, (ii) conflicts with respect to the allocation of the time of the Advisor and its key personnel and (iii) conflicts with respect to the allocation of investment opportunities. Our independent directors have an obligation to function on our behalf in all situations in which a conflict of interest may arise and have a fiduciary obligation to act on behalf of our stockholders. See “Item 13. Certain Relationships and Related Transactions, and Director Independence” of this Annual Report on Form 10-K for a description of the conflicts of interest that arise as a result of our relationships with the Advisor and its affiliates.

Compliance with Federal, State and Local Environmental Laws

Properties that we may acquire, and the properties underlying our investments, are subject to various federal, state and local environmental laws, ordinances and regulations. Under these laws, ordinances and regulations, a current or previous owner of real estate (including, in certain circumstances, a secured lender that succeeds to ownership or control of a property) may become liable for the costs of removal or remediation of certain hazardous or toxic substances or petroleum product releases at, on, under or in its property. These laws typically impose cleanup responsibility and liability without regard to whether the owner or control party knew of or was responsible for the release or presence of the hazardous or toxic substances. The costs of investigation,

- 11 -

remediation or removal of these substances may be substantial and could exceed the value of the property. An owner or control party of a site may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from a site. Certain environmental laws also impose liability in connection with the handling of or exposure to materials containing asbestos. These laws allow third parties to seek recovery from owners of real properties for personal injuries associated with materials containing asbestos. Our operating costs and the values of these assets may be adversely affected by the obligation to pay for the cost of complying with existing environmental laws, ordinances and regulations, as well as the cost of complying with future legislation, and our income and ability to make distributions to our stockholders could be affected adversely by the existence of an environmental liability with respect to our properties. We will endeavor to ensure our properties are in compliance in all material respects with all federal, state and local laws, ordinances and regulations regarding hazardous or toxic substances or petroleum products.

Employees

The Advisory Agreement provides that our Advisor will assume principal responsibility for managing our affairs, and as a result we have no employees. See “Item 10. Directors, Executive Officers and Corporate Governance” of this Annual Report on Form 10-K for additional discussion regarding our directors and executive officers.

Available Information

This Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q, our Current Reports on Form 8-K, as well as any amendments to those reports, and proxy statements that we file with the Securities and Exchange Commission (the “Commission”) are available free of charge as soon as reasonably practicable through our website at http://www.dividendcapitaldiversified.com. The information contained on our website is not incorporated into this Annual Report on Form 10-K.

- 12 -

ITEM 1A. RISK FACTORS

RISKS RELATED TO INVESTING IN SHARES OF OUR COMMON STOCK

There is no public trading market for the shares of our common stock and we do not expect that there will ever be a public trading market for our shares; therefore, your ability to dispose of your shares will likely be limited to redemption by us. If you do sell your shares to us, you may receive less than the price you paid.

There is no public market for the shares of our common stock and we currently have no obligation or plans to apply for listing on any public securities market. Therefore, redemption of shares by us will likely be the only way for you to dispose of your shares. We will redeem shares at a price equal to the NAV per share of the class of shares being redeemed on the date of redemption, and not based on the price at which you initially purchased your shares. We may redeem Class A, Class W or Class I shares if holders of such shares fail to maintain a minimum balance of $2,000 in shares, even if your failure to meet the minimum balance is caused solely by a decline in our NAV. Subject to limited exceptions, Class A, Class W or Class I shares redeemed within 365 days of the date of purchase will be subject to a short-term trading discount equal to 2% of the gross proceeds otherwise payable with respect to the redemption, which will inure indirectly to the benefit of our remaining stockholders. As a result of this and the fact that our NAV will fluctuate, you may receive less than the price you paid for your shares upon redemption by us pursuant to our share redemption programs.

Our ability to redeem your shares may be limited, and our board of directors may modify, suspend or terminate our share redemption programs at any time.

Generally, our Class A, Class W and Class I share redemption program imposes a quarterly cap on 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. Our Class E share redemption program is even more limited, as it generally does not permit redemptions during any consecutive 12-month period in excess of 5% of the number of Class E shares of common stock outstanding at the beginning of such 12-month period. If we do not raise significant proceeds in the Class A, Class W and Class I offering, we do not currently expect to reach the redemption volume limit of our Class E share redemption program.

The vast majority of our assets will consist of properties which cannot generally be readily liquidated on short notice without impacting our ability to realize full value upon their disposition. Therefore, we may not always have a sufficient amount of cash to immediately satisfy redemption requests. Our board of directors may modify, suspend or terminate our share redemption programs. As a result, your ability to have your shares redeemed by us may be limited, and our shares should be considered as having only limited liquidity and at times may be illiquid. See Part II, Item 5 “Share Redemption Program and Other Redemptions” for more information.

A portion of the proceeds raised in the Class A, Class W and Class I offering are intended to be used to redeem Class E shares, and such portion of the proceeds may be substantial.

We intend to use a portion of the proceeds from the Class A, Class W and Class I offering to enhance liquidity for our Class E stockholders through our Class E share redemption program. Each calendar quarter we intend to make available for Class E share redemptions an amount equal to (i) funds received from the sale of Class E shares under our distribution reinvestment plan during such calendar quarter, plus (ii) 50% of the difference between (a) the proceeds (net of sales commissions) received by us from the sale of Class A, Class W and Class I shares in any public primary offering and under our distribution reinvestment plan during the most recently completed calendar quarter, and (b) the dollar amount used to redeem Class A, Class W and Class I shares during the most recently completed calendar quarter pursuant to the Class A, Class W and Class I share redemption program, less (iii) funds used for redemptions of Class E shares in the most recently completed quarter in excess of such quarter’s applicable redemption cap due to qualifying death or disability requests of a stockholder during such calendar quarter. However, our board of directors may from time to time authorize funds for redemptions of Class E shares in greater or lower amounts. If we cannot provide this amount of liquidity

- 13 -

under our Class E share redemption program due to the program’s volume limitations, our board of directors may consider authorizing one or more self tender offers for outstanding Class E shares, but there is no assurance it will do so.

Our share redemption program for Class E shares imposes greater restrictions on the amount of Class E shares that can be redeemed in any given quarter, compared with our share redemption program for Class A, Class W, and Class I shares. As a result of such restrictions, coupled with higher demand for redemptions, we have honored Class E share redemption requests on a pro rata basis since March 2009, being unable to satisfy all requests. There is significant pent up demand from Class E holders to redeem their shares under our current Class E share redemption program, and we plan to use a portion of the proceeds from the Class A, Class W and Class I offering to satisfy such redemption requests. As a result, we may have fewer offering proceeds available to retire debt or acquire additional properties, which may result in reduced liquidity and profitability or restrict our ability to grow our NAV.

You will not have the opportunity to evaluate future investments we will make with the proceeds raised in our Class A, Class W and Class I offering prior to purchasing shares of our common stock.

We have not identified future investments that we will make with the proceeds of our Class A, Class W and Class I offering. As a result, you will not be able to evaluate the economic merits, transaction terms or other financial or operational data concerning our future investments prior to purchasing shares of our common stock. You must rely on the Advisor and our board of directors to implement our investment policies, to evaluate our investment opportunities and to structure the terms of our investments. Because you cannot evaluate all of the investments we will make in advance of purchasing shares of our common stock, this additional risk may hinder your ability to achieve your own personal investment objectives related to portfolio diversification, risk-adjusted investment returns and other objectives.

Even if we are able to raise substantial funds in our Class A, Class W and Class I offering, investors in our common stock are subject to the risk that our offering, business and operating plans may change.

Although we intend to operate as a perpetual-life REIT with an ongoing offering and share redemption programs, this is not a requirement of our charter. Even if we are able to raise substantial funds in the Class A, Class W and Class I offering, if circumstances change such that our board of directors believes it is in the best interest of our stockholders to terminate our Class A, Class W and Class I offering or to terminate our share redemption programs, we may do so without stockholder approval. Our board of directors may also change our investment objectives, borrowing policies, or other corporate policies without stockholder approval. In addition, we may change the way our fees and expenses are incurred and allocated to different classes of stockholders if the tax rules applicable to REITs change such that we could do so without adverse tax consequences. Our board of directors may decide that certain significant transactions that require stockholder approval such as dissolution, merger into another entity, consolidation or the sale or other disposition of all or substantially all of our assets, are in the best interests of our stockholders. Holders of all classes of our common stock have equal voting rights with respect to such matters and will vote as a single group rather than on a class-by-class basis. Accordingly, investors in our common stock are subject to the risk that our offering, business and operating plans may change.

Valuations and appraisals of our properties, real estate-related assets and real estate-related liabilities are estimates of value and may not necessarily correspond to realizable value.

The valuation methodologies used to value our properties and certain real estate-related assets involve subjective judgments regarding such factors as comparable sales, rental revenue and operating expense data, the capitalization or discount rate, and projections of future rent and expenses based on appropriate analysis. In addition, we do not undertake to mark to market our debt investments or real estate-related liabilities, but rather these assets and liabilities are generally included in our determination of NAV at an amount determined in accordance with GAAP. As a result, valuations and appraisals of our properties, real estate-related assets and real

- 14 -

estate-related liabilities are only estimates of current market value. Ultimate realization of the value of an asset or liability depends to a great extent on economic and other conditions beyond our control and the control of the Independent Valuation Firm and other parties involved in the valuation of our assets and liabilities. Further, these valuations may not necessarily represent the price at which an asset or liability would sell, because market prices of assets and liabilities can only be determined by negotiation between a willing buyer and seller. Valuations used for determining our NAV also are made without consideration of the expenses that would be incurred in connection with disposing of assets and liabilities. Therefore, the valuations of our properties, our investments in real estate-related assets and our liabilities may not correspond to the timely realizable value upon a sale of those assets and liabilities. Our NAV does not currently represent enterprise value and may not accurately reflect the actual prices at which our assets could be liquidated on any given day, the value a third party would pay for all or substantially all of our shares, or the price that our shares would trade at on a national stock exchange. There will be no retroactive adjustment in the valuation of such assets or liabilities, the price of our shares of common stock, the price we paid to redeem shares of our common stock or NAV-based fees we paid to the Advisor and the Dealer Manager to the extent such valuations prove to not accurately reflect the true estimate of value and are not a precise measure of realizable value. Because the price you will pay for shares of our common stock in our offerings, and the price at which your shares may be redeemed by us pursuant to our share redemption programs, are based on our estimated NAV per share, you may pay more than realizable value or receive less than realizable value for your investment.

In order to disclose a daily NAV, we are reliant on the parties that we engage for that purpose, in particular the Independent Valuation Firm and the appraisers that we hire to value and appraise our real estate portfolio.

In order to disclose a daily NAV, our board of directors, including a majority of our independent directors, has adopted valuation procedures and caused us to engage independent third parties such as the Independent Valuation Firm, to value our real estate portfolio on a daily basis, and independent appraisal firms, to provide periodic appraisals with respect to our properties. We have also engaged a firm to act as the NAV Accountant and may engage other independent third parties or our Advisor to value other assets or liabilities. Although our board of directors, with the assistance of the Advisor, oversees all of these parties and the reasonableness of their work product, we will not independently verify our NAV or the components thereof, such as the appraised values of our properties. Our management’s assessment of the market values of our properties may also differ from the appraised values of our properties as determined by the Independent Valuation Firm. If the parties engaged by us to determine our daily NAV are unable or unwilling to perform their obligations to us, our NAV could be inaccurate or unavailable, and we could decide to suspend our offerings and our share redemption programs.

Our NAV is not subject to GAAP, will not be independently audited and will involve subjective judgments by the Independent Valuation Firm and other parties involved in valuing our assets and liabilities.

Our valuation procedures and our NAV are not subject to GAAP and will not be subject to independent audit. Our NAV may differ from equity (net assets) reflected on our audited financial statements, even if we are required to adopt a fair value basis of accounting for GAAP financial statement purposes. Additionally, we are dependent on our Advisor to be reasonably aware of material events specific to our properties (such as tenant disputes, damage, litigation and environmental issues) that may cause the value of a property to change materially and to promptly notify the Independent Valuation Firm so that the information may be reflected in our real estate portfolio valuation. In addition, the implementation and coordination of our valuation procedures include certain subjective judgments of our Advisor, such as whether the Independent Valuation Firm should be notified of events specific to our properties that could affect their valuations, as well as of the Independent Valuation Firm and other parties we engage, as to whether adjustments to asset and liability valuations are appropriate. Accordingly, you must rely entirely on our board of directors to adopt appropriate valuation procedures and on the Independent Valuation Firm and other parties we engage in order to arrive at our NAV, which may not correspond to realizable value upon a sale of our assets.

- 15 -

No rule or regulation requires that we calculate our NAV in a certain way, and our board of directors, including a majority of our independent directors, may adopt changes to the valuation procedures.

There are no existing rules or regulatory bodies that specifically govern the manner in which we calculate our NAV. As a result, it is important that you pay particular attention to the specific methodologies and assumptions we use to calculate our NAV. Other public REITs may use different methodologies or assumptions to determine their NAV. In addition, each year our board of directors, including a majority of our independent directors, will review the appropriateness of our valuation procedures and may, at any time, adopt changes to the valuation procedures. For example, we currently do not undertake to mark to market our debt investments or real estate-related liabilities, but rather these assets and liabilities are generally included in our determination of NAV at an amount determined in accordance with GAAP. As a result, the realizable value of specific debt investments and real property assets encumbered by debt that are used in the calculation of our NAV may be higher or lower than the value that would be derived if such debt investments or property-related liabilities were marked to market. In some cases such difference may be significant. We also do not currently include any enterprise value or real estate acquisition costs in our assets calculated for purposes of our NAV. If we acquire real property assets as a portfolio, we may pay a premium over the amount that we would pay for the assets individually. Our board of directors may change these or other aspects of our valuation procedures, which changes may have an adverse effect on our NAV and the price at which you may redeem shares under our share redemption programs. See Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Net Asset Value Calculation” and our valuation procedures attached as Exhibit 99.1 to this Annual Report on Form 10-K for more details regarding our valuation methodologies, assumptions and procedures.

Our NAV per share may suddenly change if the valuations of our properties materially change from prior valuations or the actual operating results materially differ from what we originally budgeted.

It is possible that the annual appraisals of our properties may not be spread evenly throughout the year and may differ from the most recent daily valuation. As such, when these appraisals are reflected in our Independent Valuation Firm’s valuation of our real estate portfolio, there may be a sudden change in our NAV per share for each class of our common stock. In addition, actual operating results may differ from what we originally budgeted, which may cause a sudden increase or decrease in the NAV per share amounts. We accrue estimated income and expenses on a daily basis based on annual budgets as adjusted from time to time to reflect changes in the business throughout the year. On a periodic basis, we adjust the income and expense accruals we estimated to reflect the income and expenses actually earned and incurred. We will not retroactively adjust the NAV per share of each class for any adjustments. Therefore, because actual results from operations may be better or worse than what we previously budgeted, the adjustment to reflect actual operating results may cause the NAV per share for each class of our common stock to increase or decrease.

The NAV per share that we publish may not necessarily reflect changes in our NAV that are not immediately quantifiable.

From time to time, we may experience events with respect to our investments that may have a material impact on our NAV. For example, and not by way of limitation, changes in governmental rules, regulations and fiscal policies, environmental legislation, acts of God, terrorism, social unrest, civil disturbances and major disturbances in financial markets may cause the value of a property to change materially. The NAV per share of each class of our common stock as published on any given day may not reflect such extraordinary events to the extent that their financial impact is not immediately quantifiable. As a result, the NAV per share that we publish may not necessarily reflect changes in our NAV that are not immediately quantifiable, and the NAV per share of each class published after the announcement of a material event may differ significantly from our actual NAV per share for such class until such time as the financial impact is quantified and our NAV is appropriately adjusted in accordance with our valuation procedures. The resulting potential disparity in our NAV may inure to the benefit of redeeming stockholders or non-redeeming stockholders and new purchasers of our common stock, depending on whether our published NAV per share for such class is overstated or understated.

- 16 -

The realizable value of specific properties may change before the value is adjusted by the Independent Valuation Firm and reflected in the calculation of our NAV.

Our valuation procedures generally provide that the Independent Valuation Firm will adjust a real property’s valuation, as necessary, based on known events that have a material impact on the most recent value (adjustments for non-material events may also be made). We are dependent on our Advisor to be reasonably aware of material events specific to our properties (such as tenant disputes, damage, litigation and environmental issues, as well as positive events such as new lease agreements) that may cause the value of a property to change materially and to promptly notify the Independent Valuation Firm so that the information may be reflected in our real estate portfolio valuation. Events may transpire that, for a period of time, are unknown to us or the Independent Valuation Firm that may affect the value of a property, and until such information becomes known and is processed, the value of such asset may differ from the value used to determine our NAV. In addition, although we may have information that suggests a change in value of a property may have occurred, there may be a delay in the resulting change in value being reflected in our NAV until such information is appropriately reviewed, verified and processed. For example, we may receive an unsolicited offer, from an unrelated third party, to sell one of our assets at a price that is materially different than the price included in our NAV. Or, we may be aware of a new lease, lease expiry, or entering into a contract for capital expenditure. Where possible, adjustments generally are made based on events evidenced by proper final documentation. It is possible that an adjustment to the valuation of a property may occur prior to final documentation if the Independent Valuation Firm determines that events warrant adjustments to certain assumptions that materially affect value. However, to the extent that an event has not yet become final based on proper documentation, its impact on the value of the applicable property may not be reflected (or may be only partially reflected) in the calculation of our NAV.

Because we generally do not mark our debt investments or real estate-related liabilities to market, the realizable value of specific debt investments and real property assets that are encumbered by debt may be higher or lower than the value used in the calculation of our NAV.

We do not undertake to mark to market our debt investments or real estate-related liabilities, but rather these assets and liabilities are generally included in our determination of NAV at an amount determined in accordance with GAAP. As a result, the realizable value of specific debt investments and real property assets that are encumbered by debt used in the calculation of our NAV may be higher or lower than the value that would be derived if such debt investments or liabilities were marked to market. In some cases such difference may be significant. For example, in Note 8 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K for the year ended December 31, 2013, we disclosed that the estimated fair value of our debt liabilities, net of the fair value of our debt investments, was $40.6 million higher than the GAAP carrying balance, meaning that if we used the fair value of our debt rather than the carrying balance, our NAV would have been lower by approximately $40.6 million as of December 31, 2013.

Due to daily fluctuations in our NAV, the price at which your purchase is executed could be higher than our NAV per share at the time you submit your purchase order, and the price at which your redemption is executed could be lower than our NAV per share at the time you submit your redemption request.

The purchase and redemption price for shares of our common stock will be determined at the end of each business day based on our NAV and will not be based on any established trading price. In our Class A, Class W and Class I offering, each accepted purchase order will be executed at a price equal to our NAV per share for the class of shares being purchased next determined after the purchase order is received in good order, plus, for Class A shares sold in the primary offering only, any applicable selling commissions. For example, if a purchase order is received in good order on a business day and before the close of business (4:00 p.m. Eastern time) on that day, the purchase order will be executed at a purchase price equal to our NAV per share for the class of shares being purchased determined after the close of business on that day, plus, for Class A shares sold in the primary offering only, any applicable selling commissions. If a purchase order is received in good order on a business day, but after the close of business on that day, the purchase order will be executed at a purchase price equal to our NAV per share for the class of shares being purchased determined after the close of business on the

- 17 -

next business day, plus, for Class A shares sold in the primary offering only, any applicable selling commissions. Similarly, redemption requests received in good order will be effected at a redemption price equal to the next-determined NAV per share for the class of shares being redeemed (subject to a 2% short-term trading discount in certain circumstances). In addition, there may be a delay between your purchase or redemption decision and the execution date caused by time necessary for you and your participating broker-dealer to put a purchase order or redemption request in “good order,” which means, for these purposes, that all required information has been completed, all proper signatures have been provided, and, for purchase orders, funds for payment have been provided. As a result of this process, you will not know the purchase or redemption price at the time you submit your purchase order or redemption request. The purchase price per share at which your purchase order is executed could be higher than the NAV per share on the date you submitted your purchase order, and the redemption price per share at which your redemption request is executed could be lower than the NAV per share on the date you submitted your redemption request.

For the years ended December 31, 2012 and 2011, we experienced annual net losses and in the future we may experience additional losses that could adversely impact our NAV and our ability to conduct operations, make investments and pay distributions.

For the years ended December 31, 2012 and 2011, we had respective net losses, as determined in accordance with GAAP, of approximately $22.4 million and $64.6 million. In the event that we continue to incur net losses in the future, we may have less money available to make investments and pay distributions, and our NAV, financial condition, results of operations, cash flow and ability to service our indebtedness may be adversely impacted.

Our NAV and the NAV of your shares may be diluted in connection with our Class A, Class W and Class I offering and future securities offerings.

In connection with the Class A, Class W and Class I offering, we incur fees and expenses. Excluding selling commissions (which are effectively paid by purchasers of Class A shares in the primary offering at the time of purchase, because the purchase price of such shares is equal to the NAV per Class A share plus the selling commission, and therefore have no effect on our NAV), we expect to incur up to $15 million in primary dealer fees and approximately $16.8 million in organization and offering expenses, which will decrease the amount of cash we have available for operations and new investments. In addition, because the prices of shares sold in the Class A, Class W and Class I offering are based on our NAV, the offering may be dilutive if our NAV procedures do not fully capture the value of our shares and/or we do not utilize the proceeds accretively.

In the future we may conduct other offerings of common stock (whether existing or new classes), preferred stock, debt securities or of interests in our Operating Partnership. We may also amend the terms of the Class A, Class W and Class I offering. We may structure or amend such offerings to attract institutional investors or other sources of capital in connection with efforts to provide additional Class E liquidity or otherwise. The terms of the Class A, Class W and Class I offering will reduce the NAV of your shares over time in accordance with our valuation procedures and the terms of the Class A, Class W and Class I offering and future offerings (such as the offering price and the distribution fees and expenses) may negatively impact our ability to pay distributions and your overall return.

Investors do not have the benefit of an independent due diligence review in connection with our Class A, Class W and Class I offering which increases the risk of your investment.

Because the Advisor and the Dealer Manager are related, investors do not have the benefit of an independent due diligence review and investigation in connection with the Class A, Class W and Class I offering of the type normally performed by an unrelated, independent underwriter in connection with a securities offering. In addition, DLA Piper LLP (US) has acted as counsel to us, the Advisor and the Dealer Manager in connection with the Class A, Class W and Class I offering and, therefore, investors do not have the benefit of a due diligence

- 18 -

review that might otherwise be performed by independent counsel. Under applicable legal ethics rules, DLA Piper LLP (US) may be precluded from representing us due to a conflict of interest between us and the Dealer Manager. If any situation arises in which our interests are in conflict with those of the Dealer Manager or its related parties, we would be required to retain additional counsel and may incur additional fees and expenses. The lack of an independent due diligence review and investigation increases the risk of your investment.

Our investors may be at a greater risk of loss than the Advisor and members of our management team, because they have a limited equity investment in us.

As of December 31, 2013, the Advisor and members of our management team (excluding our independent directors, who each own 30,000 Class E shares) have invested approximately $1.7 million in us. Therefore, they have relatively little exposure to loss. Our investors may be at a greater risk of loss because the Advisor and other members of our management do not have as much to lose from a decrease in the value of our shares.

The availability and timing of cash distributions to you is uncertain.

We currently make and expect to continue to make quarterly distributions to our stockholders. However, the payment of class-specific expenses results in different amounts of distributions being paid with respect to each class of shares. In addition, we bear all expenses incurred in our operations, which reduce the amount of cash available for distribution to our stockholders. Distributions may also be negatively impacted by the failure to deploy our net proceeds on an expeditious basis, the inability to find suitable investments that are not dilutive to our distributions, the poor performance of our investments, an increase in expenses for any reason (including expending funds for redemptions) and due to numerous other factors. Any request by the holders of our OP Units to redeem some or all of their OP Units for cash may also impact the amount of cash available for distribution to our stockholders. In addition, our board of directors, in its discretion, may retain any portion of such funds for working capital. We cannot assure you that sufficient cash will be available to make distributions to our stockholders or that the amount of distributions will not either decrease or fail to increase over time. From time to time, we may adjust our distribution level and we may make such an adjustment at any time.

We may have difficulty funding our distributions with funds provided by our operations.

In prior years, our distributions had been funded through a combination of both our operations and borrowings. Although our distributions during 2013 and 2012 were fully funded from our operations, in the future we may fund distributions from other sources. Our long-term strategy is to fund the payment of quarterly distributions to our stockholders entirely from our operations over time. However, if we are unsuccessful in investing the capital we raise in our Class A, Class W and Class I offering on an effective and efficient basis, we may be required to fund our quarterly distributions to our stockholders from a combination of our operations and financing activities, which include net proceeds of our Class A, Class W and Class I offering and borrowings (including borrowings secured by our assets). Using certain of these sources may result in a liability to us, which would require a future repayment. The use of these sources for distributions and the ultimate repayment of any liabilities incurred could adversely impact our ability to pay distributions in future periods, decrease the amount of cash we have available for new investments, repayment of debt, share redemptions and other corporate purposes, and potentially reduce your overall return and adversely impact and dilute the value of your investment in shares of our common stock. We may pay distributions from sources other than cash flow from operations, including, without limitation, the sale of assets, borrowings or offering proceeds.

If we raise substantial offering proceeds in a short period of time, we may not be able to invest all of the net offering proceeds promptly, which may cause our distributions and the long-term returns to our investors to be lower than they otherwise would.

We could suffer from delays in locating suitable investments. The more money we raise in our Class A, Class W and Class I offering, the more difficult it will be to invest the net offering proceeds promptly. Therefore, the large size of our Class A, Class W and Class I offering increases the risk of delays in investing our net

- 19 -

offering proceeds. Our reliance on the Advisor to locate suitable investments for us at times when the management of the Advisor is simultaneously seeking to locate suitable investments for other entities sponsored or advised by affiliates of the Advisor could also delay the investment of the proceeds of our Class A, Class W and Class I offering. Delays we encounter in the selection, acquisition and development of income-producing properties would likely negatively affect our NAV, limit our ability to pay distributions to you and reduce your overall returns.

We are required to pay substantial compensation to the Advisor and its affiliates, which may be increased or decreased during our Class A, Class W and Class I offering or future offerings by a majority of our board of directors, including a majority of the independent directors.

Pursuant to our agreements with the Advisor and its affiliates, we are obligated to pay substantial compensation to the Advisor and its affiliates. Subject to limitations in our charter, the fees, compensation, income, expense reimbursements, interests and other payments that we are required to pay to the Advisor and its affiliates may increase or decrease during our Class A, Class W and Class I offering or future offerings if such change is approved by a majority of our board of directors, including a majority of the independent directors. These payments to the Advisor and its affiliates will decrease the amount of cash we have available for operations and new investments and could negatively impact our NAV, our ability to pay distributions and your overall return.

The performance component of the advisory fee is calculated on the basis of the overall non-compounded investment return provided to holders of Fund Interests over a calendar year, so it may not be consistent with the return on your shares.

The performance component of the advisory fee is calculated on the basis of the overall non-compounded investment return provided to holders of Fund Interests (i.e., 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) over a calendar year such that the Advisor will receive 25% of the overall return in excess of 6%; provided that in no event will the performance component exceed 10% of the overall return for such year. The overall non-compounded investment return provided to holders of Fund Interests over any applicable period is a dollar amount defined as the product of (i) the amount, if any, by which (A) the sum of (1) the weighted-average distributions per Fund Interest over the applicable period, and (2) the ending weighted-average NAV per Fund Interest, exceeds (B) the beginning weighted-average NAV per Fund Interest and (ii) the weighted-average number of Fund Interests outstanding during the applicable period. The weighted-average NAV per Fund Interest calculated on the last trading day of a calendar year shall be the amount against which changes in weighted-average NAV per Fund Interest are measured during the subsequent calendar year. However, the performance component will not be earned on any increase in the weighted-average NAV per Fund Interest except to the extent that it exceeds the historically highest year-end weighted-average NAV per Fund Interest since the commencement of our daily NAV calculations ($6.93 as of December 31, 2013). The foregoing NAV thresholds are subject to adjustment by our board of directors. Therefore, payment of the performance component of the advisory fee (1) is contingent upon the overall return to the holders of Fund Interests exceeding the 6% return, (2) will vary in amount based on our actual performance, (3) cannot cause the overall return to the holders of Fund Interests for the year to be reduced below 6%, and (4) is payable to the Advisor if the overall return to the holders of Fund Interests exceeds the 6% return in a particular calendar year, even if the overall return to the holders of Fund Interests on a cumulative basis over any longer or shorter period has been less than 6% per annum. Additionally, the Advisor will provide us with a waiver of a portion of its fees generally equal to the amount of the performance component that would have been payable with respect to the Class E shares and the Class E OP Units held by third parties until the NAV of such shares or units exceeds $10.00 per share or unit, the benefit of which will be shared among all holders of Fund Interests.

As a result, the performance component is not directly tied to the performance of the shares you purchase, the class of shares you purchase, or the time period during which you own your shares. The performance component may be payable to the Advisor even if the NAV of your shares at the end of the calendar year is

- 20 -

below your purchase price, and the thresholds at which increases in NAV count towards the overall return to the holders of Fund Interests are not based on your purchase price. Because of the class-specific expenses consisting of the dealer manager fees and the distribution fees, which differ among classes, we do not expect the overall return of each class of Fund Interests to ever be the same. However, if and when the performance fee is payable, the expense will be allocated among all holders of Fund Interests ratably according to the NAV of their units or shares, regardless of the different returns achieved by different classes of Fund Interests during the year. Further, stockholders who redeem their shares during a given year may redeem their shares at a lower NAV per share as a result of an accrual for the estimated performance component of the advisory fee, even if no performance component is ultimately payable to the Advisor at the end of such calendar year. In addition, if the weighted-average NAV per Fund Interest remains above certain threshold levels, the Advisor’s ability to earn the performance fee in any year will not be affected by poor performance in prior years, and the Advisor will not be obligated to return any portion of advisory fees paid based on our subsequent performance.

Payment of fees and expenses to the Advisor, the property manager and the Dealer Manager reduces the cash available for distribution and increases the risk that you will not be able to recover the amount of your investment in our shares.

The Advisor, the property manager (which is an affiliate of our Advisor) and the Dealer Manager perform services for us, including, among other things, the selection and acquisition of our investments, the management of our assets, dispositions of assets, financing of our assets and certain administrative services. We pay the Advisor, the property manager and the Dealer Manager fees and expense reimbursements for these services, which will reduce the amount of cash available for further investments or distribution to our stockholders.

We are dependent upon the Advisor and its affiliates to conduct our operations and our Class A, Class W and Class I offering; thus, adverse changes in their financial health or our relationship with them could cause our operations to suffer.

We are dependent upon the Advisor and its affiliates to conduct our operations and our Class A, Class W and Class I offering. Thus, adverse changes to our relationship with, or the financial health of, the Advisor and its affiliates, including changes arising from litigation, could hinder their ability to successfully manage our operations and our portfolio of investments.

If we internalize our management functions, the percentage of our outstanding common stock owned by our other stockholders could be reduced, we could incur other significant costs associated with being self-managed, and any internalization could have other adverse effects on our business and financial condition.

At some point in the future, we may consider internalizing the functions performed for us by the Advisor, although we do not currently intend to do so. The method by which we could internalize these functions could take many forms. We may hire our own group of executives and other employees or we may acquire the Advisor or its respective assets, including its existing workforce. Any internalization transaction could result in significant payments to the owners of the Advisor, including in the form of our stock which could reduce the percentage ownership of our then existing stockholders and concentrate ownership in the owner of our Advisor. In addition, there is no assurance that internalizing our management functions will be beneficial to us and our stockholders. For example, we may not realize the perceived benefits because of the costs of being self-managed or we may not be able to properly integrate a new staff of managers and employees or we may not be able to effectively replicate the services provided previously by the Advisor or its affiliates. Internalization transactions have also, in some cases, been the subject of litigation. Even if these claims are without merit, we could be forced to spend significant amounts of money defending claims which would reduce our NAV and the amount of funds available for us to invest in real estate assets or to pay distributions.

- 21 -

If we were to internalize our management or if another investment program, whether sponsored or advised by affiliates of our Sponsor or otherwise, hires the employees of the Advisor or its affiliates in connection with its own internalization transaction or otherwise, our ability to conduct our business may be adversely affected.

We rely on persons employed by the Advisor or its affiliates to manage our day-to-day operating and acquisition activities. If we were to effectuate an internalization of the Advisor, we may not be able to retain all of the employees of the Advisor or its affiliates or to maintain relationships with other entities sponsored or advised by affiliates of our Sponsor. In addition, some of the employees of the Advisor or its affiliates may provide services to one or more other investment programs. These programs or third parties may decide to retain some or all of the key employees in the future. If this occurs, these programs could hire certain of the persons currently employed by the Advisor or its affiliates who are most familiar with our business and operations, thereby potentially adversely impacting our business.

We have broad authority to incur debt, and high debt levels could hinder our ability to make distributions and could decrease the value of your investment in shares of our common stock.

Under our charter, we have a limitation on borrowing which precludes us from borrowing in excess of 300% of the value of our net assets, provided that we may exceed this limit if a higher level of borrowing is approved by a majority of our independent directors. High debt levels would cause us to incur higher interest charges, would result in higher debt service payments, could be accompanied by restrictive covenants, and would generally make us subject to the risks associated with leverage. These factors could limit the amount of cash we have available to distribute and could result in a decline in our NAV and in the value of your investment in shares of our common stock.

An investment in Class A, Class W or Class I shares will likely be impacted by class-specific expenses of future offerings.

Dealer manager fees and distribution fees are allocated on a class-specific basis, which means that the expenses are borne by all holders of the applicable class. For example, an investor who acquired Class A shares in a private offering will be allocated a proportional share of the dealer manager fees and distribution fees we pay with respect to Class A shares sold in our ongoing public offering of Class A, Class W and Class I shares. Such Class A expenses are allocated among all Class A shares ratably, regardless of how each Class A stockholder acquired his or her shares. As a result, purchasers of Class A, Class W or Class I shares in our ongoing public offering will likely be impacted by class-specific expenses that we pay with respect to future offerings of Class A, Class W and Class I shares. Specifically, we intend to operate as a perpetual-life REIT with respect to Class A, Class W and Class I stockholders, which means that we intend to offer Class A, Class W and Class I shares continuously. In order to do so, we will be required to file a new registration statement to register additional Class A, Class W and Class I shares of common stock with the Commission prior to the end of each three-year period following the commencement of our ongoing public offering of Class A, Class W and Class I shares described in Rule 415 under the Securities Act. Dealer manager fees and distribution fees that are payable to our Dealer Manager on an ongoing basis with respect to shares sold in our ongoing public offering of Class A, Class W and Class I shares (i.e., pursuant to our current registration statement) will cease when total underwriting compensation in the offering equals 10% of the gross proceeds from the primary portion of the offering. However, we expect that dealer manager fees and distribution fees will be payable with respect to Class A, Class W and Class I shares sold in subsequent offerings, and that all investors in Class A, Class W and Class I shares will be allocated a proportional share of such class-specific expenses.

- 22 -

RISKS RELATED TO CONFLICTS OF INTEREST

Our Advisor faces a conflict of interest because the fees it receives for services performed are based on our NAV, the procedures for which the Advisor will assist our board of directors in developing, overseeing, implementing and coordinating.

The Advisor assists our board of directors in developing, overseeing, implementing and coordinating our NAV procedures. It assists our Independent Valuation Firm in valuing our real property portfolio by providing the firm with property-level information, including (i) historical and projected operating revenues and expenses of the property; (ii) lease agreements on the property; and (iii) the revenues and expenses of the property. Our Independent Valuation Firm assumes and relies upon the accuracy and completeness of all such information, does not undertake any duty or responsibility to verify independently any of such information and relies upon us and our Advisor to advise if any material information previously provided becomes inaccurate or was required to be updated during the period of its review. In addition, the Advisor may have some discretion with respect to valuations of certain assets and liabilities, which could affect our NAV. Because the Advisor is paid fees for its services based on our NAV, the Advisor could be motivated to influence our NAV and NAV procedures such that they result in an NAV exceeding realizable value, due to the impact of higher valuations on the compensation to be received by the Advisor. Our Advisor may also benefit by us retaining ownership of our assets at times when our stockholders may be better served by the sale or disposition of our assets in order to avoid a possible reduction in our NAV that could result from a distribution of the proceeds. If our NAV is calculated in a way that is not reflective of our actual NAV, then the purchase price of shares of our common stock on a given date may not accurately reflect the value of our portfolio, and your shares may be worth less than the purchase price.

Our Advisor’s product specialists may recommend that we enter into transactions with entities that have a relationship or affiliation with them, and our stockholders will not be able to assess our Advisor’s product specialists’ qualifications when deciding whether to make an investment in shares of our common stock.

Our Advisor utilizes third-party and affiliated product specialists to assist in fulfilling its responsibilities to us. The strategic alliances between our Advisor and the product specialists provide, in accordance with industry standards, that the product specialists must adhere to a standard of care of commercial reasonableness when performing services on our behalf. Our Advisor’s product specialists generally do not owe fiduciary duties to us and may have time constraints and other conflicts of interest due to relationships or affiliations they have with other entities. As a result, these product specialists may recommend that we enter into transactions with such entities, in which case we will not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties. Our stockholders will not be able to assess the qualifications of our Advisor’s product specialists when deciding whether to make an investment in shares of our common stock. Therefore, our stockholders may not be able to determine whether our Advisor’s product specialists are sufficiently qualified or otherwise desirable to work with.

Our Advisor’s management personnel and product specialists face conflicts of interest relating to time management and there can be no assurance that our Advisor’s management personnel and product specialists will devote adequate time to our business activities or that our Advisor will be able to hire adequate additional employees.

All of our Advisor’s management personnel, other employees, affiliates and related parties may also provide services to other entities sponsored or advised by affiliates of our Sponsor, including, but not limited to, Industrial Income Trust Inc. (“IIT”) and Industrial Property REIT Inc. (“IPT”). We are not able to estimate the amount of time that such management personnel and product specialists will devote to our business. As a result, certain of our Advisor’s management personnel and product specialists may have conflicts of interest in allocating their time between our business and their other activities which may include advising and managing various other real estate programs and ventures, which may be numerous and may change as programs are closed or new programs are formed. During times of significant activity in other programs and ventures, the time they

- 23 -

devote to our business may decline and be less than we would require. There can be no assurance that our Advisor’s affiliates will devote adequate time to our business activities or that our Advisor will be able to hire adequate additional employees to perform the tasks currently being performed by our Advisor’s affiliates should the amount of time devoted to our business activities by such affiliates prove to be insufficient.

Our Advisor and its affiliates, including our officers and two of our directors, face conflicts of interest caused by compensation arrangements with us and other entities sponsored or advised by affiliates of our Sponsor, which could result in actions that are not in our stockholders’ best interests.

Some of our executive officers, two of our directors and other key personnel are also officers, directors, managers, key personnel and/or holders of an ownership interest in the Advisor, our Dealer Manager, our property manager and/or other entities related to our Sponsor. Our Advisor and its affiliates receive substantial fees from us in return for their services and these fees could influence their advice to us. Among other matters, the compensation arrangements could affect their judgment with respect to:

• the continuation, renewal or enforcement of our agreements with our Advisor and its affiliates, including the Advisory Agreement, the property management agreement and the agreement with the Dealer Manager;

• recommendations to our board of directors with respect to developing, overseeing, implementing and coordinating our NAV procedures, or the decision to adjust the value of certain of our assets or liabilities if the Advisor is responsible for valuing them;

• public offerings of equity by us, which may result in increased advisory fees for the Advisor;

• competition for tenants from entities sponsored or advised by affiliates of our Sponsor that own properties in the same geographic area as us;

• asset sales, which may allow the Advisor to earn disposition fees and commissions; and

• investments in assets subject to product specialist agreements with affiliates of the Advisor.

Further, certain advisory fees paid to our Advisor and management and leasing fees paid to the property manager are paid irrespective of the quality of the underlying real estate or property management services during the term of the related agreement. Our Advisor may also be entitled to a disposition fee and a commission upon a property sale, each equal to a percentage of the sales price. These fees and commissions may incentivize our Advisor to recommend the sale of an asset or assets that may not be in our best interests at the time. The premature sale of an asset may add concentration risk to the portfolio or may be at a price lower than if we held the asset. Moreover, our Advisor has considerable discretion with respect to the terms and timing of disposition and leasing transactions. In evaluating investments and other management strategies, the opportunity to earn these fees may lead our Advisor to place undue emphasis on criteria relating to its compensation at the expense of other criteria, such as preservation of capital, in order to achieve higher short-term compensation. Considerations relating to compensation to our Advisor and its affiliates from us and other entities sponsored or advised by affiliates of our Sponsor could result in decisions that are not in our stockholders’ best interests, which could hurt our ability to pay our stockholders distributions or result in a decline in the value of our stockholders’ investment. Conflicts of interest such as those described above have contributed to stockholder litigation against certain other externally managed REITs that are not affiliated with us or our Sponsor.

When considering whether to recommend investments through a joint venture or other co-ownership arrangement, the fee arrangements between our Advisor and the proposed joint venture partner may incentivize our Advisor to recommend investing a greater proportion of our resources in joint venture investments than may be in our stockholders’ best interests.

When we invest in assets through joint ventures or other co-ownership arrangements, our Advisor may, directly or indirectly (including, without limitation, through us or our subsidiaries), receive fees from our joint venture partners and co-owners of our properties for the services our Advisor provides to them with respect to

- 24 -

their proportionate interests. Fees received from joint venture entities or partners and paid, directly or indirectly (including without limitation, through us or our subsidiaries), to the Advisor may be more or less than similar fees that we pay to the Advisor pursuant to the Advisory Agreement. Because the Advisor may receive fees from our joint venture partners and co-owners in connection with our joint venture or other co-ownership arrangements, the Advisor may be incentivized to recommend a higher level of investment through joint ventures than may otherwise be in the best interests of our stockholders.

The time and resources that entities sponsored or advised by affiliates of our Sponsor devote to us may be diverted and we may face additional competition due to the fact that these entities are not prohibited from raising money for another entity that makes the same types of investments that we target.

Entities sponsored or advised by affiliates of our Sponsor are not prohibited from raising money for another investment entity that makes the same types of investments as those we target. As a result, the time and resources they could devote to us may be diverted. For example, our Dealer Manager is currently involved in other public offerings for other entities sponsored or advised by affiliates of our Sponsor, including IIT and IPT. In addition, we may compete with any such investment entity for the same investors and investment opportunities. We may also co-invest with any such investment entity. Even though all such co-investments will be subject to approval by our independent directors, they could be on terms not as favorable to us as those we could achieve co-investing with an unrelated third party.

Our Advisor may have conflicting fiduciary obligations if we acquire properties with an entity sponsored or advised by one of its affiliates or other related entities; as a result, in any such transaction we may not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

Our Advisor may cause us to acquire an interest in a property from, or through a joint venture with, an entity sponsored or advised by one of its affiliates or to dispose of an interest in a property to such an entity. In these circumstances, our Advisor will have a conflict of interest when fulfilling its fiduciary obligation to us. In any such transaction we may not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

The fees we pay to entities sponsored or advised by affiliates of our Sponsor in connection with our offerings of securities and in connection with the management of our investments were not determined on an arm’s length basis, and therefore, we do not have the benefit of arm’s length negotiations of the type normally conducted between unrelated parties.

Our Advisor, our Dealer Manager and other of our Advisor’s affiliates have earned and will continue to earn fees, commissions and expense reimbursements from us. The fees, commissions and expense reimbursements paid and to be paid to our Advisor, our Dealer Manager and other of our Advisor’s affiliates for services they provided us in connection with past offerings and in connection with our Class A, Class W and Class I offering were not determined on an arm’s length basis. As a result, the fees have been determined without the benefit of arm’s length negotiations of the type normally conducted between unrelated parties.

We may compete with other entities or programs sponsored or advised by affiliates of our Sponsor, including IIT and IPT, for opportunities to acquire or sell investments, which may have an adverse impact on our operations.

We may compete with other entities or programs sponsored or advised by affiliates of our Sponsor, whether existing or created in the future, including IIT and IPT, for opportunities to acquire, finance or sell certain types of real properties. We may also buy, finance or sell real properties at the same time that other entities or programs sponsored or advised by affiliates of our Sponsor, including IIT and IPT, are buying, financing or selling properties. In this regard, there is a risk that our Advisor will advise us to purchase a real property that provides lower returns to us than a real property purchased by an entity or program sponsored or advised by an

- 25 -

affiliate of our Sponsor, including IIT and IPT. Certain programs sponsored or advised by affiliates of our Sponsor own and/or manage real properties in geographic areas in which we expect to own real properties. Therefore, our real properties may compete for tenants with other real properties owned and/or managed by other programs sponsored or advised by affiliates of our Sponsor, including IIT and IPT. Our Advisor may face conflicts of interest when evaluating tenant leasing opportunities for our real properties and other real properties owned and/or managed by programs sponsored or advised by affiliates of our Sponsor, including IIT and IPT, and these conflicts of interest may have an adverse impact on our ability to attract and retain tenants.

Programs sponsored or advised by affiliates of our Sponsor may be given priority over us with respect to the acquisition of certain types of investments. As a result of our potential competition with these programs, certain investment opportunities that would otherwise be available to us may not in fact be available. For example, in the event that an investment opportunity with respect to (i) industrial properties located in the U.S. or Mexico or (ii) debt investments related to industrial properties located in the U.S. or Mexico (if such debt is intended to provide the entity making the investment with the opportunity to acquire the equity ownership in the underlying industrial asset) is equally suitable for us and one or more entities sponsored or advised by affiliates of our Sponsor, then our Sponsor and its affiliates will utilize a reasonable allocation method to determine whether the investment is presented to our board of directors as opposed to the board of directors of such other program or programs. Our Sponsor and its affiliates may propose a new allocation procedure, but such procedure may not preclude the allocation of attractive investments to IIT, IPT or other entities sponsored or advised by affiliates of our Sponsor. One of our independent directors, Mr. Charles Duke, is also an independent director for IIT and IPT. If there are any transactions or policies affecting us and IIT or IPT, Mr. Duke will recuse himself from making any such decisions for as long as he holds both positions.

We may also compete with other entities or programs sponsored or advised by affiliates of our Sponsor for opportunities to acquire, finance or sell certain types of debt related investments.

As a result of our potential competition with other entities or programs sponsored or advised by affiliates of our Sponsor, certain investment opportunities that would otherwise be available to us may not in fact be available. This competition may also result in conflicts of interest that are not resolved in our favor.

We have purchased and may in the future purchase real estate assets from third parties who have existing or previous business relationships with affiliates or other related entities of our Sponsor; as a result, in any such transaction, we may not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

We have purchased and may in the future purchase assets from third parties that have existing or previous business relationships with affiliates of our Sponsor. Affiliates of our Sponsor who also perform or have performed services for such third parties may have had or have a conflict in representing our interests in these transactions on the one hand and in preserving or furthering their respective relationships with such third parties on the other hand. In any such transaction, we will not have the benefit of arm’s-length negotiations of the type normally conducted between unrelated parties.

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

- 26 -

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 our ongoing primary 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. 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, we may explore additional liquidity strategies for our Class E 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.

RISKS RELATED TO ADVERSE CHANGES IN GENERAL ECONOMIC CONDITIONS

Changes in global economic and capital market conditions, including periods of generally deteriorating real estate industry fundamentals, may significantly affect our results of operations and returns to our stockholders.

We are subject to risks generally incident to the ownership of real property including changes in global, national, regional or local economic, demographic, political, real estate, or capital market conditions and other factors particular to the locations of our respective real property investments. We are unable to predict future changes in these market conditions. For example, an economic downturn or rise in interest rates could make it more difficult for us to lease properties or dispose of them. In addition, rising interest rates could make alternative interest bearing and other investments more attractive and, therefore, potentially lower the relative value of our existing real estate investments.

In addition, we believe the risks associated with our business are more severe during periods of economic slowdown or recession if these periods are accompanied by deteriorating fundamentals and declining values in the real estate industry. Because many of our debt related investments consist of mortgages secured by real property, these same conditions could also adversely affect the underlying borrowers and collateral of assets that we own. Declining real estate values and deteriorating real estate fundamentals would also likely reduce the level of new mortgage loan originations, since borrowers often use increases in the value of their existing properties to support the purchase of, or investment in, additional properties. Furthermore, borrowers may not be able to pay principal and interest on our loans. Declining real estate values also significantly increases the likelihood that we will incur losses on our debt investments in the event of a default because the value of our collateral may be insufficient to cover some or all of our basis in the investment.

We have recorded impairments of our real properties, significant other-than-temporary impairment charges related to our real estate securities holdings, and provisions for losses on our debt related investments, as a result of such conditions that occurred recently. Please refer to our financial statements beginning on page F-1 of this Annual Report on Form 10-K for additional information. To the extent that there is a general economic slowdown or real estate fundamentals deteriorate, it may have a significant and adverse impact on our revenues, results from operations, financial condition, liquidity, overall business prospects and ultimately our ability to make distributions to our stockholders.

- 27 -

Uncertainty and volatility in the credit markets could affect our ability to obtain debt financing on reasonable terms, or at all, which could reduce the number of properties we may be able to acquire and the amount of cash distributions we can make to our stockholders.

The U.S. and global credit markets recently experienced severe dislocations and liquidity disruptions, which caused volatility in the credit spreads on prospective debt financings and constrained the availability of debt financing due to the reluctance of lenders to offer financing at high leverage ratios. Similar conditions in the future could adversely impact our ability to access additional debt financing on reasonable terms or at all, which may adversely affect investment returns on future acquisitions or our ability to make acquisitions.

If mortgage debt is unavailable on reasonable terms as a result of increased interest rates, increased credit spreads, decreased liquidity or other factors, we may not be able to finance the initial purchase of properties. In addition, when we incur mortgage debt on properties, we run the risk of being unable to refinance such debt upon maturity, or of being unable to refinance on favorable terms.

If interest rates are higher or other financing terms, such as principal amortization, the need for a corporate guaranty, or other terms are not as favorable when we refinance debt or issue new debt, our income could be reduced. To the extent we are unable to refinance debt on reasonable terms, at appropriate times or at all, we may be required to sell properties on terms that are not advantageous to us, or could result in the foreclosure of such properties. If any of these events occur, our cash flow would be reduced. This, in turn, would reduce cash available for distribution to our stockholders and may hinder our ability to raise more capital by issuing securities or borrowing more money.

Economic events that may cause our stockholders to request that we redeem their shares may materially adversely affect our cash flow and our ability to achieve our investment objectives.

Future economic events affecting the U.S. economy generally, or the real estate sector specifically, could cause our stockholders to seek to sell their shares to us pursuant to our share redemption programs. Generally, our Class A, Class W and Class I share redemption program imposes a quarterly cap on net redemptions 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. Our Class E share redemption program is even more limited, as it generally does not permit redemptions during any consecutive 12-month period in excess of 5% of the number of Class E shares of common stock outstanding at the beginning of such 12-month period. Even if we are able to satisfy all resulting redemption requests, our cash flow could be materially adversely affected. In addition, if we determine to sell valuable assets to satisfy redemption requests, our ability to achieve our investment objectives, including, without limitation, diversification of our portfolio by property type and location, moderate financial leverage, conservative operating risk and an attractive level of current income, could be materially adversely affected.

Inflation or deflation may adversely affect our financial condition and results of operations.

Although neither inflation nor deflation has materially impacted our operations in the recent past, increased inflation could have an adverse impact on our floating rate mortgages, interest rates and general and administrative expenses, as these costs could increase at a rate higher than our rental and other revenue. Inflation could also have an adverse effect on consumer spending which could impact our tenants’ sales and, in turn, our percentage rents, where applicable. Conversely, deflation could lead to downward pressure on rents and other sources of income.

- 28 -

The failure of any banking institution in which we deposit our funds could have an adverse effect on our results of operations, financial condition and ability to pay distributions to our stockholders.

Currently, the Federal Deposit Insurance Corporation, or FDIC, generally, only insures amounts up to $250,000 per depositor per insured bank. A small proportion of our cash and cash equivalents, primarily those used to fund property-level working capital needs, are currently held in FDIC-insured bank accounts. The significant majority of our idle cash is currently invested in a combination of AAA-rated money market mutual funds, which in turn are primarily invested in short-term, high credit quality commercial paper, U.S. government funds and Treasury funds. To the extent that we have deposited funds with banking institutions, then if any of such institutions ultimately fail, we would lose the amount of our deposits over the then current FDIC insurance limit. The loss of our deposits could reduce the amount of cash we have available to distribute or invest and would likely result in a decline in the value of your investment.

RISKS RELATED TO OUR GENERAL BUSINESS OPERATIONS AND OUR CORPORATE STRUCTURE

We depend on our Advisor and its key personnel; if any of such key personnel were to cease employment with our Advisor, our business could suffer.

Our ability to make distributions and achieve our investment objectives is dependent upon the performance of our Advisor in the acquisition, disposition and management of real properties, and debt related investments, the selection of tenants for our real properties, the determination of any financing arrangements and other factors. In addition, our success depends to a significant degree upon the continued contributions of certain of our Advisor’s key personnel, including John A. Blumberg, Jeffrey L. Johnson, Andrea L. Karp, Richard D. Kincaid, Austin W. Lehr, J. Michael Lynch, Lainie P. Minnick, Gregory M. Moran, James R. Mulvihill, Gary M. Reiff, M. Kirk Scott, Jeffrey W. Taylor, Joshua J. Widoff, and Evan H. Zucker, each of whom would be difficult to replace. We currently do not have, nor do we expect to obtain key man life insurance on any of our Advisor’s key personnel. If our Advisor were to lose the benefit of the experience, efforts and abilities of one or more of these individuals, our operating results and NAV could suffer.

Our board of directors determines our major policies and operations, which increases the uncertainties faced by our stockholders.

Our board of directors determines our major policies, including our policies regarding acquisitions, dispositions, financing, growth, debt capitalization, REIT qualification, redemptions and distributions. Our board of directors may amend or revise these and other policies without a vote of the stockholders. Under the Maryland General Corporation Law and our charter, our stockholders have a right to vote only on limited matters. Our board of directors’ broad discretion in setting policies and our stockholders’ inability to exert control over those policies increases the uncertainty and risks our stockholders face, especially if our board of directors and our stockholders disagree as to what course of action is in our stockholders’ best interests.

Our UPREIT structure may result in potential conflicts of interest with limited partners in the Operating Partnership whose interests may not be aligned with those of our stockholders.

Limited partners in the Operating Partnership have the right to vote on certain amendments to the agreement that governs the Operating Partnership, as well as on certain other matters. Persons holding such voting rights may exercise them in a manner that conflicts with our stockholders’ interests. As general partner of the Operating Partnership, we are obligated to act in a manner that is in the best interests of all partners of the Operating Partnership. Circumstances may arise in the future when the interests of limited partners in the Operating Partnership may conflict with the interests of our stockholders. These conflicts may be resolved in a manner stockholders believe is not in their best interests.

- 29 -

We currently own certain co-ownership interests in real property that are subject to certain co-ownership agreements, which may have an adverse effect on our results of operations, relative to if the co-ownership agreements did not exist.

We currently own certain co-ownership interests, specifically in connection with our Operating Partnership’s private placements including tenancy-in-common interests in real property and beneficial interests in specific Delaware statutory trusts, that are subject to certain co-ownership agreements. The co-ownership agreements may limit our ability to encumber, lease, or dispose of our co-ownership interests. Such agreements could affect our ability to turn our investments into cash and could affect cash available for distributions to our stockholders. The co-ownership agreements could also impair our ability to take actions that would otherwise be in the best interests of our stockholders and, therefore, may have an adverse effect on our results of operations and NAV, relative to if the co-ownership agreements did not exist.

The Operating Partnership’s private placements of tenancy-in-common interests in real properties and beneficial interests in specific Delaware statutory trusts could subject us to liabilities from litigation or otherwise.

The Operating Partnership, through DCTRT Leasing Corp., a wholly owned subsidiary, offered undivided tenancy-in-common interests in real properties and beneficial interests in specific Delaware statutory trusts (collectively referred to as “fractional interests”), to accredited investors in private placements exempt from registration under the Securities Act. These fractional interests may have served as replacement properties for investors seeking to complete like-kind exchange transactions under Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”). All of the fractional interests sold to investors pursuant to such private placements are or were 100% master leased by the Operating Partnership or a wholly owned subsidiary thereof, as applicable. Additionally, the Operating Partnership was given a purchase option giving it the right, but not the obligation, to acquire these fractional interests from the investors at a later time in exchange for OP Units (under a prior program administered by the Operating Partnership, such options were granted in the lease itself, and the Operating Partnership continues to hold these options as well). Investors who acquired fractional interests pursuant to such private placements may have done so seeking certain tax benefits that depend on the interpretation of, and compliance with, extremely technical tax laws and regulations. As the general partner of the Operating Partnership, we may become subject to liability, from litigation or otherwise, as a result of such transactions, including in the event an investor fails to qualify for any desired tax benefits.

Cash redemptions to holders of OP Units will reduce cash available for distribution to our stockholders or to honor their redemption requests under our share redemption programs.

The holders of OP Units (other than us) generally have the right to cause the Operating Partnership to redeem all or a portion of their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both. Our election to redeem OP Units for cash may reduce funds available for distribution to our stockholders or to honor our stockholders’ redemption requests under our share redemption programs.

Maryland law and our organizational documents limit our stockholders’ right to bring claims against our officers and directors.

Maryland law provides that a director will not have any liability as a director so long as he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be in our best interests, and with the care that an ordinarily prudent person in a like position would use under similar circumstances. In addition, our charter provides that, subject to the applicable limitations set forth therein or under Maryland law, no director or officer will be liable to us or our stockholders for monetary damages. Our charter also provides that we will generally indemnify our directors, our officers, our Advisor and its affiliates for losses they may incur by reason of their service in those capacities unless their act or omission was material to the matter giving rise to the proceeding and was committed in bad faith or was the result of active and deliberate dishonesty, they actually

- 30 -

received an improper personal benefit in money, property or services or, in the case of any criminal proceeding, they had reasonable cause to believe the act or omission was unlawful. Moreover, we have entered into separate indemnification agreements with each of our independent directors and executive officers. As a result, we and our stockholders have more limited rights against these persons than might otherwise exist under common law. In addition, we are obligated to fund the defense costs incurred by these persons in some cases. However, our charter does provide that we may not indemnify our directors, our Advisor and its affiliates for any liability or loss suffered by them unless they have determined that the course of conduct that caused the loss or liability was in our best interests, they were acting on our behalf or performing services for us, the liability or loss was not the result of negligence or misconduct by our non-independent directors, our Advisor and its affiliates or gross negligence or willful misconduct by our independent directors, and the indemnification is recoverable only out of our net assets and not from the stockholders.

Your interest will be diluted if we or the Operating Partnership issue additional securities.

Existing stockholders and new investors purchasing shares of common stock do not have preemptive rights to any shares issued by us in the future. Under our charter, we have authority to issue a total of 1,200,000,000 shares of capital stock. Of the total number of shares of capital stock authorized (a) 1,000,000,000 shares are designated as common stock, 400,000,000 of which are unclassified (however, we refer to them herein as Class E shares to more easily distinguish them from the shares offered in our Class A, Class W and Class I offering), 200,000,000 of which are classified as Class A shares, 200,000,000 of which are classified as Class W shares, and 200,000,000 of which are classified as Class I shares and (b) 200,000,000 shares are designated as preferred stock. Our board of directors may amend our charter to increase the aggregate number of authorized shares of capital stock or the number of authorized shares of capital stock of any class or series without stockholder approval. We intend to operate as a perpetual-life REIT, and investors will likely experience dilution of their equity investment in us as a result of our ongoing Class A, Class W and Class I offering, including the distribution reinvestment plan, our ongoing Class E distribution reinvestment plan and future public offerings. Investors will also experience dilution if we issue securities in one or more private offerings, issue equity compensation pursuant to our equity incentive plans, issue shares to the Advisor in lieu of cash payments or reimbursements under the Advisory Agreement, or redeem OP Units for shares of common stock. In addition, we may in the future cause the Operating Partnership to issue a substantial number of additional OP Units in order to raise capital, acquire properties, or consummate a merger, business combination or another significant transaction. OP Units may generally be converted into shares of our common stock, thereby diluting the percentage ownership interest of other stockholders. Ultimately, any additional issuance by us of equity securities or by the Operating Partnership of OP Units will dilute your indirect interest in the Operating Partnership, through which we own all of our interests in our investments.

We may issue preferred stock or new classes of OP Units, which issuance could adversely affect those stockholders who purchased shares of our common stock in our public offerings.

If we ever created and issued preferred stock or one or more new classes of OP Units with a distribution preference over common stock, payment of any distribution preferences on outstanding preferred stock or OP Units would reduce the amount of funds available for the payment of distributions on our common stock. Further, holders of preferred stock are normally entitled and holders of new classes of OP Units could be entitled to receive a preference payment in the event we liquidate, dissolve or wind up before any payment is made to our common stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence. Holders of preferred stock or new classes of OP Units could be given other preferential rights, such as preferential redemption rights, that could reduce the amount of funds available for the payment of distributions on our common stock or otherwise negatively affect our common stockholders. In addition, under certain circumstances, the issuance of preferred stock, a new class of OP Units, or a separate class or series of common stock may render more difficult or tend to discourage:

• a merger, offer or proxy contest;

• the assumption of control by a holder of a large block of our securities; and/or

• the removal of incumbent management.

- 31 -

The limit on the percentage of shares of our common stock that any person may own may discourage a takeover or business combination that may have benefited our stockholders.

Our charter restricts the direct or indirect ownership by one person or entity to no more than 9.8% of the value of our then outstanding capital stock (which includes common stock and any preferred stock we may issue) and no more than 9.8% of the value or number of shares, whichever is more restrictive, of our then outstanding common stock. This restriction may discourage a change of control of us and may deter individuals or entities from making tender offers for shares of our common stock on terms that might be financially attractive to stockholders or which may cause a change in our management. This ownership restriction may also prohibit business combinations that would have otherwise been approved by our board of directors and our stockholders. In addition to deterring potential transactions that may be favorable to our stockholders, these provisions may also decrease our stockholders’ ability to sell their shares of our common stock.

Although we are not currently afforded the full protection of the Maryland General Corporation Law relating to deterring or defending hostile takeovers, our board of directors could opt into these provisions of Maryland law in the future, which may discourage others from trying to acquire control of us and may prevent our stockholders from receiving a premium price for their stock in connection with a business combination.

Under Maryland law, “business combinations” between a Maryland corporation and certain interested stockholders or affiliates of interested stockholders are prohibited for five years after the most recent date on which the interested stockholder becomes an interested stockholder. These business combinations include a merger, consolidation, share exchange, or, in circumstances specified in the statute, an asset transfer or issuance or reclassification of equity securities. Also under Maryland law, control shares of a Maryland corporation acquired in a control share acquisition have no voting rights except to the extent approved by a vote of two-thirds of the votes entitled to be cast on the matter. Shares owned by the acquirer, an officer of the corporation or an employee of the corporation who is also a director of the corporation are excluded from the vote on whether to accord voting rights to the control shares. Should our board of directors opt into these provisions of Maryland law, it may discourage others from trying to acquire control of us and increase the difficulty of consummating any offer. Similarly, provisions of Title 3, Subtitle 8 of the Maryland General Corporation Law could provide similar anti-takeover protection.

Our charter includes a provision regarding tender offers that may discourage a stockholder from launching a tender offer for our shares.

Our charter provides that any person making a tender offer that is not otherwise subject to Regulation 14D of the Exchange Act, including any “mini-tender” offer, must comply with most of the provisions of Regulation 14D of the Exchange Act, including the notice and disclosure requirements. In addition, the offeror must provide us notice of such tender offer at least 10 business days before initiating the tender offer. If the offeror does not comply with the provisions set forth above, we will have the right to redeem that offeror’s shares, if any, and any shares acquired in such tender offer. In addition, the non-complying offeror will be responsible for all of our expenses in connection with that offeror’s noncompliance. Although we believe that these are important protective measures for our stockholders, this provision of our charter may discourage a stockholder from initiating a tender offer for our shares.

We depend on our relationships with lenders, joint venture partners, and property managers to conduct our business. If we fail to honor any of our contractual obligations, there could be a material and adverse impact on our ability to raise capital or manage our portfolio.

If we are viewed as developing underperforming properties, suffer sustained losses on our investments, default on a significant level of loans or experience significant foreclosure of our properties, our reputation could be damaged. Damage to our reputation could make it more difficult to successfully develop or acquire properties in the future and to continue to grow and expand our relationships with our lenders, joint venture partners, tenants and third-party management clients, which could adversely affect our business, financial condition, NAV, results of operations and ability to make distributions.

- 32 -

RISKS RELATED TO INVESTMENTS IN REAL PROPERTY

Real properties are illiquid investments, and we may be unable to adjust our portfolio in response to changes in economic or other conditions or sell a property if or when we decide to do so.

Real properties are illiquid investments and we may be unable to adjust our portfolio in response to changes in economic or other conditions. In addition, the real estate market is affected by many factors, such as general economic conditions, availability of financing, interest rates and other factors, including supply and demand, that are beyond our control. We cannot predict whether we will be able to sell any real property for the price or on the terms set by us, or whether any price or other terms offered by a prospective purchaser would be acceptable to us. We cannot predict the length of time needed to find a willing purchaser and to close the sale of a real property. In addition, we may acquire real properties that are subject to contractual “lock-out” provisions that could restrict our ability to dispose of the real property for a period of time.

We may also be required to expend funds to correct defects or to make improvements before a property can be sold. We cannot assure you that we will have funds available to correct such defects or to make such improvements.

In acquiring a real property, we may agree to restrictions that prohibit the sale of that real property for a period of time or impose other restrictions, such as a limitation on the amount of debt that can be placed or repaid on that real property. Our real properties may also be subject to resale restrictions. All of these provisions would restrict our ability to sell a property.

We are dependent on tenants for revenue, and our inability to lease our real properties or to collect rent from our tenants may adversely affect our results of operations, NAV and returns to our stockholders.

Our revenues from our real property investments are dependent on our ability to lease our real properties and the creditworthiness of our tenants and would be adversely affected by the loss of or default by one or more significant lessees. Furthermore, certain of our assets may utilize leases with payments directly related to tenant sales, where the amount of rent that we charge a tenant is calculated as a percentage of such tenant’s revenues over a fixed period of time, and a reduction in sales can reduce the amount of the lease payments required to be made to us by tenants leasing space in such assets. The success of those real properties depends on the financial stability of the respective tenants. The financial results of our tenants can depend on several factors, including but not limited to the general business environment, interest rates, inflation, the availability of credit, taxation and overall consumer confidence. The recent economic downturn has, and may continue to, impact all of these factors, some to a greater degree than others.

In addition, our ability to increase our revenues and operating income partially depends on steady growth of demand for the products and services offered by the tenants located in the assets that we own and manage. A drop in demand, as a result of a slowdown in the U.S. and global economy or otherwise, could result in a reduction in tenant performance and consequently, adversely affect our results of operations, NAV and returns to our stockholders. Inflation could also have an adverse effect on consumer spending which could impact our tenants’ sales and, in turn, our percentage rents, where applicable. Conversely, deflation could lead to downward pressure on rents and other sources of income.

If indicators of impairment exist in any of our real properties, for example, we experience negative operating trends such as prolonged vacancies or operating losses, we may not recover some or all of our investment. Please refer to our financial statements beginning on page F-1 of this Annual Report on Form 10-K for historical information regarding our impairments.

Lease payment defaults by tenants could cause us to reduce the amount of distributions to our stockholders and could force us to find an alternative source of funds to make mortgage payments on any mortgage loans. In the event of a tenant default, we may also experience delays in enforcing our rights as landlord and may incur

- 33 -

substantial costs in protecting our investment and re-leasing our real property. If a lease is terminated, we may be unable to lease the real property for the rent previously received or sell the real property without incurring a loss.

If the market for commercial real estate experiences increased vacancy rates, particularly in certain large metropolitan areas, it could result in lower revenues for us.

Over the past few years, the recent global economic downturn negatively impacted the commercial real estate market in the U.S., particularly in certain large metropolitan areas, and resulted in, among other things, increased tenant defaults under leases, generally lower demand for rentable space, and an oversupply of rentable space, all of which could lead to increased concessions, tenant improvement expenditures or reduced rental rates to maintain occupancies. We believe that the risks associated with our business could be more severe if the economy deteriorates again or if commercial real estate values decline. Our revenues will decline and our NAV and ability to pay distributions will be negatively impacted if our commercial properties experience higher vacancy rates or decline in value.

A real property that incurs a vacancy could be difficult to sell or re-lease.

A real property may incur a vacancy either by the continued default of a tenant under its lease or the expiration of the lease. In addition, certain of the real properties we acquire may have some vacancies at the time of closing. Certain other real properties may be specifically suited to the particular needs of a tenant and such real property may become vacant. Certain of our leases with retail tenants contain provisions giving the particular tenant the exclusive right to sell particular types of merchandise or provide specific types of services within the particular retail center. These provisions may limit the number and types of prospective tenants interested in leasing space in a particular retail property. Therefore, we may have difficulty obtaining a new tenant for any vacant space we have in our real properties. If the vacancy continues for a long period of time, we would suffer reduced revenues, which could materially and adversely affect our liquidity and NAV, and result in lower cash distributions to our stockholders. In addition, the resale value of the real property could be diminished because the market value may depend principally upon the value of the leases of such real property.

Adverse economic and other conditions in the regions where our assets are located may have a significant adverse impact on our financial results.

A deterioration of general economic or other relevant conditions, changes in governmental laws and regulations, acts of nature, demographics or other factors in any of the states or the geographic region in which our assets are located could result in the loss of a tenant, a decrease in the demand for our properties and a decrease in our revenues from those markets, which in turn may have a disproportionate and material adverse effect on our results of operations and financial condition. In addition, some of our investments are located in areas that are more susceptible to natural disasters, and therefore, our tenants and properties are particularly susceptible to revenue loss, cost increase or damage caused by earthquakes or other severe weather conditions or natural disasters. Any significant loss due to a natural disaster may not be covered by insurance and may lead to an increase in the cost of insurance and expenses for our tenants, or could limit the future availability of such insurance, which could limit our tenants’ ability to satisfy their obligations to us.

In addition, our results of operations depend substantially on our ability to lease the areas available in the assets that we own as well as the price at which we lease such space. Adverse conditions in the regions and specific markets where we operate may reduce our ability to lease our properties, reduce occupancy levels, restrict our ability to increase lease prices and force us to lower lease prices and/or offer tenant incentives. Should our assets fail to generate sufficient revenues for us to meet our obligations, our financial condition and results of operations, as well as our NAV and ability to make distributions, could be adversely affected.

- 34 -

Properties that have significant vacancies, especially value-add or other types of discounted real estate assets, may experience delays in leasing up or could be difficult to sell, which could diminish our return on these properties and the return on your investment.

Our investments in value-add properties or other types of discounted properties may have significant vacancies at the time of acquisition. If vacancies continue for a prolonged period of time beyond the expected lease-up stage that we anticipate will follow any redevelopment or repositioning efforts, we may suffer reduced revenues, resulting in less cash available for distributions to our stockholders. In addition, the resale value of the property could be diminished because the market value of a particular property depends principally upon the value of the cash flow generated by the leases associated with that property. Such a reduction on the resale value of a property could also reduce our NAV and the overall return on your investment.

Changes in supply of or demand for similar real properties in a particular area may increase the price of real property assets we seek to purchase or adversely affect the value of the real property assets that we own.

The real estate industry is subject to market forces and we are unable to predict certain market changes including changes in supply of or demand for similar real properties in a particular area. For example, if demand for the types of real property assets in which we seek to invest were to sharply increase or supply of those assets were to sharply decrease, the prices of those assets could rise significantly. Any potential purchase of an overpriced asset could decrease our rate of return on these investments and result in lower operating results and overall returns to our stockholders. Likewise, a sharp increase in supply could adversely affect leasing rates and occupancy, which could lower operating results, our NAV and overall returns to our stockholders.

Actions of our joint venture partners could adversely impact our performance.

We have entered into and may continue to enter into joint ventures with third parties, including entities that are affiliated with our Advisor or entities sponsored or advised by affiliates of our Sponsor. We have purchased and developed and may also continue to purchase and develop properties in joint ventures or in partnerships, co-tenancies or other co-ownership arrangements with the sellers of the properties, affiliates of the sellers, developers or other persons. Such investments may involve risks not otherwise present with a direct investment in real estate, including, for example:

• the possibility that our venture partner, co-tenant or partner in an investment might become bankrupt or otherwise be unable to meet its capital contribution obligations;

• that such venture partner, co-tenant or partner may at any time have economic or business interests or goals which are or which become inconsistent with our business interests or goals;

• that such venture partner, co-tenant or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives; or

• that actions by such venture partner, co-tenant or partner could adversely affect our reputation, negatively impacting our ability to conduct business.

Actions by a joint venture partner or co-tenant might have the result of subjecting the property to liabilities in excess of those contemplated and may have the effect of reducing our stockholders’ returns.

Under certain joint venture arrangements, neither venture partner may have the power to control the venture, and an impasse could be reached, which might have a negative influence on the joint venture and decrease potential returns to our stockholders. In the event that a venture partner has a right of first refusal to buy out the other partner, it may be unable to finance such a buy-out at that time. It may also be difficult for us to sell our interest in any such joint venture or partnership or as a co-tenant in a particular property. In addition, to the extent that our venture partner or co-tenant is an affiliate of our Advisor or an entity sponsored or advised by affiliates of our Sponsor, certain conflicts of interest will exist.

- 35 -

We compete with numerous other parties or entities for real property investments and tenants, and we may not compete successfully.

We compete with numerous other persons or entities seeking to buy real property assets or to attract tenants to real properties we already own. These persons or entities may have greater experience and financial strength. There is no assurance that we will be able to acquire real property assets or attract tenants on favorable terms, if at all. For example, our competitors may be willing to offer space at rental rates below our rates, causing us to lose existing or potential tenants and pressuring us to reduce our rental rates to retain existing tenants or convince new tenants to lease space at our properties. Similarly, the opening of new competing assets near the assets that we own may hinder our ability to renew our existing leases or to lease to new tenants, because the proximity of new competitors may divert existing or new tenants to such competitors. Each of these factors could adversely affect our results of operations, financial condition, NAV and ability to pay distributions to our stockholders.

Delays in the acquisition, development and construction of real properties or debt investments may have adverse effects on portfolio diversification, results of operations and returns to our stockholders.

Delays we encounter in selecting, acquiring and developing additional real properties or debt investments could adversely affect our stockholders’ returns. The uncertain state of the real estate markets in recent years and the resulting incentives of lenders and sellers to retain their investments had previously led to generally lower transaction volume in the broader real estate market and for us, in part due to pricing and valuation uncertainties. It is possible that such disruptions and uncertainties may reoccur. Alternatively, increased competition for high quality investments may also limit our ability to make incremental accretive investments in real properties and debt investments. These factors may continue to have a negative effect on our stockholders’ returns, and may also hinder our ability to reach our portfolio diversification objectives.

In addition, where properties are acquired prior to the start of construction or during the early stages of construction, it will typically take several months to complete construction and rent available space. Therefore, we may not receive any income from these properties, and distributions to our stockholders could suffer. Delays in the completion of construction could give tenants the right to terminate preconstruction leases for space at a newly developed project. We may incur additional risks when we make periodic progress payments or other advances to builders prior to completion of construction. Each of those factors could result in increased costs of a project or loss of our investment. In addition, we will be subject to normal lease-up risks relating to newly constructed projects. Furthermore, the price we agree to for a real property will be based on our projections of rental income and expenses and estimates of the fair market value of the real property upon completion of construction. If our projections are inaccurate, we may pay too much for a property.

We may be unable to achieve our diversification goals or to realize benefits from diversification.

Our objective is to build a high-quality, diversified real estate portfolio. Although there can be no assurance that we will achieve this objective, we intend to diversify our portfolio by key portfolio attributes including, but not limited to, (1) property type, (2) target market, with consideration given to geographic concentrations, (3) average lease terms and portfolio occupancy expectations, (4) tenant concentrations, including credit and exposure to particular businesses or industries and (5) debt profile with the goal of maximizing flexibility while seeking to minimize cost and mitigate the risks associated with changes in interest rates and debt maturities. However, we may not successfully implement our diversification strategy. For example, although we primarily target direct investments, through equity interests and/or joint ventures, in our four target property categories of office, industrial, retail and multifamily, we currently do not own any multifamily investments. Even if we do fully achieve our diversification goals, it is possible our diversified portfolio will not perform as well as a portfolio that is concentrated in a particular type of real estate.

- 36 -

We may alter our exposure to various property categories and we may not always own properties in each category.

We primarily target direct investments, through equity interests and/or joint ventures, in our four target property categories of office, industrial, retail and multifamily. Although we aim to diversify our real estate portfolio by owning properties in each of these categories, we may not always have significant holdings, or any holdings at all, in each category. For example, we currently have no multifamily investments and have recently sold a large portion of our industrial holdings. We may elect to increase or decrease our holdings in each category at any time and we may change our target property categories at any time. If we decrease or eliminate our holdings in any property category or cease to target any of the four property categories our real estate portfolio will be less diversified and we may not realize the benefits of diversification.

Our real properties are subject to property and other taxes that may increase in the future, which could adversely affect our cash flow.

Our real properties are subject to real and personal property and other taxes that may increase as tax rates change and as the properties are assessed or reassessed by taxing authorities. Certain of our leases provide that the property taxes, or increases therein, are charged to the lessees as an expense related to the real properties that they occupy while other leases will generally provide that we are responsible for such taxes. In any case, as the owner of the properties, we are ultimately responsible for payment of the taxes to the applicable governmental authorities. If property taxes increase, our tenants may be unable to make the required tax payments, ultimately requiring us to pay the taxes even if otherwise stated under the terms of the lease. If we fail to pay any such taxes, the applicable taxing authorities may place a lien on the property and the property may be subject to a tax sale. In addition, we will generally be responsible for property taxes related to any vacant space.

We are subject to litigation that could adversely affect our results of operations

We are a defendant from time to time in lawsuits and/or regulatory proceedings relating to our business. Unfavorable outcomes resulting from such lawsuits and/or regulatory proceedings could adversely impact our business, financial condition, NAV or results of operations.

Uninsured losses or premiums for insurance coverage relating to real property may adversely affect our returns.

There are types of losses, generally catastrophic in nature, such as losses due to wars, acts of terrorism, earthquakes, floods, hurricanes, pollution or environmental matters that are uninsurable or not economically insurable, or may be insured subject to limitations, such as large deductibles or co-payments. Risks associated with potential acts of terrorism could sharply increase the premiums we pay for coverage against property and casualty claims. Additionally, mortgage lenders sometimes require commercial property owners to purchase specific coverage against terrorism as a condition for providing mortgage loans. These policies may not be available at a reasonable cost, if at all, which could inhibit our ability to finance or refinance our real properties. In such instances, we may be required to provide other financial support, either through financial assurances or self-insurance, to cover potential losses. Changes in the cost or availability of insurance could expose us to uninsured casualty losses. In the event that any of our real properties incurs a casualty loss that is not fully covered by insurance, the value of our assets will be reduced by any such uninsured loss. In addition, we could be held liable for indemnifying possible victims of an accident. We cannot assure our stockholders that funding will be available to us for the repair or reconstruction of damaged real property in the future or for liability payments to accident victims.

- 37 -

The real estate industry is subject to extensive regulation, which may result in higher expenses or other negative consequences that could adversely affect us.

Our activities are subject to federal, state and municipal laws, and to regulations, authorizations and license requirements with respect to, among other things, zoning, environmental protection and historical heritage, all of which may affect our business. We may be required to obtain licenses and permits with different governmental authorities in order to acquire and manage our assets.

In addition, on July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”). Various aspects of the legislation may have a significant impact on our business, including, without limitation, provisions of the legislation that increase regulation of and disclosure requirements related to investment advisors, swap transactions and hedging policies, corporate governance and executive compensation, investor protection and enforcement provisions, and asset-backed securities. We expect that the Dodd-Frank Act, together with the significant rulemaking that it requires, will create a new financial regulatory environment that may significantly increase our costs.

In addition, public authorities may enact new and more stringent standards, or interpret existing laws and regulations in a more restrictive manner, which may force companies in the real estate industry, including us, to spend funds to comply with these new rules. Any such action on the part of public authorities may adversely affect our results from operations.

In the event of noncompliance with such laws, regulations, licenses and authorizations, we may face the payment of fines, project shutdowns, cancellation of licenses, and revocation of authorizations, in addition to other civil and criminal penalties.

Costs of complying with governmental laws and regulations related to environmental protection and human health and safety may be high.

All real property and the operations conducted on the real property are subject to federal, state and local laws and regulations relating to environmental protection and human health and safety. Some of these laws and regulations may impose joint and several liability on tenants, owners or operators for the costs to investigate or remediate contaminated properties, regardless of fault or whether the acts causing the contamination were legal.

Under various federal, state and local environmental laws, a current or previous owner or operator of real property may be liable for the cost of removing or remediating hazardous or toxic substances on such real property. Such laws often impose liability whether or not the owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. Third parties may also sue the owner or operator of a site for damages based on personal injury, natural resources or property damage or other costs, including investigation and clean-up costs resulting from the environmental contamination. In addition, the presence of hazardous substances, or the failure to properly remediate these substances, may adversely affect our ability to sell, rent or pledge such real property as collateral for future borrowings. Environmental laws also may impose restrictions on the manner in which real property may be used or businesses may be operated. A property owner who violates environmental laws may be subject to sanctions, which may be enforced by government agencies or, in certain circumstances, private parties. Some of these laws and regulations have been amended so as to require compliance with new or more stringent standards as of future dates. Compliance with new or more stringent laws or regulations or stricter interpretation of existing laws may require us to incur material expenditures. Future laws, ordinances or regulations may impose material environmental liability. Our tenants’ operations, the existing condition of land when we buy it, operations in the vicinity of our real properties, such as the presence of underground storage tanks, or activities of unrelated third parties may affect our real properties. In addition, there are various local, state and federal fire, health, life-safety and similar regulations with which we may be required to comply, and which may subject us to liability in the form of fines or damages for noncompliance. In connection with the acquisition and ownership of our real properties, we may be exposed to such costs in

- 38 -

connection with such regulations. The cost of defending against environmental claims, of any damages or fines we must pay, of compliance with environmental regulatory requirements or of remediating any contaminated real property could materially and adversely affect our business, lower the value of our assets or results of operations and, consequently, lower our NAV and the amounts available for distribution to our stockholders.

Environmental laws in the U.S. also require that owners or operators of buildings containing asbestos properly manage and maintain the asbestos, adequately inform or train those who may come into contact with asbestos and undertake special precautions, including removal or other abatement, in the event that asbestos is disturbed during building renovation or demolition. These laws may impose fines and penalties on building owners or operators who fail to comply with these requirements and may allow third parties to seek recovery from owners or operators for personal injury associated with exposure to asbestos. Some of our properties may contain asbestos-containing building materials.

From time to time, we may acquire properties, or interests in properties, with known adverse environmental conditions where we believe that the environmental liabilities associated with these conditions are quantifiable and that the acquisition will yield a superior risk-adjusted return. In such an instance, we will underwrite the costs of environmental investigation, clean-up and monitoring into the cost. Further, in connection with property dispositions, we may agree to remain responsible for, and to bear the cost of, remediating or monitoring certain environmental conditions on the properties.

All of our properties are subject to a Phase I or similar environmental assessment by independent environmental consultants prior to or in connection with our acquisition of such properties. Phase I assessments are intended to discover and evaluate information regarding the environmental condition of the surveyed property and surrounding properties. Phase I assessments generally include a historical review, a public records review, an investigation of the surveyed site and surrounding properties, and preparation and issuance of a written report, but do not include soil sampling or subsurface investigations and typically do not include an asbestos survey. We cannot give any assurance that an environmental liability that we believe would have a material adverse effect on our business, financial condition or results of operations taken as a whole, will not currently exist at the time of acquisition or may not arise in the future, with respect to any of our properties. Material environmental conditions, liabilities or compliance concerns may arise after an environmental assessment has been completed. Moreover, there can be no assurance that future laws, ordinances or regulations will not impose any material environmental liability, or that the then current environmental condition of our properties will not be affected by tenants, by the condition of land or operations in the vicinity of such properties (such as releases from underground storage tanks), or by third parties unrelated to us.

The costs associated with complying with the Americans with Disabilities Act may reduce the amount of cash available for distribution to our stockholders.

Investment in real properties may also be subject to the Americans with Disabilities Act of 1990, as amended. Under this act, all places of public accommodation are required to comply with federal requirements related to access and use by disabled persons. The act has separate compliance requirements for “public accommodations” and “commercial facilities” that generally require that buildings and services be made accessible and available to people with disabilities. The act’s requirements could require us to remove access barriers and our failure to comply with the act’s requirements could result in the imposition of injunctive relief, monetary penalties or, in some cases, an award of damages. We will attempt to acquire properties that comply with the act or place the burden on the seller or other third party, such as a tenant, to ensure compliance with the act. We cannot assure our stockholders that we will be able to acquire properties or allocate responsibilities in this manner. Any monies we use to comply with the act will reduce our NAV and the amount of cash available for distribution to our stockholders.

- 39 -

We may not have funding for future tenant improvements, which may adversely affect the value of our assets, our results of operations and returns to our stockholders.

When a tenant at one of our real properties does not renew its lease or otherwise vacates its space in one of our buildings, it is likely that, in order to attract one or more new tenants, we will be required to expend substantial funds to construct new tenant improvements in the vacated space. We expect to invest the net proceeds from our Class A, Class W and Class I offering in real estate-related investments, and we do not anticipate that we will maintain permanent working capital reserves. We do not currently have an identified funding source to provide funds that may be required in the future for tenant improvements and tenant refurbishments in order to attract new tenants. If we do not establish sufficient reserves for working capital or obtain adequate financing to supply necessary funds for capital improvements or similar expenses, we may be required to defer necessary or desirable improvements to our real properties. If we defer such improvements, the applicable real properties may decline in value, and it may be more difficult for us to attract or retain tenants to such real properties or the amount of rent we can charge at such real properties may decrease. We cannot assure our stockholders that we will have any sources of funding available to us for repair or reconstruction of damaged real property in the future.

Lease agreements may have specific provisions that create risks to our business and may adversely affect us.

Our lease agreements are regulated by local, municipal, state and federal laws, which may grant certain rights to tenants, such as the compulsory renewal of their lease by filing lease renewal actions when certain legal conditions are met. A lease renewal action may represent two principal risks for us: (i) if we plan to vacate a given unit in order to change or adapt an asset’s mix of tenants, the tenant could remain in that unit by filing a lease renewal action and interfere with our strategy; and (ii) if we desire to increase the lease price for a specific unit, this increase may need to be approved in the course of a lease renewal action, and the final value could be decided at the discretion of a judge. We would then be subject to the court’s interpretation and decision, and could be forced to accept an even lower price for the lease of the unit. The compulsory renewal of our lease agreements and/or the judicial review of our lease prices may adversely affect our cash flow and our operating results.

Certain of our lease agreements may not be “triple net leases,” under which the lessee undertakes to pay all the expenses of maintaining the leased property, including insurance, taxes, utilities and repairs. We will be exposed to higher maintenance, taxes, and property management expenses with respect to all of our leases that are not “triple net.”

Operating expenses, such as expenses for fuel, utilities, labor, building materials and insurance are not fixed and may increase in the future. There is no guarantee that we will be able to pass such increases on to our tenants. To the extent such increases cannot be passed on to our tenants, any such increases would cause our cash flow, NAV and operating results to decrease.

We depend on the availability of public utilities and services, especially for water and electric power. Any reduction, interruption or cancellation of these services may adversely affect us.

Public utilities, especially those that provide water and electric power, are fundamental for the sound operation of our assets. The delayed delivery or any material reduction or prolonged interruption of these services could allow certain tenants to terminate their leases or result in an increase in our costs, as we may be forced to use backup generators, which also could be insufficient to fully operate our facilities and could result in our inability to provide services. Accordingly, any interruption or limitation in the provision of these essential services may adversely affect us.

- 40 -

RISKS RELATED TO INVESTMENTS IN REAL ESTATE-RELATED DEBT AND SECURITIES

The mortgage loans in which we invest will be subject to the risk of delinquency, foreclosure and loss, which could result in losses to us.

Commercial mortgage loans are secured by commercial property and are subject to risks of delinquency and foreclosure and risks of loss. The ability of a borrower to repay a loan secured by a property typically is dependent primarily upon the successful operation of such property rather than upon the existence of independent income or assets of the borrower. If the net operating income of the property is reduced, the borrower’s ability to repay the loan may be impaired. Net operating income of an income-producing property can be affected by, among other things: tenant mix, success of tenant businesses, property management decisions, property location and condition, competition from comparable types of properties, changes in laws that increase operating expenses or limit rents that may be charged, any need to address environmental contamination at the property, the occurrence of any uninsured casualty at the property, changes in national, regional or local economic conditions and/or specific industry segments, current and potential future capital markets uncertainty, declines in regional or local real estate values, declines in regional or local rental or occupancy rates, increases in interest rates, real estate tax rates and other operating expenses, changes in governmental rules, regulations and fiscal policies, including environmental legislation, acts of God, terrorism, social unrest and civil disturbances.

In the event of any default under a mortgage loan held directly by us, we will bear a risk of loss of principal to the extent of any deficiency between the value of the collateral and the principal and accrued interest of the mortgage loan, which could have a material adverse effect on our cash flow from operations and results from operations and limit amounts available for distribution to our stockholders. In the event of the bankruptcy of a mortgage loan borrower, the mortgage loan to such borrower will be deemed to be secured only to the extent of the value of the underlying collateral at the time of bankruptcy (as determined by the bankruptcy court), and the lien securing the mortgage loan will be subject to the avoidance powers of the bankruptcy trustee or debtor-in-possession to the extent the lien is unenforceable under state law. Foreclosure of a mortgage loan can be an expensive and lengthy process, which could have a substantial adverse effect on our anticipated return on the foreclosed mortgage loan. In addition, if we foreclose on a particular property, we could become, as owner of the property, subject to liabilities associated with such property, including liabilities related to taxes and environmental matters.

The mezzanine loans and B-notes in which we invest involve greater risks of loss than senior loans secured by income-producing real properties.

We invest in mezzanine loans and B-notes that substantially take the form of subordinated loans secured by second mortgages on the underlying real property or loans secured by a pledge of the ownership interests of either the entity owning the real property or the entity that owns the interest in the entity owning the real property. These types of investments involve a higher degree of risk than long-term senior mortgage loans secured by income-producing real property because the investment may become unsecured as a result of foreclosure by the senior lender. In the event of a bankruptcy of the entity providing the pledge of its ownership interests as security, we may not have full recourse to the assets of such entity, or the assets of the entity may not be sufficient to satisfy our mezzanine loan in whole or in part. In addition, there may be significant delays and costs associated with the process of foreclosing on collateral securing or supporting these investments. If a borrower defaults on our mezzanine loan or debt senior to our loan, or in the event of a borrower bankruptcy, our mezzanine loan will be satisfied only after the senior debt. As a result, we may not recover some or all of our investment. In addition, mezzanine loans may have higher loan-to-value ratios than conventional mortgage loans, resulting in less equity in the real property and increasing the risk of loss of principal. Further, even if we are successful in foreclosing on the equity interests serving as collateral for our mezzanine loans, such foreclosure will result in us inheriting all of the liabilities of the underlying mortgage borrower, including the senior mortgage on the applicable property. This may result in both increased costs to us and a negative impact on our overall debt covenants and occupancy levels. In many cases a significant restructuring of the senior mortgage may be required in order for us to be willing to retain longer term ownership of the property. If we are

- 41 -

unsuccessful in restructuring the underlying mortgage debt in these scenarios, the mortgage lender ultimately may foreclose on the property causing us to lose any remaining investment. Please refer to our financial statements beginning on page F-1 of this Annual Report on Form 10-K for historical information regarding our losses on debt-related investments.

A portion of our debt related investments may be considered illiquid, and we may not be able to adjust our portfolio in response to changes in economic and other conditions.

Certain of the debt related investments that we have purchased or may purchase in the future in connection with privately negotiated transactions are not or may not be registered under the relevant securities laws, resulting in a prohibition against their transfer, sale, pledge or other disposition except in a transaction that is exempt from the registration requirements of, or is otherwise effected in accordance with, those laws. As a result, our ability to vary our portfolio in response to changes in economic and other conditions may be limited. The mezzanine, B-note and bridge loans that we have purchased or may purchase in the future are, or will be, particularly illiquid investments due to their short life, their unsuitability for securitization and the greater difficulty of recoupment in the event of a borrower’s default. In addition, due to current credit market conditions, certain of our registered securities may not be as liquid as when originally purchased.

Bridge loans may involve a greater risk of loss than conventional mortgage loans.

We may provide bridge loans secured by first lien mortgages on properties to borrowers who are typically seeking short-term capital to be used in an acquisition, development or refinancing of real estate. The borrower may have identified an undervalued asset that has been undermanaged or is located in a recovering market. If the market in which the asset is located fails to recover according to the borrower’s projections, or if the borrower fails to improve the quality of the asset’s management or the value of the asset, the borrower may not receive a sufficient return on the asset to satisfy the bridge loan, and we may not recover some or all of our investment.

In addition, owners usually borrow funds under a conventional mortgage loan to repay a bridge loan. We may, therefore, be dependent on a borrower’s ability to obtain permanent financing to repay our bridge loan, which could depend on market conditions and other factors. Bridge loans, like other loans secured directly or indirectly by property, are subject to risks of borrower defaults, bankruptcies, fraud, losses and special hazard losses that are not covered by standard hazard insurance. In the event of any default under bridge loans held by us, we bear the risk of loss of principal and nonpayment of interest and fees to the extent of any deficiency between the value of the mortgage collateral and the principal amount of the bridge loan. Any such losses with respect to our investments in bridge loans could have an adverse effect on our NAV, results of operations, and financial condition.

Interest rate and related risks may cause the value of our real estate securities investments to be reduced.

Interest rate risk is the risk that fixed-income securities such as preferred and debt securities, and to a lesser extent dividend paying common stocks, will decline in value because of changes in market interest rates. Generally, when market interest rates rise, the market value of such securities will decline, and vice versa. In addition, during periods of rising interest rates, the average life of certain types of securities may be extended because of slower than expected principal payments. This may lock in a below-market interest rate, increase the security’s duration and reduce the value of the security. This is known as extension risk. During periods of declining interest rates, an issuer may be able to exercise an option to prepay principal earlier than scheduled, which is generally known as call or prepayment risk. If this occurs, we may be forced to reinvest in lower yielding securities. This is known as reinvestment risk. Preferred and debt securities frequently have call features that allow the issuer to repurchase the security prior to its stated maturity. An issuer may redeem an obligation if the issuer can refinance the debt at a lower cost due to declining interest rates or an improvement in the credit standing of the issuer. To the extent we invest in real estate securities going forward, these risks may reduce the value of such investments.

- 42 -

Investments in real estate-related securities are subject to specific risks relating to the particular issuer of the securities and may be subject to the general risks of investing in subordinated real estate securities.

We may invest in real estate-related common equity, preferred equity and debt securities of both publicly traded and private real estate companies. Investments in real estate-related securities will involve special risks relating to the particular issuer of the securities, including the financial condition and business outlook of the issuer. Issuers of real estate-related securities generally invest in real estate or real estate-related assets and are subject to the inherent risks associated with real estate-related debt investments discussed in this Annual Report on Form 10-K.

Real estate-related securities may be unsecured and subordinated to other obligations of the issuer. As a result, investments in real estate-related securities are subject to risks of (i) limited liquidity in the secondary trading market, (ii) substantial market price volatility, (iii) subordination to the prior claims of banks and other senior lenders to the issuer and preferred equity holders, (iv) the operation of mandatory sinking fund or call/redemption provisions during periods of declining interest rates that could cause the issuer to reinvest redemption proceeds in lower yielding assets, (v) the possibility that earnings of the issuer may be insufficient to meet its debt service and distribution obligations and (vi) the declining creditworthiness and potential for insolvency of the issuer during periods of rising interest rates and economic downturn. These risks may adversely affect the value of outstanding real estate-related securities and the ability of the issuers thereof to pay dividends.

We may make investments in non-U.S. dollar denominated securities, which will be subject to currency rate exposure and risks associated with the uncertainty of foreign laws and markets.

Some of our real estate-related securities investments may be denominated in foreign currencies, and therefore, we expect to have currency risk exposure to any such foreign currencies. A change in foreign currency exchange rates may have an adverse impact on returns on our non-U.S. dollar denominated investments.

Although we may hedge our foreign currency risk subject to the REIT income qualification tests, we may not be able to do so successfully and may incur losses on these investments as a result of exchange rate fluctuations. To the extent that we invest in non-U.S. dollar denominated securities, in addition to risks inherent in the investment in securities generally discussed in this Annual Report on Form 10-K, we will also be subject to risks associated with the uncertainty of foreign laws and markets including, but not limited to, unexpected changes in regulatory requirements, political and economic instability in certain geographic locations, difficulties in managing international operations, currency exchange controls, potentially adverse tax consequences, additional accounting and control expenses and the administrative burden of complying with a wide variety of foreign laws.

RISKS ASSOCIATED WITH DEBT FINANCING

We incur mortgage indebtedness and other borrowings, which may increase our business risks, and could hinder our ability to make distributions to our stockholders.

We have financed and may continue to finance a portion of the purchase price of certain of our investments by borrowing funds. As of December 31, 2013, our leverage ratio is approximately 50% of the fair value of our real property and debt related investments (determined in accordance with our valuation procedures) inclusive of property and entity-level debt. Our current leverage target is between 40-60%. Although we will generally work to maintain the targeted leverage ratio over the near term, we may change our targeted leverage ratio from time to time. In addition, we may vary from our target leverage ratio from time to time, and there are no assurances that we will maintain the targeted range disclosed above or achieve any other leverage ratio that we may target in the future. Our board of directors may from time to time modify our borrowing policy in light of then-current economic conditions, the relative costs of debt and equity capital, the fair values of our properties, general conditions in the market for debt and equity securities, growth and acquisition opportunities or other factors.

- 43 -

Under our charter, we have a limitation on borrowing that precludes us from borrowing in excess of 300% of the value of our net assets unless approved by a majority of the independent directors and disclosed to stockholders in our next quarterly report along with justification for the excess. Net assets for purposes of this calculation are defined to be our total assets (other than intangibles), valued at cost prior to deducting depreciation or other non-cash reserves, less total liabilities. Generally speaking, the preceding calculation is expected to approximate 75% of the aggregate cost of our real property assets and debt related investments before non-cash reserves and depreciation. In addition, we have incurred and may continue to incur mortgage debt secured by some or all of our real properties to obtain funds to acquire additional real properties or for working capital. We may also borrow funds to satisfy the REIT tax qualification requirement that we distribute at least 90% of our annual REIT taxable income to our stockholders. Furthermore, we may borrow funds if we otherwise deem it necessary or advisable to ensure that we maintain our qualification as a REIT for federal income tax purposes.

High debt levels would generally cause us to incur higher interest charges, and could result in higher debt service payments and could be accompanied by restrictive covenants. If there is a shortfall between the cash flow from a property and the cash flow needed to service mortgage debt on that property, then the amount available for distributions to our stockholders may be reduced. In addition, incurring mortgage debt increases the risk of loss of a property since defaults on indebtedness secured by a property may result in lenders initiating foreclosure action. In that case, we could lose the property securing the loan that is in default or be forced to sell the property at an inopportune time, thus reducing the value of our investments. For tax purposes, a foreclosure on any of our properties will be treated as a sale of the property for a purchase price equal to the outstanding balance of the debt secured by the mortgage. If the outstanding balance of the debt secured by the mortgage exceeds our tax basis in the property, we will recognize taxable income on foreclosure, but we would not receive any cash proceeds. We and our Operating Partnership have historically given certain full, partial or limited guarantees, and may continue to give full, partial or limited guarantees in the future, to lenders of mortgage debt to the entities that own our properties. When we give a guarantee on behalf of an entity that owns one of our properties, we are responsible to the lender for satisfaction of the debt if it is not paid by such entity. If any mortgage contains cross-collateralization or cross-default provisions, a default on a single property could affect multiple properties. If any of our properties are foreclosed upon due to a default, our NAV, liquidity and ability to pay cash distributions to our stockholders will be adversely affected.

Increases in interest rates could increase the amount of our debt payments and therefore adversely impact our operating results.

We currently utilize a significant amount of variable rate debt financing. To the extent we do not have derivative instruments to hedge exposure to changes in interest rates, increases in interest rates would increase our interest costs, which would reduce our cash flows and our ability to make distributions to our stockholders. If we need to repay existing debt during periods of rising interest rates, we could be required to liquidate one or more of our real property or debt related investments at times, which may not permit realization of the maximum return on such investments.

Our derivative instruments used to hedge against interest rate fluctuations may not be successful in mitigating our risks associated with interest rates and could reduce the overall returns on our investments.

We utilize derivative instruments to hedge exposure to changes in interest rates on certain of our loans secured by our real properties, but no hedging strategy can protect us completely. We may use derivative instruments, such as forward starting swaps, to hedge interest rate risks associated with debt incurrences that we anticipate may occur. However, if we fail to accurately forecast such debt incurrences we will be subject to interest rate risk without successfully hedging the underlying transaction. Furthermore, the use of derivative instruments may cause us to forgo the benefits of otherwise favorable fluctuations in interest rates, since derivative instruments may prevent us from realizing the full benefits of lower borrowing cost in an environment of declining interest rates.

- 44 -

In addition, derivative instruments may not mitigate all of the risk associated with fluctuations in borrowing costs. Derivative instruments are generally used to hedge fluctuations in benchmark interest rates, such as London Interbank Offered Rate (“LIBOR”) and U.S. treasury security-based interest rates. However, there are other components of borrowing costs that may comprise the “spread” that lenders apply to the benchmark interest rates. The “spread” that lenders apply to benchmark interest rates when making loans may fluctuate from time to time. Fluctuations in the “spread” may be attributable to volatility in the credit markets or borrower-specific credit risk. When we enter into derivative instruments in anticipation of certain debt incurrences, such derivative instruments do not mitigate the risks of fluctuations in “spread” which could exacerbate the risks described above.

We cannot assure our stockholders that our hedging strategy and the derivatives that we use will adequately offset all of our risk related to interest rate volatility or that our hedging of these risks will not result in losses. These derivative instruments may also generate income that may not be treated as qualifying REIT income for purposes of the 75% or 95% REIT income tests. For additional discussion of our hedging program and the related impact on our results of operations, see Note 6 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

We have entered into loan agreements that contain restrictive covenants relating to our operations, which could limit our ability to make distributions to our stockholders.

When providing financing, a lender typically imposes restrictions on us that may affect our distribution and operating policies and our ability to incur additional debt. Our loan agreements include restrictions, covenants, customary market carve-outs and/or guarantees by us. Certain financial covenants include tests of our general liquidity and debt servicing capability as well as certain collateral specific performance and valuation ratios. In addition, our loan agreements may contain covenants that limit our ability to further mortgage the property, discontinue insurance coverage, or replace the Advisor as our advisor. Further, our loan agreements may limit our ability to replace the property manager or terminate certain operating or lease agreements related to the property. These or other limitations may adversely affect our flexibility and our ability to achieve our investment objectives and make distributions to our stockholders. There can be no assurance that we will be able to comply with these covenants in the future, or that if we violate a covenant the lender would be willing to provide a waiver of such covenant. Violation of these covenants could result in the acceleration of maturities under the default provisions of our loan agreements. As of December 31, 2013, we were in compliance with all financial covenants.

We have entered into, and may continue to enter into, financing arrangements involving balloon payment obligations, which may adversely affect our ability to refinance or sell properties on favorable terms, and to make distributions to our stockholders.

Most of our current mortgage financing arrangements require us to make a lump-sum or “balloon” payment at maturity. Our ability to make a balloon payment at maturity will be uncertain and may depend upon our ability to obtain additional financing or our ability to sell the particular property. At the time the balloon payment is due, we may or may not be able to refinance the balloon payment on terms as favorable as the original loan or to sell the particular property at a price sufficient to make the balloon payment. The effect of a refinancing or sale could affect the rate of return to our stockholders and the projected time of disposition of our assets. In an environment of increasing mortgage rates, if we place mortgage debt on properties, we run the risk of being unable to refinance such debt if mortgage rates are higher at the time a balloon payment is due. In addition, payments of principal and interest made to service our debts, including balloon payments, may leave us with insufficient cash to pay the distributions that we are required to pay to maintain our qualification as a REIT.

- 45 -

RISKS RELATED TO OUR TAXATION AS A REIT

Failure to qualify as a REIT could adversely affect our operations and our ability to make distributions.

If we were to fail to qualify as a REIT for any taxable year, we would be subject to U.S. federal income tax on our taxable income at corporate rates. In addition, we would generally be disqualified from treatment as a REIT for the four taxable years following the year in which we lose our REIT status. Losing our REIT status would reduce our net earnings available for investment or distribution to stockholders because of the additional tax liability. In addition, distributions to stockholders would no longer be deductible in computing our taxable income and we would no longer be required to make distributions. To the extent that distributions had been made in anticipation of our qualifying as a REIT, we might be required to borrow funds or liquidate some investments in order to pay the applicable corporate income tax. In addition, although we intend to operate in a manner to qualify as a REIT, it is possible that future economic, market, legal, tax or other considerations may cause our board of directors to recommend that we revoke our REIT election.

Failure of our Operating Partnership to be taxable as a partnership could cause us to fail to qualify as a REIT and we could suffer other adverse tax consequences.

We believe that the Operating Partnership will continue to be treated for federal income tax purposes as a partnership and not as an association or as a publicly traded partnership taxable as a corporation. If the Internal Revenue Service were successfully to determine that the Operating Partnership was properly treated as a corporation, the Operating Partnership would be required to pay U.S. federal income tax at corporate rates on its net income, its partners would be treated as stockholders of the Operating Partnership and distributions to partners would constitute distributions that would not be deductible in computing the Operating Partnership’s taxable income. In addition, we could fail to qualify as a REIT, with the resulting consequences described above.

To continue to qualify as a REIT, we must meet annual distribution requirements, which may result in us distributing amounts that may otherwise be used for our operations.

To maintain 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. We are subject to U.S. federal income tax on our undistributed taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (i) 85% of our ordinary income, (ii) 95% of our capital gain net income and (iii) 100% of our undistributed income from prior years. These requirements could cause us to distribute amounts that otherwise would be spent on acquisitions of properties and it is possible that we might be required to borrow funds or sell assets to fund these distributions. Additionally, it is possible that we might not always be able to make distributions sufficient to meet the annual distribution requirements and to avoid corporate income taxation on the earnings that we distribute.

From time to time, we may generate taxable income greater than our taxable income for financial reporting purposes, or differences in timing between the recognition of taxable income and the actual receipt of cash may occur. If we do not have other funds available in these situations, we could be required to borrow funds on unfavorable terms, sell investments at disadvantageous prices or distribute amounts that would otherwise be invested in future acquisitions to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our equity. Thus, compliance with the REIT requirements may hinder our ability to grow, which could adversely affect the value of our common stock.

We may be required to report taxable income for certain investments in excess of the economic income we ultimately realize from them.

We may acquire debt instruments in the secondary market for less than their face amount. The amount of such discount will generally be treated as “market discount” for U.S. federal income tax purposes. Accrued

- 46 -

market discount is reported as income when, and to the extent that, any payment of principal of the debt instrument is made, unless we elect to include accrued market discount in income as it accrues. Principal payments on certain loans are made monthly, and consequently accrued market discount may have to be included in income each month as if the debt instrument were assured of ultimately being collected in full. If we collect less on the debt instrument than our purchase price plus the market discount we had previously reported as income, we may not be able to benefit from any offsetting loss deductions.

Similarly, some of the debt instruments that we acquire may have been issued with original issue discount. We will be required to report such original issue discount based on a constant yield method and will be taxed based on the assumption that all future projected payments due on such debt instruments will be made. If such debt instrument turns out not to be fully collectible, an offsetting loss deduction will become available only in the later year that uncollectability is provable. Finally, in the event that any debt instruments acquired by us are delinquent as to mandatory principal and interest payments, or in the event payments with respect to a particular debt instrument are not made when due, we may nonetheless be required to continue to recognize the unpaid interest as taxable income as it accrues, despite doubt as to its ultimate collectability. Similarly, we may be required to accrue interest income with respect to subordinate debt instruments at their stated rate regardless of whether corresponding cash payments are received or are ultimately collectable. In each case, while we would in general ultimately have an offsetting loss deduction available to us when such interest was determined to be uncollectible, the utility of that deduction could depend on our having taxable income in that later year or thereafter.

The REIT gross income testing rules create a further risk if we acquire loans on the secondary market. Specifically, the interest apportionment rules applicable to REITs generally provide that, if such an acquired mortgage is secured by both real property and other property, a REIT is required to apportion its annual interest income to the real property security based on a fraction, the numerator of which is the value of the real property securing the loan, determined when the REIT commits to acquire the loan, and the denominator of which is the highest “principal amount” of the loan during the year. The IRS issued Revenue Procedure 2011-16, which interprets the “principal amount” of the loan to be the face amount of the loan, despite the Code requiring taxpayers to treat any market discount, that is the difference between the purchase price of the loan and its face amount, for all purposes (other than certain withholding and information reporting purposes) as interest rather than principal.

If the IRS were to assert successfully that any of our mortgage loans (or similar obligations) we have acquired on the secondary market were secured by property other than real estate, that the interest apportionment rules applied for purposes of our REIT testing, and that the position taken in IRS Revenue Procedure 2011-16 should be applied to our portfolio, then depending upon the value of the real property securing our mortgage loans and their face amount, and the sources of our gross income generally, we may fail to meet the 75% REIT gross income test. If we do not meet this test, we could potentially lose our REIT qualification or be required to pay a penalty to the IRS.

To maintain our REIT status, we may have to borrow funds on a short-term basis during unfavorable market conditions.

To qualify as a REIT, we generally must distribute annually to our stockholders a minimum of 90% of our net taxable income excluding capital gains. We will be subject to regular corporate income taxes to the extent that we distribute less than 100% of our REIT taxable income each year. Additionally, we will be subject to a 4% nondeductible excise tax on any amount by which distributions paid by us in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from previous years. Payments we make to our stockholders under our redemption programs will not be taken into account for purposes of these distribution requirements. If we do not have sufficient cash to make distributions necessary to preserve our REIT status for any year or to avoid taxation, we may be forced to borrow funds or sell assets even if the market conditions at that time are not favorable for these borrowings or sales.

- 47 -

Recharacterization of sale-leaseback transactions may cause us to lose our REIT status.

We may purchase real properties and lease them back to the sellers of such properties. If we were to attempt to structure a sale-leaseback transaction such that the lease would be characterized as a “true lease” that would allow us to be treated as the owner of the property for federal income tax purposes, we cannot assure our stockholders that the IRS will not challenge such characterization. In the event that any such sale-leaseback transaction is challenged and recharacterized as a financing transaction or loan for U.S. federal income tax purposes, deductions for depreciation and cost recovery relating to such property would be disallowed. If a sale-leaseback transaction were so recharacterized, we might fail to satisfy the REIT qualification “asset tests” or the “income tests” and, consequently, lose our REIT status effective with the year of recharacterization. Alternatively, the amount of our REIT taxable income could be recalculated, which might also cause us to fail to meet the distribution requirement for a taxable year.

Our stockholders may have current tax liability on distributions if our stockholders elect to reinvest in shares of our common stock.

Even if our stockholders participate in our distribution reinvestment plan, our stockholders will be deemed to have received, and for U.S. federal income tax purposes will be taxed on, the amount reinvested in shares of our common stock to the extent the amount reinvested was not a tax-free return of capital. As a result, our stockholders that are not tax-exempt entities may have to use funds from other sources to pay their tax liability on the value of the common stock received.

Distributions payable by REITs do not qualify for the reduced tax rates that apply to other corporate distributions.

The maximum U.S. federal income tax rate for distributions payable by corporations to domestic stockholders that are individuals, trusts or estates is 20% as of January 1, 2013. Distributions payable by REITs, however, generally are taxed at the ordinary income tax rate applicable to the individual recipient, rather than the maximum 20% preferential rate. The more favorable rates applicable to regular corporate distributions could cause investors who are individuals to perceive investments in REITs to be relatively less attractive than investments in the stocks of non-REIT corporations that pay distributions, which could adversely affect the value of the stock of REITs, including our common stock.

If we were considered to actually or constructively pay a “preferential dividend” to certain of our stockholders, our status as a REIT could be adversely affected.

In order to qualify as a REIT, we must distribute to our stockholders at least 90% of our annual REIT taxable income (excluding net capital gain), determined without regard to the deduction for dividends paid. In order for distributions to be counted as satisfying the annual distribution requirements for REITs, and to provide us with a REIT-level tax deduction, the distributions must not be “preferential dividends.” A dividend is not a preferential dividend if the distribution is pro rata among all outstanding shares of stock within a particular class, and in accordance with the preferences among different classes of stock as set forth in our organizational documents. There is no de minimis exception with respect to preferential dividends; therefore, if the IRS were to take the position that we paid a preferential dividend, we may be deemed to have failed the 90% distribution test, and our status as a REIT could be terminated for the year in which such determination is made if we were unable to cure such failure. We have received a private letter ruling from the IRS concluding that differences in the dividends distributed to holders of Class E shares, holders of Class A shares, and holders of Class W shares, as described in the ruling, will not cause such dividends to be preferential dividends. We will also issue Class I shares in reliance on the rationale and tax authorities described in the ruling. We may change the way our fees and expenses are incurred and allocated to different classes of stockholders if the tax rules applicable to REITs change such that we could do so without adverse tax consequences.

- 48 -

In certain circumstances, we may be subject to federal and state income taxes as a REIT, which would reduce our cash available for distribution to our stockholders.

We may be subject to taxes on our income or property even if we qualify as a REIT for federal income tax purposes, including those described below.

• In order to qualify as a REIT, we are required to distribute annually at least 90% of our REIT taxable income (determined without regard to the dividends-paid deduction or net capital gain) to our stockholders. If we satisfy the distribution requirement but distribute less than 100% of our REIT taxable income, we will be subject to corporate income tax on the undistributed income.

• We will be required to pay a 4% nondeductible excise tax on the amount, if any, by which the distributions we make to our stockholders in any calendar year are less than the sum of 85% of our ordinary income, 95% of our capital gain net income and 100% of our undistributed income from previous years.

• If we have net income from the sale of foreclosure property that we hold primarily for sale to customers in the ordinary course of business or other non-qualifying income from foreclosure property, we will be required to pay a tax on that income at the highest corporate income tax rate.

• Any gain we recognize on the sale of a property, other than foreclosure property, that we hold primarily for sale to customers in the ordinary course of business, would be subject to the 100% “prohibited transaction” tax unless the sale qualified for a statutory safe harbor that requires, among other things, a two year holding period.

Our board of directors is authorized to revoke our REIT election without stockholder approval, which may cause adverse consequences to our stockholders.

Our charter authorizes our board of directors to revoke or otherwise terminate our REIT election, without the approval of our stockholders, if it determines that it is not in our best interest to qualify as a REIT. In this event, we would become subject to U.S. federal income tax on our taxable income and we would no longer be required to distribute most of our net income to our stockholders, which may cause a reduction in the total return to our stockholders.

Distributions to tax-exempt investors may be classified as unrelated business taxable income.

Neither ordinary nor capital gain distributions with respect to our common stock nor gain from the sale of common stock should generally constitute unrelated business taxable income to a tax-exempt investor. However, there are certain exceptions to this rule. In particular:

• part of the income and gain recognized by certain qualified employee pension trusts with respect to our common stock may be treated as unrelated business taxable income if shares of our common stock are predominately held by qualified employee pension trusts, we are required to rely on a special look-through rule for purposes of meeting one of the REIT share ownership tests, and we are not operated in a manner to avoid treatment of such income or gain as unrelated business taxable income;

• part of the income and gain recognized by a tax-exempt investor with respect to our common stock would constitute unrelated business taxable income if the investor incurs debt in order to acquire the common stock; and

• part or all of the income or gain recognized with respect to our common stock by social clubs, voluntary employee benefit associations, supplemental unemployment benefit trusts and qualified group legal services plans that are exempt from federal income taxation under Sections 501(c)(7), (9), (17), or (20) of the Code may be treated as unrelated business taxable income.

- 49 -

Our investments in real estate partnerships subject us to the tax risks associated with the tax status of such entities.

We are invested in real estate partnerships. Such investments are subject to the risk that any such partnership may fail to satisfy the requirements to qualify as a partnership, as the case may be, in any given taxable year. Such failure could subject such partnership to an entity-level tax and reduce the entity’s ability to make distributions to us. In addition, such failures could, depending on the circumstances, jeopardize our ability to qualify as a REIT.

Complying with the REIT requirements may cause us to forgo otherwise attractive opportunities.

To maintain our status as a REIT for U.S. federal income tax purposes, we must continually satisfy tests concerning, among other things, the sources of our income, the nature and diversification of our assets, the amounts we distribute to our stockholders and the ownership of shares of our common stock. We may be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Thus, compliance with the REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

Complying with the REIT requirements may force us to liquidate otherwise attractive investments.

To maintain our status as a REIT, we must ensure that at the end of each calendar quarter, at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets, including shares of stock in other REITs, certain mortgage loans, and mortgage-backed securities. The remainder of our investments in securities (other than governmental securities and qualified real estate assets) generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer. In addition, in general, no more than 5% of the value of our assets (other than government securities and qualified real estate assets) can consist of the securities of any one issuer, and no more than 25% (20% prior to July 30, 2008) of the value of our total securities can be represented by securities of one or more taxable REIT subsidiaries. If we fail to comply with these requirements at the end of any calendar quarter, we must correct such failure within 30 days after the end of the calendar quarter to avoid losing our REIT status and suffering adverse tax consequences. As a result, we may be required to liquidate otherwise attractive investments.

The stock ownership limit imposed by the Code for REITs and our charter may restrict our business combination opportunities and you may be restricted from acquiring or transferring certain amounts of our capital stock.

To maintain our status as a REIT under the Code, not more than 50% in value of our outstanding stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) at any time during the last half of each taxable year after our first year in which we qualify as a REIT. Our charter, with certain exceptions, authorizes our board of directors to take the actions that are necessary and desirable to preserve our qualification as a REIT. Unless an exemption is granted by our board of directors, no person (as defined to include entities) may own more than 9.8% in value of our capital stock or more than 9.8% in value or in number of shares, whichever is more restrictive, of our common stock following the completion of our public offerings. In addition, our charter will generally prohibit beneficial or constructive ownership of shares of our capital stock by any person who owns, actually or constructively, an interest in any of our tenants that would cause us to own, actually or constructively, more than a 9.9% interest in any of our tenants. Our board of directors may grant an exemption in its sole discretion, subject to such conditions, representations and undertakings as it may determine. These ownership limitations in our charter are common in REIT charters and are intended, among other purposes, to assist us in complying with the tax law requirements and to minimize administrative burdens. However, these ownership limits might also delay or prevent a transaction or a change in our control that might involve a premium price for our common stock or otherwise be in the best interests of our stockholders.

- 50 -

The tax on prohibited transactions will limit our ability to engage in transactions, including certain methods of syndicating and securitizing mortgage loans, that would be treated as sales for federal income tax purposes.

A REIT’s net income from prohibited transactions is subject to a 100% tax. In general, prohibited transactions are sales or other dispositions of property, other than foreclosure property, but including mortgage loans that are held primarily for sale to customers in the ordinary course of business. We might be subject to this tax if we were to syndicate, dispose of, or securitize loans in a manner that was treated as a sale of the loans for U.S. federal income tax purposes. Therefore, to avoid the prohibited transactions tax, we may choose not to engage in certain sales of loans at the REIT level and may limit the structures we utilize for our securitization transactions, even though the sales or structures otherwise might be beneficial to us.

In addition, the Code provides a safe harbor that, if met, allows us to avoid being treated as engaged in a prohibited transaction. In order to meet the safe harbor, (i) we must have held the property for at least 2 years (and, in the case of property which consists of land or improvements not acquired through foreclosure, we must have held the property for 2 years for the production of rental income), (ii) we must not have made aggregate expenditures includible in the basis of the property during the 2-year period preceding the date of sale that exceed 30% of the net selling price of the property, and (iii) during the taxable year the property is disposed of, we must not have made more than 7 property sales or, alternatively, the aggregate adjusted basis or fair market value of all the properties sold by us during the taxable year must not exceed 10% of the aggregate adjusted basis or 10% of the fair market value, respectively, of all our assets as of the beginning of the taxable year. If the 7-sale limitation in (iii) above is not satisfied, substantially all of the marketing and development expenditures with respect to the property must be made through an independent contractor from whom we do not derive or receive any income. For sales on or prior to July 30, 2008, the 2-year periods referenced in (i) and (ii) above were 4 years, and the 10% fair market value test described in the alternative in (iii) above did not apply. We will endeavor to avoid engaging in prohibited transactions or we will attempt to comply with the safe harbor provisions. There is no assurance, however, that we will not engage in prohibited transactions.

The failure of a mezzanine loan to qualify as a real estate asset could adversely affect our ability to qualify as a REIT.

The IRS has issued Revenue Procedure 2003-65, which provides a safe harbor pursuant to which a mezzanine loan that is secured by interests in a pass-through entity will be treated by the IRS as a real estate asset for purposes of the REIT tests, and interest derived from such loan will be treated as qualifying mortgage interest for purposes of the REIT 75% income test. Although the Revenue Procedure provides a safe harbor on which taxpayers may rely, it does not prescribe rules of substantive tax law. To the extent that any mezzanine loans in which we invest do not satisfy all of the requirements for reliance on the safe harbor set forth in the Revenue Procedure, there can be no assurance that the IRS will not challenge the tax treatment of such loans, which could jeopardize our ability to qualify as a REIT.

Liquidation of assets may jeopardize our REIT status.

To maintain our status as a REIT, we must comply with requirements regarding our assets and our sources of income. If we are compelled to liquidate our investments to satisfy our obligations to our lenders, we may be unable to comply with these requirements, ultimately jeopardizing our status as a REIT, or we may be subject to a 100% tax on any resultant gain if we sell assets that are treated as dealer property or inventory.

Legislative or regulatory action could adversely affect investors.

In recent years, numerous legislative, judicial and administrative changes have been made to the U.S. federal income tax laws applicable to investments in REITs and similar entities. Additional changes to tax laws are likely to continue to occur in the future, and we cannot assure our stockholders that any such changes will not adversely affect the taxation of a stockholder. Any such changes could have an adverse effect on an

- 51 -

investment in shares of our common stock. We urge our stockholders to consult with their own tax advisor with respect to the status of legislative, regulatory or administrative developments and proposals and their potential effect on an investment in shares of our common stock.

Recharacterization of transactions under the Operating Partnership’s private placements could result in a 100% tax on income from prohibited transactions, which would diminish our cash distributions to our stockholders.

The Internal Revenue Service could recharacterize transactions under the Operating Partnership’s private placements such that the Operating Partnership could be treated as the bona fide owner, for tax purposes, of properties acquired and resold by the entity established to facilitate the transaction. Such recharacterization could result in the income realized on these transactions by the Operating Partnership being treated as gain on the sale of property that is held as inventory or otherwise held primarily for the sale to customers in the ordinary course of business. In such event, such gain could constitute income from a prohibited transaction and might be subject to a 100% tax. If this occurs, our ability to pay cash distributions to our stockholders will be adversely affected.

Qualifying as a REIT involves highly technical and complex provisions of the Code.

Qualification as a REIT involves the application of highly technical and complex Code provisions for which only limited judicial and administrative authorities exist. Even a technical or inadvertent violation could jeopardize our REIT qualification. Our continued qualification as a REIT will depend on our satisfaction of certain asset, income, organizational, distribution, stockholder ownership and other requirements on a continuing basis. In addition, our ability to satisfy the requirements to qualify as a REIT depends in part on the actions of third parties over which we have no control or only limited influence, including in cases where we own an equity interest in an entity that is classified as a partnership for U.S. federal income tax purposes.

Foreign investors may be subject to FIRPTA on the sale of common shares if we are unable to qualify as a “domestically controlled qualified investment entity.”

A foreign person disposing of a U.S. real property interest, including shares of a U.S. corporation whose assets consist principally of U.S. real property interests, is generally subject to a tax, known as FIRPTA, on the gain recognized on the disposition. FIRPTA does not apply, however, to the disposition of stock in a REIT if the REIT is a “domestically controlled qualified investment entity” (as defined in section 897(h)(4)(B) of the Code). A domestically controlled qualified investment entity includes a REIT in which, at all times during a specified testing period, less than 50% in value of its shares is held directly or indirectly by non-U.S. holders. We cannot assure our stockholders that we will qualify as a domestically controlled qualified investment entity. If we were to fail to so qualify, gain realized by a foreign investor on a sale of our common stock would be subject to FIRPTA unless our common stock was traded on an established securities market and the foreign investor did not at any time during a specified testing period directly or indirectly own more than 5% of the value of our outstanding common stock. Regardless of our status as a domestically controlled qualified investment entity, capital gain distributions attributable to a disposition of a U.S. real property interest will be subject to tax under FIRPTA in the hands of non-U.S. investors.

INVESTMENT COMPANY RISKS

Avoiding registration as an investment company imposes limits on our operations, and failure to avoid registration reduces the value of your investment.

We conduct our operations so as not to become regulated as an investment company under the Investment Company Act of 1940, as amended, which we refer to as the “Investment Company Act.” To do so, we will have to continue to monitor the value of our securities in comparison with the value of our other assets and make sure that the value of our securities does not exceed 40% of the value of all of our assets on an unconsolidated basis. As a result, we may be unable to sell assets we would otherwise want to sell and may be unable to purchase securities we would otherwise want to purchase.

- 52 -

If we were obligated to register as an investment company, we would have to comply with a variety of substantive requirements under the Investment Company Act that impose, among other things:

• limitations on capital structure;

• restrictions on specified investments;

• prohibitions on transactions with affiliates; and

• compliance with reporting, record keeping, voting, proxy disclosure and other rules and regulations that would significantly increase our operating expenses.

Registration with the Commission as an investment company would be costly, would subject our company to a host of complex regulations, and would divert the attention of management from the conduct of our business.

Further, if it were established that we were an unregistered investment company, there would be a risk that we would be subject to monetary penalties and injunctive relief in an action brought by the Commission, that we would be unable to enforce contracts with third parties, and that third parties could seek to obtain rescission of transactions undertaken during the period it was established that we were an unregistered investment company. Any such results would be likely to have a material adverse effect on us.

RETIREMENT PLAN RISKS

If you fail to meet the fiduciary and other standards under the Employee Retirement Income Security Act of 1974, as amended, or “ERISA,” or the Code as a result of an investment in our stock, you could be subject to criminal and civil penalties.

There are special considerations that apply to employee benefit plans subject to ERISA (such as profit-sharing, section 401(k) or pension plans) and other retirement plans or accounts subject to Section 4975 of the Code (such as an IRA) that are investing in our shares. If you are investing the assets of such a plan or account in our common stock, you should satisfy yourself that:

• your investment is consistent with your fiduciary and other obligations under ERISA and the Code;

• your investment is made in accordance with the documents and instruments governing the plan or IRA, including the plan’s or account’s investment policy;

• your investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA and other applicable provisions of ERISA and the Code;

• your investment in our shares, for which no trading market may exist, is consistent with the liquidity needs of the plan or IRA;

• your investment will not produce an unacceptable amount of “unrelated business taxable income” for the plan or IRA;

• you will be able to comply with the requirements under ERISA and the Code to value the assets of the plan or IRA annually; and

• your investment will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

With respect to the annual valuation requirements described above, we expect to provide an estimated value of our net assets per share annually to those fiduciaries (including IRA trustees and custodians) who request it. Although this estimate will be based upon determinations of the NAV of our shares in accordance with our valuation procedures, no assurance can be given that such estimated value will satisfy the applicable annual valuation requirements under ERISA and the Code. The Department of Labor or the Internal Revenue Service may determine that a plan fiduciary or an IRA custodian is required to take further steps to determine the value of our common shares. In the absence of an appropriate determination of value, a plan fiduciary or an IRA custodian may be subject to damages, penalties or other sanctions.

- 53 -

Failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA and the Code may result in the imposition of civil and criminal penalties, and can subject the fiduciary to claims for damages or for equitable remedies, including liability for investment losses. In addition, if an investment in our shares constitutes a prohibited transaction under ERISA or the Code, the fiduciary or IRA owner who authorized or directed the investment may be subject to the imposition of excise taxes with respect to the amount invested. Additionally, the investment transaction may have to be undone. In the case of a prohibited transaction involving an IRA owner, the IRA may be disqualified as a tax-exempt account and all of the assets of the IRA may be deemed distributed and subjected to tax. ERISA plan fiduciaries and IRA owners should consult with counsel before making an investment in our shares.

If our assets are deemed to be plan assets, the Advisor and we may be exposed to liabilities under Title I of ERISA and the Code.

In some circumstances where an ERISA plan holds an interest in an entity, the assets of the entity are deemed to be ERISA plan assets unless an exception applies. This is known as the “look-through rule.” Under those circumstances, the obligations and other responsibilities of plan sponsors, plan fiduciaries and plan administrators, and of parties in interest and disqualified persons, under Title I of ERISA and Section 4975 of the Code, as applicable, may be applicable, and there may be liability under these and other provisions of ERISA and the Code. We believe that our assets should not be treated as plan assets because the shares should qualify as “publicly-offered securities” that are exempt from the look-through rules under applicable Treasury Regulations. We note, however, that because certain limitations are imposed upon the transferability of shares so that we may qualify as a REIT, and perhaps for other reasons, it is possible that this exemption may not apply. If that is the case, and if the Advisor or we are exposed to liability under ERISA or the Code, our performance and results of operations could be adversely affected. Prior to making an investment in us, you should consult with your legal and other advisors concerning the impact of ERISA and the Code on your investment and our performance.

- 54 -

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

As of December 31, 2013, we held the majority ownership in 82 real properties, all of which were operating properties. The properties are located in 30 distinct geographical markets throughout the United States and comprise approximately 15.3 million net rentable square feet. As of December 31, 2013, our operating properties were subject to mortgage notes with an aggregate principal amount outstanding of approximately $977.0 million. For additional discussion of our borrowings, see Note 5 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Geographic Distribution

The following map describes the geographic distribution and types of our 82 operating properties by market as of December 31, 2013.

- 55 -

The following table describes our 82 operating properties, by market, which are presented on a consolidated basis for purposes of financial reporting as of December 31, 2013 (dollar amounts and square footage amounts in thousands).

Market	Number of Properties		Gross Investment Amount (1)		Net Rentable Square Feet		Secured Indebtedness (2)		% of Gross Investment Amount			% of Total Net Rentable Square Feet			% Leased (3)
Office Properties:
Washington, DC		3	$	283,085		878	$	60,404		11.1	%		5.7	%		99.5	%
Northern New Jersey		2		249,595		807		130,768		9.7	%		5.3	%		100.0	%
East Bay, CA		2		151,337		465		—		5.9	%		3.0	%		87.1	%
Dallas, TX		3		116,917		618		46,677		4.5	%		4.1	%		90.6	%
San Francisco, CA		1		116,313		269		57,827		4.5	%		1.8	%		84.8	%
Los Angeles, CA		3		76,897		450		31,619		3.0	%		3.0	%		75.3	%
Silicon Valley, CA		2		60,635		196		30,998		2.4	%		1.3	%		84.4	%
Princeton, NJ		1		51,163		167		34,227		2.0	%		1.1	%		100.0	%
Miami, FL		1		48,232		240		19,372		1.9	%		1.6	%		100.0	%
Chicago, IL		2		45,846		303		29,880		1.8	%		2.0	%		79.3	%
Austin, TX		1		44,978		156		19,786		1.7	%		1.0	%		100.0	%
Philadelphia, PA		1		41,049		173		24,000		1.6	%		1.1	%		94.8	%
Minneapolis/St Paul, MN		1		29,441		107		—		1.1	%		0.7	%		100.0	%
Little Rock, AR		1		22,015		102		13,650		0.9	%		0.7	%		100.0	%
Denver, CO		1		17,887		138		—		0.7	%		0.9	%		100.0	%
Fayetteville, AR		1		11,695		63		—		0.5	%		0.4	%		100.0	%
Total/Weighted Average		26		1,367,085		5,132		499,208		53.3	%		33.7	%		92.7	%
Industrial Properties:
Dallas, TX		4		82,764		1,204		49,263		3.2	%		7.8	%		76.3	%
Los Angeles, CA		1		78,160		107		16,923		3.0	%		0.7	%		100.0	%
Houston, TX		1		41,338		465		18,537		1.6	%		3.0	%		100.0	%
Minneapolis/St Paul, MN		3		36,394		472		15,259		1.4	%		3.1	%		100.0	%
Central Pennsylvania		1		29,464		502		9,767		1.1	%		3.3	%		100.0	%
Louisville, KY		4		26,114		736		8,298		1.0	%		4.8	%		100.0	%
Central Kentucky		1		25,820		727		11,579		1.0	%		4.8	%		100.0	%
Cleveland, OH		1		23,805		230		8,684		0.9	%		1.5	%		100.0	%
Atlanta, GA		1		23,272		491		—		0.9	%		3.2	%		100.0	%
Indianapolis, IN		1		22,994		475		12,000		0.9	%		3.1	%		96.2	%
Columbus, OH		2		21,667		451		11,651		0.8	%		3.0	%		100.0	%
Cincinnati, OH		2		20,682		349		8,751		0.8	%		2.3	%		100.0	%
Chicago, IL		1		20,660		575		8,907		0.8	%		3.8	%		100.0	%
Silicon Valley, CA		1		18,989		177		14,250		0.7	%		1.2	%		41.3	%
Denver, CO		1		6,232		85		2,794		0.2	%		0.6	%		100.0	%
Total/Weighted Average		25		478,355		7,046		196,663		18.3	%		46.2	%		94.2	%
Retail Properties:
Boston		25		437,048		1,934		110,710		17.1	%		12.6	%		92.9	%
Philadelphia, PA		1		104,157		426		67,800		4.1	%		2.8	%		100.0	%
Washington, DC		1		62,624		233		38,926		2.4	%		1.5	%		100.0	%
Raleigh, NC		1		45,184		142		26,200		1.8	%		0.9	%		100.0	%
San Antonio, TX		1		32,060		161		21,500		1.2	%		1.1	%		89.6	%
Pittsburgh, PA		1		24,468		103		16,000		1.0	%		0.7	%		91.3	%
Jacksonville, FL		1		19,499		73		—		0.8	%		0.5	%		54.4	%
Total/Weighted Average		31		725,040		3,072		281,136		28.4	%		20.1	%		93.6	%
Grand Total/Weighted Average		82	$	2,570,480		15,250	$	977,007		100.0	%		100.0	%		93.6	%

- 56 -

(1) “Gross Investment Amount” as used here and throughout this document represents the allocated gross basis of real property, inclusive of the effect of gross intangible lease liabilities totaling approximately $113.5 million and before accumulated depreciation and amortization of approximately $502.8 million as of December 31, 2013. Table includes amounts related to properties classified as held for sale in our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

(2) Does not include our GAAP mark-to-market adjustment, fair value adjustment, or principal amortization related to troubled debt restructurings.

(3) Percentage leased is based on executed leases as of December 31, 2013.

Lease Expirations

As of December 31, 2013, the weighted average remaining term of our leases was approximately 7.1 years, based on contractual remaining base rent, and 4.7 years, based on leased square footage. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of this Annual Report on Form 10-K for a schedule of expiring leases for our consolidated operating properties by annual minimum rents as of December 31, 2013.

Tenant Information

The following table describes our top ten tenants and their industry sectors as of December 31, 2013 (dollar and square footage amounts in thousands).

	Tenant	Locations	Industry Sector	Annualized Base Rent (1)		% of Total Annualized Base Rent			Square Feet		% of Occupied Square Feet
1	Charles Schwab & Co, Inc	1	Securities, Commodities, Fin. Inv./Rel. Activites	$	22,761		11.5	%		594		4.2	%
2	Northrop Grumman	2	Professional, Scientific and Technical Services		17,532		8.9	%		699		4.9	%
3	Sybase	1	Publishing Information (except Internet)		17,283		8.8	%		405		2.8	%
4	Stop & Shop	15	Food and Beverage Stores		13,828		7.0	%		872		6.1	%
5	CEVA Freight/Logistics	3	Truck Transportation		5,198		2.6	%		790		5.5	%
6	Novo Nordisk	1	Chemical Manufacturing		4,353		2.2	%		167		1.2	%
7	Seton Health Care	1	Hospitals		4,339		2.2	%		156		1.1	%
8	Crawford and Company	1	Insurance Carriers and Related Activities		3,894		2.0	%		240		1.7	%
9	Nokia Siemens Networks US LLC	1	Telecommunications		3,821		1.9	%		294		2.1	%
10	Equinix Operating Co Inc	1	Information		3,584		1.8	%		107		0.7	%
	Total	27		$	96,593		48.9	%		4,324		30.3	%

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

ITEM 3. LEGAL PROCEEDINGS

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

- 57 -

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

There is no public market for shares of our common stock and we currently have no obligation or plans to apply for listing on any public trading market. The prices at which our shares of common stock are sold pursuant to our public offerings, or redeemed pursuant to our share redemption programs, are based on the daily NAV per share determined in accordance with our valuation procedures, as described further below.

We commenced calculating a daily NAV on July 12, 2012. The following table presents the high and low NAV per share of each class of common stock for each quarter following the commencement of our daily NAV calculations on July 12, 2012 (to date, our classes have had the same NAV on each day):

Quarter	Low		High
Third Quarter 2012	$	6.63	$	6.69
Fourth Quarter 2012	$	6.64	$	6.70
First Quarter 2013	$	6.71	$	6.79
Second Quarter 2013	$	6.74	$	6.84
Third Quarter 2013	$	6.83	$	6.89
Fourth Quarter 2013	$	6.84	$	6.93

- 58 -

Performance Graph

The following graph is a comparison of the cumulative return of our shares of common stock calculated on a weighted average basis (after class-specific expenses), against the NCREIF Fund Index-Open-End Diversified Core Equity (“ODCE”) and Standard and Poor’s 500 Index (“S&P 500”), as peer group indices. The graph assumes that $100 was invested on September 30, 2012 in our shares of common stock and each index assuming that all dividends were reinvested. There can be no assurance that the performance of our shares will continue in line with the same or similar trends depicted in the graph below. Our total return since July 12, 2012, the date we initiated daily NAV pricing, was 12.3%, or 8.2% annualized. Our total return for the year ended December 31, 2013 was 8.75% on a weighted-average basis across our multiple share classes.

This performance and the chart below do not reflect selling commissions of up to 3.0% of the NAV per share applicable to Class A shares sold in our primary offering.

(1) The ODCE is an equal weighted, time weighted index of open-end core real estate funds reported net of fees. The term core typically reflects lower risk investment strategies, utilizing low leverage and generally represented by equity ownership positions in stable U.S. operating properties. Funds are weighted equally, regardless of size. While funds used in this benchmark have characteristics that differ from the Company (including differing management fees), our management feels that the ODCE is an appropriate and accepted index for the purpose of evaluating returns on investments in direct real estate funds. Investors cannot invest in this index. The Company has the ability to utilize higher leverage than is allowed for the funds in this index, which could increase the Company’s volatility relative to the index.

- 59 -

The following table shows the return, by share class, of each of our classes of common stock for the period December 31, 2012 through December 31, 2013 (share amounts are in thousands).

Share Class	Weighted average number of shares outstanding during period (in thousands)		Return
Class E		176,046		8.75	%
Class A (1)		29		7.58	%
Class W		30		8.11	%
Class I		2,091		8.64	%
Total / Weighted Average		178,196		8.75	%

(1) Does not reflect selling commission of up to 3.0% of our NAV per share, applicable to Class A shares purchased in our primary offering.

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. One fundamental element of the valuation process, the valuation of our real property portfolio, is managed by Altus Group U.S., Inc., an independent valuation firm (“the Independent Valuation Firm”) approved by our board of directors, including a majority of our independent directors. See Exhibit 99.1 of this Annual Report on Form 10-K for a description of our valuation procedures, including important disclosure regarding real property valuations provided by the Independent Valuation Firm.

The following table sets forth the components of NAV for the Company as of December 31, 2013 and September 30, 2013 (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.

	As of December 31, 2013			As of September 30, 2013
Real properties (1)	$	2,525,375		$	2,413,945
Debt related investments		123,935			127,055
Cash and other assets, net of other liabilities		3,904			21,132
Debt obligations		(1,325,286	)		(1,240,881	)
Outside investor’s interests		(16,004	)		(15,751	)
Aggregate Fund NAV	$	1,311,924		$	1,305,500
Total Fund Interests outstanding		189,280			190,163
NAV per Fund Interest	$	6.93		$	6.87

(1) The NAV of real properties as of December 31, 2013 includes $1,378.1 million in office properties, $716.5 million in retail properties, and $430.8 million in industrial properties. The NAV of real properties as of September 30, 2013 includes $1,278.9 million in office properties, $713.3 million in retail properties, and $421.7 million in industrial properties.

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 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

- 60 -

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

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; or (3) a stockholder would be able to realize the per share NAV if such stockholder attempted to sell his or her shares to a third party.

The December 31, 2013 valuation for our real properties was provided by the Independent Valuation Firm in accordance with our valuation procedures and determined starting with the appraised value. The aggregate real property valuation of $2.53 billion compares to a GAAP basis of real properties (before accumulated amortization and depreciation and the impact of intangible lease liabilities) of $2.46 billion, representing an increase of approximately $68.4 million or 2.8%. 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.

	Office			Industrial			Retail			Weighted Average Basis
Exit capitalization rate		7.09	%		7.09	%		6.77	%		7.00	%
Discount rate / internal rate of return (“IRR”)		7.73	%		7.66	%		7.29	%		7.60	%
Annual market rent growth rate		3.26	%		3.03	%		3.02	%		3.15	%
Average holding period		10.1			10.4			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 1.83% and 1.95%, respectively.

- 61 -

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 A Common Stock			Class W Common Stock			Class I Common Stock			Class E OP Units
NAV as of September 30, 2013	$	1,305,500		$	1,184,273		$	84		$	84		$	28,899		$	92,160
Fund level changes to NAV
Realized/unrealized gains (losses) on net assets		9,615			8,712			7			8			216			672
Income accrual		23,564			21,366			10			10			525			1,653
Net dividend accrual		(16,697	)		(15,149	)		(5	)		(6	)		(365	)		(1,172	)
Advisory fee		(3,806	)		(3,451	)		(1	)		(2	)		(85	)		(267	)
Performance based fee		(52	)		(47	)			*			*		(1	)		(4	)
Class specific changes to NAV
Dealer Manager fee		(9	)		—			(1	)		(1	)		(7	)		—
Distribution fee		(1	)		—			(1	)		—			—			—
NAV as of December 31, 2013
before share sale/redemption activity	$	1,318,114		$	1,195,704		$	93		$	93		$	29,182		$	93,042
Share sale/redemption activity
Shares sold		8,782			5,179			1,409			1,354			840			—
Shares redeemed		(14,972	)		(13,887	)		—			—			(30	)		(1,055	)
NAV as of December 31, 2013	$	1,311,924		$	1,186,996		$	1,502		$	1,447		$	29,992		$	91,987
Shares outstanding as of September 30, 2013		190,163			172,504			12			12			4,209			13,426
Shares sold		1,278			755			204			197			122			—
Shares redeemed		(2,161	)		(2,004	)		—			—			(4	)		(153	)
Shares outstanding as of December 31, 2013		189,280			171,255			216			209			4,327			13,273
NAV per share as of September 30, 2013				$	6.87		$	6.87		$	6.87		$	6.87		$	6.87
Change in NAV per share					0.06			0.06			0.06			0.06			0.06
NAV per share as of December 31, 2013				$	6.93		$	6.93		$	6.93		$	6.93		$	6.93

* Includes an amount less than $500.

Holders

As of February 28, 2014, we had (i) approximately 172.0 million shares of our Class E common stock outstanding held by a total of approximately 31,000 stockholders, (ii) approximately 457,000 shares of our Class A common stock outstanding held by a total of approximately 200 stockholders, (iii) approximately 325,000 shares of our Class W common stock outstanding held by a total of approximately 200 stockholders, and (iv) approximately 4.3 million shares of our Class I common stock outstanding held by a total of approximately 700 stockholders. As of February 28, 2014, we had approximately 13.0 million Class E OP Units outstanding issued to approximately 200 third parties in connection with our Operating Partnership’s private placement offerings.

- 62 -

Distributions

We intend to continue to accrue distributions daily and make distributions to our stockholders on a quarterly basis following the end of each calendar quarter. We began making such distributions following the first calendar quarter after the quarter in which the minimum offering requirements were met for our initial public offering. However, we reserve the right to adjust the periods during which distributions accrue and are paid.

In connection with a distribution to our stockholders, our board has historically authorized, and intends to continue to authorize, a quarterly distribution of a certain dollar amount per share of our common stock before or on the first day of each quarter. We then calculate each stockholder’s specific distribution amount for the quarter using daily record and declaration dates and each stockholder’s distributions begin to accrue on the date and time that they become a record owner of our common stock, subject to our board of directors declaring a distribution for record owners as of such date and time. We accrue the amount of declared distributions as our liability on a daily basis, and such liability is accounted for in determining the NAV.

We are required to make distributions sufficient to satisfy the requirements for qualification as a REIT for federal income tax purposes. Generally, income distributed will not be taxable to us under the Code if we distribute at least 90% of our taxable income each year (computed without regard to the dividends paid deduction and our net capital gain). In addition, if we fail to distribute during each calendar year at least the sum of (a) 85% of our ordinary income for such year, (b) 95% of our capital gain net income for such year, and (c) any undistributed taxable income from prior periods, we will be subject to a 4% excise tax on the excess of the required distribution over the sum of (i) the amounts actually distributed by us, plus (ii) retained amounts on which we pay income tax at the corporate level. Distributions will be authorized at the discretion of the board of directors, in accordance with our earnings, cash flow and general financial condition. The board’s discretion will be directed, in substantial part, by its obligation to cause us to comply with the REIT requirements. Because we may receive income from interest or rents at various times during our fiscal year, distributions may not reflect our income earned in that particular distribution period and may be made in advance of actual receipt of funds in an attempt to make distributions relatively uniform. We are authorized to borrow money, issue new securities or sell assets in order to make distributions. There are no restrictions on the ability of the Operating Partnership to transfer funds to us.

For a summary of distributions that had been paid by us for the years ended December 31, 2013 and 2012 and declared for the first quarter of 2014, refer to Note 10 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

- 63 -

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

	For the Three Months Ended										For the Year Ended
	December 31, 2013		% of Total Distributions			December 31, 2012		% of Total Distributions			December 31, 2013		% of Total Distributions			December 31, 2012		% of Total Distributions
Distributions:
Common stock distributions paid in cash	$	10,287		61.3	%	$	10,211		59.7	%	$	41,123		60.7	%	$	53,311		57.4	%
Other cash distributions (1)		1,250		7.5	%		1,407		8.2	%		5,447		8.0	%		8,617		9.3	%
Total cash distributions	$	11,537		68.8	%	$	11,618		67.9	%	$	46,570		68.7	%	$	61,928		66.7	%
Common stock distributions reinvested in common shares		5,238		31.2	%		5,505		32.1	%		21,207		31.3	%		30,948		33.3	%
Total distributions	$	16,775		100.0	%	$	17,123		100.0	%	$	67,777		100.0	%	$	92,876		100.0	%
Sources of distributions:
Cash flow from operations (2)	$	16,775		100.0	%	$	17,123		100.0	%	$	67,777		100.0	%	$	92,876		100.0	%
Borrowings (3)		—		0.0	%		—		0.0	%		—		0.0	%		—		0.0	%
Financial performance metric:
FFO (4)		20,405		121.6	%		21,687		126.7	%		91,791		135.4	%		89,798		96.7	%

(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) Commencing on January 1, 2009, 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 and as a deduction to our cash from operations. We incurred such acquisition-related expenses, net of other gains, of approximately $337,000 for the three and twelve months ended December 31, 2013, and $2,000 and $325,000 during the three and twelve months ended December 31, 2012, respectively.

(3) 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. In periods where cash flows from operations are not sufficient to fund distributions, we fund any shortfall with proceeds from borrowings.

(4) FFO is an operating metric and should not be used as a liquidity measure. However, management believes the relationship between FFO and distributions may be meaningful for investors to better understand the sustainability of our operating performance compared to distributions made. For a discussion of FFO and Company-Defined FFO, including definitions, reconciliations to GAAP net income, and their inherent limitations, see “How We Measure Our Performance” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Annual Report on Form 10-K.

DRIP Plan

Our distribution reinvestment plan allows stockholders to elect to have their cash distributions attributable to the class of shares owned automatically reinvested in additional shares of the same class. Holders of OP Units may also participate in the distribution reinvestment plan and have cash otherwise distributable to them by the Operating Partnership invested in Class E shares of our common stock. The per share purchase price for shares purchased pursuant to the distribution reinvestment plan is equal to our NAV per share applicable to the class of shares purchased, calculated as of the distribution date. A stockholder may terminate participation in our distribution reinvestment plan at any time, without penalty, by delivering to us a written notice. Such notice must be received by us at least one business day prior to a distribution date in order for a stockholder’s termination to be effective for such distribution date (i.e., a termination notice will be effective the day after it is received and will not affect participation in our distribution reinvestment plan for any prior date).

We reserve the right to amend any aspect of our distribution reinvestment plan without the consent of our stockholders, provided that notice of any material amendment is sent to participants at least 10 days prior to the effective date of that amendment. Our board of directors may amend, suspend or terminate the distribution

- 64 -

reinvestment plan for any reason at any time upon 10 days’ prior notice to participants. We may provide notice by including such information (a) in a Current Report on Form 8-K or in our annual or quarterly reports, all publicly filed with the Commission or (b) in a separate mailing to the participants.

Share Redemption Programs and Other Redemptions

We have adopted a Class E Share Redemption Program (the “Class E SRP”), whereby Class E stockholders may request that we redeem all or any portion of their Class E shares in accordance with the procedures and subject to certain conditions and limitations described below. We also have a separate Class A, W and I Share Redemption Program (“Class AWI SRP”) for holders of our Class A, Class W or Class I shares, described below. Our board of directors may modify, suspend or terminate our share redemption programs if it deems such action to be in the best interest of our stockholders.

Class E Share Redemption Program

Under the Class E SRP, we redeem Class E shares on a quarterly basis. If a redemption request with respect to Class E shares is made and accepted, the redemption price per share is equal to the NAV per Class E share on the date of redemption.

Each calendar quarter we intend to make available for Class E share redemptions an amount equal to (i) funds received from the sale of Class E shares under our distribution reinvestment plan during such calendar quarter, plus (ii) 50% of the difference between (a) the proceeds (net of sales commissions) received by us from the sale of Class A, Class W and Class I shares in any public primary offering and under our distribution reinvestment plan during the most recently completed calendar quarter, and (b) the dollar amount used to redeem Class A, Class W and Class I shares during the most recently completed calendar quarter pursuant to the Class AWI SRP, less (iii) funds used for redemptions of Class E shares in the most recently completed quarter in excess of such quarter’s applicable redemption cap due to qualifying death or disability requests of a stockholder during such calendar quarter. However, our board of directors may from time to time authorize funds for redemptions of Class E shares in greater or lower amounts.

Notwithstanding the Class E liquidity level desired by our board of directors, under the program, we will generally not redeem in any consecutive 12-month period more than 5% of the number of Class E shares outstanding at the beginning of such 12-month period (excluding certain redemptions made in connection with a stockholder’s death), unless we receive no-action relief from the Commission with respect to the tender offer rules. If we wish to provide liquidity to our Class E stockholders in excess of this limit, we currently intend to conduct one or more tender offers for outstanding Class E shares.

Class A, Class W and Class I Share Redemption Program

Under the Class AWI SRP, on each day the New York Stock Exchange is open for trading (a business day), stockholders may request that we redeem all or any portion of their Class A, Class W and Class I shares. Redemption requests received in good order by our transfer agent or a fund intermediary on a business day and before the close of business (4:00 p.m. Eastern time) on that day will be effected at a redemption price equal to our NAV per share for the class of shares being redeemed calculated after the close of business on that day. Subject to limited exceptions, shares redeemed within 365 days of the date of purchase will be redeemed at NAV per share for the class of shares being redeemed less a short-term trading discount equal to 2% of the gross proceeds otherwise payable with respect to the redemption.

Currently, our 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,

- 65 -

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 this offering. As a result, the Quarterly Cap will be relevant during a calendar quarter only to the extent the aggregate value of share redemptions of such class during the quarter exceeds the aggregate value of share purchases (net of sales commissions) of such class in the same quarter. Measuring redemptions on a net basis will allow us to provide our stockholders with more liquidity during quarters when we are experiencing inflows of capital. 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 this 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. The Quarterly Cap will be monitored each business day by us based on reports from our transfer agent, which will provide daily updated information on the proceeds from sales of new shares and the redemption proceeds paid by us. If the Quarterly Cap is reached during a given day for any class of shares, redemptions of that share class will be satisfied pro rata on that day and we will no longer redeem shares of such class for the remainder of the quarter, regardless of additional share purchases of such class by investors for the remainder of such 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.” In order for the board of directors to change the application of the Quarterly Cap from net redemptions to gross redemptions or vice versa, we will notify stockholders through a prospectus supplement and/or a special or periodic report filed with the Commission, as well as in a press release or on our website, at least 10 days before the first business day of the quarter for which the new test will apply.

For the three months ended December 31, 2013, we redeemed approximately 2.0 million Class E shares of common stock pursuant to the Class E SRP for approximately $13.9 million, and approximately 4,400 Class I shares pursuant to the Class AWI SRP for approximately $30,000, as described further in the table below.

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)
October 1 - October 31, 2013		13,109	$	6.83		13,109		—
November 1 - November 30, 2013		2,153		6.80		2,153		—
December 1 - December 31, 2013		1,992,874		6.93		1,992,874		—
Total		2,008,136	$	6.93		2,008,136		—

(1) Redemptions are limited under the Class E SRP and the Class AWI SRP as described above. We redeemed all Class A, W, and I shares that were requested to be redeemed during the three months ended December 31, 2013. As of December 31, 2013, we had capacity under the Class AWI SRP to redeem up to $1.4 million in Class A shares, $1.4 million in Class W shares, and $2.3 million in Class I shares. Pursuant to the Class AWI SRP, this capacity resets at the beginning of each quarter.

- 66 -

Below is a summary of common stock redemptions pursuant to the Class E SRP for each quarter during 2013 and 2012.

For the Quarter Ended:	Number of Class E Shares Requested for Redemption		Number of Class E Shares Redeemed		Percentage of Shares Requested for Redemption Redeemed			Percentage of Shares Requested for Redemption Redeemed Pro Rata  (1)			Average Price Paid per Share
March 31, 2012		11,853		1,545		13.0	%		5.3	%	$	8.45
June 30, 2012		12,886		827		6.4	%		1.0	%		8.45
September 30, 2012		16,745		4,223		25.2	%		20.4	%		6.64
December 31, 2012		14,770		1,693		11.5	%		7.8	%		6.70
Average 2012		14,064		2,072		14.7	%		9.4	%	$	7.17
March 31, 2013		14,978		1,721		11.5	%		8.7	%		6.79
June 30, 2013		15,824		4,145		26.2	%		22.6	%		6.83
September 30, 2013		13,968		2,111		15.1	%		11.4	%		6.87
December 31, 2013		15,368		2,004		13.0	%		9.6	%		6.93
Average 2013		15,035		2,495		16.6	%		13.2	%	$	6.85

(1) Represents redemptions of shares from investors that did not qualify for death or disability redemptions.

Furthermore, during the second quarter of 2012, we redeemed approximately 895,000 Class E shares pursuant to an issuer tender offer for a purchase price of $6.00 per share. Additionally, during the fourth quarter of 2013, we satisfied 100% of redemption requests received pursuant to our Class AWI SRP; we redeemed 4,428 Class I shares for an average price of approximately $6.72 per share pursuant to our Class AWI SRP.

Securities Authorized for Issuance under Equity Compensation Plans

The following table gives information regarding our equity incentive plans as of December 31, 2013.

	Equity Compensation Plans Information
Plan Category	Number of Securities To Be Issued Upon Exercise of Outstanding Options, Warrants, and Rights		Weighted-Average Exercise Price of Outstanding Options, Warrants, and Rights		Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (1)
Equity compensation plans approved by security holders		90,000	$	11.00		1,910,000
Equity compensation plans not approved by security holders		—		—		2,000,000
Total / Weighted Average		90,000	$	11.00		3,910,000

(1) We have two equity incentive plans. Under each plan, an aggregate maximum of 5.0 million shares may be issued upon grant, vesting or exercise of awards, although the board of directors, as of December 31, 2013, has only authorized and reserved for issuance a total of 2.0 million shares of our common stock under each plan.

Unregistered Issuance of Securities

During 2013, we did not issue any securities that were not registered under the Securities Act.

- 67 -

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth selected financial data relating to our historical financial condition and results of operations for each of the five years ended December 31, 2013. The financial data in the table is qualified in its entirety by, and should be read in conjunction with, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and related notes beginning on page F-1 of this Annual Report on Form 10-K. The amounts in the table are in thousands except per share and footnote information.

	As of or For the Year Ended December 31,
	2013			2012			2011			2010 (1)			2009
Statement of Operations Data:
Total revenue (2)	$	217,777		$	216,325		$	218,857		$	180,523		$	118,414
Total operating expenses, excluding acquisition-related expenses and gains and losses on real property, debt related investments, and real estate securities		(155,939	)		(156,550	)		(162,885	)		(130,305	)		(81,347	)
Acquisition-related expenses net of other gains		(337	)		(325	)		(610	)		(18,185	)		(4,936	)
Impairments and provisions for loss on real property, real estate-related debt investments and real estate securities (3)		(2,600	)		—			(26,406	)		(6,665	)		(30,480	)
Interest expense		(65,325	)		(69,844	)		(74,406	)		(61,324	)		(39,821	)
(Loss) income from continuing operations (4)		(9,084	)		(14,961	)		(43,056	)		4,150			(43,608	)
Discontinued operations, net of tax (5)		65,554			(7,410	)		(21,510	)		(26,557	)		(3,473	)
Net income (loss)		56,470			(22,371	)		(64,566	)		(22,407	)		(47,081	)
Net loss (income) attributable to noncontrolling interests		(4,002	)		110			6,886			1,705			2,296
Net (loss) income attributable to common stockholders	$	52,468		$	(22,261	)	$	(57,680	)	$	(20,702	)	$	(44,785	)
Comprehensive (Loss) Income Data:
Net (loss) income	$	56,470		$	(22,371	)	$	(64,566	)	$	(22,407	)	$	(47,081	)
Net unrealized change from available-for-sale securities		—			(1,426	)		1,260			(28,864	)		36,153
Net unrealized change from cash flow hedging derivatives		4,975			3,963			2,837			2,499			16,380
Total other comprehensive income		4,975			2,537			4,097			(26,365	)		52,533
Comprehensive (loss) income	$	61,445		$	(19,834	)	$	(60,469	)	$	(48,772	)	$	5,452
Per Share Data:
Net (loss) income per basic and diluted common share:
Continuing operations	$	(0.05	)	$	(0.08	)	$	(0.22	)	$	0.02		$	(0.24	)
Discontinued operations	$	0.34		$	(0.04	)	$	(0.09	)	$	(0.13	)	$	(0.02	)
Common Stock Distributions
Common stock distributions declared	$	62,330		$	84,259		$	105,704		$	110,430		$	104,366
Weighted average common stock distributions declared per share	$	0.3498		$	0.4625		$	0.5750		$	0.6000		$	0.6000
Other Information:
Weighted average number of common shares outstanding:
Basic		178,196			181,982			183,813			184,215			174,006
Diluted		191,932			197,244			197,377			193,773			181,109
Number of common shares outstanding at end of period		176,007			178,128			182,331			182,717			182,839
Number of diluted shares outstanding at end of period		189,278			192,303			198,529			195,529			189,842

- 68 -

	As of or For the Year Ended December 31,
	2013			2012			2011			2010 (1)			2009
Balance Sheet Data:
Real estate, before accumulated depreciation (6)	$	2,570,480		$	2,819,550		$	2,724,684		$	2,858,307		$	1,685,572
Total assets	$	2,305,409		$	2,659,254		$	2,670,419		$	2,999,207		$	2,362,991
Total debt obligations (7)	$	1,323,472		$	1,619,452		$	1,481,503		$	1,592,780		$	840,966
Total liabilities	$	1,500,398		$	1,817,727		$	1,671,150		$	1,842,233		$	1,090,405
Cash Flow Data:
Net cash provided by operating activities	$	86,589		$	94,487		$	94,342		$	50,200		$	51,221
Net cash provided by (used in) investing activities	$	72,847		$	(39,465	)	$	89,457		$	(1,297,007	)	$	(245,114	)
Net cash (used in) provided by financing activities	$	(171,530	)	$	(146,597	)	$	(138,911	)	$	815,580		$	168,466
Supplemental Information
FFO attributable to common stockholders (4)(8)	$	85,216		$	82,851		$	65,237		$	83,728		$	7,944
Company-defined FFO attributable to common stockholders (8)	$	87,859		$	88,402		$	90,680		$	76,686		$	52,819

(1) In June 2010, we completed the purchase of a portfolio of 32 office and industrial properties (the “NOIP Portfolio”) for a total purchase price of approximately $1.4 billion, effectively doubling the value and size of our real property portfolio. Related to this purchase, we incurred incremental borrowings of approximately $858.6 million and acquisition costs of $18.2 million.

(2) Includes equity-in-earnings from an unconsolidated joint venture of approximately $941,000 and $2.2 million for the years ended December 31, 2010 and 2009, respectively.

(3) Impairments and provisions for loss on real property, debt related investments and real estate securities include (i) real property impairment of $2.6 million during 2013, (ii) provisions for loan loss, net of reversals, of $23.0 million, $1.3 million, and $17.3 million during 2011, 2010 and 2009, respectively, and (iii) other than temporary impairment on securities of $3.4 million, $5.4 million and $13.1 million during 2011, 2010 and 2009, respectively. Real property impairment losses of $5.7 million and $23.5 million recorded during the years ended December 31, 2012 and 2011, respectively, relate to properties that we have disposed of and are included within discontinued operations.

(4) Loss from continuing operations and FFO attributable to common stockholders includes (i) realized gain on the disposition of securities of $39.9 million during 2010, (ii) loss on derivatives of $8.0 million during 2009, and losses on extinguishment of debt of $2.5 million, $5.7 million and $5.1 million in 2013, 2012 and 2010, respectively.

(5) Discontinued operations, net of tax represents the results of operations and any gains or losses upon the disposition directly attributable to all properties sold or classified as held for sale as of December 31, 2013, and includes the results of (i) 12 properties classified as held for sale as of December 31, 2013, (ii) 13 properties disposed of during 2013 (iii) three properties disposed of during 2012, (iv) five properties disposed of during 2011, and (v) 13 properties disposed of during 2010, including 12 operating properties and one property that we had previously held an interest in as a mezzanine lender.

(6) Real estate, before accumulated depreciation includes approximately $193.6 million that we classified within assets held for sale as of December 31, 2013.

(7) Total debt obligations includes approximately $80.4 million that we classified within liabilities related to assets held for sale as of December 31, 2013.

(8) Funds from Operations (FFO) and Company-Defined FFO are defined, reconciled to GAAP net income, and discussed in “How We Measure Our Performance – Funds From Operations” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Annual Report on Form 10-K.

- 69 -

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

This section of our Annual Report on Form 10-K 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 that follow beginning on page F-1 of this Annual Report on Form 10-K. The following discussion and analysis should be read together with our consolidated financial statements and notes thereto included in this Annual Report on Form 10-K. The following information contains forward-looking statements, which are subject to risks and uncertainties. Should one or more of these risks or uncertainties materialize, actual results may differ materially from those expressed or implied by the forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” above for a description of these risks and uncertainties.

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. 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 believe we have operated in such a manner to qualify as a real estate investment trust (“REIT”) for federal income tax purposes, commencing with the taxable year ended December 31, 2006, when we first elected REIT status. We 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 LP (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 Dividend Capital Total Advisors LLC (our “Advisor”), a related party, under the terms and conditions of an advisory agreement (the “Advisory Agreement”).

On July 12, 2012, the Commission declared effective our Registration Statement on Form S-11 (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 new classes of shares: Class A shares, Class W shares and Class I shares with net asset value (“NAV”) based pricing. See Part II, Item 5, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities” and Exhibit 99.1 of this Annual Report on Form 10-K, 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 (“the Independent Valuation Firm”). Our NAV is not audited by our independent registered public accounting firm. 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 will continue to 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) (the “Class E DRIP Offering”). As of December 31, 2013, we had 216,745 Class A shares, 208,889 Class W shares, and 4,327,085 Class I shares outstanding. We refer to the Offering and the Class E DRIP Offering collectively as our “Public Offerings.”

- 70 -

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

Our current investments include:

(1) Direct investments in real properties, consisting of office, industrial, and retail properties, located in the United States; and

(2) Certain debt related investments, including originating and participating in whole mortgage loans secured by commercial real estate, B-notes, mezzanine debt and other related investments (herein referred to as “debt related investments”).

As of December 31, 2013, we had total gross investments with an estimated fair value of approximately $2.6 billion (calculated in accordance with our valuation procedures), comprised of:

(1) 82 operating properties located in 30 geographic markets in the United States, aggregating approximately 15.3 million net rentable square feet, which were approximately 93.6% leased. Our operating real property portfolio includes an aggregate fair value of approximately $2.5 billion and consists of:

• 26 office properties located in 16 geographic markets, aggregating approximately 5.1 million net rentable square feet, with an aggregate fair value of approximately $1.4 billion;

• 25 industrial properties located in 15 geographic markets, aggregating approximately 7.0 million net rentable square feet, with an aggregate fair value of approximately $430.8 million; and

• 31 retail properties located in seven geographic markets, aggregating approximately 3.1 million net rentable square feet, with an aggregate fair value of approximately $716.5 million.

(2) Approximately $123.9 million in net debt related investments, including (i) investments in mortgage notes of approximately $108.0 million, and (ii) investments in mezzanine debt of $15.9 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 13 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

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 the Public Offerings, proceeds from the sale of existing investments, and the issuance and assumption of debt obligations.

• Cash on hand — As of December 31, 2013, we had approximately $24.8 million of cash and cash equivalents.

• Cash available under our line of credit — As of December 31, 2013, the unused portion of our revolving credit facility was approximately $320.0 million, of which approximately $86.1 was available.

• Cash generated from operations — During the year ended December 31, 2013, we generated approximately $86.6 million from operations of our real properties and income from debt related investments.

- 71 -

• Proceeds from public offerings of equity securities — We currently maintain 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). During the year ended December 31, 2013, we raised approximately $32.3 million in proceeds from the sale of Class A, W and I shares in the Offering, including approximately $121,000 under the distribution reinvestment plan. Additionally, during the year ended December 31, 2013, we received approximately $21.4 million in proceeds from the Class E DRIP Offering.

• Proceeds from sales and repayments of existing investments — During the year ended December 31, 2013, we sold 12 operating properties for approximately $267.0 million. After buyer credits, closing costs and the repayment of the related mortgage notes, we received net proceeds of $133.5 million. Subsequent to December 31, 2013, we sold a portfolio of 12 operating properties for approximately $175.0 million, and we received net cash proceeds of approximately $90.6 million. In addition, during the year ended December 31, 2013, four of our debt related investments with aggregate principal balances of $73.7 million were repaid to us in full.

• The issuance and assumption of debt obligations — During the year ended December 31, 2013, we assumed the mortgage related to an office property in the San Francisco, CA market with a principal balance of approximately $57.9 million at acquisition as a result of our acquisition of the property.

We believe that our existing cash balance, cash generated from operations, proceeds from our Public Offerings and our ability to sell investments and to issue debt obligations, 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.

Current Business Environment

During 2013, gross domestic product (“GDP”) grew at an estimated annualized rate of 1.9%, compared to 2.8% in 2012. While the rate of GDP growth decreased when compared to 2012, during the third and fourth quarters of 2013 GDP grew at annualized rates of 4.1% and 2.4%, respectively. The consumer price index increased 1.5% in 2013 which compares to an increase of 1.7% in 2012, continuing the recent trend of very low levels of inflation. The unemployment rate was 6.7% at the end of 2013 compared with 7.8% at the end of 2012. The Federal Reserve currently estimates GDP growth for 2014 to be between 2.8% and 3.2% while an analyst composite estimates growth of 2.9% during 2014, with a positive outlook based on these and other macroeconomic factors.

With inflation seemingly in check for the foreseeable future, the Federal Reserve has not completely backed off from stimulating the economy through the strategy of quantitative easing which has resulted in generally lower interest rates. The low interest rate environment has created an extremely competitive environment within the capital markets for high-quality and higher yielding investments. The lower interest rate environment has also created a very attractive financing market for real estate owners who can obtain long-term financing at historically low interest rates for quality balance sheets and properties. Although the demand for high-quality investments is high, the underwriting standards also continue to be very high and the focus is generally concentrated in higher quality assets and more desirable locations.

Fundamentals within the real estate industry continue to improve according to national statistics, with few, if any, recent surprises. Occupancy and rent growth are proceeding at a steady pace across our four target property sectors (office, retail, industrial and multifamily), and vacancies as of the end of 2013 were lower than in 2012. National rental rates are up year-over-year across the major sectors. Operating fundamentals are expected to be solid through 2014, with the sectors that were slower to recover from the recession gaining

- 72 -

momentum. Growth in the supply of commercial real estate has lagged, making up for the long recovery in demand. Commercial real estate pricing has improved to pre-recession levels in most major sectors, and in some instances actually exceeds these levels. We believe that these improving fundamentals provide us with an opportunity to improve leasing within our portfolio in 2014. The low interest rate environment combined with the lack of new supply in conjunction with a modestly improving economy could continue to position commercial real estate owners well for the future.

Significant Transactions During the Year Ended December 31, 2013

Real Estate Acquisitions

During the year ended December 31, 2013, we acquired one office property in the San Francisco, CA market comprising approximately 269,000 square feet with a purchase price of approximately $109.7 million. The property was subject to a mortgage note with an outstanding principal balance of approximately $57.9 million at acquisition bearing interest at a fixed rate of 6.01%, which matures in June 2016.

Real Estate Dispositions

During the year ended December 31, 2013, we sold or disposed of 13 properties for a combined sales price of approximately $389.3 million. We received net cash proceeds from the dispositions of approximately $133.5 million, after the satisfaction of approximately $239.9 million of outstanding mortgage note balances, and the payment of closing costs and fees related to the sale of the properties and the payoff of debt. Related to these dispositions, we recorded gains of approximately $74.3 million. The properties disposed included (i) two office properties in the Dallas, TX market, one of which was disposed of via foreclosure, (ii) an industrial portfolio comprising seven properties in the Philadelphia, PA, Sacramento, CA, Central Pennsylvania, Charlotte, NC, Atlanta, GA, and Chicago, IL markets, (iii) two office properties in the Denver, CO market, (iv) an office property in the Boston, MA market, and (v) an office property in the Chicago, IL market, comprising an aggregate of approximately 4.1 million net rentable square feet.

Debt Related Investments

During the year ended December 31, 2013, we received full repayment of four debt related investments, three of which were structured as mortgage notes and one of which was structured as a B-note. The repayments resulted in a net decrease in our debt related investments principal outstanding of $73.7 million. We received net cash proceeds from the repayments of approximately $28.1 million, which comprised borrower repayment of principal and other costs of $74.3 million, partially offset by our repayment of borrowings secured by the debt related investments of approximately $46.2 million.

Increase of Revolving Credit Facility

On December 19, 2012, we entered into a credit agreement providing for a $450.0 million senior unsecured term loan and revolving line of credit, with a syndicate of lenders led by Bank of America, N.A. as Administrative Agent, (collectively, the “Facility”). The Facility provided us with the ability from time to time to increase the size of the Facility up to a total of $800 million less the amount of any prepayments under the term loan component of the Facility, subject to receipt of lender commitments and other conditions. During the year ended December 31, 2013, we increased the revolving line of credit by $170.0 million, thereby providing us with a $270.0 million term loan and a $350.0 million revolving credit facility, for a total of $620.0 million in aggregate.

- 73 -

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 GAAP implicitly assumes that the value of real estate assets diminishes predictably over time, as reflected through depreciation and amortization expense. However, since real estate values have historically risen or fallen with market and other conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient. Thus, NAREIT created FFO as a supplemental measure of operating performance for real estate investment trusts that consists of net income (loss), calculated in accordance with GAAP, plus real estate-related depreciation and amortization and impairment of depreciable real estate, less gains (or losses) from dispositions of real estate held for investment purposes.

The following unaudited tables present a reconciliation of FFO to net income (loss) for the three months and years ended December 31, 2013, 2012, and 2011 (amounts in thousands, except per share information).

	For the Three Months Ended,									For the Year Ended,
	December 31,									December 31,
	2013			2012			2011			2013			2012			2011
Reconciliation of net earnings to FFO:
Net (loss) income attributable to common stockholders	$	(1,367	)	$	(14,165	)	$	(33,873	)	$	52,468		$	(22,261	)	$	(57,680	)
Add (deduct) NAREIT-defined adjustments:
Real estate depreciation and amortization expense		25,093			31,846			30,765			108,191			129,116			126,890
(Gain) loss on real estate property dispositions		(5,580	)		37			(9,518	)		(74,306	)		(21,108	)		(13,588	)
Impairment of real property		2,600			5,700			23,500			2,600			5,700			23,500
Noncontrolling interests’ share of net loss		(85	)		(1,240	)		(4,966	)		4,002			(110	)		(6,886	)
Noncontrolling interests’ share of FFO		(1,687	)		(2,099	)		(891	)		(7,739	)		(8,486	)		(6,999	)
FFO attributable to common shares-basic		18,974			20,079			5,017			85,216			82,851			65,237
FFO attributable to dilutive OP units		1,431			1,608			371			6,575			6,947			4,810
FFO attributable to common shares-diluted	$	20,405		$	21,687		$	5,388		$	91,791		$	89,798		$	70,047
FFO per share-basic and diluted		0.11			0.11			0.03			0.48			0.46			0.35
Weighted average number of shares outstanding
Basic		177,548			179,605			183,619			178,196			181,982			183,813
Diluted		190,942			193,985			197,189			191,932			197,244			197,377

- 74 -

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: gains and losses on real estate securities, gains and losses associated with provisions for loss on debt related investments, acquisition-related expenses, gains and losses on derivatives, and gains and losses associated with extinguishment of debt and financing commitments. Management’s evaluation of our future operating performance excludes these items based on the following economic considerations:

Gains and losses on real estate securities and provision for loss on debt related investments — Our investment strategy does not include purchasing and selling real properties, real estate securities, or debt related investments for purposes of generating short-term gains. Rather, our strategy is focused on longer term investments while generating current income. As such, management believes any gains or losses generated from the sale or impairment of any of our real estate securities or debt related investments are not related to our ongoing operations. Management believes that providing a performance metric based primarily on income generated from the portfolio, absent the effects of gains and losses and impairments, to be a useful metric providing for a better indication of the sustainability of our operating performance for management and investors.

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.

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

- 75 -

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 tables present a reconciliation of Company-Defined FFO to FFO for the three months and years ended December 31, 2013, 2012, and 2011 (amounts in thousands, except per share information).

	For the Three Months Ended, December 31,									For the Year Ended, December 31,
	2013			2012			2011			2013			2012			2011
Reconciliation of FFO to Company-Defined FFO:
FFO attributable to common shares-basic	$	18,974		$	20,079		$	5,017		$	85,216		$	82,851		$	65,237
Add (deduct) our adjustments:
Other-than-temporary impairment and related amortization on securities		—			—			280			—			—			3,495
Provision for loss on debt related investments		—			—			17,461			—			—			23,037
Acquisition-related expenses		337			2			2			337			325			610
(Gain) loss on derivatives		—			—			—			—			19			85
Loss on extinguishment of debt and financing commitments		1,808			1,766			75			2,507			5,675			95
Noncontrolling interests’ share of FFO		1,687			2,099			891			7,739			8,486			6,999
Noncontrolling interest share of Company-Defined FFO		(1,837	)		(2,230	)		(2,117	)		(7,940	)		(8,954	)		(8,878	)
Company-Defined FFO attributable to common shares-basic		20,969			21,716			21,609			87,859			88,402			90,680
Company-Defined FFO attributable to dilutive OP units		1,582			1,739			1,597			6,776			7,414			6,689
Company-Defined FFO attributable to common shares-diluted	$	22,551		$	23,455		$	23,206		$	94,635		$	95,816		$	97,369
Company-Defined FFO per share-basic and diluted		0.12			0.12			0.12			0.49			0.49			0.49
Weighted average number of shares outstanding
Basic		177,548			179,605			183,619			178,196			181,982			183,813
Diluted		190,942			193,985			197,189			191,932			197,244			197,377

- 76 -

Limitations of FFO and Company-Defined FFO

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

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

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

- 77 -

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 13 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Our Operating Results

For the year ended December 31, 2013, we had net income attributable to common stockholders of $52.5 million. For the year ended December 31, 2012, we had a net loss attributable to common stockholders of $22.3 million. The results of our operations for the year ended December 31, 2013 were substantially different from our results for the same period in 2012, primarily as a result of (i) an increase in gains realized on the disposition of real properties and (ii) a decrease in interest expense and losses on extinguishment of debt and financing commitments during 2013, due primarily to our increased use of our corporate term loan and line of credit, instead of secured borrowings.

For the years ended December 31, 2012 and 2011, we had a net loss attributable to common stockholders of $22.3 million and $57.7 million, respectively. The results of our operations for the year ended December 31, 2012 were substantially different from our results for the same period in 2011, primarily as a result of (i) gains realized on the disposition of certain properties during 2012, (ii) impairment of real property and CMBS and CRE-CDO securities and provisions for loan losses related to non-performing loans recorded in 2011, and (iii) an overall decrease in asset management and advisory fees during 2012 as a result of the revised Advisory Agreement in connection with the effectiveness of the Offering during 2012, partially offset by (i) an increase in interest expense as a result of increased borrowings during 2012, and (ii) a loss on extinguishment of debt and financing commitments as a result of the early repayment of certain of our outstanding borrowings during 2012.

The following series of tables and discussions describe in more detail our results of operations, including those items specifically mentioned above, for the year ended December 31, 2013 compared to the year ended December 31, 2012 and for the year ended December 31, 2012 compared to the year ended December 31, 2011.

- 78 -

Year Ended December 31, 2013 Compared to the Year Ended December 31, 2012

The following table illustrates the changes in rental revenues, rental expenses, net operating income, other income and other expenses for the year ended December 31, 2013 compared to the year ended December 31, 2012. Our 2013 same store portfolio includes all operating properties that we owned for the entirety of both reporting periods, and includes certain properties that were disposed of subsequent to December 31, 2013. Our 2013 same store portfolio includes 81 properties acquired prior to January 1, 2012, and owned through December 31, 2013, comprising approximately 15.0 million square feet. A discussion of these changes follows the table (dollar amounts in thousands).

	For the Year Ended December 31,
	2013			2012			$ Change			% Change
Revenues
Base rental revenue-same store (1)	$	185,567		$	185,375		$	192			0	%
Other rental revenue- same store		36,039			36,287			(248	)		-1	%
Total rental revenue-same store		221,606			221,662			(56	)		0	%
Rental revenue - 2012/2013 acquisitions		1,577			—			1,577			100	%
Less: rental revenue - assets held for sale		(15,855	)		(14,746	)		(1,109	)		8	%
Total continuing rental revenue		207,328			206,916			412			0	%
Debt related income		10,449			9,409			1,040			11	%
Total continuing revenues		217,777			216,325			1,452			1	%
Rental Expenses
Same store		47,176			44,517			2,659			6	%
2012/2013 acquisitions		720			—			720			100	%
Less: Rental expenses - assets held for sale		(4,224	)		(3,982	)		(242	)		6	%
Total continuing rental expenses		43,672			40,535			3,137			8	%
Net Operating Income
Real property - same store		174,430			177,145			(2,715	)		-2	%
Real property - 2012/2013 acquisitions		857			—			857			100	%
Less: real property - assets held for sale		(11,631	)		(10,764	)		(867	)		8	%
Debt related income		10,449			9,409			1,040			11	%
Total continuing net operating income (2)	$	174,105		$	175,790		$	(1,685	)		-1	%

(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 “Net Operating Income” included above in this “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For a reconciliation to GAAP, refer to Note 13 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Rental Revenue

The increase in continuing rental revenue is primarily attributable to our acquisition and continued ownership of an additional operating real property subsequent to December 31, 2011, partially offset by a slight decline in revenue in our same store portfolio. Our operating portfolio was approximately 93.6% leased as of December 31, 2013, compared to approximately 90.0% as of December 31, 2012.

- 79 -

Same store base rental revenue increased approximately $192,000 for the year ended December 31, 2013 compared to the same period in 2012. The increase comprises (i) a $312,000 increase in our same store retail portfolio, and (ii) a $141,000 increase in our same store office portfolio, partially offset by a $260,000 decrease in our same store industrial portfolio. At the total same store portfolio level, the increase is due to a 20 basis point year-over-year increase in our average leased square feet (from 95.3% to 95.5%), partially offset by a $0.02 year-over-year decrease in our average base rent per leased square foot (from $12.99 to $12.97), which resulted largely from a $0.06 decrease in the average base rent per leased square foot in our same store industrial portfolio, primarily due to certain lease renewals that included rent concessions.

The total increase in average leased square footage for our same store portfolio comprises increases in average leased square footage of approximately 31,000 square feet and 15,000 square feet in our same store industrial and retail portfolios, respectively, partially offset by a 16,000 square feet decrease in average leased square footage in our same store office portfolio. The $0.02 decrease in average base rent per leased square foot of the same store portfolio resulted from a decrease of $0.06 in our same store industrial portfolio, partially offset by increases of $0.11 and $0.03 in our same store office and retail portfolios, respectively.

Same store other rental revenue decreased for the year ended December 31, 2013 compared to the same period in 2012. Net amortization of above and below market lease assets and liabilities was the primary driver of the decrease, and the change was due to the expiration of off-market leases during the period. This decrease was partially offset by an increase in tenant rebill, late fee, and early termination income in certain same store properties.

Debt Related Income

Debt related income increased for the year ended December 31, 2013, compared to the same period in 2012. The increase was primarily attributable to additional investment of approximately $132.3 million new or increased principal balances subsequent to December 31, 2011, partially offset by the repayment of approximately $96.1 million in principal balances and the write-off or foreclosure of approximately $35 million in non-performing loans, subsequent to December 31, 2011.

Rental Expenses

Rental expenses increased for the year ended December 31, 2013, compared to the same period in 2012. This increase is primarily attributable to an increase in rental expenses in our same store portfolio and our acquisition and continued ownership of one additional operating real property subsequent to December 31, 2011.

Same store rental expenses increased for the year ended December 31, 2013, compared to the same period in 2012. This increase is due primarily to (i) an increase in engineering expense, primarily due to emergency repairs and union-related cost increases at one of our office properties located in the northeast, and (ii) severe winter weather during the year ended December 31, 2013 in certain markets resulting in an increase in snow removal costs during the year ended December 31, 2013 compared to the same period in 2012.

Other Operating Expenses

Depreciation and Amortization Expense

Depreciation and amortization expense decreased by approximately $4.0 million, or 4%, for the year ended December 31, 2013, compared to the same period in 2012. This decrease was primarily attributable to a large number of our acquired intangible lease assets becoming fully depreciated subsequent to December 31, 2011, partially offset by depreciation related to our acquisition and continued ownership of one additional operating real property subsequent to December 31, 2011.

- 80 -

General and Administrative Expenses

General and administrative expenses increased by approximately $2.7 million, or 38%, for the year ended December 31, 2013, compared to the same period in 2012. The revised fee structure pursuant to the amended and restated Advisory Agreement, entered into in connection with the effectiveness of the 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.

Advisory Fees

Asset management fees paid to our Advisor decreased by approximately $2.5 million, or 14%, for the year ended December 31, 2013, compared to the same period in 2012. This decrease is attributable to the revised fee structure pursuant to the amended and restated Advisory Agreement, entered into in connection with the effectiveness of the Offering on July 12, 2012, which reduced asset management and advisory fees overall.

Unrealized Loss on Real Property

During the year ended December 31, 2013, we recognized an impairment charge of approximately $2.6 million based on our estimate of future cash flow and fair value of a wholly-owned industrial property. During the year ended December 31, 2012, we recognized an impairment charge of approximately $5.7 million based on our estimate of future cash flow and fair value of an industrial property held through a joint venture in which we were not the managing partner. This property was disposed of during 2013, and accordingly, the impairment charge is included within discontinued operations. See Note 3 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K for further discussion of these impairment charges.

Other Income (Expenses)

Interest Expense

Interest expense decreased for the year ended December 31, 2013, compared to the same period in 2012 due to lower overall borrowings and a lower weighted average interest rate during the current year period. The $620 million Facility we entered into in December 2012, and subsequently expanded, significantly changed the composition of our borrowings as we repaid senior secured mortgage notes and other secured borrowings using proceeds from the Facility. The lower cost of borrowing associated with the Facility and other repayments of borrowings related to disposition activity significantly decreased our interest on mortgage notes. Additionally, we repaid one of our repurchase facilities during 2013, which reduced the total interest expense associated with other secured borrowings. 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 Year Ended December 31,
Debt Obligation	2013		2012
Mortgage notes	$	65,201	$	85,253
Other secured borrowings		2,973		5,535
Line of credit and other unsecured borrowings		8,610		1,627
Financing obligations		1,205		1,199
Total interest expense	$	77,989	$	93,614

- 81 -

Loss on Extinguishment of Debt and Financing Commitments

Loss on extinguishment of debt and financing commitments was approximately $2.5 million and $5.7 million for the years ended December 31, 2013 and 2012, respectively. The loss in 2013 primarily resulted from (i) the recognition of derivative hedge losses previously included in our accumulated other comprehensive loss (“OCI”) related to loans that were assumed by the buyer of an industrial portfolio subsequent to December 31, 2013, and (ii) the accelerated amortization of deferred financing costs upon the repayment of borrowings under our repurchase facilities earlier than we had originally expected. The loss in 2012 resulted primarily from (i) the repurchase of our own debt at a premium, (ii) the recognition of derivative hedge losses previously included in OCI upon early repayment of the related debt, and (iii) the accelerated recognition of deferred financing costs related to early repayment of three mortgage notes, one mezzanine loan, and outstanding borrowings under the Facility.

Year Ended December 31, 2012 Compared to the Year Ended December 31, 2011

The following table illustrates the changes in revenues, rental expenses, and net operating income for the year ended December 31, 2012 compared to the year ended December 31, 2011. Our 2012 same store portfolio includes all operating properties that we owned for the entirety of the current and each of the prior year reporting periods, and includes certain properties disposed of subsequent to December 31, 2013. Our 2012 same store portfolio includes 79 properties acquired prior to January 1, 2011 and owned through December 31, 2013, comprising approximately 14.8 million square feet. A discussion of these changes follows the table (dollar amounts in thousands).

	For the Year Ended December 31,
	2012			2011			$ Change			% Change
Revenues
Base rental revenue-same store (1)	$	183,652		$	181,407		$	2,245			1	%
Other rental revenue- same store		35,529			39,020			(3,491	)		-9	%
Total rental revenue-same store		219,181			220,427			(1,246	)		-1	%
Rental revenue-2011/2012 acquisitions		2,481			1,989			492			25	%
Less: rental revenue - assets held for sale		(14,746	)		(14,666	)		(80	)		1	%
Total continuing rental revenue		206,916			207,750			(834	)		0	%
Debt related income		9,409			11,107			(1,698	)		-15	%
Total continuing revenues		216,325			218,857			(2,532	)		-1	%
Rental Expenses
Same store		43,838			44,925			(1,087	)		-2	%
2011/2012 acquisitions		679			501			178			36	%
Less: Rental expenses - assets held for sale		(3,982	)		(3,628	)		(354	)		10	%
Total continuing rental expenses		40,535			41,798			(1,263	)		-3	%
Net Operating Income
Real property - same store		175,343			175,502			(159	)		0	%
Real property - 2011/2012 acquisitions		1,802			1,488			314			21	%
Less: real property - assets held for sale		(10,764	)		(11,038	)		274			-2	%
Debt related income		9,409			11,107			(1,698	)		-15	%
Total continuing net operating income (2)	$	175,790		$	177,059		$	(1,269	)		-1	%

(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.”

- 82 -

(2) For a discussion as to why we view net operating income to be an appropriate supplemental performance measure, refer to “Net Operating Income” included above in this “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” For a reconciliation to GAAP, refer to Note 13 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Rental Revenue

The decrease in continuing rental revenue is primarily attributable to a decline in rental revenue from our same store properties, partially offset by an increase in revenue due to our acquisition and continued ownership of two additional real properties subsequent to December 31, 2010. Leased square footage of our operating portfolio was approximately 90.0% as of December 31, 2012, compared to approximately 94.7% as of December 31, 2011.

Same store base rental revenue increased approximately $2.2 million for the year ended December 31, 2012 compared to the same period in 2011. The increase comprises (i) a $1.3 million increase in our same store industrial portfolio, (ii) a $556,000 increase in our same store retail portfolio, and (iii) a $374,000 increase in our same store office portfolio. At the total same store portfolio level, the increase is due to (i) an 80 basis point year-over-year increase in our average leased square feet (from 94.4% to 95.2%), and a $0.05 year-over-year increase in our average base rent per leased square foot (from $12.95 to $13.00).

The total increase in average leased square footage for our same store portfolio comprises an increase in average leased square footage of approximately 186,000 square feet in our same store industrial portfolio, partially offset by decreases in average leased square footage of 42,000 square feet and 26,000 square feet in our same store office and retail portfolios, respectively. The $0.05 increase in average base rent per leased square foot of the same store portfolio resulted from increases of $0.35, $0.30, and $0.06 in our same store retail, office and industrial portfolios, respectively.

Same store other rental revenue decreased for the year ended December 31, 2012, compared to the same period in 2011. This decrease was primarily attributable to a decrease in our straight line adjustments across the same store portfolio, related to the expiration of free rent periods.

Debt Related Income

Debt related income decreased for the year ended December 31, 2012, compared to the same period in 2011. The decrease was primarily attributable to the (i) repayment of approximately $123.8 million in debt related investments and (ii) the foreclosure of approximately $20.0 million in debt related investments subsequent to December 31, 2010, partially offset by investments in debt-related investments of approximately $120.1 million subsequent to December 31, 2010.

Rental Expenses

Rental expenses decreased for the year ended December 31, 2012, compared to the same period in 2011. This decrease is primarily attributable to a decrease in rental expenses within our same store portfolio.

Same store rental expenses decreased for the year ended December 31, 2012, compared to the same period in 2011, primarily due to lower averaged leased square footage. Recoverable same store rental expenses increased during 2012 compared to 2011 due primarily to higher property taxes, partially offset by lower snow removal costs during 2012 compared to 2011. Non-recoverable expenses decreased during 2012 compared to 2011, primarily due to collections efforts that reduced bad debt expense.

- 83 -

Other Operating Expenses

General and Administrative Expenses

General and administrative expenses increased by approximately $403,000, or 6%, for the year ended December 31, 2012, compared to the same period in 2011. This increase is primarily attributable to increases in payroll, appraisal and valuation fees, accounting costs, and legal fees, primarily related to the effectiveness of the Offering during 2012.

Advisory Fees

Asset management fees paid to our Advisor decreased by approximately $3.2 million, or 15%, for the year ended December 31, 2012, compared to the same period in 2011. This decrease is attributable to the revised fee structure pursuant to the amended and restated Advisory Agreement, entered into in connection with the effectiveness of the Offering on July 12, 2012, which reduced asset management and advisory fees overall.

Impairment of Real Estate Property

During the year ended December 31, 2012, we recognized an impairment charge of approximately $5.7 million based on our estimate of future cash flow and fair value of an industrial property held through a joint venture in which we were not the managing partner. This property was disposed of during 2013, and accordingly, the impairment charge is included within discontinued operations. During the year ended December 31, 2011, we recorded an impairment charge of $23.5 million on one office property located in the Silicon Valley, CA. This property was disposed of during 2012, and accordingly, the impairment charge is included within discontinued operations. See Note 3 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K for further discussion of these impairment charges.

Provision for Loss on Debt Related Investments

We did not record any provision for loss on debt related investments during 2012. During the year ended December 31, 2011, we recorded $23.0 million in provision for loan losses related to two subordinate debt related investments in the Dallas, TX market.

Other Income (Expenses)

Interest and Other Income

Interest and other income decreased by approximately $1.6 million, or 66%, for the year ended December 31, 2012, compared to the same period in 2011. This decrease is primarily attributable to the continued deterioration in the performance of our CMBS and CRE-CDO securities portfolio.

- 84 -

Interest Expense

Interest expense increased by approximately $778,000, or 0.8%, for the year ended December 31, 2012, compared to the same period in 2011. This increase resulted primarily from expanded use of our line of credit and term loan and revolving credit facility during 2012 and additional repurchase facility borrowings during 2012 as compared to 2011. The increase from these borrowings was offset by a decrease in interest paid on mortgage notes as we disposed of properties and expanded use of our corporate borrowing capacity. The following table further describes our interest expense by debt obligation, including amortization of loan costs, amortization related to our derivatives, and amortization of discounts and premiums, for the years ended December 31, 2012 and 2011 (amounts in thousands).

	For the Year Ended December 31,
Debt Obligation	2012		2011
Mortgage notes	$	85,253	$	85,982
Other secured borrowings		5,535		3,988
Line of credit and other unsecured borrowings		1,627		186
Financing obligations		1,199		2,680
Total interest expense	$	93,614	$	92,836

Loss on Extinguishment of Debt and Financing Commitments

Loss on extinguishment of debt and financing commitments was approximately $5.7 million for the year ended December 31, 2012. This loss resulted primarily from (i) the repurchase of our own debt at a premium, (ii) the recognition of derivative hedge losses previously included in OCI upon early repayment of the related debt, and (iii) the accelerated recognition of deferred financing costs related to early repayment of three mortgage notes, one mezzanine loan, and outstanding borrowings under the Facility. We did not record a loss on extinguishment of debt and financing commitments during the year ended December 31, 2011.

Discontinued Operations

Results of operations and any gains or losses upon the disposition directly attributable to all properties sold or classified as held for sale as of December 31, 2013 are presented within Discontinued Operations for all periods presented. During the year ended December 31, 2013, we disposed of 13 operating properties and had classified a portfolio of 12 operating properties as held for sale as of December 31, 3013. During the year ended December 31, 2012, we disposed of three operating properties from our portfolio and included in our 2012 results a net gain realized from the sale of these properties. During the year ended December 31, 2011, we disposed of five operating properties from our portfolio, and included in our 2011 results the amount of the gain on a 2010 property sale where we financed the sale with a mortgage loan, related to which we participated in the profit upon the subsequent sale of the property during 2011.

Liquidity and Capital Resources

Liquidity Outlook

We believe our existing cash balance, our available credit under the Facility, 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 $132.5 million, of which approximately $84.2 million are subject to certain extension options, redemption payments, acquisitions of real property and debt related investments.

- 85 -

In order to maintain a reasonable level of liquidity for redemptions of Class A, Class W and Class I shares pursuant to our Class AWI SRP, 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 Class AWI SRP if it deems such action to be in the best interest of our stockholders. As of December 31, 2013, the aggregate NAV of our outstanding Class A, Class W and Class I shares was approximately $32.9 million.

As of December 31, 2013, we had approximately $24.8 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 year ended December 31, 2013, which resulted in the net cash decrease of approximately $12.1 million.

Operating Activities

Net cash provided by operating activities decreased by approximately $7.9 million to $86.6 million for the year ended December 31, 2013, compared to net cash provided by operating activities of approximately $94.5 million for the same period in 2012. This decrease is primarily due to a decrease in net operating income from our real property portfolio, primarily due to disposition activity, partially offset by a decrease in cash paid for interest and an increase in 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 the longer term and as of December 31, 2013, the weighted average remaining term of our leases was approximately 7.1 years, based on contractual remaining base rent, and 4.7 years, based on leased square footage. The following is a schedule of expiring leases for our consolidated operating properties by annualized base rent and square footage as of December 31, 2013 and assuming no exercise of lease renewal options (amounts in thousands).

	Lease Expirations
Year	Number of Leases Expiring		Annualized Base Rent (1)		%			Square Feet		%
2014 (2)		118	$	12,899		6.6	%		1,878		13.2	%
2015		97		16,969		8.6	%		1,784		12.5	%
2016		64		23,582		11.9	%		1,514		10.6	%
2017 (3)		52		53,054		26.9	%		2,646		18.5	%
2018		72		11,934		6.0	%		1,367		9.6	%
2019		55		24,246		12.3	%		1,252		8.8	%
2020		30		8,370		4.2	%		471		3.3	%
2021		14		12,440		6.3	%		1,004		7.0	%
2022		11		5,983		3.0	%		431		3.0	%
2023		19		16,042		8.1	%		801		5.6	%
Thereafter		20		11,994		6.1	%		1,122		7.9	%
Total		552	$	197,513		100.0	%		14,270		100.0	%

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

(2) Includes leases that are on a month-to-month basis at annualized amounts.

(3) Includes approximately $22.8 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

- 86 -

sub-tenants. Approximately $7.9 million and 219,000 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.

During the year ended December 31, 2013, we signed new leases for approximately 1.1 million square feet and renewal leases for approximately 2.0 million square feet. Tenant improvements and leasing commissions related to these leases were approximately $10.6 million and $9.3 million, respectively, or $9.53 and $4.55 per square foot, respectively.

Investing Activities

Net cash provided by investing activities was approximately $72.8 million, compared to net cash used in investing activities of approximately $39.5 million for the year ended December 31, 2012. The majority of cash provided by investing activities in 2013 was due to our sale of 12 operating properties and the collection of principal repayments from four debt related investments. Net cash used in investing activities during 2012 was due to our investment in 15 debt related investments during the year and other capital expenditures, partially offset by cash provided from the sale of three operating properties during the year.

Real Estate Acquisition

During the year ended December 31, 2013, we acquired one operating real property for a purchase price of approximately $109.7 million. Related to this acquisition, we assumed a mortgage note with an unpaid principal balance of approximately $57.9 million at acquisition. The acquisition resulted in net cash used of approximately $48.2 million. We did not acquire any operating properties during the year ended December 31, 2012. See Note 3 to our financial statements, beginning on page F-1 of this Annual Report on Form 10-K for further discussion of this acquisition activity.

Capital Expenditures in Real Property

During the year ended December 31, 2013, cash used for capital expenditures in real property was approximately $25.4 million, comprising approximately $9.5 million in tenant improvements, $9.3 million in leasing costs, and $6.6 million in building improvements. During the year ended December 31, 2012, cash used for capital expenditures in real property was approximately $21.5 million, comprising $9.0 million in leasing costs, $6.4 million in tenant improvements, and $6.1 million in land and building improvements. The increase in cash used for tenant improvements during the year ended December 31, 2013, compared to the year ended December 31, 2012, primarily related to improvements for long-term leases at two properties that were disposed of during 2013.

Real Estate Dispositions

During the year ended December 31, 2013, we disposed of 13 operating real properties, 12 of which were sold for a total gross sales price of $267.0 million, from which we received net investing cash flows of approximately $133.5 million. During the year ended December 31, 2012, we disposed of three operating real properties for total net proceeds of approximately $10.8 million, from which we received net investing cash flows of approximately $7.1 million. See Note 3 to our financial statements, beginning on page F-1 of this Annual Report on Form 10-K for further discussion of this disposition activity.

Debt Related Investments

During the year ended December 31, 2013, we received full repayment of four debt investments, three of which were structured as mortgage notes and one of which was structured as a B-note. These repayments resulted in net cash proceeds of approximately $28.1 million, after the repayment of borrowings secured by the investments. Additionally, we invested approximately $12.3 million in two debt investments (one structured as a mortgage note and one as mezzanine financing) that we originated during 2012.

- 87 -

During the year ended December 31, 2012, we invested approximately $40.0 million to invest in 15 debt related investments, all of which were structured as mortgage notes, except for one which was structured as a mezzanine loan. Additionally, we received full repayment of three debt investments, all of which were structured as mortgage notes, during the year ended December 31, 2012 which resulted in net cash proceeds of approximately $5.9 million, after the repayment of borrowings secured by the investments.

See Note 4 to our financial statements, beginning on page F-1 of this Annual Report on Form 10-K for further discussion of this debt related investment activity.

Financing Activities

Net cash used in financing activities was approximately $171.5 million for the year ended December 31, 2013, compared to net cash used in financing activities of approximately $146.6 million during the same period in 2012. The majority of cash used for financing activities in both years comprised (i) principal repayments of outstanding mortgage notes and other secured borrowings, (ii) the redemption of common shares under our Class E SRP, and (iii) distributions to common stockholders and noncontrolling interests, partially offset by (i) borrowings on the Facility during 2012 and (ii) net proceeds from the issuance of common stock from the Offering in 2013. During 2012, we paid down principal balances of outstanding mortgages and other secured borrowings of approximately $318.7 million, which was primarily funded by borrowings under the Facility.

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 $13.0 million to approximately $21.5 million for the year ended December 31, 2013, from approximately $34.5 million for the same period in 2012. On July 12, 2012, we commenced the Offering. As of December 31, 2013, we had raised gross proceeds of approximately $32.3 million from the sale of approximately 4.7 million shares in the Offering, including approximately $121,000 through our distribution reinvestment plan, all of which was raised during the year ended December 31, 2013.

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.

Distributions declared payable to common stockholders decreased approximately $22.0 million to approximately $62.3 million for the year ended December 31, 2013 from approximately $84.3 million for the same period in 2012. Such distributions were paid following the respective quarters for which they were declared. Approximately $41.1 million and $53.3 million, respectively, were paid in cash and approximately $21.2 million and $30.9 million, respectively, were reinvested in shares of our common stock pursuant to our distribution reinvestment plan during the years ended December 31, 2013 and 2012.

Redemptions

During the years ended December 31, 2013 and 2012, we redeemed approximately 10.0 million and 9.2 million Class E, A, W, and I shares, respectively, of common stock, the significant majority of which were redeemed pursuant to our Class E SRP. Cash used to redeem such shares increased approximately $3.6 million to $68.4 million during the year ended December 31, 2013, from $64.8 million for the same period in 2012. See

- 88 -

“Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities — Share Redemption Programs and Other Redemptions” of this Annual Report on Form 10-K for a description of our share redemption programs and other redemptions. In addition to the above-mentioned redemptions, during the years ended December 31, 2013 and 2012, we redeemed approximately 904,000 and 1.7 million OP Units from our OP Unit holders for approximately $6.2 million and $12.8 million in cash, respectively. Additionally, during the year ended December 31, 2012, we redeemed approximately 273,000 OP Units by issuing approximately 269,000 Class E shares.

Off-Balance Sheet Arrangements

As of December 31, 2013, we had no material off-balance sheet arrangements that had or are reasonably likely to have a current or future effect on our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures or capital resources. There are no lines of credit, side agreements, or any other derivative financial instruments related to or between our unconsolidated joint venture and us, and we believe we have no material exposure to financial guarantees.

Contractual Obligations

The following table reflects our contractual obligations as of December 31, 2013, specifically our obligations under mortgage note agreements and operating lease agreements (amounts in thousands).

	Payments due by period
Contractual Obligations	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Borrowings (1)	$	1,540,164	$	201,691	$	609,683	$	537,746	$	191,044
Financing Obligations (2)		7,057		1,164		2,621		2,624		648
Total	$	1,547,221	$	202,855	$	612,304	$	540,370	$	191,692

(1) Includes principal and interest payments due for our mortgage notes and other secured and unsecured borrowing obligations.

(2) As of December 31, 2013, we had operating master lease obligations relating to one property, in connection with our Operating Partnership’s private placement offerings of fractional interests. These amounts represent rental payments due under the related master lease schedule.

Subsequent Events

Disposition of Industrial Portfolio

On January 22, 2014, we disposed of a portfolio of 12 industrial real properties aggregating 3.4 million square feet to an unrelated third party. The properties were located in the Atlanta, GA, Cincinnati, OH, Central Pennsylvania, Columbus, OH, Dallas, TX, Indianapolis, IN, and Minneapolis, MN markets.

The following information provides a summary snapshot of our real property portfolio as of January 31, 2014.

As of January 31, 2014, we held the majority ownership in 70 operating properties located in 25 geographic markets in the United States, aggregating approximately 11.9 million square feet. As of January 31, 2014, our real property portfolio was approximately 91.9% leased to approximately 450 tenants. As of January 31, 2014, these properties had an estimated fair value of approximately $2.4 billion (calculated in accordance with our valuation procedures), comprising:

• 26 office properties located in 16 geographic markets, aggregating approximately 5.1 million net rentable square feet, with an aggregate fair value amount of approximately $1.4 billion. Of these 26 properties, nine are considered “multi-tenant” properties and aggregate approximately 1.9 million net

- 89 -

rentable square feet, with an aggregate fair value amount of approximately $611.1 million, and 17 are considered “single-tenant” properties and aggregate approximately 3.2 million net rentable square feet, with an aggregate fair value amount of approximately $763.4 million;

• 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 $718.2 million; and

• 13 industrial properties located in 9 geographic markets, aggregating approximately 3.7 million net rentable square feet, with an aggregate fair value amount of approximately $260.9 million.

The chart below shows the current allocations of our real property investments across geographic markets. Percentages in the chart correspond to our fair value as of January 31, 2014.

In addition, we own real property investments in the following markets, though the fair value of the investments in each market account for less than 1% of the total fair value of our real property investments: Denver, CO, Fayetteville, AR, Jacksonville, FL, Little Rock, AR, and Pittsburgh, PA

See Note 17 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K for further discussion of this disposition.

Inflation

Substantially all of our leases provide for separate real estate tax and operating expense escalations over a base amount. In addition, many of our leases provide for fixed base rent increases or indexed rent increases. We believe that inflationary increases in costs may be at least partially offset by the contractual rent increases and operating expense escalations in our leases. To date, we believe that inflation has not had a material impact to our operations or overall liquidity.

Critical Accounting Policies

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the financial statements and disclosures. Some of these estimates and assumptions require application of difficult, subjective, and/or complex judgment, often about the effect of matters that are inherently uncertain and that may change in subsequent periods. We are required to make such estimates and assumptions when applying the following accounting policies.

- 90 -

Principles of Consolidation

Due to our control of our Operating Partnership through our sole general partnership interest and the limited rights of the limited partners, we consolidate our Operating Partnership and limited partner interests not held by us and they are reflected as noncontrolling interests in the accompanying consolidated financial statements (herein referred to as “financial statements”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Our financial statements also include the accounts of our consolidated subsidiaries and joint ventures through which we are the primary beneficiary, when such subsidiaries and joint ventures are variable interest entities, or through which we have a controlling interest. In determining whether we have a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which we have the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses that could potentially be significant to the entity or the right to receive benefits that could potentially be significant to the entity.

All joint ventures in which we have investments are variable interest entities. All of our investments in joint ventures represent our interests in real estate partnerships, formed for the purpose of acquiring, leasing, managing, holding for investment, selling and otherwise dealing with real property investments. Our involvement with our joint ventures affects our financial position, financial performance and cash flows in ways similar to direct ownership of real property investment. We own a significantly disproportionate majority of the ownership interests of our joint ventures. In each of our joint ventures, our joint venture partner performs the day-to-day management of the real properties owned by the respective joint ventures. However, in each of our joint ventures, we approve the activities that most significantly impact the joint venture’s economic performance. Due to our substantive approval rights and our exposure to the economic returns and losses of each of the joint ventures, we are the primary beneficiary of each of our joint ventures. Based on these considerations, we consolidate all of our investments in joint ventures. See our consolidated balance sheets for disclosure of the amount of real property and mortgage note borrowings that we consolidated through our investments in variable interest entities as of December 31, 2013 and 2012.

Judgments made by us with respect to our level of influence or control of an entity and whether we are the primary beneficiary of a variable interest entity involve consideration of various factors, including the form of our ownership interest, the size of our investment (including loans), our ability to direct the activities of the entity, and our obligation to absorb the losses of, or, our right to receive benefits from the entity. Our ability to correctly assess our influence or control over an entity affects the presentation of these investments in our financial statements and, consequently, our financial position and specific items in our results of operations that are used by our stockholders, lenders and others in their evaluation of us. As of December 31, 2013 and 2012, we consolidated approximately $306.6 million and $654.0 million, respectively, in real property investments, before accumulated depreciation and amortization of approximately $81.2 million and $133.7 million, respectively, and approximately $141.1 million and $419.5 million, respectively, in mortgage note borrowings associated with our consolidated variable interest entities. The maximum risk of loss related to our investment in these consolidated variable interest entities is limited to our recorded investments in such entities. The creditors of the consolidated variable interest entities do not have recourse to our general credit.

Generally, we consolidate real estate partnerships and other entities that are not variable interest entities when we own, directly or indirectly, a majority voting interest in the entity.

- 91 -

Revenue Recognition — Real Property

We record rental revenue for the full term of each lease on a straight-line basis. Certain properties have leases that offer the tenant a period of time where no rent is due or where rent payments increase during the term of the lease. Accordingly, we record a receivable from tenants for rent that we expect to collect over the remaining lease term rather than currently, which is recorded as straight-line rents receivable. When we acquire a property, the term of existing leases is considered to commence as of the acquisition date for purposes of this calculation. For the years ended December 31, 2013, 2012 and 2011, the total increase to rental revenue due to straight-line rent adjustments was approximately $8.9 million, $8.1 million, and $9.9 million, respectively.

Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as rental revenue. Tenant recovery income recognized as rental revenue for the years ended December 31, 2013, 2012 and 2011 was approximately $33.0 million, $33.6 million, and $33.4 million, respectively.

Revenue Recognition — Debt Related Investments

Interest income on debt related investments is recognized over the life of the investment using the effective interest method and is recognized on an accrual basis. Fees received in connection with loan commitments are deferred until the loan is funded and are then recognized over the term of the loan. Anticipated exit fees, where collection is expected, are also recognized over the term of the debt related investment. A debt related investment is considered to be non-performing and is placed on non-accrual status when it becomes delinquent and management determines it is probable that it will be unable to collect all amounts due according to contractual terms. While on non-accrual status, debt related investments are accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash. Non-accrual debt investments are returned to accrual status when they become contractually current and management believes it will collect all amounts contractually due.

Impairment — Real Property

We review our investments in real property individually on a quarterly basis, and more frequently when such an evaluation is warranted, to determine their appropriate classification, as well as whether there are indicators of impairment. The investments in real property are either classified as held for sale or held and used.

As of December 31, 2013, 70 of our properties are classified as held and used, and a portfolio of 12 properties are classified as held for sale. The held and used assets are reviewed for indicators of impairment, which may include, among others, vacancy, each tenant’s inability to make rent payments, operating losses or negative operating trends at the property level, notification by a tenant that it will not renew its lease, a decision to dispose of a property, including a change in estimated holding periods, or adverse changes in the fair value of any of our properties. If indicators of impairment exist on a held and used asset, we compare the future estimated undiscounted cash flows from the expected use of the property to its net book value to determine if impairment exists. If the sum of the future estimated undiscounted cash flows is greater than the current net book value, we conclude no impairment exists. If the sum of the future estimated undiscounted cash flows is less than its current net book value, we recognize an impairment loss for the difference between the net book value of the property and its estimated fair value. For our properties classified as held for sale, we recognize an impairment loss if the current net book value of the property exceeds its fair value less selling costs. If our assumptions, projections or estimates regarding a property change in the future, we may have to record an impairment charge to reduce or further reduce the net book value of the property.

During the year ended December 31, 2013, we recorded a $2.6 million impairment related to a wholly-owned industrial property.

- 92 -

During the year ended December 31, 2012, we recorded a $5.7 million impairment related to an industrial property held in a joint venture in which we did not act as the managing partner. The property was sold subsequent to December 31, 2012, and thus the impairment charge is recorded within discontinued operations.

Impairment — Debt Related Investments

We review our debt related investments on a quarterly basis, and more frequently when such an evaluation is warranted, to determine if impairment exists. A debt related investment is impaired when, based on current information and events, 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 a loan is deemed impaired, the impairment is measured based on the expected future cash flows discounted at the loan’s effective interest rate. As a practical expedient, the Financial Accounting Standards Board (the “FASB”) issued ASC Topic 310, Receivables (“ASC Topic 310”) which permits a creditor to measure impairment based on the fair value of the collateral of an impaired collateral-dependent loan or to measure impairment based on an observable market price for the impaired loan as an alternative to discounting expected future cash flows. Regardless of the measurement method, a creditor should measure impairment based on the fair value of the collateral when the creditor determines that foreclosure is probable.

We did not record any provisions for loan losses during the years ended December 31, 2013 or 2012.

During 2011, we recognized provision losses of approximately $23.0 million related to two of our debt related investments due to our determination that there has been or it is probable that there will be a disruption of cash flows, in timing or amount, and the resulting estimated discounted cash flows from our investments is less than our carrying value. During the year ended December 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, as further discussed in Note 3 and Note 4 to our financial statements beginning on page F-1 of this Annual Report on Form 10-K.

Derivative Instruments and Hedging Activities

ASC Topic 815, Derivatives and Hedging (“ASC Topic 815”) establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. We record all derivative instruments in the accompanying balance sheets at fair value. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. Derivative instruments used to hedge exposure to changes in the fair value of an asset, liability, or firm commitments attributable to a particular risk, such as interest rate risk, are considered “fair value” hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, such as future interest payments, or other types of forecasted transactions, are considered “cash flow” hedges. We do not have any fair value hedges.

For derivative instruments designated as cash flow hedges, the changes in the fair value of the derivative instrument that represent changes in expected future cash flows that are effectively hedged by the derivative instrument are initially reported as other comprehensive income (loss) in the statement of equity until the derivative instrument is settled. Upon settlement, the effective portion of the hedge is recognized as other comprehensive income (loss) and amortized over the term of the designated cash flow or transaction the derivative instrument was intended to hedge. The change in value of any derivative instrument that is deemed to be ineffective is charged directly to earnings when the determination of ineffectiveness is made. We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative instrument with the changes in fair value or cash flows of the designated hedged item or transaction. For purposes of determining hedge ineffectiveness, management estimates the timing and potential amount of future fixed-rate debt issuances each quarter in order to estimate the cash flows of the designated hedged item or transaction. Management considers the likelihood of the timing and amount of entering into such forecasted

- 93 -

transactions when determining the expected future fixed-rate debt issuances. We do not use derivative instruments for trading or speculative purposes. Additionally, we have an interest rate collar that is not designated as a hedge pursuant to the requirements of ASC Topic 815. This derivative is not speculative and is used to manage exposure to interest rate volatility. We classify cash paid to settle our forward starting swaps as financing activities in our statements of cash flows.

New Accounting Pronouncements

In February 2013, the FASB issued accounting standards update (“ASU”) 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date (“ASU 2013-04”), which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This will require an entity to measure those obligations as the sum of the amount the entity agreed to pay on the basis of its arrangement among its co-obligors as well as any additional amount the entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The amendments in this ASU are effective for reporting periods beginning after December 15, 2013, with early adoption permitted. Retrospective application is required. We do not believe that the adoption of ASU 2013-04 will have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, 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.

- 94 -

ITEM 7A. 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.

As of December 31, 2013, the outstanding principal balance of variable rate debt investments indexed to LIBOR rates was $25.0 million. If the LIBOR rates relevant to our variable rate debt investments were to decrease 10%, we estimate that our annual interest income would decrease by approximately $4,000 based on the LIBOR rates and our outstanding floating-rate debt investments as of December 31, 2013.

As of December 31, 2013, the fair value of our fixed rate mortgage debt was $1,010.1 million and the carrying value of our fixed rate mortgage debt was $969.6 million. The fair value estimate of our fixed rate mortgage 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 December 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 December 31, 2013, we had approximately $108.6 million of unhedged 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 annual interest expense would increase by approximately $18,000 based on our outstanding floating-rate debt as of December 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. As described elsewhere in this Annual Report on Form 10-K, adverse market and credit conditions have resulted in our recording of other-than-temporary impairment in certain securities and a provision for loan loss related to our debt related investments.

- 95 -

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The report of the independent registered public accounting firm and the financial statements listed in the accompanying index are included in “Item 15. Exhibits and Financial Statement Schedules” of this Annual Report on Form 10-K. See “Index to Consolidated Financial Statements” on page F-1 of this Annual Report on Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

- 96 -

ITEM 9A. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

As of December 31, 2013, the end of the period covered by this Annual Report on Form 10-K, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, under the supervision and with the participation of our Chief Executive Officer (principal executive officer) and our Chief Financial Officer (principal financial officer). Based upon this evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures were effective as of December 31, 2013, to provide reasonable assurance that information required to be disclosed by us in the reports filed or submitted by us under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms and that information is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Exchange Act Rules 13a-15(f) and 15d-15(f).

Our internal control over financial reporting is a process designed under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer.

During 2013, management conducted an evaluation of the effectiveness of our internal control over financial reporting, based upon criteria established in Internal Control — Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 framework). This evaluation included a review of the documentation of controls, evaluation of the design effectiveness of controls, testing of the operating effectiveness of controls, and a conclusion on this evaluation. Based upon this evaluation, management determined that our internal control over financial reporting is effective as of December 31, 2013.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control procedures that occurred during the quarter ended December 31, 2013, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

- 97 -

PART III

We will file a definitive Proxy Statement for our 2014 Annual Meeting of Stockholders (the “Proxy Statement”) with the Commission, pursuant to Regulation 14A, not later than 120 days after the end of our fiscal year. Accordingly, certain information required by Part III has been omitted under General Instruction G(3) to Form 10-K. Only those sections of the Proxy Statement that specifically address the items required to be set forth herein are incorporated by reference.

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information regarding our directors is incorporated herein by reference from the section entitled “Board of Directors” in our Proxy Statement.

The information regarding our executive officers is incorporated herein by reference from the section entitled “Executive Officers” in our Proxy Statement.

The information regarding compliance with Section 16(a) of the Exchange Act is incorporated herein by reference from the section entitled “Section 16(a) Beneficial Ownership Reporting Compliance” in our Proxy Statement.

The information regarding the Company’s Code of Business Conduct and Ethics is incorporated herein by reference from the section entitled “Corporate Governance” in our Proxy Statement.

The information regarding the Company’s procedures by which stockholders may recommend nominees to the Company’s Board of Directors is incorporated herein by reference from the section entitled “Advance Notice for Stockholder Nominations and Proposals for the 2015 Annual Meeting” in our Proxy Statement.

The information regarding the members of the Audit Committee and the determination of an audit committee financial expert is incorporated herein by reference from the section entitled “Board and Committee Meetings” in our Proxy Statement.

ITEM 11. EXECUTIVE COMPENSATION

Information required for this item is incorporated herein by reference from the section entitled “Compensation of Directors and Executive Officers” in our Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

Information regarding security ownership of certain beneficial owners and management and securities authorized for issuance under our equity compensation plans are incorporated herein by reference from the sections entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Incentive Plans” in our Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information regarding certain relationships and related transactions is incorporated herein by reference from the section entitled “Certain Relationships and Related Party Transactions” in our Proxy Statement.

Information regarding director independence is incorporated herein by reference from the section entitled “Board of Directors” in our Proxy Statement.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information regarding principal accountant fees and services is incorporated herein by reference from the section entitled “Principal Accountant Fees and Services” in our Proxy Statement.

- 98 -

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements and Schedules.

Reference is made to the “Index to Consolidated Financial Statements” on page F-1 of this Annual Report on Form 10-K and the consolidated financial statements included therein, beginning on page F-2.

All other financial statement schedules are not required under the related instructions, or they have been omitted either because they are not significant or the required information has been disclosed in the consolidated financial statements and the notes related thereto.

(b) Exhibits

The following exhibits are filed as part of this Annual Report on Form 10-K:

Exhibit Number	Description
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	Fourth Amended and Restated Bylaws, incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed September 26, 2013
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	Amended and Restated Class A, W and I Share Redemption Program, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-k, filed September 26, 2013
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 Post-Effective Amendment No. 3 to the Company’s Registration Statement on Form S-11 (No. 333-175989), filed April 15, 2013
10.1	Eighth Amended and Restated Advisory Agreement, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed July 12, 2012
10.2	Fourth Amended and Restated Operating Partnership Agreement of Dividend Capital Total Realty Operating Partnership LP, incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, filed July 12, 2012

- 99 -

Exhibit Number	Description
10.3	Amendment No. 1 to Fourth Amended and Restated Operating Partnership Agreement of Dividend Capital Total Realty Operating Partnership LP, incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q, filed November 13, 2012
10.4	Property Management Agreement between the Company (f/k/a Dividend Capital Total Realty Trust Inc.) and Dividend Capital Property Management LLC, incorporated by reference to Exhibit 10.3 to Amendment No. 5 to the Company’s Registration Statement on Form S-11, Commission File No. 333-125338, filed January 13, 2006
10.5	Form of Management Agreement between various affiliates of the Company (f/k/a Dividend Capital Total Realty Trust Inc.) and KeyPoint Partners LLC, as property manager (New England Retail Portfolio), incorporated by reference to Exhibit 10.27 to the Company’s Quarterly Report on Form 10-Q, filed August 14, 2007
10.6	Dividend Capital Fixed Rate Office Portfolio Loan Agreement between TRT Lending Subsidiary I, LLC and Wells Fargo Bank, National Association, dated June 25, 2010, incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, filed August 13, 2010
10.7	Side Letter Agreement Related to Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Filing by and among the Company (f/k/a Dividend Capital Total Realty Trust Inc.) and New York Life Insurance Company, dated June 25, 2010, incorporated by reference to Exhibit 10.5.1 to the Company’s Quarterly Report on Form 10-Q, filed August 13, 2010
10.8	Credit Agreement, incorporated by reference to Exhibit 1.1 to the Company’s Current Report on Form 8-K, filed December 21, 2012
10.9	Amended and Restated Dealer Manager Agreement, including Form of Selected Dealer Agreement, incorporated by reference to Exhibit 10.8 to the Company’s Annual Report on Form 10-K, filed March 19, 2013
10.10	Amendment No. 1 to Amended and Restated Dealer Manager Agreement, incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K, filed June 5, 2013
10.11	Amendment No. 2 to Amended and Restated Dealer Manager Agreement, incorporated by reference to Exhibit 1.3 to Post-Effective Amendment No. 5 to the Company’s Registration Statement on Form S-11 (File No. 333-175989), filed August 2, 2013
10.12	Selected Dealer Agreement with Raymond James & Associates, Inc., incorporated by reference to Exhibit 1.2 of the Company’s Current Report on Form 8-K, filed June 5, 2013
10.13	Form of Indemnification Agreement for officers and directors, incorporated by reference to Exhibit 10.4 to Amendment No. 5 to the Company’s Registration Statement on Form S-11, Commission File No. 333-125338, filed January 13, 2006
10.14	Amended and Restated Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed December 10, 2013
10.15	Secondary Equity Incentive Plan, incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed December 10, 2013
10.16	Form of Director Option Agreement, incorporated by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K, filed April 7, 2006
10.17	Form of Independent Director Restricted Stock Unit Agreement*
21	Subsidiaries of the registrant*
23.1	Consent of KPMG LLP*

- 100 -

Exhibit Number	Description
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 Principal 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 Principal 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	Valuation Procedures*
99.2	Consent of Altus Group U.S., Inc.*
101.1	The following information from this Annual Report on Form 10-K for the year ended December 31, 2013, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets; (ii) Consolidated Statements of Operations; (iii) Consolidated Statements of Stockholders’ Equity; and (iv) Consolidated Statements of Cash Flows*

* Filed or furnished herewith.

- 101 -

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-2
Consolidated Balance Sheets	F-3
Consolidated Statements of Operations	F-4
Consolidated Statements of Comprehensive Income and Loss	F-5
Consolidated Statement of Equity	F-6
Consolidated Statements of Cash Flows	F-7
Notes to Consolidated Financial Statements	F-8
Report of Independent Registered Public Accounting Firm	F-49
Schedule III — Real Estate and Accumulated Depreciation	F-50

F-1

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Dividend Capital Diversified Property Fund Inc.:

We have audited the accompanying consolidated balance sheets of Dividend Capital Diversified Property Fund Inc. and subsidiaries (the Company) as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income and loss, equity and cash flows for each of the years in the three-year period ended December 31, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Dividend Capital Diversified Property Fund Inc. and subsidiaries as of December 31, 2013 and 2012, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2013, in conformity with U.S. generally accepted accounting principles.

/s/ KPMG LLP

Denver, Colorado

March 10, 2014

F-2

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and footnoted information)

	As of December 31
	2013			2012
ASSETS
Investments in real property	$	2,376,864		$	2,819,550
Accumulated depreciation and amortization		(452,222	)		(482,782	)
Total net investments in real property (1)		1,924,642			2,336,768
Debt related investments, net		123,935			187,321
Total net investments		2,048,577			2,524,089
Cash and cash equivalents		24,778			36,872
Restricted cash		25,550			32,968
Other assets, net		60,328			65,325
Assets held for sale (2)		146,176			—
Total Assets	$	2,305,409		$	2,659,254
LIABILITIES AND EQUITY
Liabilities:
Accounts payable and accrued expenses	$	45,769		$	53,221
Mortgage notes and other secured borrowings (3)		943,045			1,319,452
Unsecured borrowings		300,000			300,000
Intangible lease liabilities, net		74,413			88,331
Other liabilities		50,503			56,723
Liabilities associated with assets held for sale (4)		86,668			—
Total Liabilities		1,500,398			1,817,727
Equity:
Stockholders’ equity:
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 176,006,755 and 178,127,559 shares issued and outstanding, as of December 31, 2013 and December 31, 2012, respectively (5)		1,760			1,781
Additional paid-in capital		1,582,886			1,610,996
Distributions in excess of earnings		(860,747	)		(850,885	)
Accumulated other comprehensive loss		(10,794	)		(16,196	)
Total stockholders’ equity		713,105			745,696
Noncontrolling interests		91,906			95,831
Total Equity		805,011			841,527
Total Liabilities and Equity	$	2,305,409		$	2,659,254

(1) Includes approximately $82.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of December 31, 2013 and 2012, respectively.

(2) Includes approximately $143.0 million, after accumulated depreciation and amortization, in consolidated real property variable interest investments as of December 31, 2013.

(3) Includes approximately $60.7 million and $419.5 million in consolidated mortgage notes in variable interest entity investments as of December 31, 2013 and 2012, respectively.

(4) Includes approximately $80.4 million in consolidated mortgage notes in variable interest entity investments as of December 31, 2013.

(5) Includes 171,254,036 shares of Class E common stock, 216,745 shares of Class A common stock, 208,889 shares of Class W common stock, and 4,327,085 shares of Class I common stock issued and outstanding as of December 31, 2013, and 178,090,434 shares of Class E common stock, 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 12,375 shares of Class I common stock issued and outstanding as of December 31, 2012.

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

F-3

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share and footnoted information)

	For the Year Ended December 31,
	2013			2012			2011
REVENUE:
Rental revenue	$	207,328		$	206,916		$	207,750
Debt related income		10,449			9,409			11,107
Total Revenue		217,777			216,325			218,857
EXPENSES:
Rental expense		43,672			40,535			41,798
Real estate depreciation and amortization expense		87,174			91,127			93,407
General and administrative expenses		9,973			7,229			6,826
Advisory fees, related party		15,120			17,659			20,854
Acquisition-related expenses (1)		337			325			610
Impairment of real estate property		2,600			—			—
Provision for loss on debt related investments		—			—			23,037
Other-than-temporary impairment on securities		—			—			3,369
Total Operating Expenses		158,876			156,875			189,901
Other Income (Expenses):
Interest and other income (expense)		(153	)		807			2,394
Interest expense		(65,325	)		(69,844	)		(74,406	)
Loss on extinguishment of debt and financing commitments		(2,507	)		(5,374	)		—
Loss from continuing operations		(9,084	)		(14,961	)		(43,056	)
Discontinued operations, net of taxes (2)		65,554			(7,410	)		(21,510	)
Net income (loss)		56,470			(22,371	)		(64,566	)
Net (income) loss attributable to noncontrolling interests		(4,002	)		110			6,886
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	52,468		$	(22,261	)	$	(57,680	)
Net income (loss) per basic and diluted common share:
Continuing operations	$	(0.05	)	$	(0.08	)	$	(0.22	)
Discontinued operations	$	0.34		$	(0.04	)	$	(0.09	)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	0.29		$	(0.12	)	$	(0.31	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic		178,196			181,982			183,813
Diluted		191,932			197,244			197,377

(1) Includes approximately $218,000 paid to our Advisor for the year ended December 31, 2011. We did not pay any acquisition fees to our Advisor during the years ended December 31, 2013 and 2012.

(2) Includes approximately $2.6 million, $101,000, and $1.6 million paid to our Advisor for fees associated with the disposition of real properties during the years ended December 31, 2013, 2012, and 2011, respectively.

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

F-4

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS

(In thousands)

	For the Year Ended December 31,
	2013			2012			2011
Net Income (Loss)	$	56,470		$	(22,371	)	$	(64,566	)
Other Comprehensive Income (Loss), net of tax:
Net unrealized change from available-for-sale securities		—			(1,426	)		1,260
Unrealized change from cash flow hedging derivatives		4,975			3,963			2,837
Total Other Comprehensive Income, net of tax		4,975			2,537			4,097
Comprehensive income (loss)		61,445			(19,834	)		(60,469	)
Comprehensive (income) loss attributable to noncontrolling interests		(3,577	)		(87	)		6,605
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	57,868		$	(19,921	)	$	(53,864	)

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

F-5

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONSOLIDATED STATEMENT OF EQUITY

(In thousands)

	Stockholders’ Equity
	Common Stock						Additional Paid-in Capital			Distributions in Excess of Earnings			Accumulated Other Comprehensive Income (Loss)			Noncontrolling Interests			Total Equity
	Shares			Amount
Balances, December 31, 2010		182,717		$	1,827		$	1,644,249		$	(580,981	)	$	(22,352	)	$	114,231		$	1,156,974
Comprehensive income (loss):
Net loss		—			—			—			(57,680	)		—			(6,886	)		(64,566	)
Net unrealized change from available-for-sale securities		—			—			—			—			1,174			86			1,260
Unrealized change from cash flow hedging derivatives		—			—			—			—			2,642			195			2,837
Common stock:
Issuance of common stock, net of offering costs		5,274			53			45,749			—			—			—			45,802
Conversion of OP Units to common stock		118			1			977			—			—			(978	)		—
Redemptions of common stock		(5,778	)		(58	)		(48,308	)		—			—			—			(48,366	)
Amortization of stock based compensation		—			—			22			—			—			—			22
Distributions declared on common stock		—			—			—			(105,704	)		—			—			(105,704	)
Noncontrolling interests:
Contributions of noncontrolling interests		—			—			—			—			—			28,065			28,065
Distributions to noncontrolling interests		—			—			—			—			—			(10,470	)		(10,470	)
Buyout of noncontrolling interest		—			—			(2,353	)		—			—			(4,232	)		(6,585	)
Balances, December 31, 2011		182,331		$	1,823		$	1,640,336		$	(744,365	)	$	(18,536	)	$	120,011		$	999,269
Comprehensive income (loss):
Net loss		—		$	—		$	—		$	(22,261	)	$	—		$	(110	)	$	(22,371	)
Net unrealized change from available-for-sale securities		—			—			—			—			(1,315	)		(111	)		(1,426	)
Unrealized change from cash flow hedging derivatives		—			—			—			—			3,655			308			3,963
Common stock:
Issuance of common stock, net of offering costs		4,711			47			34,877			—			—			—			34,924
Conversion of OP Units to common stock		269			3			2,270			—			—			(2,273	)		—
Redemptions of common stock		(9,183	)		(92	)		(65,066	)		—			—			—			(65,158	)
Amortization of stock based compensation		—			—			7			—			—			—			7
Distributions declared on common stock		—			—			—			(84,259	)		—			—			(84,259	)
Noncontrolling interests:
Contributions of noncontrolling interests		—			—			—			—			—			1,053			1,053
Distributions to noncontrolling interests		—			—			—			—			—			(8,617	)		(8,617	)
Redemptions of noncontrolling interests		—			—			—			—			—			(12,785	)		(12,785	)
Buyout of noncontrolling interest		—			—			(1,428	)		—			—			(1,645	)		(3,073	)
Balances, December 31, 2012		178,128		$	1,781		$	1,610,996		$	(850,885	)	$	(16,196	)	$	95,831		$	841,527
Comprehensive income (loss):
Net income		—		$	—		$	—		$	52,468		$	—		$	4,002		$	56,470
Unrealized change from cash flow hedging derivatives		—			—			—			—			4,621			354			4,975
Common stock:
Issuance of common stock, net of offering costs		7,864			78			48,611			—			—			—			48,689
Redemptions of common stock		(9,985	)		(99	)		(68,432	)		—			—			—			(68,531	)
Distributions declared on common stock		—			—			—			(62,330	)		—			—			(62,330	)
Noncontrolling interests:
Contributions of noncontrolling interests		—			—			—			—			—			212			212
Distributions declared to noncontrolling interests		—			—			—			—			—			(5,446	)		(5,446	)
Redemptions of noncontrolling interests		—			—			(5,549	)		—			781			(1,408	)		(6,176	)
Buyout of noncontrolling interest		—			—			(2,740	)		—			—			(1,639	)		(4,379	)
Balances, December 31, 2013		176,007		$	1,760		$	1,582,886		$	(860,747	)	$	(10,794	)	$	91,906		$	805,011

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

F-6

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Year Ended December 31,
	2013			2012			2011
OPERATING ACTIVITIES:
Net income (loss)	$	56,470		$	(22,371	)	$	(64,566	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Real estate depreciation and amortization expense		108,191			129,116			126,890
Gain on disposition of real property		(74,306	)		(21,144	)		(13,588	)
Unrealized impairment loss on real property		2,600			5,700			23,500
Provision for loss on debt related investments		—			—			23,037
Other adjustments to reconcile loss to net cash provided by operating activities		9,835			14,824			9,841
Changes in operating assets and liabilities		(16,201	)		(11,638	)		(10,772	)
Net cash provided by operating activities		86,589			94,487			94,342
INVESTING ACTIVITIES:
Acquisition of real property		(48,228	)		—			(21,456	)
Capital expenditures in real property		(25,436	)		(21,456	)		(11,850	)
Proceeds from disposition of real properties		133,485			7,081			81,651
Investment in debt related investments		(10,848	)		(39,958	)		—
Principal collections on debt related investments		29,018			7,300			43,605
Other investing activities		(5,144	)		7,568			(2,493	)
Net cash provided by (used in) investing activities		72,847			(39,465	)		89,457
FINANCING ACTIVITIES:
Mortgage note proceeds		—			15,126			—
Mortgage note principal repayments		(29,046	)		(291,281	)		(11,109	)
Net proceeds from revolving line of credit borrowings		—			30,000			—
Proceeds from term loan borrowings		—			270,000			—
Proceeds from other secured borrowings		—			—			19,162
Repayment of other secured borrowings		(44,256	)		(27,461	)		(471	)
Redemption of common shares		(66,073	)		(53,916	)		(62,588	)
Distributions on common stock		(41,050	)		(57,005	)		(64,458	)
Proceeds from sale of common stock		30,917			567			—
Offering costs for issuance of common stock		(3,812	)		(3,403	)		(91	)
Distributions to noncontrolling interest holders		(5,599	)		(9,230	)		(10,408	)
Redemption of OP Unit holder interests		(6,405	)		(11,944	)		(824	)
Other financing activities		(6,206	)		(8,050	)		(8,124	)
Net cash used in financing activities		(171,530	)		(146,597	)		(138,911	)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(12,094	)		(91,575	)		44,888
CASH AND CASH EQUIVALENTS, beginning of period		36,872			128,447			83,559
CASH AND CASH EQUIVALENTS, end of period	$	24,778		$	36,872		$	128,447
Supplemental Disclosure of Cash Flow Information:
Assumed mortgage	$	57,897		$	124,800		$	—
Cash paid for interest	$	72,352		$	87,935		$	84,113
Amount issued pursuant to the distribution reinvestment plan	$	21,473		$	34,491		$	45,732
Non-cash reduction of mortgage note and other secured borrowings	$	239,573		$	63,253		$	120,029
Non-cash disposition of real property*	$	193,066		$	46,282		$	—
Non-cash principal collection on debt related investments	$	46,183		$	17,778		$	61,103
Non-cash origination of debt related investments	$	—		$	82,343		$	—
Non-cash investment in real property	$	—		$	125,854		$	—
Non-cash origination of repurchase facility	$	—		$	96,534		$	—
Issuances of OP Units for beneficial interests	$	—		$	—		$	28,597

* Represents the amount of proceeds from the disposition of real property that we did not receive in cash, primarily due to the repayment or assumption of related mortgage note borrowings by the purchaser at closing.

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

F-7

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2013

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.

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 II, Item 5, and Exhibit 99.1 of this Annual Report on Form 10-K 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.

As of December 31, 2013, we had raised gross proceeds of approximately $32.3 million from the sale of approximately 4.7 million shares in the Offering, including approximately $121,000 through our distribution reinvestment plan. As of December 31, 2013, approximately $2,967.7 million in shares remained available for sale pursuant to the Offering, including approximately $749.9 million in shares available for sale through our distribution reinvestment plan.

F-8

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Due to our control of our Operating Partnership through our sole general partnership interest and the limited rights of the limited partners, we consolidate our Operating Partnership, and limited partner interests not held by us are reflected as noncontrolling interests in the accompanying consolidated financial statements (herein referred to as “financial statements”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Our financial statements also include the accounts of our consolidated subsidiaries and joint ventures through which we are the primary beneficiary, when such subsidiaries and joint ventures are variable interest entities, or through which we have a controlling interest. In determining whether we have a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which we have the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses that could potentially be significant to the entity or the right to receive benefits that could potentially be significant to the entity.

All joint ventures in which we have investments are variable interest entities. All of our investments in joint ventures represent our interests in real estate partnerships, formed for the purpose of acquiring, leasing, managing, holding for investment, selling and otherwise dealing with real property investments. Our involvement with our joint ventures affects our financial position, financial performance and cash flows in ways similar to direct ownership of real property investment. We own a significantly disproportionate majority of the ownership interests of our joint ventures. In each of our joint ventures, our joint venture partner performs the day-to-day management of the real properties owned by the respective joint ventures. However, in each of our joint ventures, we approve the activities that most significantly impact the joint venture’s economic performance. Due to our substantive approval rights and our exposure to the economic returns and losses of each of the joint ventures, we are the primary beneficiary of each of our joint ventures. Based on these considerations, we consolidate all of our investments in joint ventures. See our consolidated balance sheets for disclosure of the amount of real property and mortgage note borrowings that we consolidated through our investments in variable interest entities as of December 31, 2013 and 2012.

Judgments made by us with respect to our level of influence or control of an entity and whether we are the primary beneficiary of a variable interest entity involve consideration of various factors, including the form of our ownership interest, the size of our investment (including loans), our ability to direct the activities of the entity, and our obligation to absorb the losses of, or, our right to receive benefits from the entity. Our ability to correctly assess our influence or control over an entity affects the presentation of these investments in our financial statements and, consequently, our financial position and specific items in our results of operations that are used by our stockholders, lenders and others in their evaluation of us. The maximum risk of loss related to our investment in these consolidated variable interest entities is limited to our recorded investments in such entities. The creditors of the consolidated variable interest entities do not have recourse to our general credit.

Generally, we consolidate real estate partnerships and other entities that are not variable interest entities when we own, directly or indirectly, a majority voting interest in the entity.

Reclassifications

Certain amounts included in the accompanying financial statements for 2012 and 2011 have been reclassified to conform to the 2013 financial statement presentation. Balance sheet amounts for properties classified as held for sale have been reclassified as of December 31, 2013. Statement of operations amounts for properties disposed of or classified as held for sale have been reclassified to discontinued operations for all periods presented. Amounts in our segment and quarterly financial data disclosures in Notes 13 and 16 reflect the reclassification of amounts related to properties that have been disposed of or classified as held for sale as of December 31, 2013.

F-9

Investments

Real Property

Costs associated with the acquisition of real property, including acquisition fees paid to our Advisor, are expensed as incurred. In addition, we estimate the fair value of contingent consideration and contingencies related to acquisitions of real property in determining the total cost of the property acquired. Subsequent changes in the fair value of such contingent consideration are recorded either as a gain or loss in our statement of operations. Contingencies are subsequently adjusted through the statement of operations when new information becomes available indicating that settlement of a contingent liability is probable and can be estimated at an amount greater than the acquisition date fair value, or the contingency is resolved, in which case the contingent asset or liability is derecognized.

Costs associated with the development and improvement of our real property assets are capitalized as incurred. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred. During the land development and construction periods, we capitalize interest costs, insurance, real estate taxes and certain general and administrative costs if such costs are incremental and identifiable to a specific activity to get the asset ready for its intended use. The results of operations for acquired real property are included in our accompanying statements of operations from their respective acquisition dates.

Upon acquisition, the total cost of a property is allocated to land, building, building and land improvements, tenant improvements and intangible lease assets and liabilities. The purchase price allocation of the total cost to land, building, building improvements, tenant improvements, intangible lease assets and intangible lease liabilities is based on our estimate of the property’s as-if vacant fair value. The as-if vacant fair value is calculated by using all available information such as the replacement cost of such asset, appraisals, property condition reports, market data and other related information. The difference between the fair value and the face value of debt assumed in an acquisition is recorded as an adjustment to the purchase price allocation. The allocation of the total cost of a property to an intangible lease asset includes the value associated with the in-place leases, which may include lost rent, leasing commissions, tenant improvements, legal and other costs.

We record acquired “above-market” and “below-market” leases at their fair value equal to the difference between the contractual amounts to be paid pursuant to each in-place lease and our estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the remaining term of the lease plus the term of any below-market fixed-rate renewal option periods for below-market leases. In addition, we allocate a portion of the purchase price of an acquired property to the estimated value of customer relationships, if any. As of December 31, 2013, we had not recognized any estimated value to customer relationships.

Intangible in-place lease assets are amortized over the corresponding lease term. Above-market lease assets are amortized as a reduction in rental revenue over the corresponding lease term. Below-market lease liabilities are amortized as an increase in rental revenue over the corresponding lease term, plus any applicable below-market fixed-rate renewal option periods. The following table summarizes the amounts that we have incurred in amortization expense for intangible lease assets and adjustments to rental revenue for above-market lease assets and below-market lease liabilities for the years ended December 31, 2013, 2012 and 2011 (amounts in thousands).

	For the Year Ended December 31,
	2013			2012			2011
Above-market lease assets	$	(7,293	)	$	(8,050	)	$	(8,393	)
Below-market lease liabilities		7,537			9,567			9,756
Net increase to rental revenue	$	244		$	1,517		$	1,363
Intangible lease asset amortization	$	(62,325	)	$	(80,739	)	$	(77,452	)

F-10

We expense any unamortized intangible lease asset or record an adjustment to rental revenue for any unamortized above-market lease asset or below-market lease liability when a tenant terminates a lease before the stated lease expiration date. We recorded an insignificant amount of adjustments related to write-offs of unamortized intangible lease assets and liabilities due to early lease terminations during the years ended December 31, 2013, 2012 and 2011.

Real property assets, including land, building, building and land improvements, tenant improvements, lease commissions, and intangible lease assets and liabilities are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization are computed on a straight-line basis over their estimated useful lives as described in the following table.

Description	Depreciable Life
Land	Not depreciated
Building	40 years
Building and land improvements	5-20 years
Tenant improvements	Lesser of useful life or lease term
Lease commissions	Over lease term
Intangible in-place lease assets	Over lease term
Above-market lease assets	Over lease term
Below-market lease liabilities	Over lease term, including below-market fixed-rate renewal options

The following table presents expected amortization during the next five years and thereafter related to the acquired above-market lease assets, below-market lease liabilities and acquired in-place lease intangibles, for properties owned (including properties classified as held for sale) as of December 31, 2013 (amounts in thousands).

	For the Year Ended December 31,
	2014			2015			2016			2017			2018			Thereafter			Total
Acquired below-market lease liabilities	$	7,125		$	5,895		$	5,201		$	4,975		$	4,920		$	49,433		$	77,549
Acquired above-market lease assets		(6,716	)		(6,315	)		(6,248	)		(3,711	)		(1,418	)		(1,897	)		(26,305	)
Net rental revenue increase (decrease)	$	409		$	(420	)	$	(1,047	)	$	1,264		$	3,502		$	47,536		$	51,244
Acquired in-place lease intangible amortization	$	47,544		$	40,203		$	37,527		$	22,382		$	12,099		$	29,002		$	188,757

Discontinued Operations and Held for Sale

Discontinued operations represent properties that we have either disposed of or have classified as held for sale if both the operations and cash flows of the property have been or will be eliminated from our ongoing operations as a result of the disposal transaction and if we will not have any significant continuing involvement in the operations of the property after the disposal transaction. The results of operations of properties that have been classified as discontinued operations are also reported as discontinued operations for all periods presented. We classify real property as held for sale when our management commits to a plan to sell the property, the plan has appropriate approvals, the sale of the property is probable, and certain other criteria are met. At such time, the respective assets and liabilities are presented separately on our balance sheets and depreciation is no longer recognized. Assets held for sale are reported at the lower of their carrying amount or their estimated fair value less the costs to sell the assets. We recognize an impairment loss if the current net book value of the property exceeds its fair value less selling costs. As of December 31, 2013 and 2012, 12 and zero of our properties were classified as held for sale, respectively.

F-11

Debt Related Investments

Debt related investments are considered to be held for investment, as we have both the intent and ability to hold these investments until maturity. Accordingly, these assets are carried at cost, net of unamortized loan origination costs and fees, discounts, repayments and unfunded commitments unless such loans or investments are deemed to be impaired.

Revenue Recognition

Revenue Recognition — Real Property

We record rental revenue for the full term of each lease on a straight-line basis. Certain properties have leases that offer the tenant a period of time where no rent is due or where rent payments increase during the term of the lease. Accordingly, we record a receivable from tenants for rent that we expect to collect over the remaining lease term rather than currently, which is recorded as straight-line rents receivable. When we acquire a property, the term of existing leases is considered to commence as of the acquisition date for purposes of this calculation. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as rental revenue.

The following table summarizes straight-line rental adjustments and tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands):

	For the Year Ended December 31,
	2013		2012		2011
Straight-line rent adjustments	$	8,864	$	8,107	$	9,902
Tenant recovery income	$	33,029	$	33,585	$	33,445

Revenue Recognition — Debt Related Investments

Interest income on debt related investments is recognized over the life of the investment using the effective interest method and is recognized on an accrual basis. Fees received in connection with loan commitments are deferred until the loan is funded and are then recognized over the term of the loan. Anticipated exit fees, where collection is expected, are also recognized over the term of the debt related investment. A debt related investment is considered to be non-performing and is placed on non-accrual status when it becomes delinquent and management determines it is probable that it will be unable to collect all amounts due according to contractual terms. While on non-accrual status, debt related investments are accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash. Non-accrual debt investments are returned to accrual status when they become contractually current and management believes it will collect all amounts contractually due.

Impairment

Impairment — Real Property

We review our investments in real property that are classified as held and used individually on a quarterly basis, and more frequently when such an evaluation is warranted, to determine their appropriate classification, as well as whether there are indicators of impairment.

As of December 31, 2013, 70 of our properties are classified as held and used. These held and used assets are reviewed for indicators of impairment, which may include, among others, each tenant’s inability to make rent payments, operating losses or negative operating trends at the property level, notification by a tenant that it will not renew its lease, a decision to dispose of a property, including a change in estimated holding periods, or adverse changes in the fair value of any of our properties. If indicators of impairment exist on a held and used

F-12

asset, we compare the future estimated undiscounted cash flows from the expected use of the property to its net book value to determine if impairment exists. If the sum of the future estimated undiscounted cash flows is greater than the current net book value, we conclude no impairment exists. If the sum of the future estimated undiscounted cash flows is less than its current net book value, we recognize an impairment loss for the difference between the net book value of the property and its estimated fair value. If our assumptions, projections or estimates regarding a property change in the future, we may have to record an impairment charge to reduce or further reduce the net book value of the property. See Note 3 for a discussion of impairment charges relating to our real properties recorded during the years ended December 31, 2013, 2012, and 2011.

Impairment — Debt Related Investments

We review our debt related investments on a quarterly basis, and more frequently when such an evaluation is warranted, to determine if impairment exists. 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 our 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 investment or to measure impairment based on an observable market price for the impaired investment as an alternative to discounting expected future cash flows. Regardless of the measurement method, we measure impairment based on the fair value of the collateral when it is determined that foreclosure is probable. A debt related investment is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). A TDR occurs when we grant a concession to a borrower in financial difficulty by modifying the original terms of the loan. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loan. See Note 4 for a discussion of impairment charges relating to our debt related investments recorded during the years ended December 31, 2013, 2012, and 2011.

Impairment — Real Estate Securities

As of both December 31, 2013 and 2012, we held investments in real estate securities of approximately $0.5 million. Real estate securities are included in other assets, net, in the accompanying balance sheets.

During the years ended December 31, 2013, 2012, and 2011, we recorded approximately $0, $0 and $3.4 million, respectively, related to other-than-temporary impairment of our CMBS and CRE-CDO securities. Due to volatility with the credit market and its unpredictable impact for such securities, we determined that we cannot reliably predict the timing and amount of cash flows that we expect to receive related to the majority of our CMBS and CRE-CDO securities. Therefore, we account for such securities under the cost recovery method of accounting. The application of the cost recovery method of accounting requires that we cease recognizing interest income related to these securities until the amortized cost of each respective security is depleted or until we can reliably estimate cash flows. Once the amortized cost of each security is depleted or we can reasonably estimate cash flows, cash payments will be recorded to interest income. Under the cost recovery method of accounting, if the fair value of a security falls below the amortized cost of that security and we do not anticipate that the receipt of near term cash flows will sufficiently reduce the security’s amortized cost below its fair value, then we recognize an other-than-temporary impairment in an amount equal to the difference between that security’s fair value and its amortized cost.

Credit Losses

A credit loss represents the difference between the present value of expected future cash flows and the amortized cost basis of a debt security. As of both December 31, 2013 and 2012, we had recognized approximately $140.1 million of cumulative credit losses in other-than-temporary impairment related to our investments in debt securities. We recorded impairment losses of $0, $0, and $3.4 million for each of the years ended December 31, 2013, 2012, and 2011, respectively.

F-13

Derivative Instruments and Hedging Activities

We record all derivative instruments in the accompanying balance sheets at fair value. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. Derivative instruments used to hedge exposure to changes in the fair value of an asset, liability, or firm commitments attributable to a particular risk, such as interest rate risk, are considered “fair value” hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, such as future interest payments, or other types of forecasted transactions, are considered “cash flow” hedges. We do not have any fair value hedges.

For derivative instruments designated as cash flow hedges, the changes in the fair value of the derivative instrument that represent changes in expected future cash flows, which are effectively hedged by the derivative instrument, are initially reported as other comprehensive income (loss) in the statement of equity until the derivative instrument is settled. Upon settlement, the effective portion of the hedge is recognized as other comprehensive income (loss) and amortized over the term of the designated cash flow or transaction the derivative instrument was intended to hedge. The change in value of any derivative instrument that is deemed to be ineffective is charged directly to earnings when the determination of hedge ineffectiveness is made. We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative instrument with the changes in fair value or cash flows of the designated hedged item or transaction. For purposes of determining hedge ineffectiveness, management estimates the timing and potential amount of future fixed-rate debt issuances each quarter in order to estimate the cash flows of the designated hedged item or transaction. Management considers the likelihood of the timing and amount of entering into such forecasted transactions when determining the expected future fixed-rate debt issuances. We do not use derivative instruments for trading or speculative purposes. We classify cash paid to settle our forward starting swaps as financing activities in our statements of cash flows.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less such as money market mutual funds or certificates of deposits. As of both December 31, 2013 and 2012, we have not realized any losses in such cash accounts or investments and believe that we are not exposed to any significant credit risk.

Restricted Cash

Restricted cash consists primarily of lender and property-related escrow accounts. As of both December 31, 2013 and 2012, we had not realized any losses in such restricted cash accounts or investments related to, and believe that we are not exposed to any significant credit risk.

Collectability of Receivables

We evaluate the collectability of our rent and other receivables on a regular basis based on factors including, among others, payment history, the financial strength of the tenant or borrower and any guarantors. Specifically with regards to our debt related investments, we evaluate the collectability of our receivables based on factors including, among others, the value of the underlying collateral, the operations and operating trends of the underlying collateral, if any, the asset type and current economic conditions. If our evaluation of these factors indicates we may not recover the full amount of the receivable, we provide a reserve against the portion of the receivable that we estimate may not be recovered. This analysis requires us to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected. As of December 31, 2013 and 2012, we had allowances included in the caption other assets, net, in our accompanying balance sheets of approximately $251,000 and $510,000, respectively, related to our rent and other receivables. If our assumptions or estimates regarding the collectability of a receivable change in the future, we may have to record allowances to reduce or further reduce the carrying value of the receivable.

F-14

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) as reported in the accompanying statements of equity primarily consists of the cumulative loss related to our derivatives of $8.8 million, before attribution to noncontrolling interests of $1.0 million, and cumulative gain related to our real estate securities of approximately $411,000, before attribution of a cumulative loss to noncontrolling interests of $1.3 million.

Basic and Diluted Net Income (Loss) per Common Share

Basic net income (loss) per common share is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share includes the effects of potentially issuable common stock, but only if dilutive, including the presumed exchange of OP Units.

Income Taxes

We operate in a manner intended to qualify as a REIT for U.S. federal income tax purposes. As a REIT, we generally will not be subject to federal income taxes on net income that we distribute to our stockholders. We intend to make timely distributions sufficient to satisfy the annual distribution requirements. We believe we are organized and operate in such a manner and intend to operate in the foreseeable future in such a manner to qualify as a REIT for federal income tax purposes. We are, however, subject to certain state and local taxes. Our taxable REIT subsidiary, DCTRT Leasing Corporation, is also subject to federal, state, and local taxes.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the periods they are determined to be necessary.

New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued accounting standards update (“ASU”) 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date, (“ASU 2013-04”) which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date. This will require an entity to measure those obligations as the sum of the amount the entity agreed to pay on the basis of its arrangement among its co-obligors as well as any additional amount the entity expects to pay on behalf of its co-obligors. ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations. The amendments in this ASU are effective for reporting periods beginning after December 15, 2013, with early adoption permitted. Retrospective application is required. We do not believe that the adoption of ASU 2013-04 will have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, 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.

F-15

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 December 31, 2013 and 2012 (amounts in thousands):

Real Property	Land		Building and Improvements			Intangible Lease Assets			Total Investment Amount			Intangible Lease Liabilities			Net Investment Amount
As of December 31, 2013:
Office	$	232,117	$	769,654		$	365,314		$	1,367,085		$	(15,861	)	$	1,351,224
Industrial (1)		51,678		359,800			66,877			478,355			(46,626	)		431,729
Retail		227,218		420,070			77,752			725,040			(51,059	)		673,981
Total gross book value		511,013		1,549,524			509,943			2,570,480			(113,546	)		2,456,934
Accumulated depreciation/amortization		—		(207,966	)		(294,881	)		(502,847	)		35,997			(466,850	)
Total net book value	$	511,013	$	1,341,558		$	215,062		$	2,067,633		$	(77,549	)	$	1,990,084
As of December 31, 2012:
Office	$	218,738	$	833,226		$	457,754		$	1,509,718		$	(25,121	)	$	1,484,597
Industrial		71,725		436,340			79,610			587,675			(48,432	)		539,243
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 $21.1 million in land, $157.7 million in building and improvements, $14.9 million in intangible lease assets, and $5.6 million in intangible lease liabilities, before accumulated depreciation on assets of $50.6 million and accumulated amortization of intangible lease liabilities of $2.5 million, related to 12 industrial properties classified as held for sale in the accompanying balance sheet as of December 31, 2013.

Acquisitions

On November 7, 2013, we acquired 100% of a 269,000 square foot office property in San Francisco, CA (“655 Montgomery”). 655 Montgomery was subject to a mortgage note with a principal balance of $57.9 million as of the acquisition date bearing interest at 6.0%, which matures in June 2016. As of December 31, 2013, the unpaid principal balance of this mortgage note was $57.8 million.

As of December 31, 2013, we have made an allocation of the fair value of the acquired assets and liabilities of 655 Montgomery to land, building, improvements and intangible lease assets and liabilities. Based on this allocation of the $109.7 million in estimated fair value of the acquired assets and liabilities of 655 Montgomery, we attributed approximately $32.6 million to land, approximately $67.8 million to building and improvements, approximately $15.9 million to intangible lease assets, approximately $1.5 million to intangible lease liabilities, and approximately $3.1 million to other liabilities and the mark-to-market adjustment on the mortgage assumed at acquisition. The weighted-average amortization periods for the intangible lease assets and intangible lease liabilities were approximately 4.4 years and 2.3 years, respectively, at the acquisition date. We have also recognized the assumed mortgage note based on an estimate of fair value of $61.7 million as of the acquisition date. We have not made any material adjustments related to this acquisition since the acquisition date.

For the year ended December 31, 2013, our consolidated statement of operations includes aggregate revenue of $1.6 million and net operating income (as defined in Note 13) of $857,000 attributable to 655 Montgomery.

F-16

Real Property Impairment

During the year ended December 31, 2013, we determined that one of our wholly-owned industrial properties, located in the Silicon Valley, CA market, was unlikely to generate cash flows during our estimated investment period sufficient to recover our net book basis as of December 31, 2013. The primary factor leading to this determination was our determination that the market rental rate we could obtain, and the low demand for industrial space in the particular sub market in which the building is located, did not support our recorded carrying value. As a result of our review and based on our estimate of future cash flow and fair value of the office property, we recognized an impairment charge of approximately $2.6 million to adjust the carrying value to our estimate of fair value as of December 31, 2013.

During the year ended December 31, 2012, we recorded a $5.7 million impairment related to an industrial property held in a joint venture in which we do not act as the managing partner. This property is included in a portfolio of industrial properties held in the same joint venture that serves as collateral for a cross-collateralized senior mortgage note. During the year ended December 31, 2012 we began to consider possible disposition opportunities for this portfolio of industrial properties. Such disposition opportunities caused us to significantly reduce our estimated holding period for these properties, triggering impairment recognition based on our estimate of future cash flows from the operation and disposition of these properties. We disposed of this property during the year ended December 31, 2013, and accordingly, the impairment charge is included within discontinued operations.

During the year ended December 31, 2011, we determined that one of our office properties held through a joint venture in which we were not the managing partner, located in the Silicon Valley, CA market, was unlikely to generate cash flows during our estimated investment period sufficient to recover our net book basis as of December 31, 2011. The primary factor leading to this determination was our determination that the market rental rate we could obtain, and the low demand for office space in the particular sub market in which the building is located, did not support our recorded carrying value. As a result of our review and based on our estimate of future cash flow and fair value of the office property, we recognized an impairment charge of approximately $23.5 million to adjust the carrying value to our estimate of fair value as of December 31, 2011. We disposed of that property during the year ended December 31, 2012, and accordingly, the impairment charge is included within discontinued operations.

Discontinued Operations

During 2013, 2012, and 2011 we disposed of or classified as held for sale the following properties (dollar amounts and square footage in thousands):

Type of Property	Market	DPF Ownership			Square Feet		Disposition Date	Gain (Loss)
2013 Dispositions:
Office	Dallas, TX		100.0	%		62	January 13, 2013	$	1,217
Industrial Portfolio	Various (1)		96.4	%		1,918	May 10, 2013		(311	)
Office (2)	Dallas, TX		100.0	%		1,509	May 31, 2013		15,462
Office	Boston, MA		100.0	%		132	June 6, 2013		6,734
Office	Denver, CO		100.0	%		257	July 31, 2013		35,371
Office	Denver, CO		100.0	%		133	September 13, 2013		10,233
Office	Chicago, IL		100.0	%		100	October 15, 2013		5,580
Total						4,111		$	74,286
2012 Dispositions:
Retail	Boston, MA		100.0	%		19	February 27, 2012	$	(328	)
Office	Silicon Valley, CA		90.0	%		427	July 31, 2012		19,584
Industrial	Louisville, KY		90.0	%		164	June 5, 2012		1,857
Total						610		$	21,113

F-17

Type of Property	Market	DPF Ownership			Square Feet		Disposition Date	Gain (Loss)
2011 Dispositions:
Office	Silicon Valley, CA		97.5	%		52	September 23, 2011	$	1,187
Industrial	Cincinnati, OH		95.6	%		604	October 17, 2011		(1,046	)
Office	Silicon Valley, CA		100.0	%		187	November 18, 2011		8,305
Industrial	Kansas City, MO		88.6	%		180	November 21, 2011		70
Retail	Boston, MA		100.0	%		46	December 21, 2011		2,266
Total						1,069		$	10,782
Assets held for sale
Industrial Portfolio	Various (3)		92.5	%		3,387	January 22, 2014
Total						3,387

(1) Industrial portfolio included seven properties located in the following markets: Philadelphia, PA, Sacramento, CA, Central Pennsylvania, Charlotte, NC, Atlanta, GA, and Chicago, IL.

(2) During the year ended December 31, 2012, we became the 100% owner of the titleholder of a 1.5 million square foot office property in the Dallas, TX market (“Comerica Bank Tower”), as the result of our foreclosure of a non-performing mezzanine loan for which such ownership interest had served as collateral. Comerica Bank Tower was subject to a mortgage note with a principal balance of $179.8 million as of the acquisition date bearing interest at 5.8%, which matures in January 2017. On September 10, 2012, we were notified that a receiver (the “Receiver”) had been appointed for the Comerica Bank Tower. As of March 31, 2013, the unpaid principal balance of this mortgage note was $177.4 million. On May 31, 2013, Comerica Bank Tower was sold by the Receiver pursuant to court order to a purchaser unaffiliated with us. Because of the outstanding principal balance of the mortgage note, we did not receive any proceeds from the sale of Comerica Bank Tower.

(3) Industrial portfolio included 12 properties located in the following markets: Atlanta, GA, Central Pennsylvania, Cincinnati, OH, Columbus, OH, Dallas, TX, Indianapolis, IN, and Minneapolis/St. Paul, MN.

Assets Held for Sale

As of December 31, 2013, we had agreed to dispose of a portfolio of 12 industrial properties to an unrelated third party. Accordingly, the assets and liabilities related to properties in this portfolio are classified as held for sale in the accompanying balance sheet as of December 31, 2013. We sold the properties on January 22, 2014. See Note 17 for additional discussion of this disposition.

F-18

We present the results of operations of disposed properties and properties held for sale and their respective aggregate net gains (losses), collectively, as discontinued operations in our accompanying statements of operations 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 Year Ended December 31,
	2013			2012			2011 (1)
Revenues	$	39,023		$	61,461		$	53,603
Rental expense		(14,020	)		(21,731	)		(12,709	)
Real estate depreciation and amortization expense		(21,017	)		(37,989	)		(33,483	)
Impairment of real estate property		—			(5,700	)		(23,500	)
Interest expense		(12,662	)		(23,771	)		(18,429	)
Other expenses		(56	)		(793	)		(625	)
Income (loss) from discontinued operations, net of taxes		(8,732	)		(28,523	)		(35,143	)
Gain (Loss) on disposition, net of taxes		74,286			21,113			13,633
Discontinued operations, net of taxes	$	65,554		$	(7,410	)	$	(21,510	)

(1) Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

Future Minimum Rentals

Future minimum rentals to be received under non-cancelable operating and ground leases in effect as of December 31, 2013, are as follows (amounts in thousands):

For the Years Ended December 31,	Future Minimum Rentals
2014	$	192,551
2015		181,583
2016		174,497
2017		129,026
2018		95,009
Thereafter		283,661
Total	$	1,056,327

The table above does not reflect future rental revenues from the potential renewal or replacement of existing and future leases and excludes property operating expense reimbursements and assumes no early termination of leases.

F-19

Concentration of Credit Risk

Concentration of credit risk with respect to accounts receivable currently exists due to a number of tenants whose rental payments to us make up a relatively high percentage of our rental revenue. The following is a summary, as of December 31, 2013, of the top five tenants as a percentage of consolidated annual base rent and square feet (dollar amounts and square feet in thousands):

Tenant	Locations		Industry	Annualized Rental Revenue (1)		% of Total Annualized Rental Revenue			Square Feet		% of Total Portfolio Square Feet
Charles Schwab & Co, Inc		1	Securities, Commodities, Fin. Inv./Rel. Activites	$	22,761		11.5	%		594		4.2	%
Northrop Grumman		2	Professional, Scientific and Technical Services		17,532		8.9	%		699		4.9	%
Sybase		1	Publishing Information (except Internet)		17,283		8.8	%		405		2.8	%
Stop & Shop		15	Food and Beverage Stores		13,828		7.0	%		872		6.1	%
CEVA Freight/Logistics		3	Truck Transportation		5,198		2.6	%		790		5.5	%
Total		22		$	76,602		38.8	%		3,360		23.5	%

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

Rental revenue from our lease with Charles Schwab & Co., Inc., as master tenant of one of our office properties, represented approximately $25.5 million, or 11.7%, of our total revenue from continuing operations for the year ended December 31, 2013. Our properties in California, New Jersey, Massachusetts, and Texas accounted for approximately 20%, 16%, 16%, and 12%, respectively, of our total gross investment in real property portfolio as of December 31, 2013. A deterioration of general economic or other relevant conditions, changes in governmental laws and regulations, acts of nature, demographics or other factors in any of those states or the geographical region in which they are located could result in the loss of a tenant, a decrease in the demand for our properties and a decrease in our revenues from those markets, which in turn may have a disproportionate and material adverse effect on our results of operations and financial condition.

4. DEBT RELATED INVESTMENTS

As of December 31, 2013 and 2012, we had invested in 14 and 19 debt related investments, respectively. The weighted average maturity of our debt investments as of December 31, 2013 was 2.5 years, based on our recorded net investment. The following table describes our debt related income for the years ended December 31, 2013, 2012, and 2011 (dollar amounts in thousands):

	For the Year Ended December 31,						Weighted Average Yield as of
Investment Type	2013		2012		2011		December 31, 2013 (1)
Mortgage notes (2)	$	8,726	$	8,732	$	6,890		5.7	%
B-notes		51		433		2,371		0.0	%
Mezzanine debt		1,672		244		1,846		16.7	%
Total	$	10,449	$	9,409	$	11,107		7.1	%

(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 December 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of December 31, 2013 for purposes of this table. As of December 31, 2013, we had one debt related investment with a net investment amount of $25.0 million that bears interest at a floating

F-20

rate 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 investment for which we have recognized a full allowance for loss as of December 31, 2013.

(2) We had four and three debt related investments repaid in full during the years ended December 31, 2013 and 2012, respectively. Amounts recorded include an early repayment fee received and accelerated amortization of origination fees offset by accelerated amortization of deferred due diligence costs related to these repayments.

The following table describes our debt investment activity for the years ended December 31, 2013 and 2012 (amounts in thousands).

	Year Ended December 31,
	2013			2012
Investment in debt related investments:
Balance at January 1,	$	187,321		$	92,247
Investments		12,323			121,842
Principal repayments		(75,702	)		(25,093	)
Amortization of deferred fees, costs, and discounts/premiums		(7	)		(1,675	)
Provision for loan loss		—			—
Balance at December 31,	$	123,935		$	187,321

Debt Related Investment and Repayment Activity

As of December 31, 2013, two of our 14 debt related investments require interest only payments. 13 of the 14 debt related investments were not subject to any delinquent principal or interest payments. Two of our debt related investments (those structured as mezzanine debt or B-notes) are subordinate to more senior positions with respect to the underlying collateral. The following table summarizes our debt related investments as of December 31, 2013 (dollar amounts in thousands).

Description	Region	Interest Rate Fixed or Variable		Interest Rate as of December 31, 2013 (1)			Maturity Date (2)		Face Amount of Debt (3)		Amount of Debt Related Investments
Mortgage note	Pacific		Fixed		7.5	%		10/8/2014	$	17,000	$	17,098
Mortgage note	West North Central		Fixed		7.8	%		4/1/2015		9,074		9,389
Mortgage note	Mountain		Fixed		7.7	%		4/1/2015		9,083		9,175
Mortgage note	Southeast		Fixed		6.3	%		2/1/2018		9,213		9,570
Mortgage note	East North Central		Fixed		6.1	%		4/1/2018		7,746		7,354
Mortgage note	Northeast		Fixed		6.2	%		11/1/2017		3,841		3,903
Mortgage note	Mountain		Fixed		6.2	%		9/1/2016		2,966		3,011
Mortgage note	Southeast		Fixed		7.0	%		3/1/2019		9,170		9,331
Mortgage note	West North Central		Fixed		6.0	%		7/1/2018		6,930		6,887
Mortgage note	Southwest		Fixed		5.8	%		6/1/2014		3,675		3,677
Mortgage note	Mountain		Fixed		5.2	%		3/1/2021		3,450		3,429
Mortgage note	Northeast		Variable		5.2	%		6/7/2015		25,000		25,211
B-note (4)	Pacific		Fixed		0.0	%		1/1/2011		3,000		—
Mezzanine debt	Mid-Atlantic		Fixed		17.0	%		7/1/2016		15,665		15,900
Total/weighted average					7.6	%			$	125,813	$	123,935

F-21

(1) Rates for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of December 31, 2013 for purposes of this table.

(2) Reflects the initial maturity of the investment or any exercised options to extend and does not consider any future options to extend that are at the discretion of the borrower.

(3) Reflects the principal amount of the debt investment outstanding, which is net of principal repayments.

(4) We have recorded a provision for loan loss of $3.0 million related to this B-note investment as of December 31, 2013, and we have assumed a yield of 0%.

Repayments

During the year ended December 31, 2013, we received full repayment of four debt investments, three of which were structured as mortgage notes and one of which was structured as a B-note. We received cash proceeds from the repayments of approximately $28.1 million, which comprised (i) principal repayment of $73.7 million, and (ii) a prepayment fee of approximately $435,000, partially offset by the repayment of borrowings secured by the debt related investments of approximately $46.2 million.

During the year ended December 31, 2012, we received full repayment of three debt investments, all of which were structured as mortgage notes. We received cash proceeds from the repayments of approximately $5.9 million, which comprised (i) principal repayment of $22.3 million, and (ii) a prepayment fee of approximately $1.4 million, partially offset by the repayment of borrowings secured by the debt related investments of approximately $17.8 million.

Restructure of B-note

One of our B-note investments had been scheduled to mature in August of 2011. During the year ended December 31, 2011, we restructured the terms of that investment, which resulted in (i) an extension of the scheduled maturity to October 2012, and (ii) a change in the payment schedule that includes monthly principal amortization which equals the difference between actual LIBOR and a 4% LIBOR floor on the outstanding balance. This restructuring qualified as a troubled debt restructuring, and therefore, this B-note investment is considered an impaired investment, as further discussed below. We record interest revenue on this debt investment at LIBOR + 3.25%. As of December 31, 2012 we had recorded an asset of $12.1 million related to this debt investment. In January 2013, the borrower repaid the outstanding principal of the loan, all interest owed to us, and a return of the collateral we had posted during 2011 to maintain our controlling interest holder position on the final property sale in the portfolio.

Impairment

During year ended December 31, 2011, we recognized approximately $23.0 million in provision losses in the accompanying statements of operations. We did not record any provision for loan loss during the years ended December 31, 2013 and 2012. However, during the years ended December 31, 2013 and 2012, we wrote off the provision for loss on debt related investments of approximately $15.0 million and $20.0 million, respectively. The loss written off in 2013 related to one B-note debt investment loan restructuring. The loss written off in 2012 related to a mezzanine debt investment that we foreclosed upon. See Note 3 for additional discussion of this foreclosure. The table below presents a reconciliation of the beginning and ending balances, between December 31, 2012 and December 31, 2013, of our allowance for loan loss (amounts in thousands):

	Allowance for Loan Loss
Beginning balance as of December 31, 2012:	$	18,000
Direct write offs		(15,000	)
Ending balance as of December 31, 2013:	$	3,000

F-22

We had one and two B-note debt investments on non-accrual status as of December 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 year ended December 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 the cash basis of accounting was not significant during the years ended December 31, 2013, 2012, or 2011. All of our debt related investments that were past due 90 days or more were on non-accrual status as of December 31, 2013 and 2012.

As of December 31, 2013 and 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 December 31,
	2013			2012
Debt investments	$	126,935		$	205,321
Less: Allowance for loan losses		(3,000	)		(18,000	)
Total	$	123,935		$	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):

As of:	Recorded Investment		Related Allowance			Amount of Impaired Loans With No Allowance Recorded
December 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 Year Ended December 31,	Average Recorded Investment		Interest Income Recognized
2013	$	6,067	$	51
2012		12,930		433
2011		25,314		3,060

F-23

5. DEBT OBLIGATIONS

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

	Weighted Average Stated Interest Rate as of December 31,						Outstanding Balance as of December 31, (1)				Gross Investment Amount Securing Borrowings as of December 31, (2)
	2013			2012			2013		2012		2013		2012
Fixed-rate mortgages (3)		5.8	%		5.8	%	$	969,622	$	1,160,042	$	1,898,946	$	2,061,757
Floating-rate mortgages (4)		3.9	%		3.5	%		8,580		23,701		15,571		42,609
Total mortgage notes		5.8	%		5.7	%		978,202		1,183,743		1,914,517		2,104,366
Repurchase facilities (5)		2.8	%		3.0	%		45,270		135,709		65,726		198,389
Total other secured borrowings		2.8	%		3.0	%		45,270		135,709		65,726		198,389
Total secured borrowings		5.6	%		5.4	%		1,023,472		1,319,452		1,980,243		2,302,755
Line of credit		1.9	%		2.2	%		30,000		30,000		N/A		N/A
Term loan (6)		2.2	%		2.2	%		270,000		270,000		N/A		N/A
Total unsecured borrowings		2.2	%		2.2	%		300,000		300,000		N/A		N/A
Total borrowings		4.9	%		4.8	%	$	1,323,472	$	1,619,452	$	1,980,243	$	2,302,755

(1) Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $0 and $55.0 million as of December 31, 2013 and 2012, respectively, (ii) unamortized premiums (discounts) to the face value of our outstanding fixed-rate mortgages of $2.7 million and ($2.7) million as of December 31, 2013 and 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $1.5 million and $718,000 as of December 31, 2013 and 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) Fixed-rate mortgages presented include outstanding balances included within liabilities related to assets held for sale as of December 31, 2013 of approximately $80.4 million at a weighted average interest rate of 6.1% secured by gross investments of approximately $170.3 million.

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

(5) As of December 31, 2013, borrowings under our repurchase facility were subject to interest at a floating rate of 2.25% over one-month LIBOR. However, we had effectively fixed the interest rate of the borrowings using an interest rate swap, resulting in a fixed interest rate of 2.84% for the term of the borrowings (provided that our borrowing balance does not exceed our derivative instrument notional during that term). As of December 31, 2012, borrowings under our repurchase facilities were subject to interest at floating rates at spreads ranging from 2.25% to 3% over one-month LIBOR. As of December 31, 2012, we had effectively fixed the interest rate of approximately $79.1 million of the total of $135.7 million in borrowings using interest rate swaps at 3.14%, resulting in a weighted average interest rate on the total repurchase facility of 3.04%.

(6) As of December 31, 2013, borrowings under our term loan were subject to interest at a floating rate of 1.70% over one-month LIBOR. However, we had effectively fixed the interest rate for $200.0 million of the

F-24

total of $270.0 million in borrowings using interest rate swaps at 2.34%, resulting in a weighted average interest rate on the total term loan of 2.21%. As of December 31, 2012, borrowings of $270.0 million under our term loan were subject to interest at a floating rate of 1.95% over one-month LIBOR, resulting in a weighted average interest rate on the total term loan of 2.16%.

As of December 31, 2013, 12 mortgage notes were interest-only and 20 mortgage notes were fully amortizing with outstanding principal balances of approximately $341.4 million and $635.6 million, respectively. None of our mortgage notes are recourse to us.

As of December 31, 2013, we had outstanding borrowings of $270.0 million and $30.0 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”). As of December 31, 2013, the unused portion of the revolving credit facility component of the Facility was approximately $320.0 million, of which approximately $86.1 million was available. 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, and $150.0 million was available for us to borrow under the revolving credit facility component of the Facility.

Borrowing Activity

Assumption of Mortgage Note

In connection with our acquisition of 655 Montgomery discussed in Note 3, we assumed a mortgage note secured by 655 Montgomery with an unpaid principal balance of approximately $57.9 million at acquisition. The mortgage note is amortizing and bears interest at a fixed rate of 6.01%. The mortgage note matures in June 2016 and does not include any extension options.

Repayments of Mortgage Notes and Other Secured Borrowings

During the year ended December 31, 2013, we repaid one mortgage note borrowing of approximately $14.5 million before its scheduled maturity. The note was secured by an office property in the Dallas, TX market. The note was originally scheduled to mature during 2013. We recognized a loss on financing commitments and early repayment of debt of approximately $233,000 relating to this repayment. Additionally, during the year ended December 31, 2013, we repaid one of our repurchase facilities in full at initial maturity and repaid a portion of our other repurchase facility before contractual maturity. Related to these repayments, we recognized a loss on financing commitments and early repayment of debt of approximately $479,000 during the year ended December 31, 2013.

As discussed in Note 3, during the year ended December 31, 2013, Comerica Bank Tower was sold by the Receiver pursuant to a court order to a purchaser unrelated to us. Comerica Bank Tower was subject to a mortgage note with an outstanding principal balance as of the date of the disposition of $177.3 million. We had carried the loan at fair value, which was $123.0 million as of December 31, 2012.

Additionally, as discussed in Note 3, during the year ended December 31, 2013, we sold 12 properties, eight of which were subject to mortgage notes at disposition. In total, the buyers of these eight properties assumed mortgage note balances of approximately $117.6 million from us.

Subsequent to December 31, 2013, as discussed in Note 3, we sold a portfolio of 12 properties, 11 of which were subject to mortgage notes at disposition. In total, the buyer of this portfolio assumed mortgage note balances of approximately $80.4 million. Related to this disposition, we recognized a loss on financing commitments and early repayment of debt during the year ended December 31, 2013, of approximately $1.8 million upon the discontinuation of hedge accounting and the reclassification of accumulated other comprehensive loss on cash flow hedges relating to these mortgages.

F-25

Debt Maturities

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

	As of December 31, 2013
	Mortgage Notes and Other Secured Borrowings				Unsecured Borrowings				Total
Year Ending December 31,	Number of Borrowings Maturing		Outstanding Balance (1)(2)(3)		Number of Borrowings Maturing		Outstanding Balance (4)		Outstanding Balance (5)(6)
2014		4	$	145,190		0	$	—	$	145,190
2015		5		127,206		0		—		127,206
2016		13		347,496		1		30,000		377,496
2017		7		223,371		0		—		223,371
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
2023		0		978		0		—		978
Thereafter		2		6,431		0		—		6,431
Total		33	$	1,022,277		2	$	300,000	$	1,322,277

(1) Three of our mortgage notes and one of our repurchase facilities with an aggregate outstanding principal balance as of December 31, 2013 of approximately $132.5 million have initial maturities before December 31, 2014. One of these mortgage notes with an outstanding balance of $38.9 million, and the repurchase facility with an outstanding balance of $45.3 million have extension options beyond December 31, 2014. 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 these extension options. However, we cannot guarantee that we will meet the requirements to extend the notes upon initial maturity. In the event that we do not qualify to extend the notes, we expect to repay them with proceeds from new borrowings or available proceeds from our revolving credit facility.

(2) Three of our mortgage notes with outstanding balances of $39.7 million, $30.9 million, and $9.8 million, maturing in 2014, 2015, and 2016, respectively, were classified within liabilities associated with assets held for sale in the accompanying balance sheet as of December 31, 2013. These mortgages were assumed by the purchaser of the related portfolio of real properties subsequent to December 31, 2013.

(3) Secured borrowings presented include (i) mortgage note borrowings of approximately $977.0 million with maturities ranging from 2014 to 2029, and (ii) borrowings under our repurchase facility of approximately $45.3 million, which matures in 2014 and is subject to three one-year extension options.

(4) Unsecured borrowings presented include (i) borrowings under our revolving credit facility of $30.0 million, which matures in 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.

(5) Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.

(6) As of December 31, 2013, our mortgage notes and secured borrowings are secured by interests in real properties and debt investments totaling approximately $2.0 billion.

F-26

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. Certain of our floating rate borrowings are not hedged and therefore, to an extent, we have ongoing exposure to interest rate movements.

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 (“ASC Topic 815”) 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 $1.8 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 $1.0 million 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 December 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):

	Gains and Losses on Cash Flow Hedges			Unrealized Gains and Losses on Available-For- Sale Securities			Accumulated Other Comprehensive Income
Beginning balance as of December 31, 2012:	$	(14,710	)	$	(1,486	)	$	(16,196	)
Other comprehensive income:
Amortization of OCI into interest expense (net of tax benefit of $0)		2,726			—			2,726
Change in fair value recognized in OCI (net of tax benefit of $0)		352			—			352
Amounts reclassified from accumulated other comprehensive income:
Losses reclassified into loss on extinguishment of debt and financing commitments upon discontinuance of cash flow hedges (net of tax benefit of $0)		1,897			—			1,897
Net current-period other comprehensive income		4,975			—			4,975
Attribution of and other adjustments to OCI attributable to noncontrolling interests		(141	)		568			427
Ending balance as of December 31, 2013	$	(9,876	)	$	(918	)	$	(10,794	)

F-27

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 December 31, 2013 and 2012 (amounts in thousands):

	Asset Derivatives					Liability Derivatives
	Balance Sheet Location	As of December 31, 2013 Fair Value		As of December 31, 2012 Fair Value		Balance Sheet Location	As of December 31, 2013 Fair Value			As of December 31, 2012 Fair Value
Derivatives designated as hedging instruments under ASC Topic 815
Interest rate contracts	Other assets, net (1)	$	748	$	—	Other liabilities (1)	$	(43	)	$	(403	)
Total derivatives designated as hedging instruments under ASC Topic 815			748		—			(43	)		(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		$	748	$	—		$	(43	)	$	(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 December 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 December 31, 2013, we had seven outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk, with a total notional amount of $255.4 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.

F-28

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, $19,000, and $85,000 for the years ended December 31, 2013, 2012, and 2011, respectively. As of December 31, 2013 we did not have any outstanding derivatives that were not designated as hedges. 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 Income (Loss)

The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands):

	For the Year Ended December 31,
	2013			2012			2011
Derivatives Designated as Hedging Instruments
Derivative type		Interest rate contracts			Interest rate contracts			Interest rate contracts
Amount of gain (loss) recognized in OCI (effective portion)	$	352		$	(436	)	$	(625	)
Location of gain or (loss) reclassified from accumulated OCI into income (effective portion)		Interest expense			Interest expense			Interest expense
Amount of loss reclassified from accumulated OCI into income (effective portion)	$	(2,726	)	$	(2,648	)	$	(2,862	)
Location of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)		Loss on financing commitments			Loss on financing commitments, Discontinued operations, net of taxes			Discontinued operations, net of taxes
Amount of loss recognized in income due to missed forecast (ineffective portion and amount excluded from effectiveness testing)	$	(1,897	)	$	(1,751	)	$	(600	)
Derivatives Not Designated as Hedging Instruments
Derivative type		Interest rate contracts			Interest rate contracts			Interest rate contracts
Location of gain or (loss) recognized in income		Interest and other income			Interest and other income			Interest and other income
Amount of loss recognized in income	$	—		$	(19	)	$	(85	)

F-29

7. FAIR VALUE DISCLOSURES

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 table below presents certain of our assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 and 2012, aggregated by the level in the fair value hierarchy within which those measurements fall as defined above (amounts in thousands). There were no changes between fair value hierarchy levels during the years ended December 31, 2013 and 2012.

	Level 1		Level 2			Level 3			Total
As of December 31, 2013:
Assets
Real estate securities	$	—	$	—		$	461		$	461
Derivative instruments		—		748			—			748
Total assets	$	—	$	748		$	461		$	1,209
Liabilities
Derivative instruments	$	—	$	(43	)	$	—		$	(43	)
Total liabilities	$	—	$	(43	)	$	—		$	(43	)
As of December 31, 2012:
Assets
Real estate securities	$	—	$	—		$	461		$	461
Total assets	$	—	$	—		$	461		$	461
Liabilities
Mortgage notes carried at fair value	$	—	$	—		$	(122,995	)	$	(122,995	)
Derivative instruments	$	—	$	(416	)	$	—		$	(416	)
Total liabilities	$	—	$	(416	)	$	(122,995	)	$	(123,411	)

F-30

We review our fair value hierarchy classifications on a quarterly basis. Transfers into or out of Level 3 are made if the significant inputs used in measuring the fair values of the assets and liabilities became unobservable or observable, respectively, in the current market environment. When assets and liabilities are transferred between levels, we recognize the transfer at the beginning of the period. The table below presents a reconciliation of the beginning and ending balances of certain of our assets and liabilities having fair value measurements based on significant unobservable inputs (Level 3), and our derivative instruments, between December 31, 2012 and December 31, 2013 (amounts in thousands).

	Mortgage Notes Carried at Fair Value			Real Estate Securities		Derivative Instruments
Beginning balance as of December 31, 2012	$	(122,995	)	$	461	$	(416	)
Total net gains (losses) included in:
Net income (other income and expense)		—			—		(8	)
Other comprehensive income (Unrealized change from cash flow hedging derivatives)		—			—		352
Total change in fair value		—			—		344
Settlements		122,995			—		777
Transfers in and/or out of Level 3		—			—		—
Ending balance as of December 31, 2013	$	—		$	461	$	705

Fair Value Estimates of Investments in Real Estate Securities

We estimate the fair value of our CMBS and CRE-CDO securities using a combination of observable market information and unobservable market assumptions. Observable market information considered in these fair market valuations include benchmark interest rates, interest rate curves, credit market indexes and swap curves. Unobservable market assumptions considered in the determination of the fair market valuations of our CMBS and CRE-CDO investments include market assumptions related to discount rates, default rates, prepayment rates, reviews of trustee or investor reports and non-binding broker quotes and pricing services in what is currently an inactive market. Additionally, we consider security-specific characteristics in determining the fair values of our CMBS and CRE-CDO investments, which include consideration of credit enhancements, the underlying collateral’s average default rates, the average delinquency rate and loan-to-value and several other characteristics. Management periodically reviews the fair value of our CMBS and CRE-CDO securities. As a result, both Level 2 and Level 3 inputs are used in arriving at the valuation of our investments in CMBS and CRE-CDOs. We consider the Level 3 inputs used in determining the fair value of its investments in CMBS and CRE-CDO securities to be significant. As such, all investments in CMBS and CRE-CDO securities fall under the Level 3 category of the fair value hierarchy. Using the above assumptions, expectations of future cash flows primarily drive our fair value estimate of our CMBS and CRE-CDO securities. Deterioration in possible cash flows from our CMBS and CRE-CDO securities will likely reduce the fair value of these securities to zero within the next 12 to 24 months.

Fair Value Estimates of Derivative Instruments

We have used interest rate swaps, zero cost collars and purchased interest rate caps to manage interest rate risk. The values of these instruments are determined by a third party valuation specialist based on assumptions provided be us using widely accepted valuation techniques, including discounted cash flow analysis of the expected cash flows of each derivative. Management reviews the fair value analyses prepared by the third party valuation specialist which reflect the contractual terms of the derivatives, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The valuation methodologies are segregated into two categories of derivatives: (i) interest rate swaps and (ii) zero cost collars/ purchased interest rate caps.

F-31

Interest Rate Swaps — Both spot starting and forward starting swaps are considered and measured at fair value similarly. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (i.e. forward curves) derived from observable market interest rate curves.

Zero Cost Collars/Interest Rate Caps (Interest Rate Options) — Zero cost collars and interest rate caps are considered and measured at fair value as interest rate options. The fair values of interest rate options are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fell below or rose above the strike rate of the caps or outside of the applicable collar rates. The variable interest rates used in the calculation of projected receipts on the cap or collar rates are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of “netting” and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

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 December 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 all of our derivative valuations are appropriately classified in Level 2 of the fair value hierarchy.

Nonrecurring Fair Value Measurements

During the year ended December 31, 2013, we recognized an impairment loss related to a wholly-owned industrial property in the accompanying statements of operations. The impairment was based on a reduction of our estimated holding period for this property, triggering impairment recognition with the related fair value measurement based on our estimate of future cash flows from the operation and disposition of this property. We consider the Level 3 inputs used in determining the fair value of this real property investment to be significant. As such, this investment falls under the Level 3 category of the fair value hierarchy. The fair value used in determining impairment for this property was $14.5 million as of December 31, 2013. The key assumption used in determining the fair value of this property is the discount rate of 8.5%, which was applied to the future cash flows we expect to receive from operating and disposing of the property. Our expectations of the future cash flows are derived from assumptions about market rents, operating expenses, and the terminal value of the property, some of which are developed by a third-party appraisal firm that we engage.

During the year ended December 31, 2012, we recognized an impairment loss related to an industrial property in the accompanying statements of operations. The impairment was based on a reduction of our estimated holding period for this property, triggering impairment recognition based on our estimate of future cash flows from the operation and disposition of this property. We consider the Level 3 inputs used in determining the fair value of this real property investment to be significant. As such, this investment falls under the Level 3 category of the fair value hierarchy.

During the year ended December 31, 2011, we recognized an impairment loss related to an office property in the accompanying statements of income (loss). The impairment was based on our determination that future cash flows from the property were highly uncertain and insufficient to cover the carrying amount of the property as of December 31, 2011. We consider the Level 3 inputs used in determining the fair value of this real property investment to be significant. As such, this investment falls under the Level 3 category of the fair value hierarchy.

F-32

8. 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 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 December 31, 2013 and 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.

F-33

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

	As of December 31, 2013				As of December 31, 2012
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Investments in real estate securities	$	461	$	461	$	461	$	461
Fixed-rate debt related investments, net		98,724		101,012		108,482		110,796
Floating-rate debt related investments, net		25,211		24,504		78,839		79,803
Derivative instruments		748		748		—		—
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	$	969,622	$	1,010,085	$	1,037,047	$	1,091,425
Fixed-rate mortgage notes carried at fair value		—		—		122,995		122,995
Floating-rate mortgage notes		8,580		8,582		23,701		23,738
Floating-rate other secured borrowings		45,270		45,270		135,709		135,931
Floating-rate unsecured borrowings		300,000		301,690		300,000		300,000
Derivative liabilities		43		43		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, Other Secured Borrowings, and Unsecured Borrowings Carried at Amortized Cost—The fair value of our mortgage notes, other secured borrowings, and unsecured 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.

F-34

9. NONCONTROLLING INTERESTS

Our noncontrolling interests consist of two components: (i) OP Units held by third parties and (ii) joint venture partnership interests held by our partners. The following table summarizes changes to noncontrolling interest balances between December 31, 2012 and December 31, 2013 in terms of cumulative contributions, distributions and cumulative allocations of net income (loss) and redemptions and buyouts of the interests (amounts in thousands).

	OP Units:			Joint Venture Partner Interests:			Noncontrolling Interests
Beginning balance as of December 31, 2012:	$	88,259		$	7,572		$	95,831
Comprehensive Income and Loss
Net income		4,010			(8	)		4,002
Unrealized change from cash flow hedging derivatives		354			—			354
Contributions, Distributions and Redemptions
Contributions from noncontrolling interest holders		—			212			212
Distributions to noncontrolling interest holders		(4,807	)		(639	)		(5,446	)
Redemption and buyout of noncontrolling interests, net		(1,408	)		(1,639	)		(3,047	)
Ending balance as of December 31, 2013	$	86,408		$	5,498		$	91,906

OP Units

Securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, are classified as redeemable noncontrolling interests outside of permanent equity in our accompanying balance sheets. We have evaluated our ability to deliver shares of common stock to satisfy redemption requests from holders of our OP Units and we have concluded that we have the right to satisfy the redemption requirements of holders of our OP Units by delivering unregistered shares of our common stock. Each outstanding OP Unit is exchangeable for one share of our common stock, and the OP Unit holder cannot require redemption in cash or other assets. As a result, we classify our OP Units held by third parties as noncontrolling interests.

We are the sole general partner of our Operating Partnership and currently own, in our capacity as the general partner, 200 OP Units for which we contributed $2,000. Subsequent to that initial investment, we have contributed 100% of the proceeds received from our offerings of common stock to our Operating Partnership in exchange for OP Units representing our interest as a limited partner of the Operating Partnership. As of December 31, 2013 and 2012, we owned approximately 93.0% and 92.6% of the outstanding limited partnership interests in our Operating Partnership, respectively, 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. After a period of one year from the date of issuance, holders of Class E OP Units (other than us) may request the Operating Partnership to redeem their Class E OP Units. We have the option of redeeming the Class E OP Units with cash for an amount based on our NAV per share as of the effective date of the redemption, shares of our common stock on a one-for-one basis, or with a combination of cash and Class E shares of common stock. During the years ended December 31, 2013 and 2012, we issued approximately 0 and 269,000 Class E shares of our common stock in redemption of approximately 0 and 273,000 Class E OP Units, respectively, in accordance with this option. During the years ended December 31, 2013 and 2012, we redeemed approximately 904,000 and 1.7 million Class E OP Units for approximately $6.2 million and $12.8 million in cash, respectively.

F-35

As of December 31, 2013 and 2012, our Operating Partnership had issued and outstanding approximately 13.3 million and 14.2 million Class E OP Units, respectively, to third-party investors in connection with its private placement offerings. Such units had a maximum approximate redemption value of $92.0 million and $95.0 million, as of December 31, 2013 and December 31, 2012, respectively, based on our December 31, 2013 and December 31, 2012 NAV per share, respectively.

Joint Venture Partner Interests

Certain of our joint ventures are consolidated by us in the accompanying financial statements. Our joint venture partners’ interests in our consolidated partnerships are not redeemable. As a result, we classify our joint venture partners’ interests as noncontrolling interests. During the year ended December 31, 2013, we purchased one of our joint venture partners’ interest in two office properties and and two industrial properties for approximately $4.4 million, which resulted in a net decrease in noncontrolling interest of $1.6 million. During the year ended December 31, 2012, we purchased one of our joint venture partners’ interest in an office property for approximately $3.0 million, which resulted in a net decrease in noncontrolling interest of $1.6 million.

10. STOCKHOLDERS’ EQUITY

Common Stock

On May 27, 2005, we filed a Registration Statement on Form S-11 with the Commission in connection with an initial public offering of our Class E shares of common stock, which was declared effective on January 27, 2006. On June 11, 2007, we filed a Registration Statement on Form S-11 with the Commission in connection with a follow-on public offering of our Class E common stock, which was declared effective on January 22, 2008. As of the close of business on September 30, 2009, we terminated the primary portion of our public offerings of Class E shares of our common stock and ceased accepting new subscriptions to purchase shares of our common stock. On October 23, 2009, we filed a Registration Statement for the sale of up to $237,500,000 in Class E shares of our common stock pursuant to our distribution reinvestment plan. This distribution reinvestment plan offering is ongoing.

F-36

On July 12, 2012, the Commission declared effective our Registration Statement on Form S-11 which applies to the offer and sale of shares of Class A, Class W, and Class I common stock to the public through a primary offering and a restated distribution reinvestment plan with NAV-based pricing. The following table describes the changes in each class of common shares during each of the years ended December 31, 2013, 2012, and 2011 (shares and dollar amounts in thousands).

	Class E Common Stock						Class A Common Stock				Class W Common Stock				Class I Common Stock						Total Proceeds
	Shares			Amount (1)			Shares		Amount (1)		Shares		Amount (1)		Shares			Amount (1)			Shares			Amount (1)
Balances, December 31, 2010		182,717		$	1,806,652			—	$	—		—	$	—		—		$	—			182,717		$	1,806,652
Common stock:
Issuance of common stock and OP Units:
Distribution Reinvestment Plan		5,274			43,540			—		—		—		—		—			—			5,274			43,540
Conversion of OP Units to common stock		118			978			—		—		—		—		—			—			118			978
Redemptions of common stock		(5,778	)		(48,205	)		—		—		—		—		—			—			(5,778	)		(48,205	)
Balances, December 31, 2011		182,331		$	1,802,965			—	$	—		—	$	—		—		$	—			182,331		$	1,802,965
Issuance of common stock:
Shares Sold		65			317			12		83		12		83		12			83			101			566
Distribution Reinvestment Plan		4,610			34,449			—		—		—		—		—			—			4,610			34,449
Conversion of OP Units to common stock		269			2,273			—		—		—		—		—			—			269			2,273
Redemptions of common stock		(9,183	)		(64,808	)		—		—		—		—		—			—			(9,183	)		(64,808	)
Balances, December 31, 2012		178,092		$	1,775,196			12	$	83		12	$	83		12		$	83			178,128		$	1,775,445
Issuance of common stock:
Shares Sold		—			—			205		1,451		197		1,354		4,301			29,333			4,703			32,138
Distribution Reinvestment Plan		3,143			21,352			—		—		—		—		18			121			3,161			21,473
Redemptions of common stock		(9,981	)		(68,402	)		—		—		—		—		(4	)		(30	)		(9,985	)		(68,432	)
Balances, December 31, 2013		171,254		$	1,728,146			217	$	1,534		209	$	1,437		4,327		$	29,507			176,007		$	1,760,624

(1) Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans and share redemption programs.

Redemptions

We have adopted a Class E Share Redemption Program (the “Class E SRP”), whereby Class E stockholders may request that we redeem all or any portion of their Class E shares subject to certain conditions and limitations. We also have a separate Class A, W and I Share Redemption Program (“Class AWI SRP”) for holders of our Class A, Class W or Class I shares. Our board of directors may modify, suspend or terminate our share redemption programs if it deems such action to be in the best interest of our stockholders. Our board of directors may from time to time, but is not obligated to, authorize funds for redemptions of Class E shares in greater or lower amounts.

During the years ended December 31, 2013 and 2012, we redeemed approximately 10.0 million and 9.2 million Class E shares, respectively, pursuant to our Class E SRP for approximately $68.4 million and $64.8 million, respectively. During the years ended December 31, 2013 and 2012, our board of directors authorized an additional $32.8 million and $25.0 million, respectively, in addition to the amounts calculated in accordance with our Class E SRP, related to these redemptions.

F-37

During the year ended December 31, 2013, we redeemed a negligible amount of Class I shares pursuant to our Class AWI SRP. We did not redeem any shares pursuant to our Class AWI SRP during the year ended December 31, 2012.

Distributions

We accrue distributions on a daily basis and pay distributions on a quarterly basis. Historically, each quarter, our board of directors has authorized the following quarter’s daily distribution accrual. We calculate individual payments of distributions to each stockholder or OP Unit holder based upon daily record dates during each quarter, so that investors are eligible to earn distributions immediately upon purchasing shares of our common stock or upon purchasing OP Units. The following table describes our total distributions declared on our common stock for the year ended December 31, 2013, 2012 and 2011, and the portion of each distribution that was paid in cash and reinvested in shares (dollar amounts in thousands).

	For the Year Ended December 31,
	2013		% of Total Distributions			2012		% of Total Distributions			2011		% of Total Distributions
Distributions:
Paid in cash	$	41,123		66.0	%	$	53,311		63.3	%	$	62,575		59.2	%
Reinvested in shares		21,207		34.0	%		30,948		36.7	%		43,129		40.8	%
Total distributions	$	62,330		100.0	%	$	84,259		100.0	%	$	105,704		100.0	%

The following table sets forth the distributions that have been paid and/or authorized as of December 31, 2013, subject to class-specific adjustments.

	Amount Declared per Share (1)
Quarter	Class E Shares		Class A Shares		Class W Shares		Class I Shares		Weighted Average		Payment Date
2012
1st Quarter 2012	$	0.1250		N/A		N/A		N/A	$	0.1250	April 16, 2012
2nd Quarter 2012	$	0.1250		N/A		N/A		N/A	$	0.1250	July 24, 2012
3rd Quarter 2012	$	0.1250	$	0.0938	$	0.1012	$	0.1086	$	0.1250	October 16, 2012
4th Quarter 2012	$	0.0875	$	0.0691	$	0.0775	$	0.0858	$	0.0875	January 16, 2013
2013
1st Quarter 2013	$	0.0875	$	0.0692	$	0.0775	$	0.0858	$	0.0875	April 16, 2013
2nd Quarter 2013	$	0.0875	$	0.0689	$	0.0774	$	0.0858	$	0.0875	July 16, 2013
3rd Quarter 2013	$	0.0875	$	0.0685	$	0.0771	$	0.0858	$	0.0875	October 16, 2013
4th Quarter 2013	$	0.0875	$	0.0684	$	0.0771	$	0.0858	$	0.0874	January 16, 2014
2014
1st Quarter 2014 (2)	$	0.0875	$	0.0875	$	0.0875	$	0.0875	$	0.0875	April 16, 2014 (3)

(1) Assumes ownership of share or unit for the entire quarter.

(2) The distribution amount herein for the first quarter of 2014 does not reflect class-specific adjustments made to our Class A, Class W, and Class I shares, which have not yet been determined.

(3) Expected payment date.

Distribution Tax Characterization

Our distributions to stockholders are characterized for federal income tax purposes as (i) ordinary income, (ii) non-taxable return of capital, or (iii) long-term capital gain. Distributions that exceed our current and accumulated tax earnings and profits constitute a return of capital for tax purposes and reduce the stockholders’ basis in the common shares. To the extent that distributions exceed both current and accumulated earnings and

F-38

profits and the stockholders’ basis in the common shares, they will generally be treated as a gain or loss upon the sale or exchange of our stockholders’ common shares. We elected to classify our fourth quarter 2013 distribution as a 2014 distribution as part of our overall tax and REIT compliance strategy, resulting in a lower amount of reported distributions than were declared for the period. This election increased the percentage of total distributions that are taxable, however, it did not increase the actual dollar amount that is taxed. We notify stockholders of the taxability of distributions paid during the preceding year on an annual basis. The following table summarizes the information reported to investors regarding the taxability of distributions on common shares for the years ended December 31, 2013, 2012 and 2011.

	For the Year Ended December 31,
	2013					2012					2011
Per Common Share	Per Share Amount		Percentage			Per Share Amount		Percentage			Per Share Amount		Percentage
Ordinary income	$	0.11		40.98	%	$	0.01		1.49	%	$	0.19		32.53	%
Non-taxable return of capital		0.15		59.02	%		0.45		98.51	%		0.39		67.47	%
Total	$	0.26		100.00	%	$	0.46		100.00	%	$	0.58		100.00	%

11. 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 two of our directors and all of our executive officers. The responsibilities of our Advisor cover all facets of our business, and include 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. The Advisory Agreement may be renewed for an unlimited number of successive one-year terms. The current term of the Advisory Agreement expires on June 30, 2014. 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. Additionally, the Advisor will provide us with a waiver of a portion of its fees generally equal to the amount of the performance component that would have been payable with respect to the Class E shares and the Class E OP Units held by third parties until the NAV of such shares or units exceeds $10.00 per share or unit, the benefit of which will be shared among all holders of Fund Interests. 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.

F-39

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.

On May 31, 2013, the Company and the Dealer Manager entered into Amendment No. 1 to the Dealer Manager Agreement (“Amendment No. 1”). Amendment No. 1 provided that the Company will pay to the Dealer Manager a primary dealer fee in the amount of up to 5.0% of the gross proceeds raised from the sale of Class I shares sold in the Company’s primary public 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 million. The Dealer Manager will retain 0.5% of such gross proceeds and reallow the remainder 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. The primary dealer fee will be considered underwriting compensation (as defined in accordance with, and subject to the underwriting compensation limits of, applicable Financial Industry Regulatory Authority, Inc. rules).

As of December 31, 2013 and December 31, 2012, we owed approximately $1.6 million and $1.4 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.

F-40

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 years ended December 31, 2013 and 2012 (amounts in thousands):

	For the Year Ended December 31,
	2013		2012		2011
Acquisition fees	$	—	$	1,534	$	218
Advisory fees		15,120		17,659		20,854
Development management fee		223		133		—
Other reimbursements		6,234		3,253		1,940
Asset management fees related to the disposition of real properties		2,639		101		1,599
Dealer manager and distribution fees		1,415		—		—
Total	$	25,631	$	22,680	$	24,611

Acquisition Fees

Prior to entering into the Eighth Amended and Restated Advisory Agreement with our Advisor on July 12, 2012, pursuant to the previous advisory agreement in effect, we paid certain acquisition fees to our Advisor. For each real property acquired in the operating stage, the acquisition fee was an amount equal to 1.0% of our proportional interest in the purchase price of the property. For each real property acquired prior to or during the development or construction stage, the acquisition fee was an amount not to exceed 4.0% of the total project cost (which was the amount actually paid or allocated to the purchase, development, construction or improvement of a property exclusive of acquisition fees and acquisition expenses). Our Advisor also was entitled to receive an acquisition fee of 1.0% of the principal amount in connection with the origination or acquisition of any type of debt investment including, but not limited to, the origination of mortgage loans, B-notes, mezzanine debt, participating debt (including with equity-like features), non-traded preferred securities, convertible debt, hybrid instruments, equity instruments and other related investments. However, to the extent that such debt investments were originated or acquired pursuant to our agreement with our debt advisor, (defined below) such acquisitions fees may have differed. See the section below titled “The Debt Advisor” for further discussion of these fees. Subsequent to entering into the Eighth Amended and Restated Advisory Agreement with our Advisor on July 12, 2012, we no longer pay acquisition fees to our Advisor.

Asset Management Fees

Prior to entering into the Eighth Amended and Restated Advisory Agreement with our Advisor on July 12, 2012, pursuant to the previous advisory agreement in effect, we paid certain asset management fees to our Advisor in connection with the asset and portfolio management of real property, debt related investments and real estate securities. Our Advisor’s asset management fee was payable as follows:

For Direct Real Properties (as defined below), the asset management fee consisted of (i) a monthly fee of one-twelfth of 0.50% of the aggregate cost (before noncash reserves and depreciation) of Direct Real Properties and (ii) a monthly fee of 6.00% of the aggregate monthly net operating income derived from all Direct Real Properties provided; however, that the aggregate monthly fee to be paid to our Advisor pursuant to these sub clauses (i) and (ii) in aggregate would not exceed one-twelfth of 0.75% of the aggregate cost (before noncash reserves and depreciation) of all Direct Real Properties.

For Product Specialist Real Properties (as defined below), the asset management fee consisted of (i) a monthly fee of one-twelfth of 0.50% of the aggregate cost (before noncash reserves and depreciation) of Product Specialist Real Properties and (ii) a monthly fee of 6.00% of the aggregate monthly net operating income derived from all Product Specialist Real Properties.

F-41

“Direct Real Properties”: shall mean those real properties acquired directly by us without the advice or participation of a product specialist engaged by our Advisor.

“Product Specialist Real Properties”: shall mean those real properties acquired by us pursuant to the advice or participation of a product specialist engaged by our Advisor pursuant to a contractual arrangement.

In addition, the asset management fee for all real property assets included a fee of 1.00% of the sales price of individual real property assets upon disposition.

For debt related investments, other than Debt Advisor (defined below) debt related investments, and securities investments, the asset management fee consisted of a monthly fee equal to one-twelfth of 1.00% of (i) the amount invested in the case of our debt related assets within our portfolio and (ii) the aggregate value, determined at least quarterly, of our real estate-related securities.

We also agreed to pay our Advisor certain acquisition and asset management fees that differed from the fee structure discussed above to facilitate the acquisition and management of certain debt investments that we acquired pursuant to a product specialist agreement that our Advisor entered into with the Debt Advisor (defined below). See the section below entitled “The Debt Advisor” for additional details of this agreement and the corresponding fee structure. As of July 12, 2012, we are no longer subject to this fee structure.

Product Specialists

In addition to utilizing its own management team, our Advisor has formed strategic alliances with recognized leaders in the real estate and investment management industries. These alliances are intended to allow our Advisor to leverage the organizational infrastructure of experienced real estate developers, operators and investment managers and to potentially give us access to a greater number of real property, debt related and real estate securities investment opportunities. The use of product specialists or other service providers does not eliminate or reduce our Advisor’s fiduciary duty to us. Our Advisor retains ultimate responsibility for the performance of all of the matters entrusted to it under the Advisory Agreement.

Our Advisor’s product specialists are and will be compensated through a combination of (i) reallowance of acquisition, disposition, asset management and/or other fees paid by us to our Advisor and (ii) potential profit participation in connection with specific portfolio asset(s) identified by them and invested in by us. We may enter into joint ventures or other arrangements with affiliates of our Advisor to acquire, develop and/or manage real properties. Our Advisor had previously entered into joint venture and/or product specialist arrangements with three additional affiliates (Dividend Capital Investments LLC, Hudson River Partners Real Estate Investment Management L.P., and FundCore LLC), as discussed below in more detail. The agreements with these three affiliates were terminated prior to December 31, 2012.

BCG TRT Advisors LLC

During the year ended December 31, 2012, our Advisor entered into a product specialist agreement with BCG TRT Advisors LLC (“BCG”), in connection with advisory services related to our investments in real estate securities assets. Pursuant to this agreement, a portion of the asset management fee that our Advisor receives from us related to real estate securities investments is reallowed to BCG in exchange for services provided. Approximately $58,000 and $25,000 were incurred related to services provided by BCG during the years ended December 31, 2013 and 2012, respectively.

The Debt Advisor

In August 2009, our Advisor entered into a product specialist agreement (the “Debt Advisor PSA”) with FundCore Finance Group LLC (the “Debt Advisor”), an entity formed by affiliates of Hudson River Partners Real Estate Investment Management L.P. (“HRP”) and certain affiliates of our Advisor. Pursuant to the Debt

F-42

Advisor PSA, the Debt Advisor had the right to perform acquisition and asset management services with respect to up to $130 million (plus any available leverage) of certain debt investments to be made by us. On August 5, 2009, our Advisor also entered into another product specialist agreement (the “HRP PSA”) with HRP. Pursuant to the HRP PSA, HRP had the right to perform the acquisition and asset management services with respect to up to $20 million (plus any available leverage) of certain debt investments to be made by us.

The fees payable to the Advisor and its affiliates related to the acquisition and management of debt investments prior to the effectiveness of the Offering were replaced by the advisory fees as stated in the Eighth Amended and Restated Advisory Agreement, as discussed above. Accordingly, the Debt Advisor and HRP PSA agreements were terminated on July 12, 2012, in connection with the effectiveness of the Offering.

The following is a summary of fees that were paid to our Advisor and its affiliates related to the acquisition and management of such debt investments prior to entering into the Eighth Amended and Restated Advisory Agreement in connection with the effectiveness of the Offering on July 12, 2012.

Debt Investment Advisory Fees

For debt investments acquired pursuant to the Debt Advisor PSA discussed above, our Advisor received an acquisition fee equal to the sum of:

(i)	1.0% of the relevant debt investment amount;
(ii)	any origination or similar fees paid by the applicable borrower at the time the debt investment is made (not to exceed 1.50% of the net debt investment amount); and
(iii)	an amount equal to the discounted present value (using a discount rate of 15%) of 1.0% per annum of the net debt investment amount (taking into account any anticipated principal amortization) for a period of time equal to the lesser of the term of the debt investment (excluding extension option years) or four years (collectively referred to as the “Initial Term”). This fee was reduced by the amount payable by borrowers pursuant to clause (ii) above.

The total acquisition fee and acquisition expenses would not exceed 6.0% of the net debt investment amount. The acquisition fee was payable on the closing date of the relevant debt investment and was reallowed in full by our Advisor to the Debt Advisor pursuant to the Debt Advisor PSA.

Debt Investment Asset Management Fees

For debt investments acquired pursuant to the Debt Advisor PSA discussed above, our Advisor received asset management fees pursuant to the following:

(i)	during the first 12 months after the closing of the respective debt investment, our Advisor received a monthly asset management fee consisting of one-twelfth of the total amount, if any, by which the sum of the total acquisition fees and expenses exceeded 6.0% of the relevant net debt investment amount;
(ii)	during the balance of the Initial Term, zero; and
(iii)	during any period following the Initial Term during which the relevant debt investment was outstanding, the asset management fee consisted of a monthly fee of one-twelfth of 1.0% of the net debt investment amount.

During the year ended December 31, 2012, we acquired one debt related investment pursuant to our arrangement with the Debt Advisor with an investment amount of approximately $22.5 million and paid an acquisition fee of approximately $619,000 to our Advisor, which was fully reallowed to FundCore LLC. We did not acquire any investments pursuant to our arrangement with the Debt Advisor during the years ended December 31, 2013 or 2011.

F-43

12. 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 years ended December 31, 2013, 2012 and 2011 are described in the following table (amounts in thousands, except per share information):

	For the Year Ended December 31,
	2013			2012			2011
Numerator
Loss from continuing operations	$	(9,084	)	$	(14,961	)	$	(43,056	)
Loss from continuing operations attributable to noncontrolling interests		558			1,081			2,997
Loss from continuing operations attributable to common stockholders		(8,526	)		(13,880	)		(40,059	)
Dilutive noncontrolling interests share of loss from continuing operations		(652	)		(1,160	)		(2,959	)
Numerator for diluted earnings per share – adjusted loss from continuing operations		(9,178	)		(15,040	)		(43,018	)
Income (loss) from discontinued operations		65,554			(7,410	)		(21,510	)
(Income) loss from discontinued operations attributable to noncontrolling interests		(4,560	)		(971	)		3,889
Income (loss) from discontinued operations attributable to common stockholders		60,994			(8,381	)		(17,621	)
Dilutive noncontrolling interests share of income (loss) from discontinued operations		4,662			(701	)		(1,301	)
Numerator for diluted earnings per share – adjusted income (loss) from discontinued operations	$	65,656		$	(9,082	)	$	(18,922	)
Denominator
Weighted average shares outstanding-basic		178,196			181,982			183,813
Incremental weighted average shares effect of conversion of OP units		13,736			15,262			13,564
Weighted average shares outstanding-diluted		191,932			197,244			197,377
INCOME (LOSS) PER COMMON SHARE-BASIC AND DILUTED
Net loss from continuing operations	$	(0.05	)	$	(0.08	)	$	(0.22	)
Net income (loss) from discontinued operations		0.34			(0.04	)		(0.09	)
Net income (loss)	$	0.29		$	(0.12	)	$	(0.31	)

13. 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. For example, the physical characteristics of our buildings, the related operating characteristics, the geographic markets, and the type of tenants are inherently different for each of our segments. During the year ended December 31, 2013, we reclassified amounts relating to four properties that we had previously classified within our office segment into our industrial segment for all periods presented.

F-44

The following table sets forth revenue and the components of net operating income (“NOI”) of our segments for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands).

	For the Year Ended December 31,
	Revenues						NOI
	2013		2012		2011		2013		2012		2011
Real property (1)
Office	$	123,838	$	122,264	$	124,438	$	95,618	$	95,625	$	97,551
Industrial (2)		26,108		26,715		26,305		23,893		24,782		24,416
Retail		57,382		57,937		57,007		44,145		45,974		43,985
Debt related investments		10,449		9,409		11,107		10,449		9,409		11,107
Total	$	217,777	$	216,325	$	218,857	$	174,105	$	175,790	$	177,059

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

(2) Amounts reported for our industrial segment for the years ended December 31, 2013, 2012 and 2011 include revenue of approximately $13.0 million, $13.7 million, and $13.6 million, respectively, and NOI of approximately $11.6 million, $12.5 million, and $12.4 million, respectively, relating to four properties that we reclassified from our office segment into our industrial segment during 2013.

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 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 excludes 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 stockholders for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands).

	For the Year Ended December 31,
	2013			2012			2011
Net operating income	$	174,105		$	175,790		$	177,059
Interest and other income (expense)		(153	)		807			2,394
Real estate depreciation and amortization expense		(87,174	)		(91,127	)		(93,407	)
General and administrative expenses		(9,973	)		(7,229	)		(6,826	)
Advisory fees, related party		(15,120	)		(17,659	)		(20,854	)
Acquisition-related expenses		(337	)		(325	)		(610	)
Interest expense		(65,325	)		(69,844	)		(74,406	)
Impairment of real estate property		(2,600	)		—			—
Loss on extinguishment of debt and financing commitments		(2,507	)		(5,374	)		—
Other-than-temporary impairment on securities		—			—			(3,369	)
Provision for loss on debt related investments		—			—			(23,037	)
Discontinued operations, net of taxes		65,554			(7,410	)		(21,510	)
Net (income) loss attributable to noncontrolling interests		(4,002	)		110			6,886
Net (income) loss attributable to common stockholders	$	52,468		$	(22,261	)	$	(57,680	)

F-45

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

	As of December 31,
	2013		2012
Segment assets:
Net investments in real property
Office	$	1,092,351	$	1,245,346
Industrial (1)		229,786		475,525
Retail		602,505		615,897
Debt related investments, net		123,935		187,321
Total segment assets, net		2,048,577		2,524,089
Non-segment assets:
Cash and cash equivalents		24,778		36,872
Other non-segment assets (2)		85,878		98,293
Assets held for sale		146,176		—
Total assets	$	2,305,409	$	2,659,254

(1) Amounts reported for our industrial segment as of December 31, 2013 and December 31, 2012 include net investments in real property of approximately $116.9 million and $125.0 million, respectively, relating to properties that we had previously classified within our office segment.

(2) Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable.

14. INCOME TAXES

We operate in a manner intended to qualify for treatment as a REIT for U.S. federal income tax purposes. As a REIT, we generally will not be subject to federal income taxation at the corporate level to the extent we distribute 100% of our REIT taxable income annually, as defined in the Code, to our stockholders and satisfy other requirements. To continue to qualify as a REIT for federal tax purposes, we must distribute at least 90% of our REIT taxable income annually. No material provisions have been made for federal income taxes in the accompanying financial statements. We had a gross deferred tax asset of approximately $4.4 million and $4.0 million as of December 31, 2013 and 2012, respectively, which is offset by a full valuation allowance. The tax years 2009 through 2013 remain open to examination by the major taxing jurisdictions to which we are subject.

15. COMMITMENTS AND CONTINGENCIES

Environmental Matters

A majority of the properties we acquire are subjected to environmental reviews either by us or the previous owners. In addition, we may incur environmental remediation costs associated with certain land parcels we may acquire in connection with the development of the land. We have acquired certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous materials. We may purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. Due to the uncertainty regarding our exposure to environmental liabilities and the timing and nature of settlement of any such liabilities, we cannot estimate the effect of such potential environmental remediation on our business, financial condition, or results of operations.

F-46

16. QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table presents selected unaudited quarterly financial data for each quarter during the years ended December 31, 2013 and 2012 (amounts in thousands, except per share information). Certain reclassifications have been made to prior period results to conform to the current presentation. The following disclosures exclude the results from discontinued operations.

													For the
	For the Quarter Ended												Year Ended
	March 31,			June 30,			September 30,			December 31,			December 31,
	2013			2013			2013			2013			2013
Rental revenue	$	50,636		$	51,199		$	52,113		$	53,380		$	207,328
Debt related income		2,735			2,615			2,309			2,790			10,449
Total revenue		53,371			53,814			54,422			56,170			217,777
Total operating expenses		(38,199	)		(37,512	)		(38,180	)		(44,985	)		(158,876	)
Other income (expenses)		(16,923	)		(16,599	)		(16,314	)		(18,149	)		(67,985	)
Loss from continuing operations		(1,751	)		(297	)		(72	)		(6,964	)		(9,084	)
Discontinued operations, net of taxes	$	(4,115	)	$	18,754		$	45,403		$	5,512			65,554
Net income (loss)		(5,866	)		18,457			45,331			(1,452	)		56,470
Net (income) loss attributable to noncontrolling interests		499			(1,329	)		(3,257	)		85			(4,002	)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(5,367	)	$	17,128		$	42,074		$	(1,367	)	$	52,468
Net loss per basic and diluted common share
Continuing operations	$	(0.01	)	$	(0.00	)	$	(0.00	)	$	(0.04	)	$	(0.05	)
Discontinued operations	$	(0.02	)	$	0.10		$	0.24		$	0.02		$	0.34
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	(0.03	)	$	0.10		$	0.24		$	(0.02	)	$	0.29

													For the
	For the Quarter Ended												Year Ended
	March 31,			June 30,			September 30,			December 31,			December 31,
	2012			2012			2012			2012			2012
Rental revenue	$	51,953		$	51,282		$	51,590		$	52,091		$	206,916
Debt related income		1,884			1,759			3,019			2,747			9,409
Total revenue		53,837			53,041			54,609			54,838			216,325
Total operating expenses		(40,388	)		(38,900	)		(38,812	)		(38,775	)		(156,875	)
Other income (expenses)		(18,507	)		(19,817	)		(17,398	)		(18,689	)		(74,411	)
Loss from continuing operations		(5,058	)		(5,676	)		(1,601	)		(2,626	)		(14,961	)
Discontinued operations, net of taxes		(4,281	)	$	(3,896	)	$	13,545			(12,778	)		(7,410	)
Net income (loss)		(9,339	)		(9,572	)		11,944			(15,404	)		(22,371	)
Net (income) loss attributable to noncontrolling interests		849			701			(2,680	)		1,240			110
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(8,490	)	$	(8,871	)	$	9,264		$	(14,164	)	$	(22,261	)
Net loss per basic and diluted common share
Continuing operations	$	(0.03	)	$	(0.03	)	$	(0.01	)	$	(0.01	)	$	(0.08	)
Discontinued operations	$	(0.02	)	$	(0.02	)	$	0.06		$	(0.06	)	$	(0.04	)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	(0.05	)	$	(0.05	)	$	0.05		$	(0.07	)	$	(0.12	)

F-47

17. SUBSEQUENT EVENTS

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

Disposition of Real Property

On January 22, 2014, we disposed of a portfolio of 12 industrial properties aggregating 3.4 million square feet to an unrelated third party. The properties were located in the Atlanta, GA, Cincinnati, OH, Central Pennsylvania, Columbus, OH, Dallas, TX, Indianapolis, IN, and Minneapolis, MN markets. We sold the properties, which had a net basis of approximately $139.9 million as of December 31, 2013, for a total sales price of $175.0 million.

F-48

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Dividend Capital Diversified Property Fund Inc.:

Under date of March 10, 2014, we reported on the consolidated balance sheets of Dividend Capital Diversified Property Fund Inc. and subsidiaries (the Company) as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income and loss, equity and cash flows for each of the years in the three-year period ended December 31, 2013. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related consolidated financial statement schedule, Schedule III — Real Estate and Accumulated Depreciation (Schedule III). Schedule III is the responsibility of the Company’s management. Our responsibility is to express an opinion on Schedule III based on our audits.

In our opinion, Schedule III — Real Estate and Accumulated Depreciation, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ KPMG LLP

Denver, Colorado

March 10, 2014

F-49

Dividend Capital Diversified Property Fund Inc.

Schedule III — Real Estate and Accumulated Depreciation

As of December 31, 2013

(dollar amounts in thousands)

					Initial Cost to Company									Gross Amount Carried at December 31, 2013
Property	Market	No. of Buildings	Encumb- rances (1)		Land		Buildings and Improvements (2)		Total Costs		Cost Capitalized or Adjustments Subsequent to Acquisition (4)			Land		Buildings and Improve- ments (2)		Total Costs (3, 4)		Accumulated Depreciation (4)		Acquisition Date		Depreciable Life (years)
Office Properties:
Jay Street	Silicon Valley, CA	3	$	23,500	$	13,859	$	21,974	$	35,833	$	4,063		$	13,859	$	26,037	$	39,896	$	7,139		6/28/06	3-40
Bala Pointe	Philadelphia, PA	1		24,000		10,115		27,516		37,631		3,418			10,115		30,934		41,049		10,430		8/28/06	3-40
40 Boulevard	Chicago, IL	1		8,580		2,611		7,797		10,408		5,163			2,611		12,960		15,571		5,767		1/24/07	1-35
Washington Commons	Chicago, IL	10		21,300		9,019		16,622		25,641		4,634			9,019		21,256		30,275		8,402		2/1/07	2-40
Shackleford	Little Rock, AR	1		13,650		2,900		18,792		21,692		323			2,900		19,115		22,015		4,523		3/20/07	5-40
Joyce Blvd	Fayetteville, AR	1		—		2,699		8,996		11,695		—			2,699		8,996		11,695		2,188		9/28/07	10-40
DeGuigne	Silicon Valley, CA	1		7,498		5,841		13,861		19,702		1,038			5,841		14,899		20,740		5,318		11/21/07	5-40
Eden Prairie (ATK)	Minneapolis/St Paul, MN	1		—		3,538		25,865		29,403		38			3,538		25,903		29,441		4,908		10/3/08	15-40
Austin-Mueller Healthcare	Austin, TX	1		19,786		2,663		42,315		44,978		—			2,663		42,315		44,978		8,108		12/23/08	11-40
1300 Connecticut	Washington, DC	1		46,421		25,177		41,250		66,427		2,928			25,177		44,178		69,355		14,373		3/10/09	5-40
Campus Road Office Center	Princeton, NJ	1		34,227		5,302		45,773		51,075		88			5,302		45,861		51,163		7,690		11/3/09	5-40
Preston Sherry Plaza	Dallas, TX	1		22,807		7,500		22,303		29,803		4,688			7,500		26,991		34,491		7,746		12/16/09	3-40
Park Place	Dallas, TX	1		—		4,075		19,625		23,700		5,383			4,075		25,008		29,083		8,895		12/16/09	3-40
Doolittle Drive	Los Angeles, CA	1		10,243		9,700		13,142		22,842		410			9,700		13,552		23,252		7,431		6/25/10	4-40
South Havana Street	Denver, CO	1		—		3,925		8,607		12,532		2			3,925		8,609		12,534		6,072		6/25/10	4-40
Sheila Street	Los Angeles, CA	1		8,907		6,150		17,536		23,686		(1	)		6,150		17,535		23,685		4,647		6/25/10	10-40
Corporate Center Drive	Los Angeles, CA	1		12,469		6,700		21,303		28,003		1,957			6,700		23,260		29,960		11,238		6/25/10	10-40
Harborside Plaza	Northern New Jersey	1		114,424		16,800		193,742		210,542		1,415			16,800		195,157		211,957		42,153		6/25/10	7-40
Colshire Drive	Washington, DC	1		—		21,100		157,983		179,083		(5	)		21,100		157,978		179,078		38,513		6/25/10	7-40
Sylvan Way	Northern New Jersey	1		16,344		5,200		32,439		37,639		(1	)		5,200		32,438		37,638		4,794		6/25/10	13-40
Sunset Hills Road	Washington, DC	1		13,984		2,700		31,915		34,615		36			2,700		31,951		34,651		9,949		6/25/10	5-40
Shadelands Drive	East Bay, CA	1		—		2,500		3,562		6,062		33			2,500		3,595		6,095		3,416		6/25/10	3-40
Sybase Drive	East Bay, CA	1		—		8,400		136,797		145,197		45			8,400		136,842		145,242		34,463		6/25/10	7-40
1600 SW 80th Street	Miami, FL	1		19,372		12,700		35,483		48,183		49			12,700		35,532		48,232		6,247		6/25/10	12-40
Connection Drive	Dallas, TX	1		23,870		3,110		50,121		53,231		112			3,110		50,233		53,343		9,233		6/25/10	9-40
655 Montgomery	San Francisco, CA	1		57,827		32,632		82,195		114,827		1,486			32,632		83,681		116,313		1,089		11/7/13	1-40
Total Office Properties		37		499,209		226,916		1,097,514		1,324,430		37,302			226,916		1,134,816		1,361,732		274,732

F-50

					Initial Cost to Company									Gross Amount Carried at December 31, 2013
Property	Market	No. of Buildings	Encumb- rances (1)		Land		Buildings and Improvements (2)		Total Costs		Cost Capitalized or Adjustments Subsequent to Acquisition (4)			Land		Buildings and Improvements (2)		Total Costs (3, 4)		Accumulated Depreciation (4)		Acquisition Date		Depreciable Life (years)
Industrial Properties:
Lundy Avenue	Silicon Valley, CA	3	$	14,250	$	5,982	$	15,459	$	21,441	$	(2,452	)	$	5,117	$	13,872	$	18,989	$	5,752		9/28/06	19-40
Shiloh Road	Dallas, TX	3		22,700		5,162		30,192		35,354		79			5,162		30,271		35,433		9,389		12/21/06	10-40
Rickenbacker	Columbus, OH	1		6,926		1,249		13,308		14,557		699			1,249		14,007		15,256		4,562		10/16/06	3-40
Park West Q	Cincinnati, OH	1		5,164		1,653		9,597		11,250		805			1,653		10,402		12,055		3,872		10/16/06	5-40
Eagle Creek East	Minneapolis/St Paul, MN	1		4,298		1,644		7,676		9,320		392			1,644		8,068		9,712		2,827		10/16/06	5-40
Park West L	Cincinnati, OH	1		3,587		902		7,393		8,295		333			902		7,726		8,628		2,380		10/31/06	2-40
Eagle Creek West	Minneapolis/St Paul, MN	1		4,869		1,910		8,474		10,384		506			1,910		8,980		10,890		2,801		10/31/06	3-40
Minnesota Valley III	Minneapolis/St Paul, MN	1		6,091		2,223		12,462		14,685		1,107			2,223		13,569		15,792		4,223		10/31/06	10-40
Plainfield III	Indianapolis, IN	1		12,000		2,101		18,424		20,525		2,469			2,101		20,893		22,994		5,769		3/28/07	9-40
Patriot Drive I	Dallas, TX	1		4,625		1,034		5,548		6,582		1,186			1,034		6,734		7,768		2,003		3/28/07	3-40
Patriot Drive II	Dallas, TX	1		18,375		3,166		23,072		26,238		5,137			3,166		28,209		31,375		7,645		3/28/07	5-40
Creekside V	Columbus, OH	1		4,725		764		5,628		6,392		18			764		5,646		6,410		2,029		6/15/07	8-40
Greenwood Parkway	Atlanta, GA	1		—		2,040		20,830		22,870		402			2,040		21,232		23,272		6,098		10/29/07	10-40
Westport	Central PA	1		9,767		2,376		27,081		29,457		7			2,376		27,088		29,464		6,417		1/9/08	10-40
6900 Riverport	Louisville, KY	1		1,645		751		4,131		4,882		103			751		4,234		4,985		981		9/17/08	10-40
7000 Riverport	Louisville, KY	1		2,593		1,124		6,821		7,945		429			1,124		7,250		8,374		1,971		9/17/08	3-40
7050 Riverport	Louisville, KY	1		1,424		672		3,862		4,534		252			672		4,114		4,786		1,254		9/17/08	5-40
7201 Riverport	Louisville, KY	1		2,636		1,130		6,614		7,744		225			1,130		6,839		7,969		1,769		9/17/08	3-40
East Maple Avenue	Los Angeles, CA	1		16,924		6,400		71,761		78,161		(1	)		6,400		71,760		78,160		7,063		6/25/10	16-40
N. Glenville Drive	Dallas, TX	1		3,563		1,580		6,610		8,190		(1	)		1,580		6,609		8,189		1,709		6/25/10	6-40
South Columbia	Central Kentucky	1		11,579		730		25,092		25,822		(2	)		730		25,090		25,820		8,682		6/25/10	4-40
Columbia Road	Cleveland, OH	1		8,684		2,525		17,337		19,862		3,943			2,525		21,280		23,805		3,423		6/25/10	6-40
200 Corporate Drive	Chicago, IL	1		8,907		925		18,937		19,862		798			925		19,735		20,660		4,097		6/25/10	8-40
Vickery Drive	Houston, TX	1		18,537		3,700		37,639		41,339		(1	)		3,700		37,638		41,338		7,514		6/25/10	8-40
East 28th Avenue	Denver, CO	1		2,794		800		5,431		6,231		1			800		5,432		6,232		1,348		6/25/10	8-40
Total Industrial Properties		29		196,663		52,543		409,379		461,922		16,434			51,678		426,678		478,356		105,578

F-51

					Initial Cost to Company									Gross Amount Carried at December 31, 2013
Property	Market	No. of Buildings	Encumb- rances (1)		Land		Buildings and Improvements (2)		Total Costs		Cost Capitalized or Adjustments Subsequent to Acquisition (4)			Land		Buildings and Improvements (2)		Total Costs (3, 4)		Accumulated Depreciation (4)		Acquisition Date		Depreciable Life (years)
Retail Properties:
Bandera Road	San Antonio, TX	1	$	21,500	$	8,221	$	23,472	$	31,693	$	367		$	8,221	$	23,839	$	32,060	$	5,883		2/1/07		5-45
Beaver Creek	Raleigh, NC	1		26,200		13,017		31,375		44,392		792			13,017		32,167		45,184		7,386		5/11/07		3-40
Centerton Square	Philadelphia, PA	1		67,800		26,488		76,838		103,326		831			26,488		77,669		104,157		19,359		5/11/07		4-57
Mt. Nebo	Pittsburgh, PA	1		16,000		9,371		16,214		25,585		(1,117	)		9,502		14,966		24,468		1,984		5/11/07		4-40
CB Square	Jacksonville, FL	1		—		3,768		16,660		20,428		(929	)		3,768		15,731		19,499		3,149		6/27/07		7-40
Braintree	Boston	1		—		9,270		31,266		40,536		520			9,270		31,786		41,056		8,328		8/1/07		5-40
Holbrook	Boston	1		—		4,590		14,724		19,314		191			4,590		14,915		19,505		4,511		8/1/07		5-40
Kingston	Boston	1		10,574		8,580		12,494		21,074		742			8,580		13,236		21,816		4,109		8/1/07		5-40
Manomet	Boston	1		—		1,890		6,480		8,370		353			1,890		6,833		8,723		1,949		8/1/07		5-40
Orleans	Boston	1		14,070		8,780		23,683		32,463		178			8,780		23,861		32,641		5,321		8/1/07		4-40
Sandwich	Boston	1		15,825		7,380		25,778		33,158		65			7,380		25,843		33,223		5,515		8/1/07		3-40
Wareham	Boston	1		24,400		13,130		27,030		40,160		1,658			13,130		28,688		41,818		6,904		8/1/07		2-40
Abington	Boston	1		4,817		14,396		594		14,990		—			14,396		594		14,990		497		8/1/07		8-63
Hyannis	Boston	1		4,770		10,405		917		11,322		—			10,405		917		11,322		319		8/1/07		18-68
Rockland 201 Market	Boston	1		—		2,417		86		2,503		—			2,417		86		2,503		86		8/1/07		35
Mansfield	Boston	1		8,600		5,340		16,490		21,830		—			5,340		16,490		21,830		3,247		8/1/07		16-86
Meriden	Boston	1		—		6,560		22,013		28,573		—			6,560		22,013		28,573		4,570		8/1/07		13-43
Weymouth	Boston	1		—		5,170		19,396		24,566		(257	)		4,913		19,396		24,309		4,958		8/1/07		19-40
Whitman 475 Bedford Street	Boston	1		7,459		3,610		11,682		15,292		—			3,610		11,682		15,292		2,377		8/1/07		16-56
Brockton Eastway Plaza	Boston	1		—		2,530		2,074		4,604		214			2,530		2,288		4,818		1,076		8/1/07		3-40
Cohasset	Boston	1		—		3,920		7,765		11,685		433			3,920		8,198		12,118		2,165		8/1/07		3-40
Cranston	Boston	1		—		1,810		4,233		6,043		109			1,810		4,342		6,152		1,884		8/1/07		2-40
Hanover	Boston	1		—		1,490		5,084		6,574		388			1,490		5,472		6,962		1,394		8/1/07		5-40
Rockland 360-372 Market	Boston	1		—		1,200		2,437		3,637		—			1,200		2,437		3,637		944		8/1/07		6-40
Brockton Westgate Plaza	Boston	1		—		3,650		6,507		10,157		5			3,650		6,512		10,162		2,066		8/1/07		11-40
Harwich	Boston	1		5,896		5,290		8,814		14,104		—			5,290		8,814		14,104		1,696		10/18/07		21-40
New Bedford	Boston	1		8,237		3,790		11,152		14,942		—			3,790		11,152		14,942		2,055		10/18/07		22-40
Norwell	Boston	1		6,061		5,850		14,547		20,397		—			5,850		14,547		20,397		2,868		10/18/07		15-65
Greater DC Retail	Washington, DC	1		38,926		19,779		42,515		62,294		330			19,781		42,843		62,624		12,866		4/6/09		5-40
Springdale	Boston	1		—		8,850		—		8,850		3,744			11,867		727		12,594		187		2/18/11		6-62

F-52

							Initial Cost to Company								Gross Amount Carried at December 31, 2013
Property	Market		No. of Buildings		Encumb- rances (1)		Land		Buildings and Improvements (2)		Total Costs		Cost Capitalized or Adjustments Subsequent to Acquisition (4)		Land		Buildings and Improvements (2)		Total Costs (3, 4)		Accumulated Depreciation (4)		Acquisition Date		Depreciable Life (years)
Saugus		Boston		1		—		3,783		9,677		13,460		100		3,783		9,777		13,560		2,884		3/17/11		3-40
Total Retail Properties				31		281,135		224,325		491,997		716,322		8,717		227,218		497,821		725,039		122,537
Land held
Inverness land		Denver, CO		0		—		5,200		0		5,200		0		5,200		153		5,353		—		6/25/10		N/A
Total land held				0		—		5,200		0		5,200		0		5,200		153		5,353		—
Grand Total				97		977,007	$	508,984	$	1,998,890	$	2,507,874	$	62,453	$	511,013	$	2,059,467	$	2,570,480	$	502,847

(1) Encumbrances represents mortgage debt principal balances encumbering each property as of December 31, 2013.

(2) Building and improvements include intangible lease assets.

(3) As of December 31, 2013, the aggregate cost for federal income tax purposes of investments in real property was approximately $2.2 billion (unaudited).

(4) Amount is presented net of impairments and other write-offs of tenant-related assets that were recorded at acquisition as part of our purchase price accounting. Such write-offs are the results of lease expirations and terminations.

F-53

The following table summarizes activity for real estate and accumulated depreciation for the years ended December 31, 2013, 2012, and 2011. The balance of investments in real estate at the end of the year ended December 31, 2013 includes amounts related to properties classified as held for sale (amounts in thousands):

	For the Year Ended December 31,
	2013			2012			2011
Investments in real estate:
Balance at the beginning of the year	$	2,819,550		$	2,724,684		$	2,858,307
Acquisitions of operating properties		114,827			128,258			21,825
Improvements		26,680			18,405			18,944
Basis of operating properties disposed of		(387,977	)		(46,097	)		(150,892	)
Impairment of real property		(2,600	)		(5,700	)		(23,500	)
Balance at the end of the year	$	2,570,480		$	2,819,550		$	2,724,684
Accumulated depreciation:
Balance at the beginning of the year	$	482,782		$	361,357		$	247,608
Net additions charged to costs and expenses		20,065			121,425			113,749
Balance at the end of the year	$	502,847		$	482,782		$	361,357

F-54

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on March 10, 2014.

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.
By:	/S/    JEFFREY L. JOHNSON
Name:	Jeffrey L. Johnson
Title:	Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated and on March 10, 2014.

Signature	Title
/S/    JEFFREY L. JOHNSON         Jeffrey L. Johnson	Chief Executive Officer (principal executive officer)
/S/    RICHARD D. KINCAID         Richard D. Kincaid	Chairman of the Board and Director
/S/    CHARLES B. DUKE         Charles B. Duke	Director
/S/    DANIEL J. SULLIVAN         Daniel J. Sullivan	Director
/S/    JOHN P. WOODBERRY         John P. Woodberry	Director
/S/    JOHN A. BLUMBERG         John A. Blumberg	Director
/S/    M. KIRK SCOTT         M. Kirk Scott	Chief Financial Officer and Treasurer (principal financial officer and principal accounting officer)

EX-10.17

Exhibit 10.17

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

INDEPENDENT DIRECTOR RESTRICTED STOCK UNIT NOTICE

FOR

[Insert name of Recipient]

This Notice evidences the award of restricted stock units (each, a “Unit,” and collectively, the “Units”) of Dividend Capital Diversified Property Fund Inc., a Maryland corporation (the “Company”), that have been granted to you pursuant to the Dividend Capital Diversified Property Fund Inc. Amended and Restated Equity Incentive Plan (the “Plan”) and conditioned upon your agreement to the terms of the attached Restricted Stock Unit Agreement (the “Agreement”). This Notice constitutes part of and is subject to the terms and provisions of the Agreement and the Plan, which are incorporated by reference herein. Each whole Unit is equivalent in value to one Class I share of the Company’s Common Stock (each, a “Class I Share” and collectively, the “Class I Shares”) and represents the Company’s commitment to issue one Class I Share at a future date, subject to the terms of the Agreement and the Plan. The Units are credited to a separate account maintained for you on the books and records of the Company (the “Account”). All amounts credited to the Account will continue for all purposes to be part of the general assets of the Company.

Date of Grant:             

Number of Units:             

Vesting Schedule: All of the Units are nonvested and forfeitable as of the Date of Grant. So long as your Service with the Company is continuous from the Date of Grant through the applicable date upon which vesting is scheduled to occur, all of the Units shall vest on the earliest of the following: (i) the first anniversary of the Date of Grant; (ii) the day immediately before the first annual meeting of stockholders of the Company at which members of the Board are to be elected that occurs after the Date of Grant; (iii) the date of your termination of Service due to death or “permanent and total disability” (as defined under Section 22(e)(3) of the Code); or (iv) immediately before and contingent upon the occurrence of a Change in Control.

Dividend Capital Diversified Property Fund Inc. Date

I acknowledge that I have carefully read the Agreement, the Plan and the prospectus for the Plan. I agree to be bound by all of the provisions set forth in those documents. I also consent to electronic delivery of all notices or other information with respect to the Units or the Company.

Signature of Participant Date

DIVIDEND CAPITAL DIVERSIFIED PROPERTY FUND INC.

INDEPENDENT DIRECTOR RESTRICTED STOCK UNIT AGREEMENT

1. Terminology. Unless otherwise provided in this Agreement, capitalized terms used herein are defined in the Glossary at the end of this Agreement, the Notice, or the Plan.

2. Vesting. All of the Units are nonvested and forfeitable as of the Date of Grant. So long as your Service is continuous from the Date of Grant through the applicable date upon which vesting is scheduled to occur, the Units will become vested and nonforfeitable in accordance with the vesting schedule set forth in the Notice. Except for the circumstances, if any, described in the Notice, none of the Units will become vested and nonforfeitable after your Service ceases.

3. Termination of Service. Unless otherwise provided in the Notice, if your Service with the Company ceases for any reason, all Units that are not then vested and nonforfeitable will be forfeited to the Company immediately and automatically upon such cessation without payment of any consideration therefor and you will have no further right, title or interest in or to such Units or the underlying Class I Shares.

4. Restrictions on Transfer. Neither this Agreement nor any of the Units may be assigned, transferred, pledged, hypothecated or disposed of in any way, whether by operation of law or otherwise, and the Units shall not be subject to execution, attachment or similar process. All rights with respect to this Agreement and the Units shall be exercisable during your lifetime only by you or your guardian or legal representative. Notwithstanding the foregoing, the Units may be transferred upon your death by beneficiary designation, last will and testament or under the laws of descent and distribution.

5. Dividend Equivalent Payments. If the Board declares and the Company pays a cash dividend on Class I Shares for any period in which your Units are unpaid and outstanding (regardless of whether such Units are then vested and including any period during which settlement of the Units is deferred pursuant to a valid Deferral Election), you will be entitled to Dividend Equivalents on the dividend payment date established by the Company with respect to that cash dividend equal to the cash dividends that would have been payable on the same number of Class I Shares as the number of whole and fractional Units subject to this Agreement and credited to your account had such Class I Shares been outstanding during the same portion of such period as the Units were unpaid and outstanding. Any such Dividend Equivalents will be paid in the form of additional Units (including, as applicable, fractional Units) being credited to your account, will be subject to the same terms and vesting as the underlying Units with respect to which the Dividend Equivalents are paid, and will be paid at the same time as the underlying Units with respect to which the Dividend Equivalents are paid. The number of additional Units credited to your account as Dividend Equivalents on any dividend payment date with respect to any period for which a dividend is paid shall be determined by dividing (1) the aggregate cash dividend that would have been payable on the same number of Class I Shares as the number of Units subject to this Agreement had such Class I Shares been outstanding during the same portion of such period as the Units were unpaid and outstanding, by (2) the per-share Class I NAV determined on the dividend payment date. For the avoidance of doubt, any additional Units that are credited to your account as Dividend Equivalents shall thereafter, until their settlement or forfeiture, be treated as unpaid and outstanding Units against which Dividend Equivalents may accrue on subsequent dividend payment dates.

6. Settlement of Units

(a) Manner of Settlement. You are not required to make any monetary payment (other than applicable tax withholding, if required by law) as a condition to settlement of the Units. The Company will issue to you, in settlement of your Units, the number of Class I Shares that equals the number of Units that become vested, and such vested Units will terminate and cease to be outstanding upon such issuance of the Class I Shares. Upon issuance of such Class I Shares, the Company will determine the form of delivery (e.g., a stock certificate or electronic entry evidencing such shares) and may deliver such shares on your behalf electronically to the Company’s designated stock plan administrator or such other broker-dealer as the Company may choose at its sole discretion, within reason. As a condition to the settlement of the Units, the Company may require you to satisfy any qualifications that may be necessary or appropriate, to evidence compliance with any applicable law or regulation, and to make any representation or warranty with respect thereto as may be requested by the Company.

(b) Timing of Settlement. Except as otherwise provided in a valid deferral election made by you in accordance with Treasury Regulation Section 1.409A-2 and acceptable to the Company (a “Deferral Election”), your Units will be settled by the Company, as described herein, within thirty (30) days after the date that the Units become vested and nonforfeitable. However, if a scheduled issuance date falls on a Saturday, Sunday or federal holiday, such issuance date shall instead fall on the next following day that the principal executive offices of the Company are open for business. In all cases absent a Deferral Election, the issuance and delivery of shares under this Agreement is intended to comply with Treasury Regulation Section 1.409A-1(b)(4) and shall be construed and administered in such a manner.

(c) Share Transfer Restrictions After Settlement. The Class I Shares received by you pursuant to this Agreement upon settlement of your Units shall be eligible for redemption under the Company’s Share Redemption Program, subject to (i) a requirement that you hold at least $30,000 in Class I Shares, based on the then-current Class I NAV and (ii) applicable restrictions under the Company’s Insider Trading Policy. Transfers outside of the Share Redemption Program will be permitted on a case-by-case basis if approved by the Board and such transfers must comply with applicable laws. Transfer restrictions will be lifted in the event you cease to be a director of the Company for any reason.

7. Adjustments for Corporate Transactions and Other Events

(a) Stock Dividend, Stock Split and Reverse Stock Split. Upon a stock dividend of, or stock split or reverse stock split affecting, the Class I Shares, the number of outstanding Units shall, without further action of the Administrator, be adjusted to reflect such event. Adjustments under this paragraph will be made by the Administrator, whose determination as to what adjustments, if any, will be made and the extent thereof will be final, binding and conclusive.

(b) Merger, Consolidation and Other Events. If the Company shall be the surviving or resulting corporation in any merger or consolidation and the Class I Shares shall be converted into other securities, the Units shall pertain to and apply to the securities to which a holder of the number of Class I Shares subject to the Units would have been entitled. If the stockholders of the Company receive by reason of any distribution in total or partial liquidation or pursuant to any merger of the Company or acquisition of its assets, securities of another entity or other

3

property (including cash), then the rights of the Company under this Agreement shall inure to the benefit of the Company’s successor, and this Agreement shall apply to the securities or other property (including cash) to which a holder of the number of Class I Shares subject to the Units would have been entitled, in the same manner and to the same extent as the Units. Nothing in this Section 7 shall be construed as limiting or modifying the authority and discretion reserved to the Administrator to take any action with respect to the Units at such time and on such terms and conditions as the Administrator determines in its absolute direction to be desirable pursuant to Section 12.6 of the Plan.

8. Non-Guarantee of Directorship. Nothing in the Plan or this Agreement shall constitute or be evidence of any agreement or understanding, express or implied, that the Company will retain you as a member of the Board for any period of time or be construed as a limitation on the right of the stockholders to remove you from the Board in accordance with the Company’s charter or bylaws.

9. Rights as Stockholder. You shall not have any of the rights of a stockholder with respect to any shares of Common Stock that may be issued in settlement of the Units until such shares of Common Stock have been issued to you.

10. The Company’s Rights. The existence of the Units shall not affect in any way the right or power of the Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations, or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company’s assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

11. Restrictions on Issuance of Shares. The issuance of Class I Shares upon settlement of the Units shall be subject to and in compliance with all applicable requirements of federal, state, or foreign law with respect to such securities. No Class I Shares may be issued hereunder if the issuance of such shares would constitute a violation of any applicable federal, state, or foreign securities laws or other law or regulations or the requirements of any stock exchange or market system upon which the Common Stock may then be listed. The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any, deemed by the Company’s legal counsel to be necessary to the lawful issuance of any shares subject to the Units shall relieve the Company of any liability in respect of the failure to issue such shares as to which such requisite authority shall not have been obtained. If necessary to satisfy any law, regulation, rule or administrative decision with respect to the Company’s ongoing operations, including any ongoing offering of Common Stock, the Company shall have authority to replace or modify the terms of any vested or unvested Units with a form of compensation that is, as close as reasonably practicable as determined in the Administrator’s discretion, economically equivalent as of the date of such replacement or modification, taking into consideration any valid Deferral Elections in effect with respect to such Units.

12. Notices. All notices and other communications made or given pursuant to this Agreement shall be given in writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by the Company to you, five (5) days after deposit in the United States

4

mail, postage prepaid, addressed to you at the last address you provided to the Company, or in the case of notices delivered to the Company by you, addressed to the Company’s Secretary at 518 17th Street, 17th Floor, Denver, CO 80202, or if the Company should move its principal office, to such principal office or, in either case, if the receiving party consents in advance, transmitted and received via telecopy or via such other electronic transmission mechanism as may be available to the parties. Notwithstanding the foregoing, the Company may, in its sole discretion, decide to deliver any documents related to participation in the Plan and this award of Units by electronic means or to request your consent to participate in the Plan or accept this award of Units by electronic means. You hereby consent to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

13. Entire Agreement. This Agreement, together with the relevant Notice, the Plan, and any Deferral Election, contain the entire agreement between the parties with respect to the Units granted hereunder. Any oral or written agreements, representations, warranties, written inducements, or other communications made prior to the execution of this Agreement with respect to the Units granted hereunder shall be void and ineffective for all purposes.

14. Amendment. This Agreement may be amended from time to time by the Administrator in its discretion; provided, however, that, except as permitted otherwise pursuant to Section 11 of this Agreement or the Plan, this Agreement may not be modified in a manner that would have a materially adverse effect on the Units as determined in the discretion of the Administrator without your written consent.

15. 409A Savings Clause. This Agreement is intended to comply with Section 409A of the Code or an exemption thereunder and shall be construed and interpreted in a manner that is consistent with the requirements for avoiding additional taxes or penalties under Section 409A of the Code. The preceding provisions shall not be construed as a guarantee by the Company of any particular tax effect of the Units and in no event shall the Company be liable for all or any portion of any taxes, penalties, interest or other expenses that may be incurred by you on account of non-compliance with Section 409A of the Code. Notwithstanding the provisions of Section 6 of this Agreement, if you are a “specified employee” (as defined under Section 409A of the Code and determined in good faith by the Administrator) when you incur a separation from Service (within the meaning of Section 409A of the Code) and your Units are to be settled on account of such separation from Service, settlement of your Units will be made within fifteen (15) days after the end of the six-month period beginning on the date of your separation from Service (or, if earlier, within fifteen (15) days after the appointment of the personal representative or executor of your estate following your death), but only if such delay in settlement is necessary to avoid the imposition of additional taxation on you in respect of such settlement under Section 409A of the Code. Each installment of Units that vests under this Agreement is intended to constitute a “separate payment” for purposes of Section 409A of the Code and Treasury Regulation Section 1.409A-2(b)(2). For purposes of Section 409A of the Code, the crediting and/or payment of Dividend Equivalents under Section 5 of this Agreement shall be construed as earnings and the time and form of payment of such Dividend Equivalents shall be treated separately from the time and form of payment of the underlying Units.

5

16. No Obligation to Minimize Taxes. The Company has no duty or obligation to minimize the tax consequences to you of this award of Units and shall not be liable to you for any adverse tax consequences to you arising in connection with this award. You are hereby advised to consult with your own personal tax, financial and/or legal advisors regarding the tax consequences of this award and by signing the Notice, and you have agreed that you have done so or knowingly and voluntarily declined to do so.

17. Conformity with Plan. This Agreement is intended to conform in all respects with, and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is available upon request to the Company’s Secretary at 518 17th Street, 17th Floor, Denver, CO 80202.

18. No Trust or Fund Created. None of this Agreement, the grant of Units hereunder, the deferral of settlement of the Units pursuant to a Deferral Election, or the issuance of shares of Common Stock upon settlement of the Units shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company and you or any other person. To the extent that you or any other person acquires a right to receive payments from the Company pursuant to this Agreement, such right shall be no greater than the right of any unsecured general creditor of the Company.

19. Law Governing. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Maryland (without reference to the conflict of laws rules or principles thereof).

20. Arbitration. To the extent that a dispute arises between the parties under this Agreement, the parties agree to attempt to settle such dispute through non-binding mediation to be held for a maximum of one (1) day administered by the Judicial Arbiter Group (“JAG”), before a mutually-agreed representative of JAG, in accordance with its commercial mediation rules then in effect. If such dispute cannot be resolved through mediation, it shall be resolved by binding arbitration before a panel of three (3) arbitrators of JAG (selected by the JAG mediator) under the commercial arbitration rules then in effect. Each party shall bear its own legal, accounting and other similar fees incurred in connection with such arbitration; provided that (a) the losing party shall bear the costs of such arbitration and (b) the arbitrators shall award legal fees to the prevailing party in such dispute. Such arbitration and determination shall be final and binding on the parties and judgment may be entered upon such determination in any court having jurisdiction thereof (and such judgment enforced, if necessary, through judicial proceedings). It is understood and agreed that the arbitrators shall be specifically empowered to designate and award any remedy available at law or in equity, including specific performance. The parties agree that any such mediation or arbitration shall be conducted in Denver, Colorado. This arbitration provision is in no way intended to reduce or modify the sole and absolute discretion afforded to the Administrator under the Plan.

21. Headings. Section, paragraph and other headings and captions are provided solely as a convenience to facilitate reference. Such headings and captions shall not be deemed in any way material or relevant to the construction, meaning or interpretation of this Agreement or any term or provision hereof.

6

22. Electronic Delivery of Documents. By your signing the Notice, you (i) consent to the electronic delivery of this Agreement, all information with respect to the Plan and the Units, and any reports of the Company provided generally to the Company’s stockholders; (ii) acknowledge that you may receive from the Company a paper copy of any documents delivered electronically at no cost to you by contacting the Company by telephone or in writing; (iii) further acknowledge that you may revoke your consent to the electronic delivery of documents at any time by notifying the Company of such revoked consent by telephone, postal service or electronic mail; and (iv) further acknowledge that you understand that you are not required to consent to electronic delivery of documents.

{Glossary begins on next page}

7

GLOSSARY

(a) “Administrator” means the Board or, if the Board so delegates its authority, the Compensation Committee.

(b) “Affiliate” or “Affiliated” means, as to any individual, corporation, partnership, trust, limited liability company or other legal entity (i) any person or entity directly or indirectly through one or more intermediaries controlling, controlled by or under common control with another person or entity; (ii) any person or entity directly or indirectly owning, controlling, or holding with power to vote ten percent (10%) or more of the outstanding voting securities of another person or entity; (iii) any officer, director, general partner or trustee of such person or entity; (iv) any person ten percent (10%) or more of whose outstanding voting securities are directly or indirectly owned, controlled or held, with power to vote, by such other person; and (v) if such other person or entity is an officer, director, general partner or trustee of a person or entity, the person or entity for which such person or entity acts in any such capacity.

(c) “Agreement” means this document, as amended from time to time, together with the Notice and the Plan which are incorporated herein by reference.

(d) “Beneficial Owner” has the meaning given in Rule 13d-3 under the Exchange Act.

(e) “Board” means the Board of Directors of the Company.

(f) “Change in Control” means any of the following transactions:

(i) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities (a “Controlling Interest”), excluding (A) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company, or (B) any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (iii) below; or

(ii) a change in the composition of the Board over a period of thirty-six (36) consecutive months (or less) such that a majority of the Board members (rounded up to the nearest whole number) ceases, by reason of one or more proxy contests for the election of Board members, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least two-thirds (2/3) of the Board members described in clause (A) who were still in office at the time such election or nomination was approved by the Board; or

(iii) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other entity, other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent

8

thereof) at least fifty percent (50%) of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) representing fifty percent (50%) or more of the combined voting power of the Company’s then outstanding securities; or

(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least fifty percent (50%) of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, a Change in Control shall not be deemed to have occurred (I) solely as the result of a public offering or (II) by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

(g) Class I NAV” means the net asset value per “Class I Share, as determined pursuant to the Company’s valuation policies and procedures, as they may be amended from time to time.

(h) “Class I Share” means a Class I share of Common Stock.

(i) “Code” means the Internal Revenue Code of 1986, as amended.

(j) “Common Stock” means the common stock of the Company, par value $0.01 per share, issued or authorized to be issued in the future, including unclassified shares of common stock as well as Class A, Class W and Class I shares of common stock, but excluding any preferred stock and any warrants, options or other rights to purchase Common Stock.

(k) “Company” means Dividend Capital Diversified Property Fund Inc., a Maryland corporation.

(l) “Date of Grant” means the effective date of a grant of Units made to you as set forth in the relevant Notice.

(m) “Deferral Election” means a valid deferral election made by you in accordance with Treasury Regulation Section 1.409A-2 and in such form acceptable to the Company in its discretion.

(n) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

9

(o) “Fair Market Value” has the meaning set forth in the Plan.

(p) “Insider Trading Policy” means the Company’s insider trading policy, as it may be amended from time to time.

(q) “Notice” means the statement, letter or other written notification provided to you by the Company setting forth the terms of a grant of Units made to you.

(r) “Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its Affiliates, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(s) “Plan” means the Dividend Capital Diversified Property Fund Inc. Amended and Restated Equity Incentive Plan, as it may be amended from time to time.

(t) “Service” means your service as a member of the Board.

(u) “Share Redemption Program” means the Company’s Class A, W and I Share Redemption Program, as it may be amended from time to time.

(v) “Unit” means a unit, the value of which shall always be equal to the value of one Class I Share.

(w) “You” or “Your” means the recipient of the Units as reflected on the applicable Notice. Whenever the word “you” or “your” is used in any provision of this Agreement under circumstances where the provision should logically be construed, as determined by the Administrator, to apply to the estate, personal representative, or beneficiary to whom the Units may be transferred by beneficiary designation, last will and testament or the laws of descent and distribution, the words “you” and “your” shall be deemed to include such person.

{End of Agreement}

10

EX-21

Exhibit 21

Subsidiaries of the Registrant

DPF Entity Name	State of Formation
Dividend Capital Diversified Property Fund Inc.	Maryland
DCTRT Springing Member Inc.	Delaware
Dividend Capital Total Realty Operating Partnership LP	Delaware
DCTRT Leasing Corp. (TRS)	Delaware
DCTRT Greenwood Leasing LLC	Delaware
TRS NOIP Mezz Holdco LLC	Delaware
TRS NOIP Real Estate Holdco	Delaware
TRT NOIP Cottonwood - Miltipas GP LLC	Delaware
TRT NOIP Cottonwood - Miltipas LP	Delaware
TRT NOIP Rue Ferrari - San Jose GP LLC	Delaware
TRT NOIP Rue Ferrari - San Jose LP	Delaware
TRT NOIP Waterview - Dallas LP LLC	Delaware
TRT NOIP Waterview - Dallas GP LLC	Delaware
TRT NOIP Waterview - Dallas LP	Delaware
TRT NOIP GT Lease Holdco	Delaware
TRT NOIP Apache Trail - Terrell GP LLC	Delaware
TRT NOIP Apache Trail - Terrell LP	Delaware
TRT NOIP GT LLC	Delaware
TRT NOIP Salem Church - York LLC	Delaware
TRT NOIP King Mill - McDonough LLC	Delaware
TRT NOIP Business Center - Stockbridge LLC	Delaware
TRT NOIP Corporate Drive - DeKalb LLC	Delaware
TRT NOIP Creekside - Lockburne LLC	Delaware
TRS Interest Holdco I LLC	Delaware
DPF TRS Holdings I LLC	Delaware
DCTRT Securities Holdco LLC	Delaware
TRT Lending LLC	Delaware
Greensboro Park 8180-8200, LLC	Delaware
TRT Lending Subsidiary I Holdco LLC	Delaware
TRT Lending Subsidiary I LLC	Delaware
TRT Lending Subsidiary II Holdco LLC	Delaware
TRT Lending Subsidiary II LLC	Delaware
TRT Comerica Mezz LLC	Delaware
1717 Dallas Partners, LLC	Delaware
DPF 1500 Wilson Mezz LLC	Delaware
DCTRT Real Estate Holdco LLC	Delaware
TRT Acquisitions LLC	Delaware
TRT Services LLC	Delaware
Mibarev Development I, LLC	Georgia
DCTRT Bala Pointe GP LLC	Delaware
DCTRT Bala Pointe LP	Delaware
Div Cap Amerimar Bala Pointe 1 General Partnership	Delaware
Bala Pointe GP LLC	Delaware
Bala Pointe Owner LP	Delaware
Dividend Jay, LLC	Delaware
DPF Jay JV Owner II LLC	Delaware
DPF Jay Partners	Delaware
DPF Jay Owner LLC	Delaware
Dividend Lundy, LLC	Delaware
DPF Lundy JV Owner II LLC	Delaware
DPF Lundy Partners	Delaware
DPF Lundy Owner LLC	Delaware
TRT 1303 Joyce Blvd LLC	Delaware
TRT Alliance JV I Diehl LLC	Delaware
TRT Alliance JV I GP	Delaware
TRT Alliance Diehl LLC	Delaware

TRT Alliance JV II Skokie LLC	Delaware
TRT Alliance JV II GP	Delaware
TRT Alliance Skokie LLC	Delaware
TRT Eastern Retail Holdings I Owner LLC	Delaware
TRT Eastern Retail Holdings I LLC	Delaware
TRT Beaver Creek LLC	Delaware
Centerton Square LLC	Delaware
TRT Mt. Nebo LLC	Delaware
TRT Mt. Nebo Pad Owner LLC	Delaware
TRT Mt. Nebo Pad LLC	Delaware
TRT Heb Marketplace GP LLC	Delaware
TRT Heb Marketplace LP	Delaware
TRT New Bedford LLC	Delaware
TRT Harwich LLC	Delaware
TRT Wareham LLC	Delaware
TRT Norwell LLC	Delaware
TRT Master Retail Holdco LLC	Delaware
TRT Springdale LLC	Delaware
TRT Saugus LLC	Delaware
TRT New England Retail Floating Rate Holdco LLC	Delaware
TRT Hyannis LLC	Delaware
TRT Kingston LLC	Delaware
TRT Kingston II LLC	Delaware
TRT Cranston LLC	Delaware
TRT North Hanover LLC	Delaware
TRT Abington LLC	Delaware
TRT Mansfield LLC	Delaware
TRT Whitman 475 Bedford LLC	Delaware
TRT Orleans LLC	Delaware
TRT Brockton Eastway Plaza LLC	Delaware
TRT New England Retail WF Holdco LLC	Delaware
TRT Braintree II LLC	Delaware
TRT Weymouth II LLC	Delaware
TRT Brockton Westgate Plaza LLC	Delaware
TRT Manomet LLC	Delaware
TRT Cohasset LLC	Delaware
TRT Holbrook LLC	Delaware
TRT Rockland 201 Market LLC	Delaware
TRT Whitman 682 Bedford LLC	Delaware
TRT Rockland 360-372 Market LLC	Delaware
TRT Hanover LLC	Delaware
TRT Meriden LLC	Delaware
TRT Shackleford West Boulevard LLC	Delaware
TRT Shiloh LLC	Delaware
DPF Shiloh JV Owner II LLC	Delaware
DPF Shiloh Partners	Delaware
DPF Shiloh Owner LLC	Delaware
TRT-DCT 130 Greenwood LLC	Delaware
TRT Industrial Fund I, LLC	Delaware
TRT-DCT Industrial JV I General Partnership	Delaware
DCT Marine SC LLC	Delaware
TRT-DCT Commerce Circle LLC	Delaware
DCT Silver Springs LLC	Delaware
TRT-DCT Pencader LLC	Delaware
TRT-DCT Veterans Corporate Center LLC	Delaware
TRT-DCT Park West L1 LLC	Delaware
TRT-DCT Eagle Creek East LLC	Delaware

TRT-DCT Minnesota Valley III LLC	Delaware
DCT Opportunity Boulevard LLC	Delaware
TRT-DCT Park West Q LLC	Delaware
TRT-DCT Rickenbacker IV LLC	Delaware
TRT-DCT Eagle Creek West LLC	Delaware
TRT-DCT Hanson Way LLC	Delaware
DCT Southfield Holdings LLC	Delaware
DCT Southfield LLC	Delaware
TRT Industrial Fund II LLC	Delaware
TRT-DCT Industrial JV II General Partnership	Delaware
TRT-DCT 4155 Patriot Drive Tx Gp LLC	Delaware
TRT-DCT 4155 Patriot Drive Tx LP	Delaware
TRT-DCT 4255 Patriot Drive Tx Gp LLC	Delaware
TRT-DCT 4255 Patriot Drive Tx LP	Delaware
DCT 2401 Midpoint LLC	Delaware
TRT-DCT Creekside V LLC	Delaware
TRT-DCT Perry Road LLC	Delaware
TRT-DCT Westport Owner LLC	Delaware
TRT-DCT Westport LLC	Delaware
TRT Industrial Fund III LLC	Delaware
TRT-DCT Industrial JV III General Partnership	Delaware
TRT-DCT 6900 Riverport LLC	Delaware
TRT-DCT 7000 Riverport LLC	Delaware
TRT-DCT 7050 Riverport LLC	Delaware
TRT-DCT 7100 Riverport LLC	Delaware
TRT-DCT 7201 Intermodal LLC	Delaware
TRT-Westcore California Circle Owner LLC	Delaware
TRT-Westcore California Circle General Partnership	Delaware
TRT-Westcore California Circle LLC	Delaware
TRT-Westcore De Guigne Owner LLC	Delaware
DPF DeGuigne JV Owner II LLC	Delaware
DPF DeGuigne Partners	Delaware
DPF DeGuigne Owner LLC	Delaware
Westcore-TRT Fortune Concourse Owner LLC	Delaware
Westcore-TRT Fortune Concourse General Partnership	Delaware
Westcore-TRT Fortune Concourse LLC	Delaware
TRT Millennium Holdco LLC	Delaware
TRT Millennium LLC	Delaware
TRT Flying Cloud Drive LLC	Delaware
Dividend Capital DST Flying Cloud Drive Property Management LLC	Colorado
DCX Flying Cloud Drive DST	Delaware
TRT 1300 Connecticut Avenue GP LLC	Delaware
TRT 1300 Connecticut Avenue LP Partner LLC	Delaware
TRT 1300 Connecticut Avenue Limited Partnership	Delaware
TRT 1300 Connecticut Avenue Owner LLC	Delaware
TRT 270 Center Holdings LLC	Delaware
TRT 270 Center Owner LLC	Delaware
TRT 1345 Philomena Street GP LLC	Delaware
TRT 1345 Philomena Street LP LLC	Delaware
TRT 1345 Philomena Street Limited Partnership	Delaware
TRT 1345 Philomena Street Owner LLC	Delaware
TRT 1100 Campus Road LLC	Delaware
TRT Preston Sherry LLC	Delaware
TRT Park Place LLC	Delaware
TRT NOIP Fixed Mezz Holdco LLC	Delaware
TRT NOIP Fixed Real Estate Holdco LLC	Delaware
TRT NOIP Fixed CA Holdco LLC	Delaware

TRT NOIP Corporate Center Drive - Newberry Park GP LLC	Delaware
TRT NOIP Corporate Center Drive - Newberry Park LP	Delaware
TRT NOIP Doolittle - Redondo Beach GP LLC	Delaware
TRT NOIP Doolittle - Redondo Beach LP	Delaware
TRT NOIP Sheila Commerce GP LLC	Delaware
TRT NOIP Sheila - Commerce LP	Delaware
TRT NOIP Maple - El Segundo GP LLC	Delaware
TRT NOIP Maple El Segundo LP	Delaware
TRT NOIP Connection - Irving LP LLC	Delaware
TRT NOIP Connection - Irving GP LLC	Delaware
TRT NOIP Connection - Irving LP	Delaware
TRT NOIP Glenville - Richardson LP LLC	Delaware
TRT NOIP Glenville - Richardson GP LLC	Delaware
TRT NOIP Glenville - Richardson LP	Delaware
TRT NOIP Sylvan Way - Parsippany LLC	Delaware
TRT NOIP Columbia - Richfield LLC	Delaware
TRT NOIP SW 80 - Plantation LLC	Delaware
TRT NOIP Corporate Drive - Dixon LLC	Delaware
TRT NOIP Columbia - Campbellsville LLC	Delaware
TRT NOIP Sunset Hills - Reston LLC	Delaware
iStar CTL Sunset Hills - Reston LLC	Delaware
TRT NOIP CEVA Lease Holdco LLC	Delaware
TRT NOIP Eagle GP LLC	Delaware
TRT NOIP Eagle LP	Delaware
TRT NOIP East 28 - Aurora LLC	Delaware
TRT NOIP Floating Mezz Holdco LLC	Delaware
TRT NOIP Floating Real Estate Holdco LLC	Delaware
TRT NOIP Floating CA LP Holdco LLC	Delaware
TRT NOIP Shadelands - Walnut Creek GP LLC	Delaware
TRT NOIP Shadelands - Walnut Creek LP	Delaware
TRT NOIP Charleston - Mountain View GP LLC	Delaware
TRT NOIP Charleston - Mountain View LP	Delaware
DPF 655 Montgomery GP LLC	Delaware
DPF 655 Montgomery LP	Delaware
TRT NOIP North Fairway Drive - Vernon Hills LLC	Delaware
TRT NOIP Inverness - Englewood LLC	Delaware
TRT NOIP Inverness - Englewood II LLC	Delaware
TRT NOIP Crown Colony - Quincy LLC	Delaware
TRT NOIP Colshire McLean LLC	Delaware
TRT NOIP Colshire McLean GP LLC	Delaware
iStar NG LP	Delaware
TRT NOIP Dublin GP LLC	Delaware
TRT NOIP Dublin LP	Delaware
TRT NOIP South Havana - Englewood LLC	Delaware
TRT Harborside LLC	Delaware
American Financial Exchange L.L.C.	New Jersey
Plaza X Realty L.L.C.	New Jersey
Plaza X Urban Renewal Associates L.L.C.	New Jersey
Plaza X Leasing Associates L.L.C	New Jersey
DCX Greenwood DST	Delaware
TRT-DCT Greenwood II LLC	Delaware
CB Square Leasing LLC	Delaware
DCTRT Lease Management LLC	Delaware
DCTRT Greenwood Lease Management LLC	Delaware
DPF 655 Lease Management LLC	Delaware
TRT-Sovereign RC Fund II Owner LLC	Delaware
TRT-Sovereign RC Joint Venture II General Partnership	Delaware

TRT-Sovereign RC Holdco II LLC	Delaware
TRT-Sovereign RC Holdco 1245 Olentangy River Road Grandview LLC	Delaware
TRT-Sovereign RC Holdco 3633 Veterans Boulevard Metairire LLC	Delaware
TRT-Sovereign RC Holdco 6700 Tamiami Trail Sarasota LLC	Delaware
TRT-Sovereign RC Fund 1 Owner LLC	Delaware
TRT-Sovereign RC Joint Venture I General Partnership	Delaware
TRT-Sovereingn RC Holdco I LLC	Delaware
TRT-Sovereign RC Holdco 74-70 Highway 111 Palm Desert LLC	Delaware
TRT-Sovereign RC Holdco 661 US Highway 1 North N Palm Beach LLC	Delaware
Shackleford West Leasing LLC	Delaware
DCX Kingston Leasing LLC	Delaware
DCX Sandwich Leasing LLC	Delaware
DCTRT REPO Holdco LLC	Delaware
TRT 625 Liberty Avenue JV LLC	Delaware
TRT/FAC Liberty Avenue Investors	Delaware
Liberty Avenue Partners	Delaware
BRE/Liberty Avenue Mezzanine LLC	Delaware
Liberty Avenue Holdings LLC	Delaware
TRT Sandwich LLC	Delaware
TRT Weymouth LLC	Delaware
TRT Braintree LLC	Delaware
DPF Property Management LLC	Delaware

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors

Dividend Capital Diversified Property Fund Inc.:

We consent to the incorporation by reference in the registration statement No. 333-162636 on Form S-3 and registration statement No. 333-194237 on Form S-8 of Dividend Capital Diversified Property Fund Inc. of our reports dated March 10, 2014, with respect to the consolidated balance sheets of Dividend Capital Diversified Property Fund Inc. and subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive income and loss, equity and cash flows for each of the years in the three-year period ended December 31, 2013, and the related consolidated financial statement schedule, which reports appear in the December 31, 2013 annual report on Form 10-K of Dividend Capital Diversified Property Fund Inc.

KPMG LLP

Denver, Colorado

March 10, 2014

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 annual report on Form 10-K 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: March 10, 2014

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 annual report on Form 10-K 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: March 10, 2014

EX-32.1

Exhibit 32.1

Certification of Principal Executive Officer Pursuant to

18 U.S.C. Section 1350

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

1. The Annual Report on Form 10-K of the Company for the annual period ended December 31, 2013 (the “Report”) 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: March 10, 2014

	/s/ JEFFREY L. JOHSON
Name:	Jeffrey L. Johnson
Title:	Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

Certification of Principal Financial Officer Pursuant to

18 U.S.C. Section 1350

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

1. The Annual Report on Form 10-K of the Company for the annual period ended December 31, 2013 (the “Report”) 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: March 10, 2014

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

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-99.1

Exhibit 99.1

NET ASSET VALUE CALCULATION AND VALUATION PROCEDURES

Valuation Procedures

Our board of directors, including a majority of our independent directors, has adopted valuation procedures, as amended from time to time, that contain a comprehensive set of methodologies to be used in connection with the calculation of our net asset value (“NAV”). As a public company, we are required to issue financial statements generally based on historical cost in accordance with GAAP as applicable to our financial statements. To calculate our NAV for the purpose of establishing a purchase and redemption price for our shares, we have adopted a model, as explained below, which adjusts the value of certain of our assets from historical cost to fair value. As a result, our NAV may differ from the amount reported as stockholder’s equity on the face of our financial statements prepared in accordance with GAAP. When the fair value of our 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. However, our valuation procedures and our NAV are not subject to GAAP and will not be subject to independent audit. Our NAV may differ from equity reflected on our audited financial statements, even if we are required to adopt a fair value basis of accounting for GAAP financial statement purposes in the future. Furthermore, no rule or regulation requires that we calculate NAV in a certain way. Although we believe our NAV calculation methodologies are consistent with standard industry principles, there is no established practice among public REITs, whether listed or not, for calculating NAV in order to establish a purchase and redemption price. As a result, other public REITs may use different methodologies or assumptions to determine NAV.

Independent Valuation Firm

With the approval of our board of directors, including a majority of our independent directors, we have engaged Altus Group U.S., Inc., an independent valuation firm (the “Independent Valuation Firm”), to serve as our independent valuation firm with respect to the daily valuation of our real property portfolio. Altus Group is a multidisciplinary provider of independent, professional real estate services with a network of over 60 offices in 14 countries worldwide, including Canada, the U.K., Australia, the United States and the Middle East. Altus Group is engaged in the business of valuing commercial real estate properties and is not affiliated with us or the Advisor. The compensation we pay to the Independent Valuation Firm will not be based on the estimated values of our real property portfolio. Our board of directors, including a majority of our independent directors, may replace the Independent Valuation Firm. We will promptly disclose any changes to the identity or role of the Independent Valuation Firm in this prospectus and in reports we publicly file with the Commission.

The Independent Valuation Firm discharges its responsibilities in accordance with our real property valuation procedures described below and under the oversight of our board of directors. Our board of directors is be involved in the day-to-day valuation of the real property portfolio, but periodically receives and reviews such information about the valuation of the real property portfolio as it deems necessary to exercise its oversight responsibility. While our Independent Valuation Firm is responsible for providing our real property valuations, our Independent Valuation Firm is not responsible for or prepare our daily NAV.

At this time, the Independent Valuation Firm is engaged solely to provide our daily real property portfolio valuation and to help us manage the property appraisal process, but it may be engaged to provide additional services, including providing an independent valuation or appraisal of any of our other assets or liabilities (contingent or otherwise), in the future. Our Independent Valuation Firm and its affiliates may from time to time in the future perform other commercial real estate and financial advisory services for our Advisor and its related parties, or in transactions related to the properties that are the subjects of the valuations being performed for us, or otherwise, so long as such other services do not adversely affect the independence of the applicable appraiser as certified in the applicable appraisal report.

Real Property Portfolio Valuation

Daily Valuation Process

The real property portfolio valuation, which is the largest component of our NAV calculation, is provided to us by the Independent Valuation Firm on each business day. The foundation for this valuation is periodic appraisals, as discussed further below. However, on each business day, the Independent Valuation Firm adjusts a real property’s valuation, as necessary, based on known events that have a material impact on the most recent value (adjustments for non-material events may also be made). For example, an unexpected termination or renewal of a material lease, a material change in vacancies, an unanticipated structural or environmental event at a property or material capital market events, among others, may cause the value of a property to change materially. Furthermore, the value of our properties is determined on an unencumbered basis. The effect of property-level debt on our NAV is discussed further below.

Using information derived from a variety of sources including, but not limited to, the property’s most recent appraisal, information from management and other information derived through the Independent Valuation Firm’s database, industry data and other sources, the Independent Valuation Firm determines the appropriate adjustment to be made to the estimated value of the property based on material events, which may include a change to underlying property fundamentals or cash flows or a change in overall market conditions. The Independent Valuation Firm collects all reasonably available material information that it deems relevant in valuing our real estate portfolio. The Independent Valuation Firm relies in part on property-level information provided by the Advisor, including (i) historical and projected operating revenues and expenses of the property; (ii) lease agreements on the property; and (iii) information regarding recent or planned capital expenditures. Upon becoming aware of the occurrence of a material event impacting property-level information, the Advisor promptly notifies the Independent Valuation Firm. Any adjustment to the valuation of a property is performed as soon as practicable after a determination that a material change with respect to such property has occurred and the financial effects of such change are quantifiable by the Independent Valuation Firm. However, rapidly changing market conditions or material events may not be immediately reflected in our daily NAV. The resulting potential disparity in our NAV may inure to the benefit of redeeming stockholders or non-redeeming stockholders and new purchasers of our common stock, depending on whether our published NAV per share for such class is higher or lower than the adjusted value of our NAV after material events have been considered. Any such adjustments are estimates of the market impact of material events to the appraised value of the

property, based on assumptions and judgments that may or may not prove to be correct, and may also be based on limited information readily available at that time. As part of the oversight by our board of directors, on a periodic basis the Independent Valuation Firm provides our board of directors with reports on its valuation activity.

The primary methodology used to value properties is the income approach, whereby value is derived by determining the present value of an asset’s stream of future cash flows (for example, discounted cash flow analysis). Consistent with industry practices, the income approach incorporates subjective judgments regarding comparable rental and operating expense data, the capitalization or discount rate, and projections of future rent and expenses based on appropriate evidence. Other methodologies that may also be used to value properties include sales comparisons and replacement cost approaches. Because the property valuations involve significant professional judgment in the application of both observable and unobservable attributes, the calculated value of our real property assets may differ from their actual realizable value or future appraised value. Our real estate portfolio valuation may not reflect the liquidation value or net realizable value of our properties because the valuations performed by the Independent Valuation Firm involve subjective judgments and do not reflect transaction costs associated with property dispositions.

Each individual appraisal report for our assets (discussed further below) is addressed solely to our company to assist the Independent Valuation Firm in providing our real property portfolio valuation. Our Independent Valuation Firm’s valuation reports are not addressed to the public and may not be relied upon by any other person to establish an estimated value of our common stock and will not constitute a recommendation to any person to purchase or sell any shares of our common stock. In preparing its valuation reports, our Independent Valuation Firm does not solicit third-party indications of interest for our common stock in connection with possible purchases thereof or the acquisition of all or any part of our company.

In conducting its investigation and analyses, our Independent Valuation Firm takes into account customary and accepted financial and commercial procedures and considerations as it deems relevant, which may include, without limitation, the review of documents, materials and information relevant to valuing the property that are provided by us or our Advisor. Although our Independent Valuation Firm may review information supplied or otherwise made available by us or our Advisor for reasonableness, it assumes and relies upon the accuracy and completeness of all such information and of all information supplied or otherwise made available to it by any other party and does not undertake any duty or responsibility to verify independently any of such information. With respect to operating or financial forecasts and other information and data to be provided to or otherwise to be reviewed by or discussed with our Independent Valuation Firm, our Independent Valuation Firm assumes that such forecasts and other information and data were reasonably prepared in good faith on bases reflecting the best currently available estimates and judgments of our management, board of directors and Advisor, and relies upon us to advise our Independent Valuation Firm promptly if any material information previously provided becomes inaccurate or was required to be updated during the period of its review.

In performing its analyses, our Independent Valuation Firm makes numerous other assumptions with respect to industry performance, general business, economic and regulatory conditions and other matters, many of which are beyond its control and our control, as well as

certain factual matters. For example, unless specifically informed to the contrary, our Independent Valuation Firm assumes that we have clear and marketable title to each real estate property valued, that no title defects exist, that improvements were made in accordance with law, that no hazardous materials are present or were present previously, that no deed restrictions exist, and that no changes to zoning ordinances or regulations governing use, density or shape are pending or being considered. Furthermore, our Independent Valuation Firm’s analysis, opinions and conclusions are necessarily based upon market, economic, financial and other circumstances and conditions existing at or prior to the valuation, and any material change in such circumstances and conditions may affect our Independent Valuation Firm’s analysis and conclusions. Our Independent Valuation Firm’s appraisal reports may contain other assumptions, qualifications and limitations set forth in the respective appraisal reports that qualify the analysis, opinions and conclusions set forth therein.

The analyses performed by our Independent Valuation Firm do not address the market value of our common stock. Furthermore, the prices at which our real estate properties may actually be sold could differ from our Independent Valuation Firm’s analyses.

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 this 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.

Appraisals are performed in accordance with the Code of Ethics and the Uniform Standards of Professional Appraisal Practices, or USPAP, the real estate appraisal industry standards created by The Appraisal Foundation. Each appraisal must be reviewed, approved and signed by an individual with the professional designation of MAI (Member of the Appraisal Institute). The Independent Valuation Firm is involved with the appraisal process, but we have

engaged other independent valuation firms (“Appraisal Firms”) to provide appraisals for our properties. Appraisal Firms were chosen from a list of firms pre-approved by our board of directors, including a majority of our independent directors, based on their qualifications. The Independent Valuation Firm confirms the reasonableness of the appraisal before reflecting any valuation change in its valuation of our real property portfolio. Real estate appraisals are reported on a free-and-clear basis (for example no mortgage), irrespective of any property-level financing that may be in place. Such property-level financings ultimately are factored in and do reduce our NAV in a manner described in more detail below.

Portfolio Assets, Joint Ventures and Developments

Properties purchased or operated as a portfolio or held in a joint venture that acquires properties over time may be valued as a single asset, which may result in a different value than if they were valued as individual assets. Investments in joint ventures that hold properties are valued by the Independent Valuation Firm in a manner that is consistent with the procedures described above and approved by our board of directors, including a majority of our independent directors, with the agreed approach taking into account the size of our investment in the joint venture, the assets owned by the joint venture, the terms of the joint venture including any promotional interests, minority discount and control, if applicable, and other relevant factors. Development assets, if any, will be valued at cost plus capital expenditures and will join the appraisal cycle upon the earlier of stabilization or 24 months from substantial completion.

Valuation of Real Estate-Related Assets

Real estate-related assets that we own or may acquire include, among other things, debt and equity interests backed principally by real estate, such as mortgage loans, participations in mortgage loans (i.e., A-Notes and B-Notes), mezzanine loans and publicly traded common and preferred stock of real estate companies. In general, the value of real estate-related assets is determined in accordance with GAAP and adjusted upon the occurrence of a material event, or in the case of liquid securities, each business day, as applicable, thereafter, according to the procedures specified below. Pursuant to our valuation procedures, our board of directors, including a majority of our independent directors, approves the pricing sources of our real estate-related assets. In general, these sources are third parties other than our Advisor. However, we may utilize the Advisor as a pricing source if the asset is immaterial or there are no other pricing sources reasonably available, and provided that our board of directors, including a majority of our independent directors, must approve the initial valuation performed by our Advisor and any subsequent material adjustments made by our Advisor. The third-party pricing source may, under certain circumstances, be our Independent Valuation Firm, subject to their acceptance of the additional engagement.

Mortgage Loans, Participations in Mortgage Loans and Mezzanine Loans

Individual investments in mortgages, mortgage participations and mezzanine loans are generally included in our determination of NAV at an amount determined in accordance with GAAP and adjusted as necessary to reflect impairments.

Private Real Estate-Related Assets

Investments in privately placed debt instruments and securities of real estate-related operating businesses (other than joint ventures), such as real estate development or management companies, are valued at cost and thereafter are revalued as determined in good faith by the pricing source. In evaluating the value of our interests in certain commingled investment vehicles (such as private real estate funds), values periodically assigned to such interests by the respective issuers or broker-dealers may be relied upon.

Publicly Traded Real Estate-Related Assets

Publicly traded debt and equity real estate-related securities (such as REIT bonds) that are not restricted as to salability or transferability are valued daily on the basis of publicly available information. Generally, to the extent the information is available, such securities are valued at the last trade of such securities that was executed at or prior to closing on the valuation day or, in the absence of such trade, the last “bid” price. The value of publicly traded debt and equity real estate-related securities that are restricted as to salability or transferability may be adjusted by the pricing source for a liquidity discount. In determining the amount of such discount, consideration will be given to the nature and length of such restriction and the relative volatility of the market price of the security.

Valuation of Liquid Non-Real Estate-Related Assets

Liquid non-real estate-related assets include credit rated government and corporate debt securities, publicly traded equity securities and cash and cash equivalents. Liquid non-real estate-related assets are valued daily on the basis of publicly available information.

Valuation of Real Estate-Related Liabilities

Our real estate-related liabilities consist of financing for our portfolio of assets. These liabilities are generally included in our determination of NAV in accordance with GAAP, however if the loan amount exceeds the value of the underlying real property and the loan is otherwise a non-recourse loan, we assume a value of zero for purposes of the real property and the loan in the determination of our NAV. Costs and expenses incurred to secure the financing are amortized over the life of the applicable loan. Unless costs can be specifically identified, we allocate the financing costs and expenses incurred with obtaining multiple loans that are not directly related to any single loan among the applicable loans, generally pro rata based on the amount of proceeds from each loan.

NAV and NAV per Share Calculation

We are offering to the public three classes of shares of our common stock, Class A shares, Class I shares and Class W shares. Our NAV is calculated for each of these classes and our Class E shares after the end of each business day that the New York Stock Exchange is open for unrestricted trading by ALPS Fund Services Inc. (“ALPS” or the “NAV Accountant”), a third-party firm approved by our board of directors, including a majority of our independent directors. Our board of directors, including a majority of our independent directors, may replace ALPS with another party, including our Advisor, if it is deemed appropriate to do so.

At the end of each such trading day, before taking into consideration accrued dividends or class-specific expense accruals, any change in the Aggregate Fund NAV (whether an increase or decrease) is allocated among each class of Fund Interest (i.e., 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) based on each class’s relative percentage of the previous Aggregate Fund NAV. Changes in the Aggregate Fund NAV reflect factors including, but not limited to, unrealized/realized gains (losses) on the value of our real property portfolio, real estate-related assets and liabilities, and daily accruals for income and expenses (including accruals for performance based fees, if any, asset management, dealer manager and distribution fees) and distributions to investors.

Our most significant source of net income is property income. We accrue estimated income and expenses on a daily basis based on annual budgets as adjusted from time to time to reflect changes in the business throughout the year. For the first month following a property acquisition, we calculate and accrue portfolio income with respect to such property based on the performance of the property before the acquisition and the contractual arrangements in place at the time of the acquisition, as identified and reviewed through our due diligence and underwriting process in connection with the acquisition. For the purpose of calculating our NAV, all organization and offering costs reduce NAV as part of our estimated income and expense accrual. On a periodic basis, our income and expense accruals are adjusted based on information derived from actual operating results.

Our liabilities are included as part of our NAV calculation generally based on GAAP. Our liabilities include, without limitation, property-level mortgages, accrued distributions, the fees payable to the Advisor and the Dealer Manager, accounts payable, accrued company-level operating expenses, any company or portfolio-level credit facilities and other liabilities.

Following the calculation and allocation of changes in the Aggregate Fund NAV as described above, NAV for each class is adjusted for accrued dividends, the distribution fee and the dealer manager fee, to determine the current day’s NAV. Selling commissions, which are paid by purchasers of Class A shares in the primary offering at the time of purchase in addition to the NAV per Class A share, have no effect on the NAV of any class.

NAV per share for each class is calculated by dividing such class’s NAV at the end of each trading day by the number of shares outstanding for that class on such day.

NAV of our Operating Partnership and OP Units

Because certain fees to the Advisor are based on our Aggregate Fund NAV (i.e., 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), our valuation procedures include the following methodology to determine the daily NAV of our Operating Partnership and the OP Units. Our Operating Partnership has four classes of OP Units (Class E, Class A, Class W and Class I) that are each economically equivalent to our corresponding classes of shares (Class E, Class A, Class W and Class I). Accordingly, on each business day, the NAV per Class E OP Unit equals the NAV per Class E share, the NAV per Class A OP Unit equals the NAV per Class A share, the NAV per Class W OP Unit equals the NAV per Class W share and the NAV per Class I OP Unit equals the NAV per Class I share. The NAV of our Operating Partnership on each business day equals the sum of the NAVs of each outstanding OP Unit on such business day.

Oversight by our Board of Directors

All parties engaged by us in the calculation of our NAV, including the Advisor, are subject to the oversight of our board of directors. As part of this process, our Advisor reviews the estimates of the values of our real property portfolio and real estate-related assets for consistency with our valuation guidelines and the overall reasonableness of the valuation conclusions, and inform our board of directors of its conclusions. Although our Independent Valuation Firm or other pricing sources may consider any comments received from us or our Advisor to their individual valuations, the final estimated values of our real property portfolio and real estate-related assets are determined by the Independent Valuation Firm or other pricing source.

Our Independent Valuation Firm is available to meet with our board of directors to review valuation information, as well as our valuation guidelines and the operation and results of the valuation process generally. Our board of directors has the right to engage additional valuation firms and pricing sources to review the valuation process or valuations, if deemed appropriate.

Review of and Changes to Our Valuation Procedures

At least once each calendar year our board of directors, including a majority of our independent directors, reviews the appropriateness of our valuation procedures. With respect to the valuation of our properties, the Independent Valuation Firm provides the board of directors with periodic valuation reports. From time to time our board of directors, including a majority of our independent directors, may adopt changes to the valuation procedures if it (1) determines that such changes are likely to result in a more accurate reflection of NAV or a more efficient or less costly procedure for the determination of NAV without having a material adverse effect on the accuracy of such determination or (2) otherwise reasonably believes a change is appropriate for the determination of NAV. We will publicly announce material changes to our valuation procedures or the identity or role of the Independent Valuation Firm.

Limitations on the Calculation of NAV

The largest component of our NAV consists of real property investments and, as with any real estate valuation protocol, each property valuation is based on a number of judgments, assumptions or opinions about future events that may or may not prove to be correct. The use of different judgments, assumptions or opinions would likely result in a different estimate of the value of our real property investments. Although the methodologies contained in the valuation procedures are designed to operate reliably within a wide variety of circumstances, it is possible that in certain unanticipated situations or after the occurrence of certain extraordinary events (such as a terrorist attack or an act of nature), our ability to implement and coordinate our NAV procedures may be impaired or delayed, including in circumstances where there is a delay in accessing or receiving information from vendors or other reporting agents. Further, the NAV per share should not be viewed as being determinative of the value of our common stock that may be received in a sale to a third party or the value at which our stock would trade on a national stock exchange. Our board of directors may suspend this offering and the redemption program if it determines that the calculation of NAV may be materially incorrect or there is a condition that restricts the valuation of a material portion of our assets.

EX-99.2

Exhibit 99.2

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 “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities—Net Asset Value Calculation” in Part II, Item 5 of the Annual Report on Form 10-K for the period ended December 31, 2013 of Dividend Capital Diversified Property Fund Inc., being incorporated by reference in (i) the Registration Statement on Form S-3 (No. 333-162636) of Dividend Capital Diversified Property Fund Inc., and the related prospectus, and (ii) the Registration Statement on Form S-8 (No. 333-194237) of Dividend Capital Diversified Property Fund Inc. 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.

March 10, 2014

XML

Segment Information (Tables)

12 Months Ended

Dec. 31, 2013

Segment Information [Abstract]

Revenue and Components of Net Operating Income

	For the Year Ended December 31,
	Revenues						NOI
	2013		2012		2011		2013		2012		2011
Real property (1)
Office	$	123,838	$	122,264	$	124,438	$	95,618	$	95,625	$	97,551
Industrial (2)		26,108		26,715		26,305		23,893		24,782		24,416
Retail		57,382		57,937		57,007		44,145		45,974		43,985
Debt related investments		10,449		9,409		11,107		10,449		9,409		11,107
Total	$	217,777	$	216,325	$	218,857	$	174,105	$	175,790	$	177,059

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

(2)Amounts reported for our industrial segment for the years ended December 31, 2013, 2012 and 2011 include revenue of approximately $13.0 million, $13.7 million, and $13.6 million, respectively, and NOI of approximately $11.6 million, $12.5 million, and $12.4 million, respectively, relating to four properties that we reclassified from our office segment into our industrial segment during 2013.

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

	For the Year Ended December 31,
	2013		2012			2011
Net operating income	$	174,105	$	175,790	$ -	$	177,059
Interest and other income (expense)		(153)		807			2,394
Real estate depreciation and amortization expense		(87,174)		(91,127)			(93,407)
General and administrative expenses		(9,973)		(7,229)			(6,826)
Advisory fees, related party		(15,120)		(17,659)			(20,854)
Acquisition-related expenses		(337)		(325)			(610)
Interest expense		(65,325)		(69,844)			(74,406)
Impairment of real estate property		(2,600)		-			-
Loss on extinguishment of debt and financing commitments		(2,507)		(5,374)			-
Other-than-temporary impairment on securities		-		-			(3,369)
Provision for loss on debt related investments		-		-			(23,037)
Discontinued operations, net of taxes		65,554		(7,410)			(21,510)
Net (income) loss attributable to noncontrolling interests		(4,002)		110			6,886
Net income (loss) attributable to common stockholders	$	52,468	$	(22,261)		$	(57,680)

Summary of Total Assets by Business Segment

	As of December 31,
	2013		2012
Segment assets:
Net investments in real property
Office	$	1,092,351	$	1,245,346
Industrial (1)		229,786		475,525
Retail		602,505		615,897
Debt related investments, net		123,935		187,321
Total segment assets, net		2,048,577		2,524,089
Non-segment assets:
Cash and cash equivalents		24,778		36,872
Other non-segment assets (2)		85,878		98,293
Assets held for sale		146,176		-
Total assets	$	2,305,409	$	2,659,254

(1)Amounts reported for our industrial segment as of December 31, 2013 and December 31, 2012 include net investments in real property of approximately $117.9 million and $125.0 million, respectively, relating to properties that we had previously classified within our office segment.

(2)Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable.

XML

Debt Related Investments (Schedule of Debt Related Income Footnote) (Details) (USD $)	3 Months Ended									12 Months Ended
	Dec. 31, 2013 security		Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013 loan security		Dec. 31, 2012 loan		Dec. 31, 2011
Investment [Line Items]
Debt related income	$ 2,790,000		$ 2,309,000	$ 2,615,000	$ 2,735,000	$ 2,747,000	$ 3,019,000	$ 1,759,000	$ 1,884,000	$ 10,449,000		$ 9,409,000		$ 11,107,000
Weighted Average Yield	7.10%	[1]								7.10%	[1]
Number of variable interest loans receivable	1									1
Carrying amount of floating rate debt investments	25,000,000									25,000,000
Number of debt investment repaid										4		3
Floating-Rate Debt Related Investments, Net [Member]
Investment [Line Items]
Weighted Average Yield	0.00%									0.00%
Mortgage Notes [Member]
Investment [Line Items]
Debt related income										8,726,000	[2]	8,732,000	[2]	6,890,000	[2]
Weighted Average Yield	5.70%	[1],[2]								5.70%	[1],[2]
Number of debt investment repaid										3
B Notes [Member]
Investment [Line Items]
Debt related income										51,000		433,000		2,371,000
Weighted Average Yield	0.00%	[1]								0.00%	[1]
Number of debt investment repaid										1
Mezzanine Debt [Member]
Investment [Line Items]
Debt related income										$ 1,672,000		$ 244,000		$ 1,846,000
Weighted Average Yield	16.70%	[1]								16.70%	[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 December 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of December 31, 2013 for purposes of this table. As of December 31, 2013, we had one debt related investment with a net investment amount of $25.0 million that bears interest at a floating rate 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 investment for which we have recognized a full allowance for loss as of December 31, 2013.

[2] We had four and three debt related investments repaid in full during the years ended December 31, 2013 and 2012, respectively. Amounts recorded include an early repayment fee received and accelerated amortization of origination fees offset by accelerated amortization of deferred due diligence costs related to these repayments.

XML

Investments In Real Property (Consolidated Investments In Real Property) (Details) (USD $)	Dec. 31, 2013 property		Dec. 31, 2012 property
Schedule of Investments [Line Items]
Investment in real property, Gross book value	$ 2,570,480,000		$ 2,819,550,000
Intangible lease liabilities, Gross book value	(113,546,000)		(124,612,000)
Real estate investments, Gross book value	2,456,934,000		2,694,938,000
Accumulated depreciation and amortization	(502,847,000)		(482,782,000)
Intangible lease liabilities, accumulated amortization	35,997,000		36,281,000
Accumulated depreciation/amortization	(466,850,000)		(446,501,000)
Investment in real property	2,067,633,000		2,336,768,000
Intangible lease liabilities, Net book value	(77,549,000)		(88,331,000)
Real estate investments, Net book value	1,990,084,000		2,248,437,000
Number of industrial properties classified as held for sale	12		0
Land [Member]
Schedule of Investments [Line Items]
Land	511,013,000		517,681,000
Building and Building Improvements [Member]
Schedule of Investments [Line Items]
Building and Improvements	1,549,524,000		1,686,537,000
Accumulated depreciation and amortization	(207,966,000)		(189,740,000)
Real estate investments, Net book value	1,341,558,000		1,496,797,000
Intangible Lease Assets [Member]
Schedule of Investments [Line Items]
Intangible Lease Assets	509,943,000		615,332,000
Accumulated depreciation and amortization	(294,881,000)		(293,042,000)
Intangible lease liabilities, Net book value	215,062,000		322,290,000
Office [Member]
Schedule of Investments [Line Items]
Investment in real property, Gross book value	1,367,085,000		1,509,718,000
Intangible lease liabilities, Net book value	(15,861,000)		(25,121,000)
Real estate investments, Net book value	1,351,224,000		1,484,597,000
Office [Member] | Land [Member]
Schedule of Investments [Line Items]
Land	232,117,000		218,738,000
Office [Member] | Building and Building Improvements [Member]
Schedule of Investments [Line Items]
Building and Improvements	769,654,000		833,226,000
Office [Member] | Intangible Lease Assets [Member]
Schedule of Investments [Line Items]
Intangible Lease Assets	365,314,000		457,754,000
Industrial [Member]
Schedule of Investments [Line Items]
Investment in real property, Gross book value	478,355,000	[1]	587,675,000
Intangible lease liabilities, Net book value	(46,626,000)	[1]	(48,432,000)
Real estate investments, Net book value	431,729,000	[1]	539,243,000
Land available-for-sale	21,100,000
Building and improvements held-for-sale	157,700,000
Intangible lease assets held-for-sale	14,900,000
Intangible lease liabilities held-for-sale	(5,600,000)
Accumulated depreciation on assets	(50,600,000)
Accumulated amortization of intangible lease liabilities	2,500,000
Number of industrial properties classified as held for sale	12
Industrial [Member] | Land [Member]
Schedule of Investments [Line Items]
Land	51,678,000	[1]	71,725,000
Industrial [Member] | Building and Building Improvements [Member]
Schedule of Investments [Line Items]
Building and Improvements	359,800,000	[1]	436,340,000
Industrial [Member] | Intangible Lease Assets [Member]
Schedule of Investments [Line Items]
Intangible Lease Assets	66,877,000	[1]	79,610,000
Retail [Member]
Schedule of Investments [Line Items]
Investment in real property, Gross book value	725,040,000		722,157,000
Intangible lease liabilities, Net book value	(51,059,000)		(51,059,000)
Real estate investments, Net book value	673,981,000		671,098,000
Retail [Member] | Land [Member]
Schedule of Investments [Line Items]
Land	227,218,000		227,218,000
Retail [Member] | Building and Building Improvements [Member]
Schedule of Investments [Line Items]
Building and Improvements	420,070,000		416,971,000
Retail [Member] | Intangible Lease Assets [Member]
Schedule of Investments [Line Items]
Intangible Lease Assets	$ 77,752,000		$ 77,968,000

[1] Includes $21.1 million in land, $157.7 million in building and improvements, $14.9 million in intangible lease assets, and $5.6 million in intangible lease liabilities, before accumulated depreciation on assets of $50.6 million and accumulated amortization of intangible lease liabilities of $2.5 million, related to 12 industrial properties classified as held for sale in the accompanying balance sheet as of December 31, 2013.

XML

Fair Value Disclosures (Reconciliation of Fair Value Measurements Based on Significant Unobservable Inputs) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended			12 Months Ended
	Dec. 31, 2013 Mortgage Notes [Member]	Dec. 31, 2013 Real Estate Securities [Member]	Dec. 31, 2012 Real Estate Securities [Member]	Dec. 31, 2013 Derivative Instruments [Member]
Fair Value, Assets and Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance as of December 31, 2012	$ (122,995)	$ 461	$ 461	$ (416)
Net income (other income and expense)				(8)
Other comprehensive income (Unrealized change from cash flow hedging derivatives)				352
Total change in fair value				344
Settlements	122,995			777
Ending balance as of December 31, 2013		$ 461	$ 461	$ 705

XML

Debt Related Investments (Debt Investment Activity) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Investment in debt related investments:
Beginning balance	$ 187,321	$ 92,247
Investments	12,323	121,842
Principal repayments	(75,702)	(25,093)
Amortization of deferred fees, costs, and discounts/premiums	(7)	(1,675)
Ending balance	$ 123,935	$ 187,321

XML

Stockholders' Equity (Summary of Information Regarding Taxability of Distributions on Common Shares) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stockholders' Equity [Abstract]
Ordinary income	$ 0.11	$ 0.01	$ 0.19
Non-taxable return of capital	$ 0.15	$ 0.45	$ 0.39
Total	$ 0.26	$ 0.46	$ 0.58
Ordinary income	40.98%	1.49%	32.53%
Non-taxable return of capital	59.02%	98.51%	67.47%
Total	100.00%	100.00%	100.00%

XML

Summary Of Significant Accounting Policies (Straight-Line Rental Adjustments and Tenant Recovery Income) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Summary Of Significant Accounting Policies [Abstract]
Straight-line rent adjustments	$ 8,864	$ 8,107	$ 9,902
Tenant recovery income	$ 33,029	$ 33,585	$ 33,445

XML

Fair Value Disclosures (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Assets and Liabilities Measured at Fair Value on Recurring Basis

	Level 1		Level 2		Level 3		Total
As of December 31, 2013:
Assets
Real estate securities	$	-	$	-	$	461	$	461
Derivative instruments		-		748		-		748
Total assets	$	-	$	748	$	461	$	1,209
Liabilities
Derivative instruments	$	-	$	(43)	$	-	$	(43)
Total liabilities	$	-	$	(43)	$	-	$	(43)
As of December 31, 2012:
Assets
Real estate securities	$	-	$	-	$	461	$	461
Total assets	$	-	$	-	$	461	$	461
Liabilities
Mortgage notes carried at fair value	$	-	$	-	$	(122,995)	$	(122,995)
Derivative instruments	$	-	$	(416)	$	-	$	(416)
Total liabilities	$	-	$	(416)	$	(122,995)	$	(123,411)

Reconciliation of Fair Value Measurements Based on Significant Unobservable Inputs

	Mortgage Notes Carried at Fair Value		Real Estate Securities		Derivative Instruments
Beginning balance as of December 31, 2012	$	(122,995)	$	461	$	(416)
Total net gains (losses) included in:
Net income (other income and expense)		-		-		(8)
Other comprehensive income (Unrealized change from cash flow hedging derivatives)		-		-		352
Total change in fair value		-		-		344
Settlements		122,995		-		777
Transfers in and/or out of Level 3		-		-		-
Ending balance as of  December 31, 2013	$	-	$	461	$	705

XML

Related Party Transactions (Narrative) (Details) (USD $)	12 Months Ended								0 Months Ended		12 Months Ended		0 Months Ended
	Dec. 31, 2013	Dec. 31, 2012 item	Dec. 31, 2013 Fund Core Finance Group, LLC [Member]	Dec. 31, 2013 Hudson River Partners Real Estate Investment Management LP [Member]	Dec. 31, 2013 BCG TRT Advisors LLC [Member]	Dec. 31, 2012 BCG TRT Advisors LLC [Member]	Dec. 31, 2013 Direct Real Properties [Member]	Dec. 31, 2013 Product Specialist Real Properties [Member]	Jul. 21, 2012 Operational Stage [Member]	Jul. 21, 2012 Debt Related Investments [Member]	Dec. 31, 2013 Debt Related Investments [Member]	Dec. 31, 2013 Maximum [Member]	Jul. 21, 2012 Maximum [Member] Development Or Construction Stage [Member]
Related Party Transaction [Line Items]
Amount owed to Advisor	$ 1,600,000	$ 1,400,000
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%
Class E Dealer Manager fee portion waived under NAV per share threshold	$ 10.00
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	5.00%
Class I shares sale transaction date	Jul. 31, 2013
Total gross proceeds raised from sale of class I shares	30,917,000	567,000										300,000,000
Percentage of gross proceeds retained by dealer manager	0.50%
Percentage of acquisition fee payable to Advisor									1.00%	1.00%			4.00%
Asset management fee as a percentage of aggregate cost							0.50%	0.50%
Asset management fee as a percentage of net operating income							6.00%	6.00%
Asset management fee as a percentage of aggregate cost							0.75%
Asset management fees as percentage of amount invested in debt related assets											1.00%
Asset management fee					58,000	25,000
Maximum level of business acquisition and asset management amount			130,000,000	20,000,000
Debt investment advisory fees as a percentage of debt investment amount	1.00%
Maximum debt investment advisory fees as percentage of debt investment amount	1.50%
Debt Investment advisory fees discount rate percentage applied	15.00%
Debt investment advisory fees as percentage of discounted present value of debt investment amount	1.00%
Debt investment advisory fees initial term	4 years
Maximum level of total acquisition fee and acquisition expenses	6.00%
Debt investment asset management fees minimum percentage of net debt investment amount	6.00%
Debt investment asset management fees after initial term as percentage of debt investment amount	1.00%
Number of debt related investments acquired during period		1
Debt related investments acquired during period		22,500,000
Acquisition fees paid to advisor		$ 619,000

XML

Noncontrolling Interests (Summary of Noncontrolling Interest Balances) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Noncontrolling Interest [Line Items]
Beginning Balance				$ 95,831					$ 95,831
Net income	(85)	3,257	1,329	(499)	(1,240)	2,680	(701)	(849)	4,002	(110)	(6,886)
Contributions of noncontrolling interests									212	1,053	28,065
Distributions									(5,446)	(8,617)
Ending Balance	91,906				95,831				91,906	95,831
Operating Partnership Units [Member]
Noncontrolling Interest [Line Items]
Beginning Balance				88,259					88,259
Net income									4,010
Unrealized change from cash flow hedging derivatives									354
Distributions									(4,807)
Redemption and buyout of noncontrolling interests, net									(1,408)
Ending Balance	86,408								86,408
Joint Venture Partners [Member]
Noncontrolling Interest [Line Items]
Beginning Balance				7,572					7,572
Net income									(8)
Contributions of noncontrolling interests									212
Distributions									(639)
Redemption and buyout of noncontrolling interests, net									(1,639)
Ending Balance	5,498								5,498
Noncontrolling Interests [Member]
Noncontrolling Interest [Line Items]
Beginning Balance				95,831					95,831
Net income									4,002
Unrealized change from cash flow hedging derivatives									354
Contributions of noncontrolling interests									212	1,053	28,065
Distributions									(5,446)	(8,617)
Redemption and buyout of noncontrolling interests, net									(3,047)
Ending Balance	$ 91,906				$ 95,831				$ 91,906	$ 95,831

XML

Schedule III - Real Estate and Accumulated Depreciation (Activity of Real Estate and Accumulated Depreciation) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Investments in real estate:
Balance at the beginning of the year	$ 2,819,550	$ 2,724,684	$ 2,858,307
Acquisitions of operating properties	114,827	128,258	21,825
Improvements	26,680	18,405	18,944
Basis of operating properties disposed of	(387,977)	(46,097)	(150,892)
Impairment of real property	(2,600)	(5,700)	(23,500)
Balance at the end of the year	2,570,480	2,819,550	2,724,684
Accumulated depreciation:
Balance at the beginning of the year	482,782	361,357	247,608
Net additions charged to costs and expenses	20,065	121,425	113,749
Balance at the end of the year	$ 502,847	$ 482,782	$ 361,357

XML

Debt Related Investments (Reconciliation of Allowance for Loan Loss on Debt Related Investments) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Debt Related Investments [Abstract]
Beginning balance as of December 31, 2012:	$ 18,000,000
Direct write offs	(15,000,000)	(20,000,000)
Ending balance as of December 31, 2013:	$ 3,000,000	$ 18,000,000

XML

Stockholders' Equity (Total Distributions Declared and Portion of Each Contribution Paid in Cash and Reinvested) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Stockholders' Equity [Abstract]
Paid in cash	$ 41,123	$ 53,311	$ 62,575
Reinvested in shares	21,207	30,948	43,129
Total distributions	$ 62,330	$ 84,259	$ 105,704
Paid in cash	66.00%	63.30%	59.20%
Reinvested in shares	34.00%	36.70%	40.80%
Total	100.00%	100.00%	100.00%

XML

Quarterly Financial Data (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Quarterly Financial Data (Unaudited) [Abstract]
Rental revenue	$ 53,380	$ 52,113	$ 51,199	$ 50,636	$ 52,091	$ 51,590	$ 51,282	$ 51,953	$ 207,328		$ 206,916		$ 207,750
Debt related income	2,790	2,309	2,615	2,735	2,747	3,019	1,759	1,884	10,449		9,409		11,107
Total revenue	56,170	54,422	53,814	53,371	54,838	54,609	53,041	53,837	217,777		216,325		218,857
Total operating expenses	(44,985)	(38,180)	(37,512)	(38,199)	(38,775)	(38,812)	(38,900)	(40,388)	(158,876)		(156,875)		(189,901)
Other income (expenses)	(18,149)	(16,314)	(16,599)	(16,923)	(18,689)	(17,398)	(19,817)	(18,507)	(67,985)		(74,411)
Loss from continuing operations	(6,964)	(72)	(297)	(1,751)	(2,626)	(1,601)	(5,676)	(5,058)	(9,084)		(14,961)		(43,056)
Discontinued operations, net of taxes	5,512	45,403	18,754	(4,115)	(12,778)	13,545	(3,896)	(4,281)	65,554	[1]	(7,410)	[1]	(21,510)	[1],[2]
Net income (loss)	(1,452)	45,331	18,457	(5,866)	(15,404)	11,944	(9,572)	(9,339)	56,470		(22,371)		(64,566)
Net (income) loss attributable to noncontrolling interests	85	(3,257)	(1,329)	499	1,240	(2,680)	701	849	(4,002)		110		6,886
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (1,367)	$ 42,074	$ 17,128	$ (5,367)	$ (14,164)	$ 9,264	$ (8,871)	$ (8,490)	$ 52,468		$ (22,261)		$ (57,680)
Net loss per basic and diluted common share
Continuing operations	$ (0.04)	$ 0.00	$ 0.00	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.03)	$ (0.03)	$ (0.05)		$ (0.08)		$ (0.22)
Discontinued operations	$ 0.02	$ 0.24	$ 0.10	$ (0.02)	$ (0.06)	$ 0.06	$ (0.02)	$ (0.02)	$ 0.34		$ (0.04)		$ (0.09)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$ (0.02)	$ 0.24	$ 0.10	$ (0.03)	$ (0.07)	$ 0.05	$ (0.05)	$ (0.05)	$ 0.29		$ (0.12)		$ (0.31)

[1] Includes approximately $2.6 million, $101,000, and $1.6 million paid to our Advisor for fees associated with the disposition of real properties during the years ended December 31, 2013, 2012, and 2011, respectively.

[2] Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

XML

Net Income (Loss) Per Common Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Numerator
Loss from continuing operations	$ (6,964)	$ (72)	$ (297)	$ (1,751)	$ (2,626)	$ (1,601)	$ (5,676)	$ (5,058)	$ (9,084)		$ (14,961)		$ (43,056)
Loss from continuing operations attributable to noncontrolling interests									558		1,081		2,997
Loss from continuing operations attributable to common stockholders									(8,526)		(13,880)		(40,059)
Dilutive noncontrolling interests share of loss from continuing operations									(652)		(1,160)		(2,959)
Numerator for diluted earnings per share - adjusted loss from continuing operations									(9,178)		(15,040)		(43,018)
Income (loss) from discontinued operations	5,512	45,403	18,754	(4,115)	(12,778)	13,545	(3,896)	(4,281)	65,554	[1]	(7,410)	[1]	(21,510)	[1],[2]
(Income) loss from discontinued operations attributable to noncontrolling interests									(4,560)		(971)		3,889
Income (loss) from discontinued operations attributable to common stockholders									60,994		(8,381)		(17,621)
Dilutive noncontrolling interests share of income (loss) from discontinued operations									4,662		(701)		(1,301)
Numerator for diluted earnings per share - adjusted income (loss) from discontinued operations									$ 65,656		$ (9,082)		$ (18,922)
Denominator
Weighted average shares outstanding-basic									178,196		181,982		183,813
Incremental weighted average shares effect of conversion of OP units									13,736		15,262		13,564
Weighted average shares outstanding-diluted									191,932		197,244		197,377
INCOME (LOSS) PER COMMON SHARE-BASIC AND DILUTED
Net loss from continuing operations	$ (0.04)	$ 0.00	$ 0.00	$ (0.01)	$ (0.01)	$ (0.01)	$ (0.03)	$ (0.03)	$ (0.05)		$ (0.08)		$ (0.22)
Net income (loss) from discontinued operations	$ 0.02	$ 0.24	$ 0.10	$ (0.02)	$ (0.06)	$ 0.06	$ (0.02)	$ (0.02)	$ 0.34		$ (0.04)		$ (0.09)
Net income (loss)	$ (0.02)	$ 0.24	$ 0.10	$ (0.03)	$ (0.07)	$ 0.05	$ (0.05)	$ (0.05)	$ 0.29		$ (0.12)		$ (0.31)

[1] Includes approximately $2.6 million, $101,000, and $1.6 million paid to our Advisor for fees associated with the disposition of real properties during the years ended December 31, 2013, 2012, and 2011, respectively.

[2] Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

XML

Subsequent Events (Narrative) (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended	1 Months Ended	12 Months Ended
	Dec. 31, 2013 property sqft	Jan. 22, 2014 Industrial [Member] Subsequent Event [Member] property sqft	Dec. 31, 2013 Office Property; Chicago, IL Market [Member] Subsequent Event [Member]
Subsequent Event [Line Items]
Date of acquisition or disposal			Jan. 22, 2014
Number of properties sold	12	12
Rentable square feet	3,360,000	3,400,000
Basis in property			$ 139.9
Total sales price			$ 175.0

XML

Stockholders' Equity (Distributions Paid and/or Authorized) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
1st Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.1250	[1]
Payment Date	Apr. 16, 2012
2nd Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.1250	[1]
Payment Date	Jul. 24, 2012
3rd Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.1250	[1]
Payment Date	Oct. 16, 2012
4th Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Payment Date	Jan. 16, 2013
1st Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Payment Date	Apr. 16, 2013
2nd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Payment Date	Jul. 16, 2013
3rd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Payment Date	Oct. 16, 2013
4th Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0874	[1]
Payment Date	Jan. 16, 2014
1st Quarter Twenty 2014 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1],[2]
Payment Date	Apr. 16, 2014	[2],[3]
Class E [Member] | 1st Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.1250	[1]
Class E [Member] | 2nd Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.1250	[1]
Class E [Member] | 3rd Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.1250	[1]
Class E [Member] | 4th Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Class E [Member] | 1st Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Class E [Member] | 2nd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Class E [Member] | 3rd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Class E [Member] | 4th Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1]
Class E [Member] | 1st Quarter Twenty 2014 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1],[2]
Class A [Member] | 3rd Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0938	[1]
Class A [Member] | 4th Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0691	[1]
Class A [Member] | 1st Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0692	[1]
Class A [Member] | 2nd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0689	[1]
Class A [Member] | 3rd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0685	[1]
Class A [Member] | 4th Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0684	[1]
Class A [Member] | 1st Quarter Twenty 2014 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1],[2]
Class W [Member] | 3rd Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.1012	[1]
Class W [Member] | 4th Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0775	[1]
Class W [Member] | 1st Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0775	[1]
Class W [Member] | 2nd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0774	[1]
Class W [Member] | 3rd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0771	[1]
Class W [Member] | 4th Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0771	[1]
Class W [Member] | 1st Quarter Twenty 2014 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1],[2]
Class I [Member] | 3rd Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.1086	[1]
Class I [Member] | 4th Quarter 2012 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0858	[1]
Class I [Member] | 1st Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0858	[1]
Class I [Member] | 2nd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0858	[1]
Class I [Member] | 3rd Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0858	[1]
Class I [Member] | 4th Quarter 2013 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0858	[1]
Class I [Member] | 1st Quarter Twenty 2014 [Member]
Dividends [Line Items]
Distributions declared per common share	$ 0.0875	[1],[2]

[1] Assumes ownership of share or unit for the entire quarter.

[2] The distribution amount herein for the first quarter of 2014 does not reflect class-specific adjustments made to our Class A, Class W, and Class I shares, which have not yet been determined.

[3] Expected payment date.

XML

Fair Value of Financial Instruments (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Assets:
Derivative instruments	$ 748
Liabilities:
Derivative liabilities	43	416
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Real Estate Securities [Member]
Assets:
Investments in real estate securities	461	461
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fixed-Rate Debt Related Investments, Net [Member]
Assets:
Fixed-rate debt related investments, net	98,724	108,482
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Floating-Rate Debt Related Investments, Net [Member]
Assets:
Floating-rate debt related investments, net	25,211	78,839
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fixed Rate Secured Borrowings [Member]
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	969,622	1,037,047
Fixed-rate mortgage notes carried at fair value		122,995
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Floating-Rate Mortgage Notes [Member]
Liabilities:
Floating-rate mortgage notes	8,580	23,701
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Fixed Rate Other Secured Borrowings [Member]
Liabilities:
Floating-rate other secured borrowings	45,270	135,709
Carrying (Reported) Amount, Fair Value Disclosure [Member] | Floating Rate Un-Secured Borrowings [Member]
Liabilities:
Floating-rate unsecured borrowings	300,000	300,000
Estimate of Fair Value, Fair Value Disclosure [Member]
Assets:
Derivative instruments	748
Liabilities:
Derivative liabilities	43	416
Estimate of Fair Value, Fair Value Disclosure [Member] | Real Estate Securities [Member]
Assets:
Investments in real estate securities	461	461
Estimate of Fair Value, Fair Value Disclosure [Member] | Fixed-Rate Debt Related Investments, Net [Member]
Assets:
Fixed-rate debt related investments, net	101,012	110,796
Estimate of Fair Value, Fair Value Disclosure [Member] | Floating-Rate Debt Related Investments, Net [Member]
Assets:
Floating-rate debt related investments, net	24,504	79,803
Estimate of Fair Value, Fair Value Disclosure [Member] | Fixed Rate Secured Borrowings [Member]
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	1,010,085	1,091,425
Fixed-rate mortgage notes carried at fair value		122,995
Estimate of Fair Value, Fair Value Disclosure [Member] | Floating-Rate Mortgage Notes [Member]
Liabilities:
Floating-rate mortgage notes	8,582	23,738
Estimate of Fair Value, Fair Value Disclosure [Member] | Fixed Rate Other Secured Borrowings [Member]
Liabilities:
Floating-rate other secured borrowings	45,270	135,931
Estimate of Fair Value, Fair Value Disclosure [Member] | Floating Rate Un-Secured Borrowings [Member]
Liabilities:
Floating-rate unsecured borrowings	$ 301,690	$ 300,000

XML

Subsequent Events

12 Months Ended

Dec. 31, 2013

Subsequent Events [Abstract]

Subsequent Events

17. SUBSEQUENT EVENTS

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

Disposition of Real Property

On January 22, 2014, we disposed of a portfolio of 12 industrial properties aggregating 3.4 million square feet to an unrelated third party. The properties were located in the Atlanta, GA, Cincinnati, OH, Central Pennsylvania, Columbus, OH, Dallas, TX, Indianapolis, IN, and Minneapolis, MN markets. We sold the properties, which had a net basis of approximately $139.9 million as of December 31, 2013, for a total sales price of $175.0 million.

XML

Investments in Real Property (Summary of Income and Expenses Attributable to Discontinued Operations) (Details) (USD $)	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Investments in Real Property [Abstract]
Revenues									$ 39,023,000		$ 61,461,000		$ 53,603,000	[1]
Rental expense									(14,020,000)		(21,731,000)		(12,709,000)	[1]
Real estate depreciation and amortization expense									(21,017,000)		(37,989,000)		(33,483,000)	[1]
Impairment of real estate properties											(5,700,000)		(23,500,000)	[1]
Interest expense									(12,662,000)		(23,771,000)		(18,429,000)	[1]
Other expenses									(56,000)		(793,000)		(625,000)	[1]
Income (loss) from discontinued operations, net of taxes									(8,732,000)		(28,523,000)		(35,143,000)	[1]
Gain on disposition, net of taxes									74,286,000		21,113,000		13,633,000	[1]
Discontinued operations, net of taxes	5,512,000	45,403,000	18,754,000	(4,115,000)	(12,778,000)	13,545,000	(3,896,000)	(4,281,000)	65,554,000	[2]	(7,410,000)	[2]	(21,510,000)	[1],[2]
Gain on disposition, profit participation													$ 2,900,000

[1] Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

[2] Includes approximately $2.6 million, $101,000, and $1.6 million paid to our Advisor for fees associated with the disposition of real properties during the years ended December 31, 2013, 2012, and 2011, respectively.

XML

Summary Of Significant Accounting Policies (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 property	Dec. 31, 2012 property	Dec. 31, 2011
Significant Accounting Policies [Line Items]
Number of properties classified as held and used	70
Number of properties classified as held for sale	12	0
Investment in real estate securities	$ 500,000	$ 500,000
Other-than-temporary impairment on securities	0	0	3,369,000
Other- than-temporary impairment related to investment in debt securities	140,100,000	140,100,000
Allowances on receivables	251,000	510,000
Accumulated other comprehensive income (loss) related to derivatives	8,800,000
Accumulated other comprehensive income (loss) related to real estate securities	411,000
Noncontrolling Interests [Member]
Significant Accounting Policies [Line Items]
Accumulated other comprehensive income (loss) related to derivatives	1,000,000
Accumulated other comprehensive income (loss) related to real estate securities	$ 1,300,000

XML

Stockholders' Equity (Information of Share Transactions) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011		Dec. 31, 2010
Shareholders Equity [Line Items]
Balance, Shares	176,006,755	[1]	178,127,559	[1]
Class E [Member]
Shareholders Equity [Line Items]
Balance, Shares	178,090,434		182,331,000		182,717,000
Balance, Shares	171,254,036		178,090,434		182,331,000		182,717,000
Proceeds from sale and payments for repurchase of shares	$ 1,728,146	[2]	$ 1,775,196	[2]	$ 1,802,965	[2]	$ 1,806,652	[2]
Class E [Member] | Shares Sold [Member]
Shareholders Equity [Line Items]
Shares sold			65,000
Proceeds from sale and payments for repurchase of shares			317	[2]
Class E [Member] | Distribution Reinvestment Plan [Member]
Shareholders Equity [Line Items]
Shares issued	3,143,000		4,610,000		5,274,000
Proceeds from sale and payments for repurchase of shares	21,352	[2]	34,449	[2]	43,540	[2]
Class E [Member] | Conversion of OP Units to Common Stock [Member]
Shareholders Equity [Line Items]
Conversion of OP Units to common stock (in shares)			269,000		118,000
Proceeds from sale and payments for repurchase of shares			2,273	[2]	978	[2]
Class E [Member] | Redemptions of Common Stock [Member]
Shareholders Equity [Line Items]
Redemptions of common stock (in shares)	(9,981,000)		(9,183,000)		(5,778,000)
Proceeds from sale and payments for repurchase of shares	(68,402)	[2]	(64,808)	[2]	(48,205)	[2]
Class A [Member]
Shareholders Equity [Line Items]
Balance, Shares	12,375
Balance, Shares	216,745		12,375
Proceeds from sale and payments for repurchase of shares	1,534	[2]	83	[2]
Class A [Member] | Shares Sold [Member]
Shareholders Equity [Line Items]
Shares sold	205,000		12,000
Proceeds from sale and payments for repurchase of shares	1,451	[2]	83	[2]
Class W [Member]
Shareholders Equity [Line Items]
Balance, Shares	12,375
Balance, Shares	208,889		12,375
Proceeds from sale and payments for repurchase of shares	1,437	[2]	83	[2]
Class W [Member] | Shares Sold [Member]
Shareholders Equity [Line Items]
Shares sold	197,000		12,000
Proceeds from sale and payments for repurchase of shares	1,354	[2]	83	[2]
Class I [Member]
Shareholders Equity [Line Items]
Balance, Shares	12,375
Balance, Shares	4,327,085		12,375
Proceeds from sale and payments for repurchase of shares	29,507	[2]	83	[2]
Class I [Member] | Shares Sold [Member]
Shareholders Equity [Line Items]
Shares sold	4,301,000		12,000
Proceeds from sale and payments for repurchase of shares	29,333	[2]	83	[2]
Class I [Member] | Distribution Reinvestment Plan [Member]
Shareholders Equity [Line Items]
Shares issued	18,000
Proceeds from sale and payments for repurchase of shares	121	[2]
Class I [Member] | Redemptions of Common Stock [Member]
Shareholders Equity [Line Items]
Redemptions of common stock (in shares)	(4,000)
Proceeds from sale and payments for repurchase of shares	(30)	[2]
Common Stock [Member]
Shareholders Equity [Line Items]
Balance, Shares	178,128,000		182,331,000		182,717,000
Shares issued	7,864,000		4,711,000		5,274,000
Conversion of OP Units to common stock (in shares)			269,000		118,000
Redemptions of common stock (in shares)	(9,985,000)		(9,183,000)		(5,778,000)
Balance, Shares	176,007,000		178,128,000		182,331,000		182,717,000
Proceeds from sale and payments for repurchase of shares	1,760,624	[2]	1,775,445	[2]	1,802,965	[2]	1,806,652	[2]
Common Stock [Member] | Shares Sold [Member]
Shareholders Equity [Line Items]
Shares sold	4,703,000		101,000
Proceeds from sale and payments for repurchase of shares	32,138	[2]	566	[2]
Common Stock [Member] | Distribution Reinvestment Plan [Member]
Shareholders Equity [Line Items]
Shares issued	3,161,000		4,610,000		5,274,000
Proceeds from sale and payments for repurchase of shares	21,473	[2]	34,449	[2]	43,540	[2]
Common Stock [Member] | Conversion of OP Units to Common Stock [Member]
Shareholders Equity [Line Items]
Conversion of OP Units to common stock (in shares)			269,000		118,000
Proceeds from sale and payments for repurchase of shares			2,273	[2]	978	[2]
Common Stock [Member] | Redemptions of Common Stock [Member]
Shareholders Equity [Line Items]
Redemptions of common stock (in shares)	(9,985,000)		(9,183,000)		(5,778,000)
Proceeds from sale and payments for repurchase of shares	$ (68,432)	[2]	$ (64,808)	[2]	$ (48,205)	[2]

[1] Includes 171,254,036 shares of Class E common stock, 216,745 shares of Class A common stock, 208,889 shares of Class W common stock, and 4,327,085 shares of Class I common stock issued and outstanding as of December 31, 2013, and 178,090,434 shares of Class E common stock, 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 12,375 shares of Class I common stock issued and outstanding as of December 31, 2012.

[2] Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans and share redemption programs.

XML

Related Party Transactions (Tables)

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Schedule of Fees and Other Amounts Earned by Advisor

	For the Year Ended December 31,
	2013		2012		2011
Acquisition fees	$	-	$	1,534	$	218
Advisory fees		15,120		17,659		20,854
Development management fee		223		133		-
Other reimbursements		6,234		3,253		1,940
Asset management fees related to the disposition of real properties		2,639		101		1,599
Dealer manager and distribution fees		1,415		-		-
Total	$	25,631	$	22,680	$	24,611

XML

Investments in Real Property (Summary of Top Five Tenants as Percentage of Consolidated Annual Base Rent and Square Feet) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013 sqft property
Concentration Risk [Line Items]
Locations	22
Annualized Rental Revenue	$ 76,602	[1]
% of Total Annualized Rental Revenue	38.80%
Square Feet	3,360,000
% of Total Portfolio Square Feet	23.50%
Charles Schwab and Company, Inc. [Member]
Concentration Risk [Line Items]
Locations	1
Industry	Securities, Commodities, Fin. Inv./Rel. Activites
Annualized Rental Revenue	22,761	[1]
% of Total Annualized Rental Revenue	11.50%
Square Feet	594,000
% of Total Portfolio Square Feet	4.20%
Northrop Grumman, Inc. [Member]
Concentration Risk [Line Items]
Locations	2
Industry	Professional, Scientific and Technical Services
Annualized Rental Revenue	17,532	[1]
% of Total Annualized Rental Revenue	8.90%
Square Feet	699,000
% of Total Portfolio Square Feet	4.90%
Sybase, Inc. [Member]
Concentration Risk [Line Items]
Locations	1
Industry	Publishing Information (except Internet)
Annualized Rental Revenue	17,283	[1]
% of Total Annualized Rental Revenue	8.80%
Square Feet	405,000
% of Total Portfolio Square Feet	2.80%
Stop and Shop Supermarket Company LLC. [Member]
Concentration Risk [Line Items]
Locations	15
Industry	Food and Beverage Stores
Annualized Rental Revenue	13,828	[1]
% of Total Annualized Rental Revenue	7.00%
Square Feet	872,000
% of Total Portfolio Square Feet	6.10%
Ceva Freight/Logistics [Member]
Concentration Risk [Line Items]
Locations	3
Industry	Truck Transportation
Annualized Rental Revenue	$ 5,198	[1]
% of Total Annualized Rental Revenue	2.60%
Square Feet	790,000
% of Total Portfolio Square Feet	5.50%

[1] Annualized base rent represents the annualized monthly base rent of executed leases as of December 31, 2013.

XML

Hedging Activities (Effect of Derivative Financial Instruments on Financial Statements) (Details) (Interest Rate Contract [Member], USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Designated Hedges [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) recognized in OCI (effective portion)	$ 352,000	$ (436,000)	$ (625,000)
Designated Hedges [Member] | Interest Expense [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss reclassified from accumulated OCI into income (effective portion)	(2,726,000)	(2,648,000)	(2,862,000)
Designated Hedges [Member] | Interest and Other Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of loss recognized in income due to missed forecast (ineffective portion and amount excluded from effectiveness testing)	(1,897,000)	(1,751,000)	(600,000)
Undesignated Hedges [Member] | Interest and Other Income [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain (loss) recognized in income		$ (19,000)	$ (85,000)

XML

Debt Obligations (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 property loan		Dec. 31, 2012	Dec. 31, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Number of interest-only mortgage notes	12
Number of amortizing mortgage notes	20
Interest-only mortgage notes, outstanding balance	$ 341,400,000
Amortizing mortgage notes outstanding balance	635,600,000
Total unsecured borrowings	300,000,000		300,000,000
Assumed mortgage note unpaid principal balance outstanding	57,900,000
Number of properties sold	12
Discount rate	8.50%
Preliminary estimate of fair value of assumed mortgage	57,897,000		124,800,000
Line of credit, amount outstanding	30,000,000		30,000,000
Current borrowing capacity	320,000,000
Available borrowing under revolving credit facility	86,100,000		150,000,000
Repaid of outstanding borrowings	29,046,000		291,281,000	11,109,000
Outstanding Balance	1,322,277,000	[1],[2]
Interest bearing on mortgage note	6.01%		5.80%
Restructured mortgage note face value	125,813,000	[3]
Comerica Bank Tower [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Assumed mortgage note unpaid principal balance outstanding	177,300,000
Mortgage notes, fair value			123,000,000
Repurchase Facility [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Loss on financing commitments and early repayment of debt	479,000
Outstanding borrowing spread over LIBOR	2.25%
Outstanding Balance	45,300,000
Interest rate	2.84%
Repurchase Facility [Member] | Minimum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding borrowing spread over LIBOR			2.25%
Repurchase Facility [Member] | Maximum [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Outstanding borrowing spread over LIBOR			3.00%
Repayment Of Mortgage Note
Accounts, Notes, Loans and Financing Receivable [Line Items]
Assumed mortgage note unpaid principal balance outstanding	14,500,000
Loss on financing commitments and early repayment of debt	233,000
Disposal Of Mortgage Notes [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Assumed mortgage note unpaid principal balance outstanding	117,600,000
Number of properties sold	8
Subsequent Disposal Of Mortgage Notes [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Assumed mortgage note unpaid principal balance outstanding	80,400,000
Loss on financing commitments and early repayment of debt	$ 1,800,000
Number of properties sold	11

[1] Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.

[2] Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.(6)As of December 31, 2013, our mortgage notes and secured borrowings are secured by interests in real properties and debt investments totaling approximately $2.0 billion.

[3] Reflects the principal amount of the debt investment outstanding, which is net of principal repayments.

XML

Investments in Real Property (Narrative) (Details) (USD $)	12 Months Ended						0 Months Ended		12 Months Ended											12 Months Ended
	Dec. 31, 2013 property sqft		Dec. 31, 2012 property sqft		Dec. 31, 2011 property sqft		Nov. 07, 2013 Office Property; San Francisco, CA [Member] sqft	Dec. 31, 2013 Office Property; San Francisco, CA [Member]	Dec. 31, 2013 California [Member]	Dec. 31, 2013 New Jersey [Member]	Dec. 31, 2013 Massachusetts [Member]	Dec. 31, 2013 Texas [Member]	Dec. 31, 2013 Comerica Bank Tower [Member]	Dec. 31, 2013 Industrial [Member] property		Dec. 31, 2012 Industrial [Member]		Dec. 31, 2013 Office [Member]	Dec. 31, 2012 Office [Member]	Dec. 31, 2013 Charles Schwab and Company, Inc. [Member] sqft		Dec. 31, 2013 Charles Schwab and Company, Inc. [Member] Continuing Operations [Member]
Real Estate Properties [Line Items]
Number of industrial properties classified as held for sale	12		0											12
Ownership interest in property							100.00%
Square feet of office property acquired							269,000
Unpaid principal balance	$ 57,900,000						$ 57,900,000	$ 57,800,000					$ 177,300,000
Interest bearing on mortgage note	6.01%		5.80%				6.00%
Maturity period								June 2016
Estimated fair value of assets and liabilities								109,700,000
Business Acquisition, Purchase Price Allocation, Land								32,600,000
Business Acquisition, Purchase Price Allocation, Buildings								67,800,000
Business Acquisition, Purchase Price Allocation, Intangible Assets Other than Goodwill								15,900,000
Intangible lease liabilities, net	74,413,000		88,331,000					1,500,000
Business Acquisition, Purchase Price Allocation, Other Liabilities								3,100,000
Acquired intangible asset, weighted average useful life								4 years 4 months 24 days
Acquired intangible Liability, weighted average useful life								2 years 3 months 18 days
Assumed mortgage	57,897,000		124,800,000				61,700,000
Aggregate revenue	1,600,000
Net operating income	857,000
Number of impaired properties	1				1
Impairment charges	2,600,000		5,700,000		23,500,000
Number of properties sold	12
Rentable square feet	3,360,000																			594,000
Proceeds from disposition of real property	133,485,000		7,081,000		81,651,000
Gain (loss) on disposition, net of taxes	74,286,000		21,113,000		13,633,000	[1]
Square feet of office property sold	4,111,000		610,000		1,069,000
Investments in real property	1,924,642,000	[2]	2,336,768,000	[2]										229,786,000	[3]	475,525,000	[3]	1,092,351,000	1,245,346,000
Restricted cash	25,550,000		32,968,000
Outstanding loan balance	1,322,277,000	[4],[5]
Rental revenue	$ 76,602,000	[6]																		$ 22,761,000	[6]	$ 25,500,000
Concentration percentage	38.80%								20.00%	16.00%	16.00%	12.00%								11.50%		11.70%

[1] Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

[2] Includes approximately $82.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of December 31, 2013 and 2012, respectively. (2)Includes approximately $143.0 million, after accumulated depreciation and amortization, in consolidated real property variable interest investments as of December 31, 2013.

[3] Amounts reported for our industrial segment as of December 31, 2013 and December 31, 2012 include net investments in real property of approximately $117.9 million and $125.0 million, respectively, relating to properties that we had previously classified within our office segment.

[4] Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.

[5] Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.(6)As of December 31, 2013, our mortgage notes and secured borrowings are secured by interests in real properties and debt investments totaling approximately $2.0 billion.

[6] Annualized base rent represents the annualized monthly base rent of executed leases as of December 31, 2013.

XML

Organization

12 Months Ended

Dec. 31, 2013

Organization [Abstract]

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.

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 II, Item 5, and Exhibit 99.1 of this Annual Report on Form 10-K 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.

As of December 31, 2013, we had raised gross proceeds of approximately $32.3 million from the sale of approximately 4.7 million shares in the Offering, including approximately $121,000through our distribution reinvestment plan. As of December 31, 2013, approximately $2,967.7million in shares remained available for sale pursuant to the Offering, including approximately $749.9million in shares available for sale through our distribution reinvestment plan.

XML

Debt Obligations (Summary of Borrowings) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	4.90%		4.80%
Outstanding Balance	$ 1,323,472,000		$ 1,619,452,000	[1]
Gross Investment Amount Securing Borrowings	1,980,243,000		2,302,755,000	[2]
Adjustment to mortgages	0		55,000,000
Unamortized net discount at end of period on debt payable	2,700,000		(2,700,000)
Troubled debt restructuring amortization	1,500,000		718,000
Liabilities held for sale	86,668,000	[3]
Mortgage notes	943,045,000	[4]	1,319,452,000	[4]
Line of credit, amount outstanding	30,000,000		30,000,000
Total unsecured borrowings	300,000,000		300,000,000
Fixed Rate Secured Borrowings [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	5.80%	[5]	5.80%	[5]
Outstanding Balance	969,622,000	[5]	1,160,042,000	[1],[5]
Gross Investment Amount Securing Borrowings	1,898,946,000	[5]	2,061,757,000	[2],[5]
Floating-Rate Mortgage Notes [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	3.90%	[6]	3.50%	[6]
Outstanding Balance	8,580,000	[6]	23,701,000	[1],[6]
Gross Investment Amount Securing Borrowings	15,571,000	[6]	42,609,000	[2],[6]
Outstanding borrowing spread over LIBOR	3.75%
Total mortgage Notes [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	5.80%		5.70%
Outstanding Balance	978,202,000		1,183,743,000	[1]
Gross Investment Amount Securing Borrowings	1,914,517,000		2,104,366,000	[2]
Repurchase Facility [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	2.80%	[7]	3.00%	[7]
Outstanding Balance	45,270,000	[7]	135,709,000	[1],[7]
Gross Investment Amount Securing Borrowings	65,726,000	[7]	198,389,000	[2],[7]
Outstanding borrowing spread over LIBOR	2.25%
Interest rate	2.84%
Mortgage notes	45,300,000
Total other secured borrowings
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	2.80%		3.00%
Outstanding Balance	45,270,000		135,709,000	[1]
Gross Investment Amount Securing Borrowings	65,726,000		198,389,000	[2]
Total Secured Borrowings [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	5.60%		5.40%
Outstanding Balance	1,023,472,000		1,319,452,000	[1]
Gross Investment Amount Securing Borrowings	1,980,243,000		2,302,755,000	[2]
Line of Credit [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	1.90%		2.20%
Outstanding Balance	30,000,000		30,000,000	[1]
Term Loan [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	2.20%	[8]	2.20%	[8]
Outstanding Balance	270,000,000	[8]	270,000,000	[1],[8]
Outstanding borrowing spread over LIBOR	1.70%		1.95%
Total unsecured borrowings	270,000,000		270,000,000
Unsecured Borrowings [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	2.20%		2.20%
Outstanding Balance	300,000,000		300,000,000	[1]
Interest rate	2.34%
Fixed Rate Secured Borrowings [Member]
Debt Instrument [Line Items]
Weighted Average Stated Interest Rate	6.10%
Outstanding Balance	80,400,000
Gross Investment Amount Securing Borrowings	170,300,000
Fixed Rate Secured Borrowings [Member] | Repurchase Facility [Member]
Debt Instrument [Line Items]
Outstanding Balance			79,100,000
Interest rate			3.14%
Fixed Rate Secured Borrowings [Member] | Unsecured Borrowings [Member]
Debt Instrument [Line Items]
Outstanding Balance	$ 200,000,000
Minimum [Member] | Floating-Rate Mortgage Notes [Member]
Debt Instrument [Line Items]
Outstanding borrowing spread over LIBOR			2.90%
Minimum [Member] | Repurchase Facility [Member]
Debt Instrument [Line Items]
Outstanding borrowing spread over LIBOR			2.25%
Maximum [Member] | Floating-Rate Mortgage Notes [Member]
Debt Instrument [Line Items]
Outstanding borrowing spread over LIBOR			3.75%
Maximum [Member] | Repurchase Facility [Member]
Debt Instrument [Line Items]
Outstanding borrowing spread over LIBOR			3.00%

[1] Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $0 and $55.0 million as of December 31, 2013 and 2012, respectively, (ii) unamortized premiums (discounts) to the face value of our outstanding fixed-rate mortgages of $2.7 million and ($2.7) million as of December 31, 2013 and 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $1.5 million and $718,000 as of December 31, 2013 and 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 approximately $80.4 million in consolidated mortgage notes in variable interest entity investments as of December 31, 2013.

[4] Includes approximately $60.7 million and $419.5 million in consolidated mortgage notes in variable interest entity investments as of December 31, 2013 and 2012, respectively.

[5] Fixed-rate mortgages presented include outstanding balances included within liabilities related to assets held for sale as of December 31, 2013 of approximately $80.4 million at a weighted average interest rate of 6.1% secured by gross investments of approximately $170.3 million.

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

[7] As of December 31, 2013, borrowings under our repurchase facility were subject to interest at a floating rate of 2.25% over one-month LIBOR. However, we had effectively fixed the interest rate of the borrowings using an interest rate swap, resulting in a fixed interest rate of 2.84% for the term of the borrowings (provided that our borrowing balance does not exceed our derivative instrument notional during that term). As of December 31, 2012, borrowings under our repurchase facilities were subject to interest at floating rates at spreads ranging from 2.25% to 3% over one-month LIBOR. As of December 31, 2012, we had effectively fixed the interest rate of approximately $79.1 million of the total of $135.7 million in borrowings using interest rate swaps at 3.14%, resulting in a weighted average interest rate on the total repurchase facility of 3.04%.

[8] As of December 31, 2013, borrowings under our term loan were subject to interest at a floating rate of 1.70% over one-month LIBOR. However, we had effectively fixed the interest rate for $200.0 million of the total of $270.0 million in borrowings using interest rate swaps at 2.34%, resulting in a weighted average interest rate on the total term loan of 2.21%. As of December 31, 2012, borrowings of $270.0 million under our term loan were subject to interest at a floating rate of 1.95% over one-month LIBOR, resulting in a weighted average interest rate on the total term loan of 2.16%.

XML

Summary of Significant Accounting Policies (Amortization Expense for Intangible Lease Assets and Adjustments to Rental Revenue for Above-Market Lease Assets and Below-Market Lease Liabilities) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Above Market Lease Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Net rental revenue adjustment	$ (7,293)	$ (8,050)	$ (8,393)
Below Market Lease Liabilities [Member]
Finite-Lived Intangible Assets [Line Items]
Net rental revenue adjustment	7,537	9,567	9,756
Leases, Acquired-in-Place, Market Adjustment [Member]
Finite-Lived Intangible Assets [Line Items]
Net rental revenue adjustment	244	1,517	1,363
Leases, Acquired-in-Place [Member]
Finite-Lived Intangible Assets [Line Items]
Intangible lease asset amortization	$ (62,325)	$ (80,739)	$ (77,452)

XML

Investments in Real Property (Tables)

12 Months Ended

Dec. 31, 2013

Investments in Real Property [Abstract]

Schedule of Consolidated Investments In Real Property

Real Property		Land		Building and Improvements		Intangible Lease Assets		Total Investment Amount		Intangible Lease Liabilities		Net Investment Amount
As of December 31, 2013:
Office	$	232,117	$	769,654	$	365,314	$	1,367,085	$	(15,861)	$	1,351,224
Industrial (1)		51,678		359,800		66,877		478,355		(46,626)		431,729
Retail		227,218		420,070		77,752		725,040		(51,059)		673,981
Total gross book value		511,013		1,549,524		509,943		2,570,480		(113,546)		2,456,934
Accumulated depreciation/amortization		-		(207,966)		(294,881)		(502,847)		35,997		(466,850)
Total net book value	$	511,013	$	1,341,558	$	215,062	$	2,067,633	$	(77,549)	$	1,990,084
As of December 31, 2012:
Office	$	218,738	$	833,226	$	457,754	$	1,509,718	$	(25,121)	$	1,484,597
Industrial		71,725		436,340		79,610		587,675		(48,432)		539,243
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 $21.1 million in land, $157.7 million in building and improvements, $14.9 million in intangible lease assets, and $5.6 million in intangible lease liabilities, before accumulated depreciation on assets of $50.6 million and accumulated amortization of intangible lease liabilities of $2.5 million, related to 12 industrial properties classified as held for sale in the accompanying balance sheet as of December 31, 2013.

Schedule of Disposed Properties

Type of Property	Market	DPF Ownership	Square Feet	Disposition Date	Gain (Loss)
2013 Dispositions:
Office	Dallas, TX	100.0%	62	January 13, 2013	$	1,217
Industrial Portfolio	Various (1)	96.4%	1,918	May 10, 2013		(311)
Office (2)	Dallas, TX	100.0%	1,509	May 31, 2013		15,462
Office	Boston, MA	100.0%	132	June 6, 2013		6,734
Office	Denver, CO	100.0%	257	July 31, 2013		35,371
Office	Denver, CO	100.0%	133	September 13, 2013		10,233
Office	Chicago, IL	100.0%	100	October 15, 2013		5,580
Total			4,111		$	74,286
2012 Dispositions:
Retail	Boston, MA	100.0%	19	February 27, 2012	$	(328)
Office	Silicon Valley, CA	90.0%	427	July 31, 2012		19,584
Industrial	Louisville, KY	90.0%	164	June 5, 2012		1,857
Total			610		$	21,113
2011 Dispositions:
Office	Silicon Valley, CA	97.5%	52	September 23, 2011	$	1,187
Industrial	Cincinnati, OH	95.6%	604	October 17, 2011		(1,046)
Office	Silicon Valley, CA	100.0%	187	November 18, 2011		8,305
Industrial	Kansas City, MO	88.6%	180	November 21, 2011		70
Retail	Boston, MA	100.0%	46	December 21, 2011		2,266
Total			1,069		$	10,782
Assets held for sale
Industrial Portfolio	Various (3)	92.5%	3,387	January 22, 2014
Total			3,387

(1)Industrial portfolio included seven properties located in the following markets: Philadelphia, PA, Sacramento, CA, Central Pennsylvania, Charlotte, NC, Atlanta, GA, and Chicago, IL. 

(2)During the year ended December 31, 2012, we became the 100% owner of the titleholder of a 1.5 million square foot office property in the Dallas, TX market (“Comerica Bank Tower”), as the result of our foreclosure of a non-performing mezzanine loan for which such ownership interest had served as collateral. Comerica Bank Tower was subject to a mortgage note with a principal balance of $179.8 million as of the acquisition date bearing interest at 5.8%, which matures in January 2017. On September 10, 2012, we were notified that a receiver (the “Receiver”) had been appointed for the Comerica Bank Tower. As of March 31, 2013, the unpaid principal balance of this mortgage note was $177.4 million. On May 31, 2013, Comerica Bank Tower was sold by the Receiver pursuant to court order to a purchaser unaffiliated with us. Because of the outstanding principal balance of the mortgage note, we did not receive any proceeds from the sale of Comerica Bank Tower.

(3)Industrial portfolio included12 properties located in the following markets: Atlanta, GA, Central Pennsylvania, Cincinnati, OH, Columbus, OH, Dallas, TX, Indianapolis, IN, and Minneapolis/St. Paul, MN.

Schedule of Amounts Recorded as Discontinued Operations

	For the Year Ended December 31,
	2013		2012		2011 (1)
Revenues	$	39,023	$	61,461	$	53,603
Rental expense		(14,020)		(21,731)		(12,709)
Real estate depreciation and amortization expense		(21,017)		(37,989)		(33,483)
Impairment of real estate property		-		(5,700)		(23,500)
Interest expense		(12,662)		(23,771)		(18,429)
Other expenses		(56)		(793)		(625)
Income (loss) from discontinued operations, net of taxes		(8,732)		(28,523)		(35,143)
Gain (Loss) on disposition, net of taxes		74,286		21,113		13,633
Discontinued operations, net of taxes	$	65,554	$	(7,410)	$	(21,510)

(1)Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

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

	For the Year Ended December 31,
	2013		2012		2011
Above-market lease assets	$	(7,293)	$	(8,050)	$	(8,393)
Below-market lease liabilities		7,537		9,567		9,756
Net increase to rental revenue	$	244	$	1,517	$	1,363
Intangible lease asset amortization	$	(62,325)	$	(80,739)	$	(77,452)

Future Minimum Rental Receivable Under Non Cancelable Operating and Ground Leases

For the Years Ended December 31,	Future Minimum Rentals
2014	$	192,551
2015		181,583
2016		174,497
2017		129,026
2018		95,009
Thereafter		283,661
Total	$	1,056,327

Schedule of Top Five Tenants as Percentage of Consolidated Annual Base Rent and Square Feet

Tenant	Locations	Industry	Annualized Rental Revenue (1)		% of Total Annualized Rental Revenue	Square Feet	% of Total Portfolio Square Feet
Charles Schwab & Co, Inc	1	Securities, Commodities, Fin. Inv./Rel. Activites	$	22,761	11.5%	594	4.2%
Northrop Grumman	2	Professional, Scientific and Technical Services		17,532	8.9%	699	4.9%
Sybase	1	Publishing Information (except Internet)		17,283	8.8%	405	2.8%
Stop & Shop	15	Food and Beverage Stores		13,828	7.0%	872	6.1%
CEVA Freight/Logistics	3	Truck Transportation		5,198	2.6%	790	5.5%
Total	22		$	76,602	38.8%	3,360	23.5%

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

XML

Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2013

Summary Of Significant Accounting Policies [Abstract]

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

	For the Year Ended December 31,
	2013		2012		2011
Above-market lease assets	$	(7,293)	$	(8,050)	$	(8,393)
Below-market lease liabilities		7,537		9,567		9,756
Net increase to rental revenue	$	244	$	1,517	$	1,363
Intangible lease asset amortization	$	(62,325)	$	(80,739)	$	(77,452)

Depreciation and Amortization Computed on Straight-Line Basis over Estimated Useful Lives

Description	Depreciable Life
Land	Not depreciated
Building	40 years
Building and land improvements	5-20 years
Tenant improvements	Lesser of useful life or lease term
Lease commissions	Over lease term
Intangible in-place lease assets	Over lease term
Above-market lease assets	Over lease term
Below-market lease liabilities	Over lease term, including below-market fixed-rate renewal options

Expected Amortization During Next Five Years and Thereafter Related to Acquired Above-Market Lease Assets, Below-Market Lease Liabilities and Acquired In-Place Lease Intangibles

	For the Year Ended December 31,
	2014		2015		2016		2017		2018		Thereafter		Total
Acquired below-market lease liabilities	$	7,125	$	5,895	$	5,201	$	4,975	$	4,920	$	49,433	$	77,549
Acquired above-market lease assets		(6,716)		(6,315)		(6,248)		(3,711)		(1,418)		(1,897)		(26,305)
Net rental revenue increase (decrease)	$	409	$	(420)	$	(1,047)	$	1,264	$	3,502	$	47,536	$	51,244
Acquired in-place lease intangible amortization	$	47,544	$	40,203	$	37,527	$	22,382	$	12,099	$	29,002	$	188,757

Schedule of Straight-Line Rent Adjustments and Tenant Recovery Income

	For the Year Ended December 31,
	2013		2012		2011
Straight-line rent adjustments	$	8,864	$	8,107	$	9,902
Tenant recovery income	$	33,029	$	33,585	$	33,445

XML

Debt Related Investments (Schedule of Debt Related Investments) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012	Dec. 31, 2011
Investment [Line Items]
Interest Rate as of December 31, 2013	7.60%	[1]
Face Amount of Debt	$ 125,813	[2]
Debt related investments, net	123,935		187,321	92,247
Mortgage Notes [Member] | Pacific [Member] | Fixed [Member]
Investment [Line Items]
Region	Pacific
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	7.50%	[1]
Maturity Date	Oct. 08, 2014	[3]
Face Amount of Debt	17,000	[2]
Debt related investments, net	17,098
Mortgage Notes [Member] | West North Central [Member] | Fixed [Member] | Mortgage Note 1 [Member]
Investment [Line Items]
Region	West North Central
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	7.80%	[1]
Maturity Date	Apr. 01, 2015	[3]
Face Amount of Debt	9,074	[2]
Debt related investments, net	9,389
Mortgage Notes [Member] | West North Central [Member] | Fixed [Member] | Mortgage Note 2 [Member]
Investment [Line Items]
Region	West North Central
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	6.00%	[1]
Maturity Date	Jul. 01, 2018	[3]
Face Amount of Debt	6,930	[2]
Debt related investments, net	6,887
Mortgage Notes [Member] | Mountain [Member] | Fixed [Member] | Mortgage Note 1 [Member]
Investment [Line Items]
Region	Mountain
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	7.70%	[1]
Maturity Date	Apr. 01, 2015	[3]
Face Amount of Debt	9,083	[2]
Debt related investments, net	9,175
Mortgage Notes [Member] | Mountain [Member] | Fixed [Member] | Mortgage Note 2 [Member]
Investment [Line Items]
Region	Mountain
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	6.20%	[1]
Maturity Date	Sep. 01, 2016	[3]
Face Amount of Debt	2,966	[2]
Debt related investments, net	3,011
Mortgage Notes [Member] | Mountain [Member] | Fixed [Member] | Mortgage Note 3 [Member]
Investment [Line Items]
Region	Mountain
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	5.20%	[1]
Maturity Date	Mar. 01, 2021	[3]
Face Amount of Debt	3,450	[2]
Debt related investments, net	3,429
Mortgage Notes [Member] | Southeast [Member] | Fixed [Member] | Mortgage Note 1 [Member]
Investment [Line Items]
Region	Southeast
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	6.30%	[1]
Maturity Date	Feb. 01, 2018	[3]
Face Amount of Debt	9,213	[2]
Debt related investments, net	9,570
Mortgage Notes [Member] | Southeast [Member] | Fixed [Member] | Mortgage Note 2 [Member]
Investment [Line Items]
Region	Southeast
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	7.00%	[1]
Maturity Date	Mar. 01, 2019	[3]
Face Amount of Debt	9,170	[2]
Debt related investments, net	9,331
Mortgage Notes [Member] | East North Central [Member] | Fixed [Member]
Investment [Line Items]
Region	East North Central
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	6.10%	[1]
Maturity Date	Apr. 01, 2018	[3]
Face Amount of Debt	7,746	[2]
Debt related investments, net	7,354
Mortgage Notes [Member] | Northeast [Member] | Fixed [Member]
Investment [Line Items]
Region	Northeast
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	6.20%	[1]
Maturity Date	Nov. 01, 2017	[3]
Face Amount of Debt	3,841	[2]
Debt related investments, net	3,903
Mortgage Notes [Member] | Northeast [Member] | Variable [Member]
Investment [Line Items]
Region	Northeast
Interest Rate Fixed or Variable	Variable
Interest Rate as of December 31, 2013	5.20%	[1]
Maturity Date	Jun. 07, 2015	[3]
Face Amount of Debt	25,000	[2]
Debt related investments, net	25,211
Mortgage Notes [Member] | South West [Member] | Fixed [Member]
Investment [Line Items]
Region	Southwest
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	5.80%	[1]
Maturity Date	Jun. 01, 2014	[3]
Face Amount of Debt	3,675	[2]
Debt related investments, net	3,677
B Notes [Member] | Pacific [Member] | Fixed [Member]
Investment [Line Items]
Region	Pacific	[4]
Interest Rate Fixed or Variable	Fixed	[4]
Interest Rate as of December 31, 2013	0.00%	[1],[4]
Maturity Date	Jan. 01, 2011	[3],[4]
Face Amount of Debt	3,000	[2],[4]
Mezzanine Debt [Member] | Mid-Atlantic [Member] | Fixed [Member]
Investment [Line Items]
Region	Mid-Atlantic
Interest Rate Fixed or Variable	Fixed
Interest Rate as of December 31, 2013	17.00%	[1]
Maturity Date	Jul. 01, 2016	[3]
Face Amount of Debt	15,665	[2]
Debt related investments, net	$ 15,900

[1] Rates for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of December 31, 2013 for purposes of this table.

[2] Reflects the principal amount of the debt investment outstanding, which is net of principal repayments.

[3] Reflects the initial maturity of the investment or any exercised options to extend and does not consider any future options to extend that are at the discretion of the borrower.

[4] We have recorded a provision for loan loss of $3.0 million related to this B-note investment as of December 31, 2013, and we have assumed a yield of 0%.

XML

Summary Of Significant Accounting Policies (Depreciation and Amortization Computed on Straight-Line Basis over Estimated Useful Lives) (Details)	12 Months Ended
	Dec. 31, 2013
Land [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	Not depreciated
Building [Member]
Property, Plant and Equipment [Line Items]
Depreciable Life	40 years
Building and Land Improvements [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Depreciable Life	5 years
Building and Land Improvements [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Depreciable Life	20 years
Tenant Improvements [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	Lesser of useful life or lease term
Leasing Commissions [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	Over lease term
Intangible Lease Assets [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	Over lease term
Above Market Lease Assets [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	Over lease term
Below Market Lease Liabilities [Member]
Property, Plant and Equipment [Line Items]
Estimated Useful Lives	Over lease term, including below-market fixed-rate renewal options

XML

Debt Related Investments (Tables)

12 Months Ended

Dec. 31, 2013

Debt Related Investments [Abstract]

Details of Debt Related Income

	For the Year Ended December 31,						Weighted Average Yield as of
Investment Type	2013		2012		2011		December 31, 2013 (1)
Mortgage notes (2)	$	8,726	$	8,732	$	6,890	5.7%
B-notes		51		433		2,371	0.0%
Mezzanine debt		1,672		244		1,846	16.7%
Total	$	10,449	$	9,409	$	11,107	7.1%

(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 December 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of December 31, 2013 for purposes of this table. As of December 31, 2013, we had one debt related investment with a net investment amount of $25.0 million that bears interest at a floating rate 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 investment for which we have recognized a full allowance for loss as of December 31, 2013.

(2)We had four and three debt related investments repaid in full during the years ended December 31, 2013 and 2012, respectively. Amounts recorded include an early repayment fee received and accelerated amortization of origination fees offset by accelerated amortization of deferred due diligence costs related to these repayments.

Debt Investment Activity

	Year Ended December 31,
	2013		2012
Investment in debt related investments:
Balance at January 1,	$	187,321	$	92,247
Investments		12,323		121,842
Principal repayments		(75,702)		(25,093)
Amortization of deferred fees, costs, and discounts/premiums		(7)		(1,675)
Provision for loan loss		-		-
Balance at December 31,	$	123,935	$	187,321

Summary of Debt Related Investments

Description	Region	Interest Rate Fixed or Variable	Interest Rate as of December 31, 2013 (1)	Maturity Date (2)	Face Amount of Debt (3)		Amount of Debt Related Investments
Mortgage note	Pacific	Fixed	7.5%	10/8/2014	$	17,000	$	17,098
Mortgage note	West North Central	Fixed	7.8%	4/1/2015		9,074		9,389
Mortgage note	Mountain	Fixed	7.7%	4/1/2015		9,083		9,175
Mortgage note	Southeast	Fixed	6.3%	2/1/2018		9,213		9,570
Mortgage note	East North Central	Fixed	6.1%	4/1/2018		7,746		7,354
Mortgage note	Northeast	Fixed	6.2%	11/1/2017		3,841		3,903
Mortgage note	Mountain	Fixed	6.2%	9/1/2016		2,966		3,011
Mortgage note	Southeast	Fixed	7.0%	3/1/2019		9,170		9,331
Mortgage note	West North Central	Fixed	6.0%	7/1/2018		6,930		6,887
Mortgage note	Southwest	Fixed	5.8%	6/1/2014		3,675		3,677
Mortgage note	Mountain	Fixed	5.2%	3/1/2021		3,450		3,429
Mortgage note	Northeast	Variable	5.2%	6/7/2015		25,000		25,211
B-note (4)	Pacific	Fixed	0.0%	1/1/2011		3,000		-
Mezzanine debt	Mid-Atlantic	Fixed	17.0%	7/1/2016		15,665		15,900
Total/weighted average			7.6%		$	125,813	$	123,935

(1) Rates for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of December 31, 2013 for purposes of this table.

(2) Reflects the initial maturity of the investment or any exercised options to extend and does not consider any future options to extend that are at the discretion of the borrower.

Reflects the principal amount of the debt investment outstanding, which is net of principal repayments.

(4) We have recorded a provision for loan loss of $3.0 million related to this B-note investment as of December 31, 2013, and we have assumed a yield of 0%.

Reconciliation of Allowance for Loan Loss on Debt Related Investments

		Allowance for Loan Loss
Beginning balance as of December 31, 2012:		$	18,000
	Direct write offs		(15,000)
	Ending balance as of December 31, 2013:	$	3,000

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

	Debt Investments Individually Evaluated for Impairment as of December 31,
	2013		2012
Debt investments	$	126,935	$	205,321
Less: Allowance for loan losses		(3,000)		(18,000)
Total	$	123,935	$	187,321

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

As of:	Recorded Investment		Related Allowance		Amount of Impaired Loans With No Allowance Recorded
December 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

For the Year Ended December 31,	Average Recorded Investment		Interest Income Recognized
2013	$	6,067	$	51
2012		12,930		433
2011		25,314		3,060

XML

Debt Obligations (Tables)

12 Months Ended

Dec. 31, 2013

Debt Obligations [Abstract]

Schedule of Borrowings

	Weighted Average Stated Interest Rate as of December 31,		Outstanding Balance as of December 31, (1)					Gross Investment Amount Securing Borrowings as of December 31, (2)
	2013	2012	2013		2012		2013		2012
Fixed-rate mortgages (3)	5.8%	5.8%	$	969,622	$	1,160,042	$	1,898,946	$	2,061,757
Floating-rate mortgages (4)	3.9%	3.5%		8,580		23,701		15,571		42,609
Total mortgage notes	5.8%	5.7%		978,202		1,183,743		1,914,517		2,104,366
Repurchase facilities (5)	2.8%	3.0%		45,270		135,709		65,726		198,389
Total other secured borrowings	2.8%	3.0%		45,270		135,709		65,726		198,389
Total secured borrowings	5.6%	5.4%		1,023,472		1,319,452		1,980,243		2,302,755
Line of credit	1.9%	2.2%		30,000		30,000		N/A		N/A
Term loan (6)	2.2%	2.2%		270,000		270,000		N/A		N/A
Total unsecured borrowings	2.2%	2.2%		300,000		300,000		N/A		N/A
Total borrowings	4.9%	4.8%	$	1,323,472	$	1,619,452	$	1,980,243	$	2,302,755

(1)Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $0 and $55.0 million as of December 31, 2013 and 2012, respectively, (ii) unamortized premiums (discounts) to the face value of our outstanding fixed-rate mortgages of $2.7 million and ($2.7) million as of December 31, 2013 and 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $1.5 million and $718,000 as of December 31, 2013 and 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)Fixed-rate mortgages presented include outstanding balances included within liabilities related to assets held for sale as of December 31, 2013 of approximately $80.4 million at a weighted average interest rate of 6.1% secured by gross investments of approximately $170.3 million.  

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

(5)As of December 31, 2013, borrowings under our repurchase facility were subject to interest at a floating rate of 2.25% over one-month LIBOR. However, we had effectively fixed the interest rate of the borrowings using an interest rate swap, resulting in a fixed interest rate of 2.84% for the term of the borrowings (provided that our borrowing balance does not exceed our derivative instrument notional during that term). As of December 31, 2012, borrowings under our repurchase facilities were subject to interest at floating rates at spreads ranging from 2.25% to 3% over one-month LIBOR. As of December 31, 2012, we had effectively fixed the interest rate of approximately $79.1 million of the total of $135.7 million in borrowings using interest rate swaps at 3.14%, resulting in a weighted average interest rate on the total repurchase facility of 3.04%.

(6)As of December 31, 2013, borrowings under our term loan were subject to interest at a floating rate of 1.70% over one-month LIBOR. However, we had effectively fixed the interest rate for $200.0 million of the total of $270.0 million in borrowings using interest rate swaps at 2.34%, resulting in a weighted average interest rate on the total term loan of 2.21%. As of December 31, 2012, borrowings of $270.0 million under our term loan were subject to interest at a floating rate of 1.95% over one-month LIBOR, resulting in a weighted average interest rate on the total term loan of 2.16%.

Schedule of Borrowings Reflects Contractual Debt Maturities

	As of December 31, 2013
	Mortgage Notes and Other Secured Borrowings			Unsecured Borrowings			Total
Year Ending December 31,	Number of Borrowings Maturing	Outstanding Balance (1)(2)(3)		Number of Borrowings Maturing	Outstanding Balance (4)		Outstanding Balance (5)(6)
2014	4	$	145,190	0	$	-	$	145,190
2015	5		127,206	0		-		127,206
2016	13		347,496	1		30,000		377,496
2017	7		223,371	0		-		223,371
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
2023	0		978	0		-		978
Thereafter	2		6,431	0		-		6,431
Total	33	$	1,022,277	2	$	300,000	$	1,322,277

(1)Three of our mortgage notes and one of our repurchase facilities with an aggregate outstanding principal balance as of December 31, 2013 of approximately $132.5 million have initial maturities before December 31, 2014.  One of these mortgage notes with an outstanding balance of $38.9 million, and the repurchase facility with an outstanding balance of $45.3 million have extension options beyond December 31, 2014. 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 these extension options. However, we cannot guarantee that we will meet the requirements to extend the notes upon initial maturity. In the event that we do not qualify to extend the notes, we expect to repay them with proceeds from new borrowings or available proceeds from our revolving credit facility.

(2)Three of our mortgage notes with outstanding balances of $39.7 million, $30.9 million, and $9.8 million, maturing in 2014, 2015, and 2016, respectively, were classified within liabilities associated with assets held for sale in the accompanying balance sheet as of December 31, 2013. These mortgages were assumed by the purchaser of the related portfolio of real properties subsequent to December 31, 2013.

(3)Secured borrowings presented include (i) mortgage note borrowings of approximately $977.0 million with maturities ranging from 2014 to 2029, and (ii) borrowings under our repurchase facility of approximately $45.3 million, which matures in 2014 and is subject to three one-year extension options.

(4)Unsecured borrowings presented include (i) borrowings under our revolving credit facility of $30.0 million, which matures in 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.  

(5)Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.

(6)As of December 31, 2013, our mortgage notes and secured borrowings are secured by interests in real properties and debt investments totaling approximately $2.0 billion.

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
OPERATING ACTIVITIES:
Net Income (Loss)	$ 56,470		$ (22,371)		$ (64,566)
Adjustments to reconcile net loss to net cash provided by operating activities:
Real estate depreciation and amortization expense	108,191		129,116		126,890
Gain on disposition of real property	(74,306)		(21,144)		(13,588)
Unrealized impairment loss on real property	2,600		5,700		23,500
Provision for loss on debt related investments					23,037
Other adjustments to reconcile loss to net cash provided by operating activities	9,835		14,824		9,841
Changes in operating assets and liabilities	(16,201)		(11,638)		(10,772)
Net cash provided by operating activities	86,589		94,487		94,342
INVESTING ACTIVITIES:
Acquisition of real property	(48,228)				(21,456)
Capital expenditures in real property	(25,436)		(21,456)		(11,850)
Proceeds from disposition of real property	133,485		7,081		81,651
Investment in debt related investments	(10,848)		(39,958)
Principal collections on debt related investments	29,018		7,300		43,605
Other investing activities	(5,144)		7,568		(2,493)
Net cash provided by (used in) investing activities	72,847		(39,465)		89,457
FINANCING ACTIVITIES:
Mortgage note proceeds			15,126
Mortgage note principal repayments	(29,046)		(291,281)		(11,109)
Net proceeds from revolving line of credit borrowings			30,000
Proceeds from term loan borrowings			270,000
Proceeds from other secured borrowings					19,162
Repayment of other secured borrowing	(44,256)		(27,461)		(471)
Redemption of common shares	(66,073)		(53,916)		(62,588)
Distributions on common stock	(41,050)		(57,005)		(64,458)
Proceeds from sale of common stock	30,917		567
Offering costs for issuance of common stock	(3,812)		(3,403)		(91)
Distributions to noncontrolling interest holders	(5,599)		(9,230)		(10,408)
Redemption of OP Unit holder interest	(6,405)		(11,944)		(824)
Other financing activities	(6,206)		(8,050)		(8,124)
Net cash used in financing activities	(171,530)		(146,597)		(138,911)
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS	(12,094)		(91,575)		44,888
CASH AND CASH EQUIVALENTS, beginning of period	36,872		128,447		83,559
CASH AND CASH EQUIVALENTS, end of period	24,778		36,872		128,447
Supplemental Disclosure of Cash Flow Information:
Assumed mortgage	57,897		124,800
Cash paid for interest	72,352		87,935		84,113
Amount issued pursuant to the distribution reinvestment plan	21,473		34,491		45,732
Non-cash reduction of mortgage note and other secured borrowings	239,573		63,253		120,029
Non-cash disposition of real property	193,066	[1]	46,282	[1]
Non-cash principal collection on debt related investments	46,183		17,778		61,103
Non-cash origination of debt related investments			82,343
Non-cash investment in real property			125,854
Non-cash origination of repurchase facility			96,534
Issuances of OP Units for beneficial interests					$ 28,597

[1] Represents the amount of proceeds from the disposition of real property that we did not receive in cash, primarily due to the repayment or assumption of related mortgage note borrowings by the purchaser at closing.

XML

Hedging Activities (Tables)

12 Months Ended

Dec. 31, 2013

Hedging Activities [Abstract]

Reconciliation of Accumulated Other Comprehensive Loss

		Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-For-Sale Securities		Accumulated Other Comprehensive Income
Beginning balance as of December 31, 2012:		$	(14,710)	$	(1,486)	$	(16,196)
	Other comprehensive income:
	Amortization of OCI into interest expense (net of tax benefit of $0)		2,726		-		2,726
	Change in fair value recognized in OCI (net of tax benefit of $0)		352		-		352
	Amounts reclassified from accumulated other comprehensive income:
	Losses reclassified into loss on extinguishment of debt and financing commitments upon discontinuance of cash flow hedges (net of tax benefit of $0)		1,897		-		1,897
	Net current-period other comprehensive income		4,975		-		4,975
	Attribution of and other adjustments to OCI attributable to noncontrolling interests		(141)		568		427
Ending balance as of December 31, 2013		$	(9,876)	$	(918)	$	(10,794)

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

	Asset Derivatives					Liability Derivatives
	Balance Sheet	As of December 31, 2013		As of December 31, 2012		Balance Sheet	As of December 31, 2013		As of December 31, 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)	$	748	$	-	Other liabilities (1)	$	(43)	$	(403)
Total derivatives designated as hedging instruments under ASC Topic 815			748		-			(43)		(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		$	748	$	-		$	(43)	$	(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.

XML

Segment Information (Reconciliation of Net Operating Income to Reported Net Income (Loss)) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
Reconciliation of net operating income attributable to common shareholders
Net operating income									$ 174,105		$ 175,790		$ 177,059
Interest and other income (expense)									(153)		807		2,394
Real estate depreciation and amortization expense									(87,174)		(91,127)		(93,407)
General and administrative expenses									(9,973)		(7,229)		(6,826)
Advisory fees, related party									(15,120)		(17,659)		(20,854)
Acquisition-related expenses									(337)	[1]	(325)	[1]	(610)	[1]
Interest expense									(65,325)		(69,844)		(74,406)
Impairment of real estate property									(2,600)		(5,700)		(23,500)
Loss on extinguishment of debt and financing commitments									(2,507)		(5,374)
Other-than-temporary impairment on securities									0		0		(3,369)
Provision for loss on debt related investments													(23,037)
Discontinued operations, net of taxes	5,512	45,403	18,754	(4,115)	(12,778)	13,545	(3,896)	(4,281)	65,554	[2]	(7,410)	[2]	(21,510)	[2],[3]
Net (income) loss attributable to noncontrolling interests	85	(3,257)	(1,329)	499	1,240	(2,680)	701	849	(4,002)		110		6,886
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ (1,367)	$ 42,074	$ 17,128	$ (5,367)	$ (14,164)	$ 9,264	$ (8,871)	$ (8,490)	$ 52,468		$ (22,261)		$ (57,680)

[1] Includes approximately $218,000 paid to our Advisor for the year ended December 31, 2011. We did not pay any acquisition fees to our Advisor during the years ended December 31, 2013 and 2012.

[2] Includes approximately $2.6 million, $101,000, and $1.6 million paid to our Advisor for fees associated with the disposition of real properties during the years ended December 31, 2013, 2012, and 2011, respectively.

[3] Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

XML

Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Data (Unaudited) [Abstract]

Quarterly Financial Data

									For the
	For the Quarter Ended								Year Ended
	March 31,		June 30,		September 30,		December 31,		December 31,
	2013		2013		2013		2013		2013
Rental revenue	$	50,636	$	51,199	$	52,113	$	53,380	$	207,328
Debt related income		2,735		2,615		2,309		2,790		10,449
Total revenue		53,371		53,814		54,422		56,170		217,777
Total operating expenses		(38,199)		(37,512)		(38,180)		(44,985)		(158,876)
Other income (expenses)		(16,923)		(16,599)		(16,314)		(18,149)		(67,985)
Loss from continuing operations		(1,751)		(297)		(72)		(6,964)		(9,084)
Discontinued operations, net of taxes	$	(4,115)	$	18,754	$	45,403	$	5,512		65,554
Net income (loss)		(5,866)		18,457		45,331		(1,452)		56,470
Net (income) loss attributable to noncontrolling interests		499		(1,329)		(3,257)		85		(4,002)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(5,367)	$	17,128	$	42,074	$	(1,367)	$	52,468
Net loss per basic and diluted common share
Continuing operations	$	(0.01)	$	(0.00)	$	(0.00)	$	(0.04)	$	(0.05)
Discontinued operations	$	(0.02)	$	0.10	$	0.24	$	0.02	$	0.34
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	(0.03)	$	0.10	$	0.24	$	(0.02)	$	0.29

									For the
	For the Quarter Ended								Year Ended
	March 31,		June 30,		September 30,		December 31,		December 31,
	2012		2012		2012		2012		2012
Rental revenue	$	51,953	$	51,282	$	51,590	$	52,091	$	206,916
Debt related income		1,884		1,759		3,019		2,747		9,409
Total revenue		53,837		53,041		54,609		54,838		216,325
Total operating expenses		(40,388)		(38,900)		(38,812)		(38,775)		(156,875)
Other income (expenses)		(18,507)		(19,817)		(17,398)		(18,689)		(74,411)
Loss from continuing operations		(5,058)		(5,676)		(1,601)		(2,626)		(14,961)
Discontinued operations, net of taxes		(4,281)	$	(3,896)	$	13,545		(12,778)		(7,410)
Net income (loss)		(9,339)		(9,572)		11,944		(15,404)		(22,371)
Net (income) loss attributable to noncontrolling interests		849		701		(2,680)		1,240		110
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(8,490)	$	(8,871)	$	9,264	$	(14,164)	$	(22,261)
Net loss per basic and diluted common share
Continuing operations	$	(0.03)	$	(0.03)	$	(0.01)	$	(0.01)	$	(0.08)
Discontinued operations	$	(0.02)	$	(0.02)	$	0.06	$	(0.06)	$	(0.04)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	(0.05)	$	(0.05)	$	0.05	$	(0.07)	$	(0.12)

XML

Debt Related Investments (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 loan		Dec. 31, 2012 loan		Dec. 31, 2011
Investment [Line Items]
Number of debt investments	14		19
Weighted average maturity of our debt investments	2 years 6 months
Interest only mortgage loan receivable on real estate	2
Number of debt investment repaid	4		3
Net cash proceeds from repayment	$ 28,100,000		$ 5,900,000
Principal repayment	73,700,000		22,300,000
Prepayment of fee	435,000		1,400,000
Repayments of borrowings	46,200,000		17,800,000
Investment in real property	1,924,642,000	[1]	2,336,768,000	[1]
Provision losses					23,037,000
Direct write off of allowance for loan loss	15,000,000		20,000,000
Unpaid principal balance of impaired debt investments	3,000,000		30,100,000
Number of impaired debt investments	1		3
B-notes [Member]
Investment [Line Items]
Number of Nonaccrual Loans Receivable	1		2
Mortgage Notes [Member]
Investment [Line Items]
Number of debt investment repaid	3
B Notes [Member]
Investment [Line Items]
Number of debt investment repaid	1
LIBOR floor rate					4.00%
LIBOR plus rate					3.25%
Investment in real property			12,100,000
Provision losses	$ 3,000,000
Number of non accrual loans written off			1
Non-delinquent Mortgage Loans on Real Estate [Member]
Investment [Line Items]
Number of debt investments	13
Subordinate Mortgage Loans on Real Estate [Member]
Investment [Line Items]
Number of debt investments	2

[1] Includes approximately $82.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of December 31, 2013 and 2012, respectively. (2)Includes approximately $143.0 million, after accumulated depreciation and amortization, in consolidated real property variable interest investments as of December 31, 2013.

XML

Noncontrolling Interests (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 property	Dec. 31, 2012
Noncontrolling Interest [Line Items]
Purchase in joint venture	$ 4,400,000
Decrease in noncontrolling interest	1,600,000
Office Property [Member]
Noncontrolling Interest [Line Items]
Purchase in joint venture		3,000,000
Decrease in noncontrolling interest		1,600,000
Number of properties purchased under portfolio	2
Industrial [Member]
Noncontrolling Interest [Line Items]
Number of properties purchased under portfolio	2
Class E [Member]
Noncontrolling Interest [Line Items]
Shares redeemed	10,000,000	9,200,000
Operating Partnership Units [Member]
Noncontrolling Interest [Line Items]
Number of Operating Partnership Units held by the general partner	200
Contribution for OP Units	2,000
Percentage of proceeds received contributed to our Operating Partnership	100.00%
Limited partnership interest owned in Operating Partnership	93.00%	92.60%
Operating Partnership Units [Member] | Class E [Member]
Noncontrolling Interest [Line Items]
Partnership unit conversion rate to shares of common stock	1
Shares of common stock issued for redemption of OP Units	0	269,000
Shares OP Units redeemed	0	273,000
Shares redeemed	904,000	1,700,000
OP Units redemption value maximum	6,200,000	12,800,000
Operating Partnership Units [Member] | Class E [Member] | Scenario 1 [Member]
Noncontrolling Interest [Line Items]
OP Units redemption value maximum	$ 92,000,000	$ 95,000,000
Operating Partnership units issued	13,300,000	14,200,000
Operating Partnership units outstanding	13,300,000	14,200,000

XML

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013		Dec. 31, 2012
ASSETS
Investments in real property	$ 2,376,864		$ 2,819,550
Accumulated depreciation and amortization	(452,222)		(482,782)
Total net investments in real property	1,924,642	[1]	2,336,768	[1]
Debt related investments, net	123,935		187,321
Total net investments	2,048,577		2,524,089
Cash and cash equivalents	24,778		36,872
Restricted cash	25,550		32,968
Other assets, net	60,328		65,325
Assets held for sale	146,176	[2]
Total Assets	2,305,409		2,659,254
Liabilities:
Accounts payable and accrued expenses	45,769		53,221
Mortgage notes and other secured borrowings	943,045	[3]	1,319,452	[3]
Unsecured borrowings	300,000		300,000
Intangible lease liabilities, net	74,413		88,331
Other liabilities	50,503		56,723
Liabilities held for sale	86,668	[4]
Total Liabilities	1,500,398		1,817,727
Stockholders' equity:
Common stock, $0.01 par value; 1,000,000,000 shares authorized; 176,006,755 and 178,127,559 shares issued and outstanding, as of December 31, 2013 and December 31, 2012, respectively	1,760	[5]	1,781	[5]
Additional paid-in capital	1,582,886		1,610,996
Distributions in excess of earnings	(860,747)		(850,885)
Accumulated other comprehensive loss	(10,794)		(16,196)
Total stockholders' equity	713,105		745,696
Noncontrolling interests	91,906		95,831
Total Equity	805,011		841,527
Total Liabilities and Equity	$ 2,305,409		$ 2,659,254

[1] Includes approximately $82.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of December 31, 2013 and 2012, respectively. (2)Includes approximately $143.0 million, after accumulated depreciation and amortization, in consolidated real property variable interest investments as of December 31, 2013.

[2] Includes approximately $143.0 million, after accumulated depreciation and amortization, in consolidated real property variable interest investments as of December 31, 2013.

[3] Includes approximately $60.7 million and $419.5 million in consolidated mortgage notes in variable interest entity investments as of December 31, 2013 and 2012, respectively.

[4] Includes approximately $80.4 million in consolidated mortgage notes in variable interest entity investments as of December 31, 2013.

[5] Includes 171,254,036 shares of Class E common stock, 216,745 shares of Class A common stock, 208,889 shares of Class W common stock, and 4,327,085 shares of Class I common stock issued and outstanding as of December 31, 2013, and 178,090,434 shares of Class E common stock, 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 12,375 shares of Class I common stock issued and outstanding as of December 31, 2012.

XML

Summary Of Significant Accounting Policies (Expected Amortization During Next Five Years and Thereafter Related to Acquired Above-Market Lease Assets, Below-Market Lease Liabilities and Acquired In-Place Lease Intangibles) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Below Market Lease Liabilities [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
2014	$ 7,125
2015	5,895
2016	5,201
2017	4,975
2018	4,920
Thereafter	49,433
Total	77,549
Above Market Lease Assets [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
2014	(6,716)
2015	(6,315)
2016	(6,248)
2017	(3,711)
2018	(1,418)
Thereafter	(1,897)
Total	(26,305)
Leases, Acquired-in-Place, Market Adjustment [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
2014	409
2015	(420)
2016	(1,047)
2017	1,264
2018	3,502
Thereafter	47,536
Total	51,244
Leases, Acquired-in-Place [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
2014	47,544
2015	40,203
2016	37,527
2017	22,382
2018	12,099
Thereafter	29,002
Total	$ 188,757

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND LOSS [Abstract]
Net Income (Loss)	$ 56,470	$ (22,371)	$ (64,566)
Other Comprehensive Income (Loss), net of tax:
Net unrealized change from available-for-sale securities		(1,426)	1,260
Unrealized change from cash flow hedging derivatives	4,975	3,963	2,837
Total Other Comprehensive Income, net of tax	4,975	2,537	4,097
Comprehensive income (loss)	61,445	(19,834)	(60,469)
Comprehensive (income) loss attributable to noncontrolling interests	(3,577)	(87)	6,605
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 57,868	$ (19,921)	$ (53,864)

XML

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

XML

Noncontrolling Interests (Tables)

12 Months Ended

Dec. 31, 2013

Noncontrolling Interests [Abstract]

Schedule of Noncontrolling Interest Balances

		OP Units:		Joint Venture Partner Interests:		Noncontrolling Interests
Beginning balance as of December 31, 2012:		$	88,259	$	7,572	$	95,831
	Comprehensive Income and Loss
	Net income		4,010		(8)		4,002
	Unrealized change from cash flow hedging derivatives		354		-		354
	Contributions, Distributions and Redemptions
	Contributions from noncontrolling interest holders		-		212		212
	Distributions to noncontrolling interest holders		(4,807)		(639)		(5,446)
	Redemption and buyout of noncontrolling interests, net		(1,408)		(1,639)		(3,047)
Ending balance as of  December 31, 2013		$	86,408	$	5,498	$	91,906

XML

Hedging Activities (Reconciliation of Accumulated Other Comprehensive Loss, Net of Amounts Attributable to Noncontrolling Interests) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance as of December 31, 2012	$ (16,196)
Amortization of interest expense	2,726
Change in fair value	352
Losses reclassified into loss on extinguishment of debt and financing commitments upon discontinuance of cash flow hedges (net of tax benefit of $0)	1,897
Total Other Comprehensive Income, net of tax	4,975	2,537	4,097
Attribution of and other adjustments to OCI attributable to noncontrolling interests	427
Ending balance as of December 31, 2013	(10,794)	(16,196)
Gains And Losses On Cash Flow Hedges [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance as of December 31, 2012	(14,710)
Amortization of interest expense	2,726
Change in fair value	352
Losses reclassified into loss on extinguishment of debt and financing commitments upon discontinuance of cash flow hedges (net of tax benefit of $0)	1,897
Total Other Comprehensive Income, net of tax	4,975
Attribution of and other adjustments to OCI attributable to noncontrolling interests	(141)
Ending balance as of December 31, 2013	(9,876)
Amortization of OCI into interest expense, Tax	0
Change in fair value recognized in OCI, Tax	0
Losses reclassified into loss on extinguishment of debt and financing commitments upon discontinuance of cash flow hedges, Tax	0
Unrealized Gains And Losses On Available-For-Sale Securities [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Beginning balance as of December 31, 2012	(1,486)
Attribution of and other adjustments to OCI attributable to noncontrolling interests	568
Ending balance as of December 31, 2013	$ (918)

XML

Income Taxes

12 Months Ended

Dec. 31, 2013

Income Taxes [Abstract]

Income Taxes

14.INCOME TAXES

We operate in a manner intended to qualify for treatment as a REIT for U.S. federal income tax purposes. As a REIT, we generally will not be subject to federal income taxation at the corporate level to the extent we distribute 100% of our REIT taxable income annually, as defined in the Code, to our stockholders and satisfy other requirements. To continue to qualify as a REIT for federal tax purposes, we must distribute at least 90% of our REIT taxable income annually. No material provisions have been made for federal income taxes in the accompanying financial statements. We had a gross deferred tax asset of approximately $4.4 million and $4.0 million as of December 31, 2013 and 2012, respectively, which is offset by a full valuation allowance. The tax years 2009 through 2013 remain open to examination by the major taxing jurisdictions to which we are subject.

XML

Stockholders' Equity (Tables)

12 Months Ended

Dec. 31, 2013

Stockholders' Equity [Abstract]

Information of Share Transactions

	Class E Common Stock			Class A Common Stock			Class W Common Stock			Class I Common Stock			Total Proceeds
	Shares	Amount (1)		Shares	Amount (1)		Shares	Amount (1)		Shares	Amount (1)		Shares	Amount (1)
Balances, December 31, 2010	182,717	$	1,806,652	-	$	-	-	$	-	-	$	-	182,717	$	1,806,652
Common stock:
Issuance of common stock and OP Units:
Distribution Reinvestment Plan	5,274		43,540	-		-	-		-	-		-	5,274		43,540
Conversion of OP Units to common stock	118		978	-		-	-		-	-		-	118		978
Redemptions of common stock	(5,778)		(48,205)	-		-	-		-	-		-	(5,778)		(48,205)
Balances, December 31, 2011	182,331	$	1,802,965	-	$	-	-	$	-	-	$	-	182,331	$	1,802,965
Issuance of common stock:
Shares Sold	65		317	12		83	12		83	12		83	101		566
Distribution Reinvestment Plan	4,610		34,449	-		-	-		-	-		-	4,610		34,449
Conversion of OP Units to common stock	269		2,273	-		-	-		-	-		-	269		2,273
Redemptions of common stock	(9,183)		(64,808)	-		-	-		-	-		-	(9,183)		(64,808)
Balances, December 31, 2012	178,092	$	1,775,196	12	$	83	12	$	83	12	$	83	178,128	$	1,775,445
Issuance of common stock:
Shares Sold	-		-	205		1,451	197		1,354	4,301		29,333	4,703		32,138
Distribution Reinvestment Plan	3,143		21,352	-		-	-		-	18		121	3,161		21,473
Redemptions of common stock	(9,981)		(68,402)	-		-	-		-	(4)		(30)	(9,985)		(68,432)
Balances, December 31, 2013	171,254	$	1,728,146	217	$	1,534	209	$	1,437	4,327	$	29,507	176,007	$	1,760,624

(1)Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans and share redemption programs.

Total Distributions Declared and Portion of Each Contribution Paid in Cash and Reinvested

	For the Year Ended December 31,
Distributions:	2013		% of Total Distributions	2012		% of Total Distributions	2011		% of Total Distributions
Paid in cash	$	41,123	66.0%	$	53,311	63.3%	$	62,575	59.2%
Reinvested in shares		21,207	34.0%		30,948	36.7%		43,129	40.8%
Total distributions	$	62,330	100.0%	$	84,259	100.0%	$	105,704	100.0%

Distributions Paid and/or Authorized

	Amount Declared per Share (1)
Quarter	Class E Shares		Class A Shares		Class W Shares		Class I Shares		Weighted Average		Payment Date
2012
1st Quarter 2012	$	0.1250		N/A		N/A		N/A	$	0.1250	April 16, 2012
2nd Quarter 2012	$	0.1250		N/A		N/A		N/A	$	0.1250	July 24, 2012
3rd Quarter 2012	$	0.1250	$	0.0938	$	0.1012	$	0.1086	$	0.1250	October 16, 2012
4th Quarter 2012	$	0.0875	$	0.0691	$	0.0775	$	0.0858	$	0.0875	January 16, 2013
2013
1st Quarter 2013	$	0.0875	$	0.0692	$	0.0775	$	0.0858	$	0.0875	April 16, 2013
2nd Quarter 2013	$	0.0875	$	0.0689	$	0.0774	$	0.0858	$	0.0875	July 16, 2013
3rd Quarter 2013	$	0.0875	$	0.0685	$	0.0771	$	0.0858	$	0.0875	October 16, 2013
4th Quarter 2013	$	0.0875	$	0.0684	$	0.0771	$	0.0858	$	0.0874	January 16, 2014
2014
1st Quarter 2014 (2)	$	0.0875	$	0.0875	$	0.0875	$	0.0875	$	0.0875	April 16, 2014 (3)

(1)Assumes ownership of share or unit for the entire quarter.

(2)The distribution amount herein for the first quarter of 2014 does not reflect class-specific adjustments made to our Class A, Class W, and Class I shares, which have not yet been determined.

(3)Expected payment date.

Schedule of Information Regarding Taxability of Distributions on Common Shares

	For the Year Ended December 31,
		2013			2012			2011
Per Common Share	Per Share Amount		Percentage	Per Share Amount		Percentage	Per Share Amount		Percentage
Ordinary income	$	0.11	40.98%	$	0.01	1.49%	$	0.19	32.53%
Non-taxable return of capital		0.15	59.02%		0.45	98.51%		0.39	67.47%
Total	$	0.26	100.00%	$	0.46	100.00%	$	0.58	100.00%

XML

Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2013

Quarterly Financial Data (Unaudited) [Abstract]

Quarterly Financial Data (Unaudited)

16.QUARTERLY FINANCIAL DATA (UNAUDITED)

The following table presents selected unaudited quarterly financial data for each quarter during the years ended December 31, 2013 and 2012 (amounts in thousands, except per share information). Certain reclassifications have been made to prior period results to conform to the current presentation. The following disclosures exclude the results from discontinued operations.

									For the
	For the Quarter Ended								Year Ended
	March 31,		June 30,		September 30,		December 31,		December 31,
	2013		2013		2013		2013		2013
Rental revenue	$	50,636	$	51,199	$	52,113	$	53,380	$	207,328
Debt related income		2,735		2,615		2,309		2,790		10,449
Total revenue		53,371		53,814		54,422		56,170		217,777
Total operating expenses		(38,199)		(37,512)		(38,180)		(44,985)		(158,876)
Other income (expenses)		(16,923)		(16,599)		(16,314)		(18,149)		(67,985)
Loss from continuing operations		(1,751)		(297)		(72)		(6,964)		(9,084)
Discontinued operations, net of taxes	$	(4,115)	$	18,754	$	45,403	$	5,512		65,554
Net income (loss)		(5,866)		18,457		45,331		(1,452)		56,470
Net (income) loss attributable to noncontrolling interests		499		(1,329)		(3,257)		85		(4,002)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(5,367)	$	17,128	$	42,074	$	(1,367)	$	52,468
Net loss per basic and diluted common share
Continuing operations	$	(0.01)	$	(0.00)	$	(0.00)	$	(0.04)	$	(0.05)
Discontinued operations	$	(0.02)	$	0.10	$	0.24	$	0.02	$	0.34
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	(0.03)	$	0.10	$	0.24	$	(0.02)	$	0.29

									For the
	For the Quarter Ended								Year Ended
	March 31,		June 30,		September 30,		December 31,		December 31,
	2012		2012		2012		2012		2012
Rental revenue	$	51,953	$	51,282	$	51,590	$	52,091	$	206,916
Debt related income		1,884		1,759		3,019		2,747		9,409
Total revenue		53,837		53,041		54,609		54,838		216,325
Total operating expenses		(40,388)		(38,900)		(38,812)		(38,775)		(156,875)
Other income (expenses)		(18,507)		(19,817)		(17,398)		(18,689)		(74,411)
Loss from continuing operations		(5,058)		(5,676)		(1,601)		(2,626)		(14,961)
Discontinued operations, net of taxes		(4,281)	$	(3,896)	$	13,545		(12,778)		(7,410)
Net income (loss)		(9,339)		(9,572)		11,944		(15,404)		(22,371)
Net (income) loss attributable to noncontrolling interests		849		701		(2,680)		1,240		110
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(8,490)	$	(8,871)	$	9,264	$	(14,164)	$	(22,261)
Net loss per basic and diluted common share
Continuing operations	$	(0.03)	$	(0.03)	$	(0.01)	$	(0.01)	$	(0.08)
Discontinued operations	$	(0.02)	$	(0.02)	$	0.06	$	(0.06)	$	(0.04)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$	(0.05)	$	(0.05)	$	0.05	$	(0.07)	$	(0.12)

XML

Fair Value Disclosures (Narrative) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Change in fair value of real estate securities	$ 0
Fair value of property	$ 14,500,000
Discount rate	8.50%
Minimum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Change in fair value, expected term	12 years
Maximum [Member]
Fair Value Inputs, Assets, Quantitative Information [Line Items]
Change in fair value, expected term	24 years

XML

CONSOLIDATED STATEMENTS OF EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Common Stock [Member]	Additional Paid-in Capital [Member]	Distributions in Excess of Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Noncontrolling Interests [Member]	Total
Beginning Balances at Dec. 31, 2010	$ 1,827	$ 1,644,249	$ (580,981)	$ (22,352)	$ 114,231	$ 1,156,974
Beginning Balances (in shares) at Dec. 31, 2010	182,717,000
Comprehensive income (loss):
Net income (loss)			(57,680)		(6,886)	(64,566)
Net unrealized change from available-for-sale securities				1,174	86	1,260
Unrealized change from cash flow hedging derivatives				2,642	195	2,837
Common stock:
Issuance of common stock, net of offering costs (in shares)	5,274,000
Issuance of common stock, net of offering costs	53	45,749				45,802
Conversion of OP Units to common stock (in shares)	118,000
Conversion of OP Units to common stock	1	977			(978)
Redemptions of common stock (in shares)	(5,778,000)
Redemptions of common stock	(58)	(48,308)				(48,366)
Amortization of stock based compensation		22				22
Distributions declared on common stock			(105,704)			(105,704)
Noncontrolling interests:
Contributions of noncontrolling interests					28,065	28,065
Redemptions of noncontrolling interests					(10,470)	(10,470)
Buyout of noncontrolling interest		(2,353)			(4,232)	(6,585)
Ending Balances at Dec. 31, 2011	1,823	1,640,336	(744,365)	(18,536)	120,011	999,269
Ending Balances (in shares) at Dec. 31, 2011	182,331,000
Comprehensive income (loss):
Net income (loss)			(22,261)		(110)	(22,371)
Net unrealized change from available-for-sale securities				(1,315)	(111)	(1,426)
Unrealized change from cash flow hedging derivatives				3,655	308	3,963
Common stock:
Issuance of common stock, net of offering costs (in shares)	4,711,000
Issuance of common stock, net of offering costs	47	34,877				34,924
Conversion of OP Units to common stock (in shares)	269,000
Conversion of OP Units to common stock	3	2,270			(2,273)
Redemptions of common stock (in shares)	(9,183,000)
Redemptions of common stock	(92)	(65,066)				(65,158)
Amortization of stock based compensation		7				7
Distributions declared on common stock			(84,259)			(84,259)
Noncontrolling interests:
Contributions of noncontrolling interests					1,053	1,053
Distributions to noncontrolling interests					(8,617)	(8,617)
Redemptions of noncontrolling interests					(12,785)	(12,785)
Buyout of noncontrolling interest		(1,428)			(1,645)	(3,073)
Ending Balances at Dec. 31, 2012	1,781	1,610,996	(850,885)	(16,196)	95,831	841,527
Ending Balances (in shares) at Dec. 31, 2012	178,128,000					178,127,559	[1]
Comprehensive income (loss):
Net income (loss)			52,468		4,002	56,470
Unrealized change from cash flow hedging derivatives				4,621	354	4,975
Common stock:
Issuance of common stock, net of offering costs (in shares)	7,864,000
Issuance of common stock, net of offering costs	78	48,611				48,689
Redemptions of common stock (in shares)	(9,985,000)
Redemptions of common stock	(99)	(68,432)				(68,531)
Distributions declared on common stock			(62,330)			(62,330)
Noncontrolling interests:
Contributions of noncontrolling interests					212	212
Distributions to noncontrolling interests					(5,446)	(5,446)
Redemptions of noncontrolling interests		(5,549)		781	(1,408)	(6,176)
Buyout of noncontrolling interest		(2,740)			(1,639)	(4,379)
Ending Balances at Dec. 31, 2013	$ 1,760	$ 1,582,886	$ (860,747)	$ (10,794)	$ 91,906	$ 805,011
Ending Balances (in shares) at Dec. 31, 2013	176,007,000					176,006,755	[1]

[1] Includes 171,254,036 shares of Class E common stock, 216,745 shares of Class A common stock, 208,889 shares of Class W common stock, and 4,327,085 shares of Class I common stock issued and outstanding as of December 31, 2013, and 178,090,434 shares of Class E common stock, 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 12,375 shares of Class I common stock issued and outstanding as of December 31, 2012.

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Dec. 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	176,006,755	[1]	178,127,559	[1]
Common stock, shares outstanding	176,006,755	[1]	178,127,559	[1]
Investment in real property	$ 1,924,642,000	[2]	$ 2,336,768,000	[2]
Class E [Member]
Common stock, shares issued	171,254,036		178,090,434
Class A [Member]
Common stock, shares issued	216,745		12,375
Class W [Member]
Common stock, shares issued	208,889		12,375
Class I [Member]
Common stock, shares issued	4,327,085		12,375
Variable Interest Entity Investments [Member]
Investment in real property	82,400,000		520,300,000
Mortgage notes	60,700,000		419,500,000
Variable Interest Entity Investments [Member] | Assets Held for Sale [Member]
Investment in real property	143,000,000
Variable Interest Entity Investments [Member] | Liabilities of Assets Held for Sale [Member]
Mortgage notes	$ 80,400,000

[1] Includes 171,254,036 shares of Class E common stock, 216,745 shares of Class A common stock, 208,889 shares of Class W common stock, and 4,327,085 shares of Class I common stock issued and outstanding as of December 31, 2013, and 178,090,434 shares of Class E common stock, 12,375 shares of Class A common stock, 12,375 shares of Class W common stock, and 12,375 shares of Class I common stock issued and outstanding as of December 31, 2012.

[2] Includes approximately $82.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of December 31, 2013 and 2012, respectively. (2)Includes approximately $143.0 million, after accumulated depreciation and amortization, in consolidated real property variable interest investments as of December 31, 2013.

XML

Noncontrolling Interests

12 Months Ended

Dec. 31, 2013

Noncontrolling Interests [Abstract]

Noncontrolling Interests

9.NONCONTROLLING INTERESTS

Our noncontrolling interests consist of two components: (i) OP Units held by third parties and (ii) joint venture partnership interests held by our partners. The following table summarizes changes to noncontrolling interest balances between December 31, 2012 and December 31, 2013 in terms of cumulative contributions, distributions and cumulative allocations of net income (loss) and redemptions and buyouts of the interests (amounts in thousands).

		OP Units:		Joint Venture Partner Interests:		Noncontrolling Interests
Beginning balance as of December 31, 2012:		$	88,259	$	7,572	$	95,831
	Comprehensive Income and Loss
	Net income		4,010		(8)		4,002
	Unrealized change from cash flow hedging derivatives		354		-		354
	Contributions, Distributions and Redemptions
	Contributions from noncontrolling interest holders		-		212		212
	Distributions to noncontrolling interest holders		(4,807)		(639)		(5,446)
	Redemption and buyout of noncontrolling interests, net		(1,408)		(1,639)		(3,047)
Ending balance as of  December 31, 2013		$	86,408	$	5,498	$	91,906

OP Units

Securities that are redeemable for cash or other assets at the option of the holder, not solely within the control of the issuer, are classified as redeemable noncontrolling interests outside of permanent equity in our accompanying balance sheets. We have evaluated our ability to deliver shares of common stock to satisfy redemption requests from holders of our OP Units and we have concluded that we have the right to satisfy the redemption requirements of holders of our OP Units by delivering unregistered shares of our common stock. Each outstanding OP Unit is exchangeable for one share of our common stock, and the OP Unit holder cannot require redemption in cash or other assets. As a result, we classify our OP Units held by third parties as noncontrolling interests.

We are the sole general partner of our Operating Partnership and currently own, in our capacity as the general partner, 200 OP Units for which we contributed $2,000. Subsequent to that initial investment, we have contributed 100% of the proceeds received from our offerings of common stock to our Operating Partnership in exchange for OP Units representing our interest as a limited partner of the Operating Partnership. As of December 31, 2013 and 2012, we owned approximately 93.0% and 92.6% of the outstanding limited partnership interests in our Operating Partnership, respectively, 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. After a period of one year from the date of issuance, holders of Class E OP Units (other than us) may request the Operating Partnership to redeem their Class E OP Units. We have the option of redeeming the Class E OP Units with cash for an amount based on our NAV per share as of the effective date of the redemption, shares of our common stock on a one-for-one basis, or with a combination of cash and Class E shares of common stock. During the years ended December 31, 2013 and 2012, we issued approximately 0 and 269,000 Class E shares of our common stock in redemption of approximately 0 and 273,000 Class E OP Units, respectively, in accordance with this option. During the years ended December 31, 2013 and 2012, we redeemed approximately 904,000 and 1.7 million Class E OP Units for approximately $6.2 million and $12.8 million in cash, respectively.

As of December 31, 2013 and 2012, our Operating Partnership had issued and outstanding approximately 13.3 million and 14.2 million Class E OP Units, respectively, to third-party investors in connection with its private placement offerings. Such units had a maximum approximate redemption value of $92.0 million and $95.0 million, as of December 31, 2013 and December 31, 2012, respectively, based on our December 31, 2013 and December 31, 2012 NAV per share, respectively.

Joint Venture Partner Interests

Certain of our joint ventures are consolidated by us in the accompanying financial statements. Our joint venture partners’ interests in our consolidated partnerships are not redeemable. As a result, we classify our joint venture partners’ interests as noncontrolling interests. During the year ended December 31, 2013, we purchased one of our joint venture partners’ interest in two office properties and and two industrial properties for approximately $4.4 million, which resulted in a net decrease in noncontrolling interest of $1.6 million. During the year ended December 31, 2012, we purchased one of our joint venture partners’ interest in an office property for approximately $3.0 million, which resulted in a net decrease in noncontrolling interest of $1.6 million.

XML

Document and Entity Information (USD $)	12 Months Ended
	Dec. 31, 2013	Jun. 28, 2013	Feb. 28, 2014 Class E [Member]	Feb. 28, 2014 Class A [Member]	Feb. 28, 2014 Class W [Member]	Feb. 28, 2014 Class I [Member]
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	FY
Entity Registrant Name	Dividend Capital Diversified Property Fund Inc.
Entity Central Index Key	0001327978
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding			171,984,070	457,206	324,525	4,341,011
Entity Public Float		$ 0

XML

Stockholders' Equity

12 Months Ended

Dec. 31, 2013

Stockholders' Equity [Abstract]

Stockholders' Equity

10.STOCKHOLDERS’ EQUITY

Common Stock

On May 27, 2005, we filed a Registration Statement on Form S-11 with the Commission in connection with an initial public offering of our Class E shares of common stock, which was declared effective on January 27, 2006. On June 11, 2007, we filed a Registration Statement on Form S-11 with the Commission in connection with a follow-on public offering of our Class E common stock, which was declared effective on January 22, 2008. As of the close of business on September 30, 2009, we terminated the primary portion of our public offerings of Class E shares of our common stock and ceased accepting new subscriptions to purchase shares of our common stock. On October 23, 2009, we filed a Registration Statement for the sale of up to $237,500,000 in Class E shares of our common stock pursuant to our distribution reinvestment plan. This distribution reinvestment plan offering is ongoing.

On July 12, 2012, the Commission declared effective our Registration Statement on Form S-11 which applies to the offer and sale of shares of Class A, Class W, and Class I common stock to the public through a primary offering and a restated distribution reinvestment plan with NAV-based pricing. The following table describes the changes in each class of common shares during each of the years ended December 31, 2013, 2012, and 2011 (shares and dollar amounts in thousands).

	Class E Common Stock			Class A Common Stock			Class W Common Stock			Class I Common Stock			Total Proceeds
	Shares	Amount (1)		Shares	Amount (1)		Shares	Amount (1)		Shares	Amount (1)		Shares	Amount (1)
Balances, December 31, 2010	182,717	$	1,806,652	-	$	-	-	$	-	-	$	-	182,717	$	1,806,652
Common stock:
Issuance of common stock and OP Units:
Distribution Reinvestment Plan	5,274		43,540	-		-	-		-	-		-	5,274		43,540
Conversion of OP Units to common stock	118		978	-		-	-		-	-		-	118		978
Redemptions of common stock	(5,778)		(48,205)	-		-	-		-	-		-	(5,778)		(48,205)
Balances, December 31, 2011	182,331	$	1,802,965	-	$	-	-	$	-	-	$	-	182,331	$	1,802,965
Issuance of common stock:
Shares Sold	65		317	12		83	12		83	12		83	101		566
Distribution Reinvestment Plan	4,610		34,449	-		-	-		-	-		-	4,610		34,449
Conversion of OP Units to common stock	269		2,273	-		-	-		-	-		-	269		2,273
Redemptions of common stock	(9,183)		(64,808)	-		-	-		-	-		-	(9,183)		(64,808)
Balances, December 31, 2012	178,092	$	1,775,196	12	$	83	12	$	83	12	$	83	178,128	$	1,775,445
Issuance of common stock:
Shares Sold	-		-	205		1,451	197		1,354	4,301		29,333	4,703		32,138
Distribution Reinvestment Plan	3,143		21,352	-		-	-		-	18		121	3,161		21,473
Redemptions of common stock	(9,981)		(68,402)	-		-	-		-	(4)		(30)	(9,985)		(68,432)
Balances, December 31, 2013	171,254	$	1,728,146	217	$	1,534	209	$	1,437	4,327	$	29,507	176,007	$	1,760,624

(1)Dollar amounts presented in this table represent the gross amount of proceeds from the sale of common shares, or the amount paid to stockholders to redeem common shares, and do not include other costs and expenses accounted for within additional paid-in capital, such as selling commissions, dealer manager and distribution fees, offering and organizational costs, and other costs associated with our distribution reinvestment plans and share redemption programs.

Redemptions

We have adopted a Class E Share Redemption Program (the “Class E SRP”), whereby Class E stockholders may request that we redeem all or any portion of their Class E shares subject to certain conditions and limitations. We also have a separate Class A, W and I Share Redemption Program (“Class AWI SRP”) for holders of our Class A, Class W or Class I shares. Our board of directors may modify, suspend or terminate our share redemption programs if it deems such action to be in the best interest of our stockholders. Our board of directors may from time to time, but is not obligated to, authorize funds for redemptions of Class E shares in greater or lower amounts.

During the years ended December 31, 2013 and 2012, we redeemed approximately 10.0 million and 9.2 million Class E shares, respectively, pursuant to our Class E SRP for approximately $68.4 million and $64.8 million, respectively. During the years ended December 31, 2013 and 2012, our board of directors authorized an additional $32.8 million and $25.0 million, respectively, in addition to the amounts calculated in accordance with our Class E SRP, related to these redemptions. 

During the year ended December 31, 2013, we redeemed a negligible amount of Class I shares pursuant to our Class AWI SRP. We did not redeem any shares pursuant to our Class AWI SRP during the year ended December 31, 2012.

Distributions

We accrue distributions on a daily basis and pay distributions on a quarterly basis. Historically, each quarter, our board of directors has authorized the following quarter’s daily distribution accrual. We calculate individual payments of distributions to each stockholder or OP Unit holder based upon daily record dates during each quarter, so that investors are eligible to earn distributions immediately upon purchasing shares of our common stock or upon purchasing OP Units. The following table describes our total distributions declared on our common stock for the year ended December 31, 2013, 2012 and 2011, and the portion of each distribution that was paid in cash and reinvested in shares (dollar amounts in thousands).

	For the Year Ended December 31,
Distributions:	2013		% of Total Distributions	2012		% of Total Distributions	2011		% of Total Distributions
Paid in cash	$	41,123	66.0%	$	53,311	63.3%	$	62,575	59.2%
Reinvested in shares		21,207	34.0%		30,948	36.7%		43,129	40.8%
Total distributions	$	62,330	100.0%	$	84,259	100.0%	$	105,704	100.0%

The following table sets forth the distributions that have been paid and/or authorized as of December 31, 2013, subject to class-specific adjustments.

	Amount Declared per Share (1)
Quarter	Class E Shares		Class A Shares		Class W Shares		Class I Shares		Weighted Average		Payment Date
2012
1st Quarter 2012	$	0.1250		N/A		N/A		N/A	$	0.1250	April 16, 2012
2nd Quarter 2012	$	0.1250		N/A		N/A		N/A	$	0.1250	July 24, 2012
3rd Quarter 2012	$	0.1250	$	0.0938	$	0.1012	$	0.1086	$	0.1250	October 16, 2012
4th Quarter 2012	$	0.0875	$	0.0691	$	0.0775	$	0.0858	$	0.0875	January 16, 2013
2013
1st Quarter 2013	$	0.0875	$	0.0692	$	0.0775	$	0.0858	$	0.0875	April 16, 2013
2nd Quarter 2013	$	0.0875	$	0.0689	$	0.0774	$	0.0858	$	0.0875	July 16, 2013
3rd Quarter 2013	$	0.0875	$	0.0685	$	0.0771	$	0.0858	$	0.0875	October 16, 2013
4th Quarter 2013	$	0.0875	$	0.0684	$	0.0771	$	0.0858	$	0.0874	January 16, 2014
2014
1st Quarter 2014 (2)	$	0.0875	$	0.0875	$	0.0875	$	0.0875	$	0.0875	April 16, 2014 (3)

(1)Assumes ownership of share or unit for the entire quarter.

(2)The distribution amount herein for the first quarter of 2014 does not reflect class-specific adjustments made to our Class A, Class W, and Class I shares, which have not yet been determined.

(3)Expected payment date.

Distribution Tax Characterization

Our distributions to stockholders are characterized for federal income tax purposes as (i) ordinary income, (ii) non-taxable return of capital, or (iii) long-term capital gain. Distributions that exceed our current and accumulated tax earnings and profits constitute a return of capital for tax purposes and reduce the stockholders’ basis in the common shares. To the extent that distributions exceed both current and accumulated earnings and profits and the stockholders’ basis in the common shares, they will generally be treated as a gain or loss upon the sale or exchange of our stockholders’ common shares. We elected to classify our fourth quarter 2013 distribution as a 2014 distribution as part of our overall tax and REIT compliance strategy, resulting in a lower amount of reported distributions than were declared for the period.  This election increased thepercentage of total distributions that are taxable, however, it did not increase the actual dollar amount that is taxed. We notify stockholders of the taxability of distributions paid during the preceding year on an annual basis. The following table summarizes the information reported to investors regarding the taxability of distributions on common shares for the years ended December 31, 2013, 2012 and 2011.

	For the Year Ended December 31,
		2013			2012			2011
Per Common Share	Per Share Amount		Percentage	Per Share Amount		Percentage	Per Share Amount		Percentage
Ordinary income	$	0.11	40.98%	$	0.01	1.49%	$	0.19	32.53%
Non-taxable return of capital		0.15	59.02%		0.45	98.51%		0.39	67.47%
Total	$	0.26	100.00%	$	0.46	100.00%	$	0.58	100.00%

XML

Related Party Transactions (Summary of Fees and Other Amounts Earned by Advisor and Its Related Parties) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Related Party Transaction [Line Items]
Total	$ 25,631	$ 22,680	$ 24,611
Acquisition Fees [Member]
Related Party Transaction [Line Items]
Total		1,534	218
Asset Management And Advisory Fees [Member]
Related Party Transaction [Line Items]
Total	15,120	17,659	20,854
Development Management Fees [Member]
Related Party Transaction [Line Items]
Total	223	133
Other Reimbursements [Member]
Related Party Transaction [Line Items]
Total	6,234	3,253	1,940
Asset Management Fees Related to Disposition of Real Properties [Member]
Related Party Transaction [Line Items]
Total	2,639	101	1,599
Dealer Manager and Distribution Fees [Member]
Related Party Transaction [Line Items]
Total	$ 1,415

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	12 Months Ended
	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011
REVENUE:
Rental revenue	$ 207,328		$ 206,916		$ 207,750
Debt related income	10,449		9,409		11,107
Total Revenue	217,777		216,325		218,857
EXPENSES:
Rental expense	43,672		40,535		41,798
Real estate depreciation and amortization expense	87,174		91,127		93,407
General and administrative expenses	9,973		7,229		6,826
Advisory fees, related party	15,120		17,659		20,854
Acquisition-related expenses	337	[1]	325	[1]	610	[1]
Impairment of real estate property	2,600		5,700		23,500
Provision for loss on debt related investments					23,037
Other-than-temporary impairment on securities	0		0		3,369
Total Operating Expenses	158,876		156,875		189,901
Other Income (Expenses):
Interest and other income (expense)	(153)		807		2,394
Interest expense	(65,325)		(69,844)		(74,406)
Loss on extinguishment of debt and financing commitments	(2,507)		(5,374)
Loss from continuing operations	(9,084)		(14,961)		(43,056)
Discontinued operations, net of taxes	65,554	[2]	(7,410)	[2]	(21,510)	[2],[3]
Net Income (loss)	56,470		(22,371)		(64,566)
Net (income) loss attributable to noncontrolling interests	(4,002)		110		6,886
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS	$ 52,468		$ (22,261)		$ (57,680)
Net income (loss) per basic and diluted common share:
Continuing operations	$ (0.05)		$ (0.08)		$ (0.22)
Discontinued operations	$ 0.34		$ (0.04)		$ (0.09)
NET LOSS PER BASIC AND DILUTED COMMON SHARE	$ 0.29		$ (0.12)		$ (0.31)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
Basic	178,196		181,982		183,813
Diluted	191,932		197,244		197,377

[1] Includes approximately $218,000 paid to our Advisor for the year ended December 31, 2011. We did not pay any acquisition fees to our Advisor during the years ended December 31, 2013 and 2012.

[2] Includes approximately $2.6 million, $101,000, and $1.6 million paid to our Advisor for fees associated with the disposition of real properties during the years ended December 31, 2013, 2012, and 2011, respectively.

[3] Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

XML

Debt Related Investments

12 Months Ended

Dec. 31, 2013

Debt Related Investments [Abstract]

Debt Related Investments

4. DEBT RELATED INVESTMENTS

As of December 31, 2013 and 2012, we had invested in 14 and 19 debt related investments, respectively. The weighted average maturity of our debt investments as of December 31, 2013 was 2.5 years, based on our recorded net investment. The following table describes our debt related income for the years ended December 31, 2013, 2012, and 2011 (dollar amounts in thousands):

	For the Year Ended December 31,						Weighted Average Yield as of
Investment Type	2013		2012		2011		December 31, 2013 (1)
Mortgage notes (2)	$	8,726	$	8,732	$	6,890	5.7%
B-notes		51		433		2,371	0.0%
Mezzanine debt		1,672		244		1,846	16.7%
Total	$	10,449	$	9,409	$	11,107	7.1%

(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 December 31, 2013. Yields for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of December 31, 2013 for purposes of this table. As of December 31, 2013, we had one debt related investment with a net investment amount of $25.0 million that bears interest at a floating rate 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 investment for which we have recognized a full allowance for loss as of December 31, 2013.

(2)We had four and three debt related investments repaid in full during the years ended December 31, 2013 and 2012, respectively. Amounts recorded include an early repayment fee received and accelerated amortization of origination fees offset by accelerated amortization of deferred due diligence costs related to these repayments.

The following table describes our debt investment activity for the years ended December 31, 2013 and 2012 (amounts in thousands).

	Year Ended December 31,
	2013		2012
Investment in debt related investments:
Balance at January 1,	$	187,321	$	92,247
Investments		12,323		121,842
Principal repayments		(75,702)		(25,093)
Amortization of deferred fees, costs, and discounts/premiums		(7)		(1,675)
Provision for loan loss		-		-
Balance at December 31,	$	123,935	$	187,321

Debt Related Investment and Repayment Activity

As of December 31, 2013, two of our 14 debt related investments require interest only payments.  13 of the 14 debt related investments were not subject to any delinquent principal or interest payments. Two of our debt related investments (those structured as mezzanine debt or B-notes) are subordinate to more senior positions with respect to the underlying collateral. The following table summarizes our debt related investments as of December 31, 2013 (dollar amounts in thousands).

Description	Region	Interest Rate Fixed or Variable	Interest Rate as of December 31, 2013 (1)	Maturity Date (2)	Face Amount of Debt (3)		Amount of Debt Related Investments
Mortgage note	Pacific	Fixed	7.5%	10/8/2014	$	17,000	$	17,098
Mortgage note	West North Central	Fixed	7.8%	4/1/2015		9,074		9,389
Mortgage note	Mountain	Fixed	7.7%	4/1/2015		9,083		9,175
Mortgage note	Southeast	Fixed	6.3%	2/1/2018		9,213		9,570
Mortgage note	East North Central	Fixed	6.1%	4/1/2018		7,746		7,354
Mortgage note	Northeast	Fixed	6.2%	11/1/2017		3,841		3,903
Mortgage note	Mountain	Fixed	6.2%	9/1/2016		2,966		3,011
Mortgage note	Southeast	Fixed	7.0%	3/1/2019		9,170		9,331
Mortgage note	West North Central	Fixed	6.0%	7/1/2018		6,930		6,887
Mortgage note	Southwest	Fixed	5.8%	6/1/2014		3,675		3,677
Mortgage note	Mountain	Fixed	5.2%	3/1/2021		3,450		3,429
Mortgage note	Northeast	Variable	5.2%	6/7/2015		25,000		25,211
B-note (4)	Pacific	Fixed	0.0%	1/1/2011		3,000		-
Mezzanine debt	Mid-Atlantic	Fixed	17.0%	7/1/2016		15,665		15,900
Total/weighted average			7.6%		$	125,813	$	123,935

(1) Rates for LIBOR-based, floating-rate investments have been calculated using the one-month LIBOR rate as of December 31, 2013 for purposes of this table.

(2) Reflects the initial maturity of the investment or any exercised options to extend and does not consider any future options to extend that are at the discretion of the borrower.

Reflects the principal amount of the debt investment outstanding, which is net of principal repayments.

(4) We have recorded a provision for loan loss of $3.0 million related to this B-note investment as of December 31, 2013, and we have assumed a yield of 0%.

Repayments

During the year ended December 31, 2013, we received full repayment of four debt investments, three of which were structured as mortgage notes and one of which was structured as a B-note. We received cash proceeds from the repayments of approximately $28.1 million, which comprised (i) principal repayment of $73.7 million, and (ii) a prepayment fee of approximately $435,000, partially offset by the repayment of borrowings secured by the debt related investments of approximately $46.2 million.

During the year ended December 31, 2012, we received full repayment of three debt investments, all of which were structured as mortgage notes. We received cash proceeds from the repayments of approximately $5.9 million, which comprised (i) principal repayment of $22.3 million, and (ii) a prepayment fee of approximately $1.4 million, partially offset by the repayment of borrowings secured by the debt related investments of approximately $17.8 million.

Restructure of B-note

One of our B-note investments had been scheduled to mature in August of 2011. During the year ended December 31, 2011, we restructured the terms of that investment, which resulted in (i) an extension of the scheduled maturity to October 2012, and (ii) a change in the payment schedule that includes monthly principal amortization which equals the difference between actual LIBOR and a 4% LIBOR floor on the outstanding balance. This restructuring qualified as a troubled debt restructuring, and therefore, this B-note investment is considered an impaired investment, as further discussed below. We record interest revenue on this debt investment at LIBOR + 3.25%. As of December 31, 2012 we had recorded an asset of $12.1 million related to this debt investment. In January 2013, the borrower repaid the outstanding principal of the loan, all interest owed to us, and a return of the collateral we had posted during 2011 to maintain our controlling interest holder position on the final property sale in the portfolio.

Impairment

During year ended December 31, 2011, we recognized approximately $23.0 million in provision losses in the accompanying statements of operations. We did not record any provision for loan loss during the years ended December 31, 2013 and 2012. However, during the years ended December 31, 2013 and 2012, we wrote off the provision for loss on debt related investments of approximately $15.0 million and $20.0 million, respectively. The loss written off in 2013 related to one B-note debt investment loan restructuring. The loss written off in 2012 related to a mezzanine debt investment that we foreclosed upon. See Note 3 for additional discussion of this foreclosure. The table below presents a reconciliation of the beginning and ending balances, between December 31, 2012 and December 31, 2013, of our allowance for loan loss (amounts in thousands):

		Allowance for Loan Loss
Beginning balance as of December 31, 2012:		$	18,000
	Direct write offs		(15,000)
	Ending balance as of December 31, 2013:	$	3,000

We had one and two B-note debt investments on non-accrual status as of December 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 year ended December 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 the cash basis of accounting was not significant during the years ended December 31, 2013, 2012, or 2011. All of our debt related investments that were past due 90 days or more were on non-accrual status as of December 31, 2013 and 2012.

As of December 31, 2013 and 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 December 31,
	2013		2012
Debt investments	$	126,935	$	205,321
Less: Allowance for loan losses		(3,000)		(18,000)
Total	$	123,935	$	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):

As of:	Recorded Investment		Related Allowance		Amount of Impaired Loans With No Allowance Recorded
December 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 Year Ended December 31,	Average Recorded Investment		Interest Income Recognized
2013	$	6,067	$	51
2012		12,930		433
2011		25,314		3,060

XML

Investments in Real Property

12 Months Ended

Dec. 31, 2013

Investments in Real Property [Abstract]

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 December 31, 2013 and 2012 (amounts in thousands):

Real Property		Land		Building and Improvements		Intangible Lease Assets		Total Investment Amount		Intangible Lease Liabilities		Net Investment Amount
As of December 31, 2013:
Office	$	232,117	$	769,654	$	365,314	$	1,367,085	$	(15,861)	$	1,351,224
Industrial (1)		51,678		359,800		66,877		478,355		(46,626)		431,729
Retail		227,218		420,070		77,752		725,040		(51,059)		673,981
Total gross book value		511,013		1,549,524		509,943		2,570,480		(113,546)		2,456,934
Accumulated depreciation/amortization		-		(207,966)		(294,881)		(502,847)		35,997		(466,850)
Total net book value	$	511,013	$	1,341,558	$	215,062	$	2,067,633	$	(77,549)	$	1,990,084
As of December 31, 2012:
Office	$	218,738	$	833,226	$	457,754	$	1,509,718	$	(25,121)	$	1,484,597
Industrial		71,725		436,340		79,610		587,675		(48,432)		539,243
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 $21.1 million in land, $157.7 million in building and improvements, $14.9 million in intangible lease assets, and $5.6 million in intangible lease liabilities, before accumulated depreciation on assets of $50.6 million and accumulated amortization of intangible lease liabilities of $2.5 million, related to 12 industrial properties classified as held for sale in the accompanying balance sheet as of December 31, 2013.

Acquisitions

On November 7, 2013, we acquired 100% of a 269,000 square foot office property in San Francisco, CA (“655 Montgomery”). 655 Montgomery was subject to a mortgage note with a principal balance of $57.9 million as of the acquisition date bearing interest at 6.0%, which matures in June 2016. As of December 31, 2013, the unpaid principal balance of this mortgage note was $57.8 million.

As of December 31, 2013, we have made an allocation of the fair value of the acquired assets and liabilities of 655 Montgomery to land, building, improvements and intangible lease assets and liabilities. Based on this allocation of the $109.7 million in estimated fair value of the acquired assets and liabilities of 655 Montgomery, we attributed approximately $32.6 million to land, approximately $67.8 million to building and improvements, approximately $15.9 million to intangible lease assets, approximately $1.5 million to intangible lease liabilities, and approximately $3.1 million to other liabilities and the mark-to-market adjustment on the mortgage assumed at acquisition. The weighted-average amortization periods for the intangible lease assets and intangible lease liabilities were approximately 4.4 years and 2.3 years, respectively, at the acquisition date. We have also recognized the assumed mortgage note based on an estimate of fair value of $61.7 million as of the acquisition date. We have not made any material adjustments related to this acquisition since the acquisition date.

For the year ended December 31, 2013, our consolidated statement of operations includes aggregate revenue of $1.6 million and net operating income (as defined in Note 13) of $857,000 attributable to 655 Montgomery.

Real Property Impairment

During the year ended December 31, 2013, we determined that one of our wholly-owned industrial properties, located in the Silicon Valley, CA market, was unlikely to generate cash flows during our estimated investment period sufficient to recover our net book basis as of December 31, 2013. The primary factor leading to this determination was our determination that the market rental rate we could obtain, and the low demand for industrial space in the particular sub market in which the building is located, did not support our recorded carrying value. As a result of our review and based on our estimate of future cash flow and fair value of the office property, we recognized an impairment charge of approximately $2.6 million to adjust the carrying value to our estimate of fair value as of December 31, 2013. 

During the year ended December 31, 2012, we recorded a $5.7 million impairment related to an industrial property held in a joint venture in which we do not act as the managing partner. This property is included in a portfolio of industrial properties held in the same joint venture that serves as collateral for a cross-collateralized senior mortgage note. During the year ended December 31, 2012 we began to consider possible disposition opportunities for this portfolio of industrial properties. Such disposition opportunities caused us to significantly reduce our estimated holding period for these properties, triggering impairment recognition based on our estimate of future cash flows from the operation and disposition of these properties. We disposed of this property during the year ended December 31, 2013, and accordingly, the impairment charge is included within discontinued operations.

During the year ended December 31, 2011, we determined that one of our office properties held through a joint venture in which we were not the managing partner, located in the Silicon Valley, CA market, was unlikely to generate cash flows during our estimated investment period sufficient to recover our net book basis as of December 31, 2011. The primary factor leading to this determination was our determination that the market rental rate we could obtain, and the low demand for office space in the particular sub market in which the building is located, did not support our recorded carrying value. As a result of our review and based on our estimate of future cash flow and fair value of the office property, we recognized an impairment charge of approximately $23.5 million to adjust the carrying value to our estimate of fair value as of December 31, 2011. We disposed of that property during the year ended December 31, 2012, and accordingly, the impairment charge is included within discontinued operations.

Discontinued Operations

During 2013, 2012, and 2011 we disposed of or classified as held for sale the following properties (dollar amounts and square footage in thousands):

Type of Property	Market	DPF Ownership	Square Feet	Disposition Date	Gain (Loss)
2013 Dispositions:
Office	Dallas, TX	100.0%	62	January 13, 2013	$	1,217
Industrial Portfolio	Various (1)	96.4%	1,918	May 10, 2013		(311)
Office (2)	Dallas, TX	100.0%	1,509	May 31, 2013		15,462
Office	Boston, MA	100.0%	132	June 6, 2013		6,734
Office	Denver, CO	100.0%	257	July 31, 2013		35,371
Office	Denver, CO	100.0%	133	September 13, 2013		10,233
Office	Chicago, IL	100.0%	100	October 15, 2013		5,580
Total			4,111		$	74,286
2012 Dispositions:
Retail	Boston, MA	100.0%	19	February 27, 2012	$	(328)
Office	Silicon Valley, CA	90.0%	427	July 31, 2012		19,584
Industrial	Louisville, KY	90.0%	164	June 5, 2012		1,857
Total			610		$	21,113
2011 Dispositions:
Office	Silicon Valley, CA	97.5%	52	September 23, 2011	$	1,187
Industrial	Cincinnati, OH	95.6%	604	October 17, 2011		(1,046)
Office	Silicon Valley, CA	100.0%	187	November 18, 2011		8,305
Industrial	Kansas City, MO	88.6%	180	November 21, 2011		70
Retail	Boston, MA	100.0%	46	December 21, 2011		2,266
Total			1,069		$	10,782
Assets held for sale
Industrial Portfolio	Various (3)	92.5%	3,387	January 22, 2014
Total			3,387

(1)Industrial portfolio included seven properties located in the following markets: Philadelphia, PA, Sacramento, CA, Central Pennsylvania, Charlotte, NC, Atlanta, GA, and Chicago, IL. 

(2)During the year ended December 31, 2012, we became the 100% owner of the titleholder of a 1.5 million square foot office property in the Dallas, TX market (“Comerica Bank Tower”), as the result of our foreclosure of a non-performing mezzanine loan for which such ownership interest had served as collateral. Comerica Bank Tower was subject to a mortgage note with a principal balance of $179.8 million as of the acquisition date bearing interest at 5.8%, which matures in January 2017. On September 10, 2012, we were notified that a receiver (the “Receiver”) had been appointed for the Comerica Bank Tower. As of March 31, 2013, the unpaid principal balance of this mortgage note was $177.4 million. On May 31, 2013, Comerica Bank Tower was sold by the Receiver pursuant to court order to a purchaser unaffiliated with us. Because of the outstanding principal balance of the mortgage note, we did not receive any proceeds from the sale of Comerica Bank Tower.

(3)Industrial portfolio included12 properties located in the following markets: Atlanta, GA, Central Pennsylvania, Cincinnati, OH, Columbus, OH, Dallas, TX, Indianapolis, IN, and Minneapolis/St. Paul, MN.

Assets Held for Sale

As of December 31, 2013, we had agreed to dispose of a portfolio of 12 industrial properties to an unrelated third party. Accordingly, the assets and liabilities related to properties in this portfolio are classified as held for sale in the accompanying balance sheet as of December 31, 2013. We sold the properties on January 22, 2014. See Note 17 for additional discussion of this disposition.

We present the results of operations of disposed properties and properties held for sale and their respective aggregate net gains (losses), collectively, as discontinued operations in our accompanying statements of operations 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 Year Ended December 31,
	2013		2012		2011 (1)
Revenues	$	39,023	$	61,461	$	53,603
Rental expense		(14,020)		(21,731)		(12,709)
Real estate depreciation and amortization expense		(21,017)		(37,989)		(33,483)
Impairment of real estate property		-		(5,700)		(23,500)
Interest expense		(12,662)		(23,771)		(18,429)
Other expenses		(56)		(793)		(625)
Income (loss) from discontinued operations, net of taxes		(8,732)		(28,523)		(35,143)
Gain (Loss) on disposition, net of taxes		74,286		21,113		13,633
Discontinued operations, net of taxes	$	65,554	$	(7,410)	$	(21,510)

(1)Gain on disposition, net of taxes for the year ended December 31, 2011, includes profit participation related to a property that we sold during the year ended December 31, 2010, of approximately $2.9 million.

Future Minimum Rentals

Future minimum rentals to be received under non-cancelable operating and ground leases in effect as of December 31, 2013, are as follows (amounts in thousands):

For the Years Ended December 31,	Future Minimum Rentals
2014	$	192,551
2015		181,583
2016		174,497
2017		129,026
2018		95,009
Thereafter		283,661
Total	$	1,056,327

The table above does not reflect future rental revenues from the potential renewal or replacement of existing and future leases and excludes property operating expense reimbursements and assumes no early termination of leases.

Concentration of Credit Risk

Concentration of credit risk with respect to accounts receivable currently exists due to a number of tenants whose rental payments to us make up a relatively high percentage of our rental revenue. The following is a summary, as of December 31, 2013, of the top five tenants as a percentage of consolidated annual base rent and square feet (dollar amounts and square feet in thousands): 

Tenant	Locations	Industry	Annualized Rental Revenue (1)		% of Total Annualized Rental Revenue	Square Feet	% of Total Portfolio Square Feet
Charles Schwab & Co, Inc	1	Securities, Commodities, Fin. Inv./Rel. Activites	$	22,761	11.5%	594	4.2%
Northrop Grumman	2	Professional, Scientific and Technical Services		17,532	8.9%	699	4.9%
Sybase	1	Publishing Information (except Internet)		17,283	8.8%	405	2.8%
Stop & Shop	15	Food and Beverage Stores		13,828	7.0%	872	6.1%
CEVA Freight/Logistics	3	Truck Transportation		5,198	2.6%	790	5.5%
Total	22		$	76,602	38.8%	3,360	23.5%

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

Rental revenue from our lease with Charles Schwab & Co., Inc., as master tenant of one of our office properties, represented approximately $25.5 million, or 11.7%, of our total revenue from continuing operations for the year ended December 31, 2013. Our properties in California, New Jersey, Massachusetts, and Texas accounted for approximately 20%,  16%,  16%, and 12%, respectively, of our total gross investment in real property portfolio as of December 31, 2013. A deterioration of general economic or other relevant conditions, changes in governmental laws and regulations, acts of nature, demographics or other factors in any of those states or the geographical region in which they are located could result in the loss of a tenant, a decrease in the demand for our properties and a decrease in our revenues from those markets, which in turn may have a disproportionate and material adverse effect on our results of operations and financial condition.

XML

Commitments and Contingencies

12 Months Ended

Dec. 31, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

15.COMMITMENTS AND CONTINGENCIES

Environmental Matters

A majority of the properties we acquire are subjected to environmental reviews either by us or the previous owners. In addition, we may incur environmental remediation costs associated with certain land parcels we may acquire in connection with the development of the land. We have acquired certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous materials. We may purchase various environmental insurance policies to mitigate our exposure to environmental liabilities. Due to the uncertainty regarding our exposure to environmental liabilities and the timing and nature of settlement of any such liabilities, we cannot estimate the effect of such potential environmental remediation on our business, financial condition, or results of operations.

XML

Related Party Transactions

12 Months Ended

Dec. 31, 2013

Related Party Transactions [Abstract]

Related Party Transactions

11. 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 two of our directors and all of our executive officers. The responsibilities of our Advisor cover all facets of our business, and include 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. The Advisory Agreement may be renewed for an unlimited number of successive one-year terms.  The current term of the Advisory Agreement expires on June 30, 2014. 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. Additionally, the Advisor will provide us with a waiver of a portion of its fees generally equal to the amount of the performance component that would have been payable with respect to the Class E shares and the Class E OP Units held by third parties until the NAV of such shares or units exceeds $10.00 per share or unit, the benefit of which will be shared among all holders of Fund Interests. 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 1/365th of 0.6% of our NAV per share of Class A and Class W shares outstanding and an amount equal to 1/365th 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 1/365th 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.

On May 31, 2013, the Company and the Dealer Manager entered into Amendment No. 1 to the Dealer Manager Agreement (“Amendment No. 1”). Amendment No. 1 provided that the Company will pay to the Dealer Manager a primary dealer fee in the amount of up to 5.0% of the gross proceeds raised from the sale of Class I shares sold in the Company’s primary public 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 million. The Dealer Manager will retain 0.5% of such gross proceeds and reallow the remainder 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. The primary dealer fee will be considered underwriting compensation (as defined in accordance with, and subject to the underwriting compensation limits of, applicable Financial Industry Regulatory Authority, Inc. rules).

As of December 31, 2013 and December 31, 2012, we owed approximately $1.6 million and $1.4 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 years ended December 31, 2013 and 2012 (amounts in thousands):

	For the Year Ended December 31,
	2013		2012		2011
Acquisition fees	$	-	$	1,534	$	218
Advisory fees		15,120		17,659		20,854
Development management fee		223		133		-
Other reimbursements		6,234		3,253		1,940
Asset management fees related to the disposition of real properties		2,639		101		1,599
Dealer manager and distribution fees		1,415		-		-
Total	$	25,631	$	22,680	$	24,611

Acquisition Fees

Prior to entering into the Eighth Amended and Restated Advisory Agreement with our Advisor on July 12, 2012, pursuant to the previous advisory agreement in effect, we paid certain acquisition fees to our Advisor. For each real property acquired in the operating stage, the acquisition fee was an amount equal to 1.0% of our proportional interest in the purchase price of the property. For each real property acquired prior to or during the development or construction stage, the acquisition fee was an amount not to exceed 4.0% of the total project cost (which was the amount actually paid or allocated to the purchase, development, construction or improvement of a property exclusive of acquisition fees and acquisition expenses). Our Advisor also was entitled to receive an acquisition fee of 1.0% of the principal amount in connection with the origination or acquisition of any type of debt investment including, but not limited to, the origination of mortgage loans, B-notes, mezzanine debt, participating debt (including with equity-like features), non-traded preferred securities, convertible debt, hybrid instruments, equity instruments and other related investments. However, to the extent that such debt investments were originated or acquired pursuant to our agreement with our debt advisor, (defined below) such acquisitions fees may have differed. See the section below titled “The Debt Advisor” for further discussion of these fees. Subsequent to entering into the Eighth Amended and Restated Advisory Agreement with our Advisor on July 12, 2012, we no longer pay acquisition fees to our Advisor.

Asset Management Fees

Prior to entering into the Eighth Amended and Restated Advisory Agreement with our Advisor on July 12, 2012, pursuant to the previous advisory agreement in effect, we paid certain asset management fees to our Advisor in connection with the asset and portfolio management of real property, debt related investments and real estate securities. Our Advisor’s asset management fee was payable as follows:

For Direct Real Properties (as defined below), the asset management fee consisted of (i) a monthly fee of one-twelfth of 0.50% of the aggregate cost (before noncash reserves and depreciation) of Direct Real Properties and (ii) a monthly fee of 6.00% of the aggregate monthly net operating income derived from all Direct Real Properties provided; however, that the aggregate monthly fee to be paid to our Advisor pursuant to these sub clauses (i) and (ii) in aggregate would not exceed one-twelfth of 0.75% of the aggregate cost (before noncash reserves and depreciation) of all Direct Real Properties.

For Product Specialist Real Properties (as defined below), the asset management fee consisted of (i) a monthly fee of one-twelfth of 0.50% of the aggregate cost (before noncash reserves and depreciation) of Product Specialist Real Properties and (ii) a monthly fee of 6.00% of the aggregate monthly net operating income derived from all Product Specialist Real Properties.

“Direct Real Properties”: shall mean those real properties acquired directly by us without the advice or participation of a product specialist engaged by our Advisor.

“Product Specialist Real Properties”: shall mean those real properties acquired by us pursuant to the advice or participation of a product specialist engaged by our Advisor pursuant to a contractual arrangement.

In addition, the asset management fee for all real property assets included a fee of 1.00% of the sales price of individual real property assets upon disposition.

For debt related investments, other than Debt Advisor (defined below) debt related investments, and securities investments, the asset management fee consisted of a monthly fee equal to one-twelfth of 1.00% of (i) the amount invested in the case of our debt related assets within our portfolio and (ii) the aggregate value, determined at least quarterly, of our real estate-related securities.

We also agreed to pay our Advisor certain acquisition and asset management fees that differed from the fee structure discussed above to facilitate the acquisition and management of certain debt investments that we acquired pursuant to a product specialist agreement that our Advisor entered into with the Debt Advisor (defined below). See the section below entitled “The Debt Advisor” for additional details of this agreement and the corresponding fee structure. As of July 12, 2012, we are no longer subject to this fee structure.

Product Specialists

In addition to utilizing its own management team, our Advisor has formed strategic alliances with recognized leaders in the real estate and investment management industries. These alliances are intended to allow our Advisor to leverage the organizational infrastructure of experienced real estate developers, operators and investment managers and to potentially give us access to a greater number of real property, debt related and real estate securities investment opportunities. The use of product specialists or other service providers does not eliminate or reduce our Advisor’s fiduciary duty to us. Our Advisor retains ultimate responsibility for the performance of all of the matters entrusted to it under the Advisory Agreement.

Our Advisor’s product specialists are and will be compensated through a combination of (i) reallowance of acquisition, disposition, asset management and/or other fees paid by us to our Advisor and (ii) potential profit participation in connection with specific portfolio asset(s) identified by them and invested in by us. We may enter into joint ventures or other arrangements with affiliates of our Advisor to acquire, develop and/or manage real properties. Our Advisor had previously entered into joint venture and/or product specialist arrangements with three additional affiliates (Dividend Capital Investments LLC, Hudson River Partners Real Estate Investment Management L.P., and FundCore LLC), as discussed below in more detail. The agreements with these three affiliates were terminated prior to December 31, 2012.

BCG TRT Advisors LLC

During the year ended December 31, 2012, our Advisor entered into a product specialist agreement with BCG TRT Advisors LLC (“BCG”), in connection with advisory services related to our investments in real estate securities assets. Pursuant to this agreement, a portion of the asset management fee that our Advisor receives from us related to real estate securities investments is reallowed to BCG in exchange for services provided. Approximately $58,000 and $25,000were incurred related to services provided by BCG during the years ended December 31, 2013 and 2012, respectively.

The Debt Advisor

In August 2009, our Advisor entered into a product specialist agreement (the “Debt Advisor PSA”) with FundCore Finance Group LLC (the “Debt Advisor”), an entity formed by affiliates of Hudson River Partners Real Estate Investment Management L.P. (“HRP”) and certain affiliates of our Advisor. Pursuant to the Debt Advisor PSA, the Debt Advisor had the right to perform acquisition and asset management services with respect to up to $130 million (plus any available leverage) of certain debt investments to be made by us. On August 5, 2009, our Advisor also entered into another product specialist agreement (the “HRP PSA”) with HRP. Pursuant to the HRP PSA, HRP had the right to perform the acquisition and asset management services with respect to up to $20 million (plus any available leverage) of certain debt investments to be made by us.

The fees payable to the Advisor and its affiliates related to the acquisition and management of debt investments prior to the effectiveness of the Offering were replaced by the advisory fees as stated in the Eighth Amended and Restated Advisory Agreement, as discussed above. Accordingly, the Debt Advisor and HRP PSA agreements were terminated on July 12, 2012, in connection with the effectiveness of the Offering.

The following is a summary of fees that were paid to our Advisor and its affiliates related to the acquisition and management of such debt investments prior to entering into the Eighth Amended and Restated Advisory Agreement in connection with the effectiveness of the Offering on July 12, 2012.

Debt Investment Advisory Fees

For debt investments acquired pursuant to the Debt Advisor PSA discussed above, our Advisor received an acquisition fee equal to the sum of:

(i) 1.0% of the relevant debt investment amount;

(ii) any origination or similar fees paid by the applicable borrower at the time the debt investment is made (not to exceed 1.50% of the net debt investment amount); and

(iii) an amount equal to the discounted present value (using a discount rate of 15%) of 1.0% per annum of the net debt investment amount (taking into account any anticipated principal amortization) for a period of time equal to the lesser of the term of the debt investment (excluding extension option years) or four years (collectively referred to as the “Initial Term”). This fee was reduced by the amount payable by borrowers pursuant to clause (ii) above.

The total acquisition fee and acquisition expenses would not exceed 6.0% of the net debt investment amount. The acquisition fee was payable on the closing date of the relevant debt investment and was reallowed in full by our Advisor to the Debt Advisor pursuant to the Debt Advisor PSA.

Debt Investment Asset Management Fees

For debt investments acquired pursuant to the Debt Advisor PSA discussed above, our Advisor received asset management fees pursuant to the following:

(i) during the first 12 months after the closing of the respective debt investment, our Advisor received a monthly asset management fee consisting of one-twelfth of the total amount, if any, by which the sum of the total acquisition fees and expenses exceeded 6.0% of the relevant net debt investment amount;

(ii) during the balance of the Initial Term, zero; and

(iii) during any period following the Initial Term during which the relevant debt investment was outstanding, the asset management fee consisted of a monthly fee of one-twelfth of 1.0% of the net debt investment amount.

During the year ended December 31, 2012, we acquired one debt related investment pursuant to our arrangement with the Debt Advisor with an investment amount of approximately $22.5 million and paid an acquisition fee of approximately $619,000 to our Advisor, which was fully reallowed to FundCore LLC. We did not acquire any investments pursuant to our arrangement with the Debt Advisor during the years ended December 31, 2013 or 2011.

XML

Segment Information (Schedule of Total Assets by Business Segment) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013		Dec. 31, 2012		Dec. 31, 2011	Dec. 31, 2010
Segment assets:
Net investments in real property	$ 1,924,642	[1]	$ 2,336,768	[1]
Debt related investments, net	123,935		187,321		92,247
Total segment assets, net	2,048,577		2,524,089
Non-segment assets:
Cash and cash equivalents	24,778		36,872		128,447	83,559
Other non-segment assets	85,878	[2]	98,293	[2]
Assets held for sale	146,176	[3]
Total Assets	2,305,409		2,659,254
Office [Member]
Segment assets:
Net investments in real property	1,092,351		1,245,346
Industrial [Member]
Segment assets:
Net investments in real property	229,786	[4]	475,525	[4]
Retail [Member]
Segment assets:
Net investments in real property	602,505		615,897
Debt Related Investments [Member]
Segment assets:
Debt related investments, net	123,935		187,321
Reclassified Properties from Office Segment to Industrial Segment [Member]
Segment assets:
Net investments in real property	$ 117,900		$ 125,000

[1] Includes approximately $82.4 million and $520.3 million, after accumulated depreciation and amortization, in consolidated real property variable interest entity investments as of December 31, 2013 and 2012, respectively. (2)Includes approximately $143.0 million, after accumulated depreciation and amortization, in consolidated real property variable interest investments as of December 31, 2013.

[2] Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable.

[3] Includes approximately $143.0 million, after accumulated depreciation and amortization, in consolidated real property variable interest investments as of December 31, 2013.

[4] Amounts reported for our industrial segment as of December 31, 2013 and December 31, 2012 include net investments in real property of approximately $117.9 million and $125.0 million, respectively, relating to properties that we had previously classified within our office segment.

XML

Fair Value Disclosures

12 Months Ended

Dec. 31, 2013

Fair Value Disclosures [Abstract]

Fair Value Disclosures

7.FAIR VALUE DISCLOSURES

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 table below presents certain of our assets and liabilities measured at fair value on a recurring basis as of December 31, 2013 and 2012, aggregated by the level in the fair value hierarchy within which those measurements fall as defined above (amounts in thousands). There were no changes between fair value hierarchy levels during the years ended December 31, 2013 and 2012.  

	Level 1		Level 2		Level 3		Total
As of December 31, 2013:
Assets
Real estate securities	$	-	$	-	$	461	$	461
Derivative instruments		-		748		-		748
Total assets	$	-	$	748	$	461	$	1,209
Liabilities
Derivative instruments	$	-	$	(43)	$	-	$	(43)
Total liabilities	$	-	$	(43)	$	-	$	(43)
As of December 31, 2012:
Assets
Real estate securities	$	-	$	-	$	461	$	461
Total assets	$	-	$	-	$	461	$	461
Liabilities
Mortgage notes carried at fair value	$	-	$	-	$	(122,995)	$	(122,995)
Derivative instruments	$	-	$	(416)	$	-	$	(416)
Total liabilities	$	-	$	(416)	$	(122,995)	$	(123,411)

We review our fair value hierarchy classifications on a quarterly basis. Transfers into or out of Level 3 are made if the significant inputs used in measuring the fair values of the assets and liabilities became unobservable or observable, respectively, in the current market environment. When assets and liabilities are transferred between levels, we recognize the transfer at the beginning of the period.The table below presents a reconciliation of the beginning and ending balances of certain of our assets and liabilities having fair value measurements based on significant unobservable inputs (Level 3), and our derivative instruments, between December 31, 2012 and December 31, 2013 (amounts in thousands).

	Mortgage Notes Carried at Fair Value		Real Estate Securities		Derivative Instruments
Beginning balance as of December 31, 2012	$	(122,995)	$	461	$	(416)
Total net gains (losses) included in:
Net income (other income and expense)		-		-		(8)
Other comprehensive income (Unrealized change from cash flow hedging derivatives)		-		-		352
Total change in fair value		-		-		344
Settlements		122,995		-		777
Transfers in and/or out of Level 3		-		-		-
Ending balance as of  December 31, 2013	$	-	$	461	$	705

Fair Value Estimates of Investments in Real Estate Securities

We estimate the fair value of our CMBS and CRE-CDO securities using a combination of observable market information and unobservable market assumptions. Observable market information considered in these fair market valuations include benchmark interest rates, interest rate curves, credit market indexes and swap curves. Unobservable market assumptions considered in the determination of the fair market valuations of our CMBS and CRE-CDO investments include market assumptions related to discount rates, default rates, prepayment rates, reviews of trustee or investor reports and non-binding broker quotes and pricing services in what is currently an inactive market. Additionally, we consider security-specific characteristics in determining the fair values of our CMBS and CRE-CDO investments, which include consideration of credit enhancements, the underlying collateral’s average default rates, the average delinquency rate and loan-to-value and several other characteristics. Management periodically reviews the fair value of our CMBS and CRE-CDO securities. As a result, both Level 2 and Level 3 inputs are used in arriving at the valuation of our investments in CMBS and CRE-CDOs. We consider the Level 3 inputs used in determining the fair value of its investments in CMBS and CRE-CDO securities to be significant. As such, all investments in CMBS and CRE-CDO securities fall under the Level 3 category of the fair value hierarchy. Using the above assumptions, expectations of future cash flows primarily drive our fair value estimate of our CMBS and CRE-CDO securities. Deterioration in possible cash flows from our CMBS and CRE-CDO securities will likely reduce the fair value of these securities to zero within the next 12 to 24 months.

Fair Value Estimates of Derivative Instruments

We have used interest rate swaps, zero cost collars and purchased interest rate caps to manage interest rate risk. The values of these instruments are determined by a third party valuation specialist based on assumptions provided be us using widely accepted valuation techniques, including discounted cash flow analysis of the expected cash flows of each derivative. Management reviews the fair value analyses prepared by the third party valuation specialist which reflect the contractual terms of the derivatives, including the period to maturity, and use observable market-based inputs, including interest rate curves and implied volatilities. The valuation methodologies are segregated into two categories of derivatives: (i) interest rate swaps and (ii) zero cost collars/ purchased interest rate caps.

Interest Rate Swaps — Both spot starting and forward starting swaps are considered and measured at fair value similarly. The fair values of interest rate swaps are determined using the market standard methodology of netting the discounted future fixed cash payments and the discounted expected variable cash receipts. The variable cash receipts are based on an expectation of future interest rates (i.e. forward curves) derived from observable market interest rate curves.

Zero Cost Collars/Interest Rate Caps (Interest Rate Options) — Zero cost collars and interest rate caps are considered and measured at fair value as interest rate options. The fair values of interest rate options are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates fell below or rose above the strike rate of the caps or outside of the applicable collar rates. The variable interest rates used in the calculation of projected receipts on the cap or collar rates are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

We incorporate credit valuation adjustments to appropriately reflect both our own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of our derivative contracts for the effect of nonperformance risk, we have considered the impact of “netting” and any applicable credit enhancements, such as collateral postings, thresholds, mutual puts, and guarantees.

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 December 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 all of our derivative valuations are appropriately classified in Level 2 of the fair value hierarchy.

Nonrecurring Fair Value Measurements

During the year ended December 31, 2013, we recognized an impairment loss related to a wholly-owned industrial property in the accompanying statements of operations. The impairment was based on a reduction of our estimated holding period for this property, triggering impairment recognition with the related fair value measurement based on our estimate of future cash flows from the operation and disposition of this property. We consider the Level 3 inputs used in determining the fair value of this real property investment to be significant. As such, this investment falls under the Level 3 category of the fair value hierarchy. The fair value used in determining impairment for this property was $14.5 million as of December 31, 2013. The key assumption used in determining the fair value of this property is the discount rate of 8.5%, which was applied to the future cash flows we expect to receive from operating and disposing of the property. Our expectations of the future cash flows are derived from assumptions about market rents, operating expenses, and the terminal value of the property, some of which are developed by a third-party appraisal firm that we engage.

During the year ended December 31, 2012, we recognized an impairment loss related to an industrial property in the accompanying statements of operations. The impairment was based on a reduction of our estimated holding period for this property, triggering impairment recognition based on our estimate of future cash flows from the operation and disposition of this property. We consider the Level 3 inputs used in determining the fair value of this real property investment to be significant. As such, this investment falls under the Level 3 category of the fair value hierarchy.

During the year ended December 31, 2011, we recognized an impairment loss related to an office property in the accompanying statements of income (loss). The impairment was based on our determination that future cash flows from the property were highly uncertain and insufficient to cover the carrying amount of the property as of December 31, 2011. We consider the Level 3 inputs used in determining the fair value of this real property investment to be significant. As such, this investment falls under the Level 3 category of the fair value hierarchy.

XML

Debt Related Investments (Average Recorded Net Investment in Impaired Debt Related Investments and Related Interest Income Recorded) (Details) (USD $) In Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Debt Related Investments [Abstract]
Average Recorded Investment	$ 6,067	$ 12,930	$ 25,314
Interest Income Recognized	$ 51	$ 433	$ 3,060

XML

Debt Obligations

12 Months Ended

Dec. 31, 2013

Debt Obligations [Abstract]

Debt Obligations

5. DEBT OBLIGATIONS

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

	Weighted Average Stated Interest Rate as of December 31,		Outstanding Balance as of December 31, (1)					Gross Investment Amount Securing Borrowings as of December 31, (2)
	2013	2012	2013		2012		2013		2012
Fixed-rate mortgages (3)	5.8%	5.8%	$	969,622	$	1,160,042	$	1,898,946	$	2,061,757
Floating-rate mortgages (4)	3.9%	3.5%		8,580		23,701		15,571		42,609
Total mortgage notes	5.8%	5.7%		978,202		1,183,743		1,914,517		2,104,366
Repurchase facilities (5)	2.8%	3.0%		45,270		135,709		65,726		198,389
Total other secured borrowings	2.8%	3.0%		45,270		135,709		65,726		198,389
Total secured borrowings	5.6%	5.4%		1,023,472		1,319,452		1,980,243		2,302,755
Line of credit	1.9%	2.2%		30,000		30,000		N/A		N/A
Term loan (6)	2.2%	2.2%		270,000		270,000		N/A		N/A
Total unsecured borrowings	2.2%	2.2%		300,000		300,000		N/A		N/A
Total borrowings	4.9%	4.8%	$	1,323,472	$	1,619,452	$	1,980,243	$	2,302,755

(1)Amounts presented are net of (i) fair value adjustment to mortgages carried at fair value of $0 and $55.0 million as of December 31, 2013 and 2012, respectively, (ii) unamortized premiums (discounts) to the face value of our outstanding fixed-rate mortgages of $2.7 million and ($2.7) million as of December 31, 2013 and 2012, respectively, and (iii) GAAP principal amortization related to troubled debt restructurings of $1.5 million and $718,000 as of December 31, 2013 and 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)Fixed-rate mortgages presented include outstanding balances included within liabilities related to assets held for sale as of December 31, 2013 of approximately $80.4 million at a weighted average interest rate of 6.1% secured by gross investments of approximately $170.3 million.  

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

(5)As of December 31, 2013, borrowings under our repurchase facility were subject to interest at a floating rate of 2.25% over one-month LIBOR. However, we had effectively fixed the interest rate of the borrowings using an interest rate swap, resulting in a fixed interest rate of 2.84% for the term of the borrowings (provided that our borrowing balance does not exceed our derivative instrument notional during that term). As of December 31, 2012, borrowings under our repurchase facilities were subject to interest at floating rates at spreads ranging from 2.25% to 3% over one-month LIBOR. As of December 31, 2012, we had effectively fixed the interest rate of approximately $79.1 million of the total of $135.7 million in borrowings using interest rate swaps at 3.14%, resulting in a weighted average interest rate on the total repurchase facility of 3.04%.

(6)As of December 31, 2013, borrowings under our term loan were subject to interest at a floating rate of 1.70% over one-month LIBOR. However, we had effectively fixed the interest rate for $200.0 million of the total of $270.0 million in borrowings using interest rate swaps at 2.34%, resulting in a weighted average interest rate on the total term loan of 2.21%. As of December 31, 2012, borrowings of $270.0 million under our term loan were subject to interest at a floating rate of 1.95% over one-month LIBOR, resulting in a weighted average interest rate on the total term loan of 2.16%.

As of December 31, 2013, 12 mortgage notes were interest-only and 20 mortgage notes were fully amortizing with outstanding principal balances of approximately $341.4 million and $635.6 million, respectively. None of our mortgage notes are recourse to us.

As of December 31, 2013, we had outstanding borrowings of $270.0 million and $30.0 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”). As of December 31, 2013, the unused portion of the revolving credit facility component of the Facility was approximately $320.0 million, of which approximately $86.1 million was available. 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, and $150.0 million was available for us to borrow under the revolving credit facility component of the Facility.

Borrowing Activity

Assumption of Mortgage Note

In connection with our acquisition of 655 Montgomery discussed in Note 3, we assumed a mortgage note secured by 655 Montgomery with an unpaid principal balance of approximately $57.9 million at acquisition. The mortgage note is amortizing and bears interest at a fixed rate of 6.01%. The mortgage note matures in June 2016 and does not include any extension options.

Repayments of Mortgage Notes and Other Secured Borrowings

During the year ended December 31, 2013, we repaid one mortgage note borrowing of approximately $14.5 million before its scheduled maturity. The note was secured by an office property in the Dallas, TX market. The note was originally scheduled to mature during 2013. We recognized a loss on financing commitments and early repayment of debt of approximately $233,000 relating to this repayment. Additionally, during the year ended December 31, 2013, we repaid one of our repurchase facilities in full at initial maturity and repaid a portion of our other repurchase facility before contractual maturity. Related to these repayments, we recognized a loss on financing commitments and early repayment of debt of approximately $479,000 during the year ended December 31, 2013.

As discussed in Note 3, during the year ended December 31, 2013, Comerica Bank Tower was sold by the Receiver pursuant to a court order to a purchaser unrelated to us. Comerica Bank Tower was subject to a mortgage note with an outstanding principal balance as of the date of the disposition of $177.3 million. We had carried the loan at fair value, which was $123.0 million as of December 31, 2012.

Additionally, as discussed in Note 3, during the year ended December 31, 2013, we sold 12 properties, eight of which were subject to mortgage notes at disposition. In total, the buyers of these eight properties assumed mortgage note balances of approximately $117.6 million from us.

Subsequent to December 31, 2013, as discussed in Note 3, we sold a portfolio of 12 properties, 11 of which were subject to mortgage notes at disposition. In total, the buyer of this portfolio assumed mortgage note balances of approximately $80.4 million. Related to this disposition, we recognized a loss on financing commitments and early repayment of debt during the year ended December 31, 2013, of approximately $1.8 million upon the discontinuation of hedge accounting and the reclassification of accumulated other comprehensive loss on cash flow hedges relating to these mortgages.

Debt Maturities

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

	As of December 31, 2013
	Mortgage Notes and Other Secured Borrowings			Unsecured Borrowings			Total
Year Ending December 31,	Number of Borrowings Maturing	Outstanding Balance (1)(2)(3)		Number of Borrowings Maturing	Outstanding Balance (4)		Outstanding Balance (5)(6)
2014	4	$	145,190	0	$	-	$	145,190
2015	5		127,206	0		-		127,206
2016	13		347,496	1		30,000		377,496
2017	7		223,371	0		-		223,371
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
2023	0		978	0		-		978
Thereafter	2		6,431	0		-		6,431
Total	33	$	1,022,277	2	$	300,000	$	1,322,277

(1)Three of our mortgage notes and one of our repurchase facilities with an aggregate outstanding principal balance as of December 31, 2013 of approximately $132.5 million have initial maturities before December 31, 2014.  One of these mortgage notes with an outstanding balance of $38.9 million, and the repurchase facility with an outstanding balance of $45.3 million have extension options beyond December 31, 2014. 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 these extension options. However, we cannot guarantee that we will meet the requirements to extend the notes upon initial maturity. In the event that we do not qualify to extend the notes, we expect to repay them with proceeds from new borrowings or available proceeds from our revolving credit facility.

(2)Three of our mortgage notes with outstanding balances of $39.7 million, $30.9 million, and $9.8 million, maturing in 2014, 2015, and 2016, respectively, were classified within liabilities associated with assets held for sale in the accompanying balance sheet as of December 31, 2013. These mortgages were assumed by the purchaser of the related portfolio of real properties subsequent to December 31, 2013.

(3)Secured borrowings presented include (i) mortgage note borrowings of approximately $977.0 million with maturities ranging from 2014 to 2029, and (ii) borrowings under our repurchase facility of approximately $45.3 million, which matures in 2014 and is subject to three one-year extension options.

(4)Unsecured borrowings presented include (i) borrowings under our revolving credit facility of $30.0 million, which matures in 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.  

(5)Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.

(6)As of December 31, 2013, our mortgage notes and secured borrowings are secured by interests in real properties and debt investments totaling approximately $2.0 billion.

XML

Hedging Activities

12 Months Ended

Dec. 31, 2013

Hedging Activities [Abstract]

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. Certain of our floating rate borrowings are not hedged and therefore, to an extent, we have ongoing exposure to interest rate movements.

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(“ASC Topic 815”) 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 $1.8 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 $1.0 million 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 December 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):

		Gains and Losses on Cash Flow Hedges		Unrealized Gains and Losses on Available-For-Sale Securities		Accumulated Other Comprehensive Income
Beginning balance as of December 31, 2012:		$	(14,710)	$	(1,486)	$	(16,196)
	Other comprehensive income:
	Amortization of OCI into interest expense (net of tax benefit of $0)		2,726		-		2,726
	Change in fair value recognized in OCI (net of tax benefit of $0)		352		-		352
	Amounts reclassified from accumulated other comprehensive income:
	Losses reclassified into loss on extinguishment of debt and financing commitments upon discontinuance of cash flow hedges (net of tax benefit of $0)		1,897		-		1,897
	Net current-period other comprehensive income		4,975		-		4,975
	Attribution of and other adjustments to OCI attributable to noncontrolling interests		(141)		568		427
Ending balance as of December 31, 2013		$	(9,876)	$	(918)	$	(10,794)

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 December 31, 2013 and  2012 (amounts in thousands):

	Asset Derivatives					Liability Derivatives
	Balance Sheet	As of December 31, 2013		As of December 31, 2012		Balance Sheet	As of December 31, 2013		As of December 31, 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)	$	748	$	-	Other liabilities (1)	$	(43)	$	(403)
Total derivatives designated as hedging instruments under ASC Topic 815			748		-			(43)		(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		$	748	$	-		$	(43)	$	(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 December 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 December 31, 2013, we had seven outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk, with a total notional amount of $255.4 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,  $19,000, and $85,000 for the years ended December 31, 2013, 2012, and 2011, respectively. As of December 31, 2013 we did not have any outstanding derivatives that were not designated as hedges. 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 Income (Loss)

The table below presents the effect of our derivative financial instruments on our accompanying financial statements for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands):

	For the Year Ended December 31,
	2013		2012		2011
Derivatives Designated as Hedging Instruments
Derivative type		Interest rate contracts		Interest rate contracts		Interest rate contracts
Amount of gain (loss) recognized in OCI (effective portion)	$	352	$	(436)	$	(625)
Location of gain or (loss) reclassified from accumulated OCI into income (effective portion)		Interest expense		Interest expense		Interest expense
Amount of loss reclassified from accumulated OCI     into income (effective portion)	$	(2,726)	$	(2,648)	$	(2,862)
Location of gain or (loss) recognized in income (ineffective portion and amount excluded from effectiveness testing)		Loss on financing commitments		Loss on financing commitments, Discontinued operations, net of taxes		Discontinued operations, net of taxes
Amount of loss recognized in income due to missed forecast (ineffective portion and amount excluded from effectiveness testing)	$	(1,897)	$	(1,751)	$	(600)
Derivatives Not Designated as Hedging Instruments
Derivative type		Interest rate contracts		Interest rate contracts		Interest rate contracts
Location of gain or (loss) recognized in income		Interest and other income		Interest and other income		Interest and other income
Amount of loss recognized in income	$	-	$	(19)	$	(85)

XML

Fair Value of Financial Instruments

12 Months Ended

Dec. 31, 2013

Fair Value of Financial Instruments [Abstract]

Fair Value of Financial Instruments

8. 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 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 December 31, 2013 and 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, including instruments classified as held for sale, as of December 31, 2013 and 2012 were as follows (amounts in thousands):

	As of December 31, 2013				As of December 31, 2012
		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Investments in real estate securities	$	461	$	461	$	461	$	461
Fixed-rate debt related investments, net		98,724		101,012		108,482		110,796
Floating-rate debt related investments, net		25,211		24,504		78,839		79,803
Derivative instruments		748		748		-		-
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	$	969,622	$	1,010,085	$	1,037,047	$	1,091,425
Fixed-rate mortgage notes carried at fair value		-		-		122,995		122,995
Floating-rate mortgage notes		8,580		8,582		23,701		23,738
Floating-rate other secured borrowings		45,270		45,270		135,709		135,931
Floating-rate unsecured borrowings		300,000		301,690		300,000		300,000
Derivative liabilities		43		43		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, Other Secured Borrowings, and Unsecured Borrowings Carried at Amortized Cost—The fair value of our mortgage notes, other secured borrowings, and unsecured 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.

XML

Hedging Activities (Narrative) (Details) (USD $)				12 Months Ended
	Dec. 31, 2013 Scenario, Forecast [Member]	Dec. 31, 2013 Designated Hedges [Member]	Dec. 31, 2012 Designated Hedges [Member]	Dec. 31, 2013 Undesignated Hedges [Member]	Dec. 31, 2012 Undesignated Hedges [Member]	Dec. 31, 2011 Undesignated Hedges [Member]	Dec. 31, 2014 Interest Rate Swap [Member] Scenario, Forecast [Member]	Dec. 31, 2013 Interest Rate Swap [Member] Designated Hedges [Member] agreement	Dec. 31, 2012 Interest Rate Swap [Member] Designated Hedges [Member] agreement	Dec. 31, 2012 Interest Rate Swap [Member] Undesignated Hedges [Member] agreement	Dec. 31, 2012 Interest Rate Cap [Member] Designated Hedges [Member] agreement	Dec. 31, 2012 Interest Rate Cap [Member] Undesignated Hedges [Member] agreement
Derivative [Line Items]
Estimated increase to interest expense related to termination of hedging instrument							$ 1,800,000
Estimated increase to interest expense related to active effective hedges of floating rate debt	1,000,000
Total notional amount		255,400,000	90,000,000							230,400,000
Number of outstanding derivatives								7	2	1	2	2
Undesignated derivative instruments loss recognized in income				$ 0	$ 19,000	$ 85,000

XML

Income Taxes (Details) (USD $) In Millions, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012
Income Tax [Line Items]
Percentage of REIT taxable income distributed annually	100.00%
Gross deferred tax assets	$ 4.4	$ 4.0
Minimum [Member]
Income Tax [Line Items]
Percentage of REIT taxable income distributed annually	90.00%

XML

Hedging Activities (Gross Fair Value of Derivative Financial Instruments as Well as Their Classification) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013		Dec. 31, 2012
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair value, Gross asset	$ 748
Liability Derivatives, Fair value, Gross liability	(43)		(416)
Designated Hedges [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair value, Gross asset	748
Liability Derivatives, Fair value, Gross liability	(43)		(403)
Designated Hedges [Member] | Interest Rate Contract [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Asset Derivatives, Fair value, Gross asset	748	[1]
Designated Hedges [Member] | Interest Rate Contract [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair value, Gross liability	(43)	[1]	(403)	[1]
Undesignated Hedges [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair value, Gross liability			(13)
Undesignated Hedges [Member] | Interest Rate Contract [Member] | Other Liabilities [Member]
Derivatives, Fair Value [Line Items]
Liability Derivatives, Fair value, Gross liability			$ (13)	[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.

XML

Debt Obligations (Summary of Borrowings Reflects Contractual Debt Maturities Footnote) (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 item		Dec. 31, 2012
Debt Instrument [Line Items]
Outstanding Balance	$ 1,322,277,000	[1],[2]
Secured debt	943,045,000	[3]	1,319,452,000	[3]
Number of debt borrowings classified within liabilities held for sale	3
Line of credit, amount outstanding	30,000,000		30,000,000
Adjustment to mortgages	0		55,000,000
Mark to market adjustment on assumed debt	2,700,000
Troubled debt restructuring amortization	1,500,000		718,000
Gross Investment Amount Securing Borrowings	1,980,243,000		2,302,755,000	[4]
Borrowings [Member]
Debt Instrument [Line Items]
Repurchase agreement borrowing maturity period	2014
2014 [Member]
Debt Instrument [Line Items]
Outstanding Balance	145,190,000	[1],[2]
2015 [Member]
Debt Instrument [Line Items]
Outstanding Balance	127,206,000	[1],[2]
2016 [Member]
Debt Instrument [Line Items]
Outstanding Balance	377,496,000	[1],[2]
2017 [Member]
Debt Instrument [Line Items]
Outstanding Balance	223,371,000	[1],[2]
2018 [Member]
Debt Instrument [Line Items]
Outstanding Balance	274,999,000	[1],[2]
2019 [Member]
Debt Instrument [Line Items]
Outstanding Balance	5,292,000	[1],[2]
2020 [Member]
Debt Instrument [Line Items]
Outstanding Balance	157,944,000	[1],[2]
2021 [Member]
Debt Instrument [Line Items]
Outstanding Balance	1,707,000	[1],[2]
2022 [Member]
Debt Instrument [Line Items]
Outstanding Balance	1,663,000	[1],[2]
2023 [Member]
Debt Instrument [Line Items]
Outstanding Balance	978,000	[1],[2]
Thereafter [Member]
Debt Instrument [Line Items]
Outstanding Balance	6,431,000	[1],[2]
Repurchase Facility [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	45,300,000
Secured debt	45,300,000
Extension Option, In Years	1 year
Gross Investment Amount Securing Borrowings	65,726,000	[5]	198,389,000	[4],[5]
Mortgage Notes [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	3
Outstanding Balance	38,900,000
Secured debt	977,000,000
Mortgage Notes [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt instrument maturity year	2014
Mortgage Notes [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt instrument maturity year	2029
Mortgage Notes [Member] | 2014 [Member]
Debt Instrument [Line Items]
Outstanding Balance	39,700,000
Mortgage Notes [Member] | 2015 [Member]
Debt Instrument [Line Items]
Outstanding Balance	30,900,000
Mortgage Notes [Member] | 2016 [Member]
Debt Instrument [Line Items]
Outstanding Balance	9,800,000
Mortgage Notes [Member] | Repurchase Facility [Member]
Debt Instrument [Line Items]
Outstanding Balance	132,500,000
Mortgage Notes and Other Secured Borrowings [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	33
Outstanding Balance	1,022,277,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2014 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	4
Outstanding Balance	145,190,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2015 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	5
Outstanding Balance	127,206,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2016 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	13
Outstanding Balance	347,496,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2017 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	7
Outstanding Balance	223,371,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2018 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Outstanding Balance	4,999,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2019 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Outstanding Balance	5,292,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2020 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	157,944,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2021 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Outstanding Balance	1,707,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2022 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	1,663,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | 2023 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Outstanding Balance	978,000	[6],[7],[8]
Mortgage Notes and Other Secured Borrowings [Member] | Thereafter [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	2
Outstanding Balance	6,431,000	[6],[7],[8]
Unsecured Borrowings [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	2
Outstanding Balance	300,000,000	[9]
Extension Option, In Years	1 year
Unsecured Borrowings [Member] | 2014 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings [Member] | 2015 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings [Member] | 2016 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	30,000,000	[9]
Line of credit, amount outstanding	30,000,000
Unsecured Borrowings [Member] | 2017 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings [Member] | 2018 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	1
Outstanding Balance	$ 270,000,000	[9]
Term Loan borrowings maturity period	2018
Unsecured Borrowings [Member] | 2019 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings [Member] | 2020 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings [Member] | 2021 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings [Member] | 2022 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings [Member] | 2023 [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0
Unsecured Borrowings [Member] | Thereafter [Member]
Debt Instrument [Line Items]
Number of Borrowings Maturing	0

[1] Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.

[2] Outstanding balance represents expected cash outflows for contractual amortization and scheduled balloon payment maturities and does not include the mark-to-market adjustment on assumed debt of $2.7 million as of December 31, 2013, partially offset by the GAAP principal amortization of our restructured mortgage note of approximately $1.5 million that does not reduce the contractual amount due of the related mortgage note as of December 31, 2013.(6)As of December 31, 2013, our mortgage notes and secured borrowings are secured by interests in real properties and debt investments totaling approximately $2.0 billion.

[3] Includes approximately $60.7 million and $419.5 million in consolidated mortgage notes in variable interest entity investments as of December 31, 2013 and 2012, respectively.

[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] As of December 31, 2013, borrowings under our repurchase facility were subject to interest at a floating rate of 2.25% over one-month LIBOR. However, we had effectively fixed the interest rate of the borrowings using an interest rate swap, resulting in a fixed interest rate of 2.84% for the term of the borrowings (provided that our borrowing balance does not exceed our derivative instrument notional during that term). As of December 31, 2012, borrowings under our repurchase facilities were subject to interest at floating rates at spreads ranging from 2.25% to 3% over one-month LIBOR. As of December 31, 2012, we had effectively fixed the interest rate of approximately $79.1 million of the total of $135.7 million in borrowings using interest rate swaps at 3.14%, resulting in a weighted average interest rate on the total repurchase facility of 3.04%.

[6] Three of our mortgage notes and one of our repurchase facilities with an aggregate outstanding principal balance as of December 31, 2013 of approximately $132.5 million have initial maturities before December 31, 2014. One of these mortgage notes with an outstanding balance of $38.9 million, and the repurchase facility with an outstanding balance of $45.3 million have extension options beyond December 31, 2014. 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 these extension options. However, we cannot guarantee that we will meet the requirements to extend the notes upon initial maturity. In the event that we do not qualify to extend the notes, we expect to repay them with proceeds from new borrowings or available proceeds from our revolving credit facility.

[7] Three of our mortgage notes with outstanding balances of $39.7 million, $30.9 million, and $9.8 million, maturing in 2014, 2015, and 2016, respectively, were classified within liabilities associated with assets held for sale in the accompanying balance sheet as of December 31, 2013. These mortgages were assumed by the purchaser of the related portfolio of real properties subsequent to December 31, 2013.

[8] Secured borrowings presented include (i) mortgage note borrowings of approximately $977.0 million with maturities ranging from 2014 to 2029, and (ii) borrowings under our repurchase facility of approximately $45.3 million, which matures in 2014 and is subject to three one-year extension options.

[9] Unsecured borrowings presented include (i) borrowings under our revolving credit facility of $30.0 million, which matures in 2016, subject to two one-year extension options, and (ii) term loan borrowings of $270.0 million which mature in 2018.

XML

Fair Value of Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2013

Fair Value of Financial Instruments [Abstract]

Schedule of Carrying Amount and Fair Values of Other Financial Instruments

	As of December 31, 2013				As of December 31, 2012
		Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Assets:
Investments in real estate securities	$	461	$	461	$	461	$	461
Fixed-rate debt related investments, net		98,724		101,012		108,482		110,796
Floating-rate debt related investments, net		25,211		24,504		78,839		79,803
Derivative instruments		748		748		-		-
Liabilities:
Fixed-rate mortgage notes carried at amortized cost	$	969,622	$	1,010,085	$	1,037,047	$	1,091,425
Fixed-rate mortgage notes carried at fair value		-		-		122,995		122,995
Floating-rate mortgage notes		8,580		8,582		23,701		23,738
Floating-rate other secured borrowings		45,270		45,270		135,709		135,931
Floating-rate unsecured borrowings		300,000		301,690		300,000		300,000
Derivative liabilities		43		43		416		416

XML

Investments in Real Property (Future Minimum Rental Receivable Under Non Cancelable Operating and Ground Leases) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013
Investments in Real Property [Abstract]
2014	$ 192,551
2015	181,583
2016	174,497
2017	129,026
2018	95,009
Thereafter	283,661
Total	$ 1,056,327

XML

Segment Information

12 Months Ended

Dec. 31, 2013

Segment Information [Abstract]

Segment Information

13. 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. For example, the physical characteristics of our buildings, the related operating characteristics, the geographic markets, and the type of tenants are inherently different for each of our segments. During the year ended December 31, 2013, we reclassified amounts relating to four properties that we had previously classified within our office segment into our industrial segment for all periods presented. 

The following table sets forth revenue and the components of net operating income (“NOI”) of our segments for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands).

	For the Year Ended December 31,
	Revenues						NOI
	2013		2012		2011		2013		2012		2011
Real property (1)
Office	$	123,838	$	122,264	$	124,438	$	95,618	$	95,625	$	97,551
Industrial (2)		26,108		26,715		26,305		23,893		24,782		24,416
Retail		57,382		57,937		57,007		44,145		45,974		43,985
Debt related investments		10,449		9,409		11,107		10,449		9,409		11,107
Total	$	217,777	$	216,325	$	218,857	$	174,105	$	175,790	$	177,059

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

(2)Amounts reported for our industrial segment for the years ended December 31, 2013, 2012 and 2011 include revenue of approximately $13.0 million, $13.7 million, and $13.6 million, respectively, and NOI of approximately $11.6 million, $12.5 million, and $12.4 million, respectively, relating to four properties that we reclassified from our office segment into our industrial segment during 2013.

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 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 excludes 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 stockholders for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands).

	For the Year Ended December 31,
	2013		2012			2011
Net operating income	$	174,105	$	175,790	$ -	$	177,059
Interest and other income (expense)		(153)		807			2,394
Real estate depreciation and amortization expense		(87,174)		(91,127)			(93,407)
General and administrative expenses		(9,973)		(7,229)			(6,826)
Advisory fees, related party		(15,120)		(17,659)			(20,854)
Acquisition-related expenses		(337)		(325)			(610)
Interest expense		(65,325)		(69,844)			(74,406)
Impairment of real estate property		(2,600)		-			-
Loss on extinguishment of debt and financing commitments		(2,507)		(5,374)			-
Other-than-temporary impairment on securities		-		-			(3,369)
Provision for loss on debt related investments		-		-			(23,037)
Discontinued operations, net of taxes		65,554		(7,410)			(21,510)
Net (income) loss attributable to noncontrolling interests		(4,002)		110			6,886
Net income (loss) attributable to common stockholders	$	52,468	$	(22,261)		$	(57,680)

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

	As of December 31,
	2013		2012
Segment assets:
Net investments in real property
Office	$	1,092,351	$	1,245,346
Industrial (1)		229,786		475,525
Retail		602,505		615,897
Debt related investments, net		123,935		187,321
Total segment assets, net		2,048,577		2,524,089
Non-segment assets:
Cash and cash equivalents		24,778		36,872
Other non-segment assets (2)		85,878		98,293
Assets held for sale		146,176		-
Total assets	$	2,305,409	$	2,659,254

(1)Amounts reported for our industrial segment as of December 31, 2013 and December 31, 2012 include net investments in real property of approximately $117.9 million and $125.0 million, respectively, relating to properties that we had previously classified within our office segment.

(2)Other non-segment assets primarily consist of corporate assets including restricted cash and receivables, including straight-line rent receivable.

XML

Schedule III - Real Estate and Accumulated Depreciation

12 Months Ended

Dec. 31, 2013

Scedule III - Real Estate and Accumulated Depreciation [Abstract]

Schedule III - Real Estate and Accumulated Depreciation

Dividend Capital Diversified Property Fund Inc.

Schedule III — Real Estate and Accumulated Depreciation

As of December 31, 2013

(dollar amounts in thousands)

					Initial Cost to Company									Gross Amount Carried at December 31, 2013
												Cost Capitalized
												or Adjustments
		No. of						Buildings and				Subsequent to					Buildings and				Accumulated	Acquisition	Depreciable
Property	Market	Buildings		Encumbrances (1)		Land		Improvements (2)		Total Costs		Acquisition (4)			Land		Improvements (2)		Total Costs   (3, 4)		Depreciation (4)	Date	Life (years)
Office Properties:
Jay Street	Silicon Valley, CA	3	$	23,500	$	13,859	$	21,974	$	35,833	$	4,063	$		13,859	$	26,037	$	39,896	$	7,139	6/28/06	3-40
Bala Pointe	Philadelphia, PA	1		24,000		10,115		27,516		37,631		3,418			10,115		30,934		41,049		10,430	8/28/06	3-40
40 Boulevard	Chicago, IL	1		8,580		2,611		7,797		10,408		5,163			2,611		12,960		15,571		5,767	1/24/07	1-35
Washington Commons	Chicago, IL	10		21,300		9,019		16,622		25,641		4,634			9,019		21,256		30,275		8,402	2/1/07	2-40
Shackleford	Little Rock, AR	1		13,650		2,900		18,792		21,692		323			2,900		19,115		22,015		4,523	3/20/07	5-40
Joyce Blvd	Fayetteville, AR	1		-		2,699		8,996		11,695		-			2,699		8,996		11,695		2,188	9/28/07	10-40
DeGuigne	Silicon Valley, CA	1		7,498		5,841		13,861		19,702		1,038			5,841		14,899		20,740		5,318	11/21/07	5-40
Eden Prairie (ATK)	Minneapolis/St Paul, MN	1		-		3,538		25,865		29,403		38			3,538		25,903		29,441		4,908	10/3/08	15-40
Austin-Mueller Healthcare	Austin, TX	1		19,786		2,663		42,315		44,978		-			2,663		42,315		44,978		8,108	12/23/08	11-40
1300 Connecticut	Washington, DC	1		46,421		25,177		41,250		66,427		2,928			25,177		44,178		69,355		14,373	3/10/09	5-40
Campus Road Office Center	Princeton, NJ	1		34,227		5,302		45,773		51,075		88			5,302		45,861		51,163		7,690	11/3/09	5-40
Preston Sherry Plaza	Dallas, TX	1		22,807		7,500		22,303		29,803		4,688			7,500		26,991		34,491		7,746	12/16/09	3-40
Park Place	Dallas, TX	1		-		4,075		19,625		23,700		5,383			4,075		25,008		29,083		8,895	12/16/09	3-40
Doolittle Drive	Los Angeles, CA	1		10,243		9,700		13,142		22,842		410			9,700		13,552		23,252		7,431	6/25/10	4-40
South Havana Street	Denver, CO	1		-		3,925		8,607		12,532		2			3,925		8,609		12,534		6,072	6/25/10	4-40
Sheila Street	Los Angeles, CA	1		8,907		6,150		17,536		23,686		(1)			6,150		17,535		23,685		4,647	6/25/10	10-40
Corporate Center Drive	Los Angeles, CA	1		12,469		6,700		21,303		28,003		1,957			6,700		23,260		29,960		11,238	6/25/10	10-40
Harborside Plaza	Northern New Jersey	1		114,424		16,800		193,742		210,542		1,415			16,800		195,157		211,957		42,153	6/25/10	7-40
Colshire Drive	Washington, DC	1		-		21,100		157,983		179,083		(5)			21,100		157,978		179,078		38,513	6/25/10	7-40
Sylvan Way	Northern New Jersey	1		16,344		5,200		32,439		37,639		(1)			5,200		32,438		37,638		4,794	6/25/10	13-40
Sunset Hills Road	Washington, DC	1		13,984		2,700		31,915		34,615		36			2,700		31,951		34,651		9,949	6/25/10	5-40
Shadelands Drive	East Bay, CA	1		-		2,500		3,562		6,062		33			2,500		3,595		6,095		3,416	6/25/10	3-40
Sybase Drive	East Bay, CA	1		-		8,400		136,797		145,197		45			8,400		136,842		145,242		34,463	6/25/10	7-40
1600 SW 80th Street	Miami, FL	1		19,372		12,700		35,483		48,183		49			12,700		35,532		48,232		6,247	6/25/10	12-40
Connection Drive	Dallas, TX	1		23,870		3,110		50,121		53,231		112			3,110		50,233		53,343		9,233	6/25/10	9-40
655 Montgomery	San Francisco, CA	1		57,827		32,632		82,195		114,827		1,486			32,632		83,681		116,313		1,089	11/7/13	1-40
Total Office Properties		37		499,209		226,916		1,097,514		1,324,430		37,302			226,916		1,134,816		1,361,732		274,732

						Initial Cost to Company								Gross Amount Carried at December 31, 2013
												Cost Capitalized
												or Adjustments
		No. of						Buildings and				Subsequent to				Buildings and				Accumulated	Acquisition	Depreciable
Property	Market	Buildings		Encumbrances (1)		Land		Improvements (2)		Total Costs		Acquisition (4)		Land		Improvements (2)		Total Costs   (3, 4)		Depreciation (4)	Date	Life (years)
Industrial Properties:
Lundy Avenue	Silicon Valley, CA	3	$	14,250	$	5,982	$	15,459	$	21,441	$	(2,542)	$	5,117	$	13,872	$	18,989	$	5,752	9/28/06	19-40
Shiloh Road	Dallas, TX	3		22,700		5,162		30,192		35,354		79		5,162		30,271		35,433		9,389	12/21/06	10-40
Rickenbacker	Columbus, OH	1		6,926		1,249		13,308		14,557		699		1,249		14,007		15,256		4,562	10/16/06	3-40
Park West Q	Cincinnati, OH	1		5,164		1,653		9,597		11,250		805		1,653		10,402		12,055		3,872	10/16/06	5-40
Eagle Creek East	Minneapolis/St Paul, MN	1		4,298		1,644		7,676		9,320		392		1,644		8,068		9,712		2,827	10/16/06	5-40
Park West L	Cincinnati, OH	1		3,587		902		7,393		8,295		333		902		7,726		8,628		2,380	10/31/06	2-40
Eagle Creek West	Minneapolis/St Paul, MN	1		4,869		1,910		8,474		10,384		506		1,910		8,980		10,890		2,801	10/31/06	3-40
Minnesota Valley III	Minneapolis/St Paul, MN	1		6,091		2,223		12,462		14,685		1,107		2,223		13,569		15,792		4,223	10/31/06	10-40
Plainfield III	Indianapolis, IN	1		12,000		2,101		18,424		20,525		2,469		2,101		20,893		22,994		5,769	3/28/07	9-40
Patriot Drive I	Dallas, TX	1		4,625		1,034		5,548		6,582		1,186		1,034		6,734		7,768		2,003	3/28/07	3-40
Patriot Drive II	Dallas, TX	1		18,375		3,166		23,072		26,238		5,137		3,166		28,209		31,375		7,645	3/28/07	5-40
Creekside V	Columbus, OH	1		4,725		764		5,628		6,392		18		764		5,646		6,410		2,029	6/15/07	8-40
Greenwood Parkway	Atlanta, GA	1		-		2,040		20,830		22,870		402		2,040		21,232		23,272		6,098	10/29/07	10-40
Westport	Central PA	1		9,767		2,376		27,081		29,457		7		2,376		27,088		29,464		6,417	1/9/08	10-40
6900 Riverport	Louisville, KY	1		1,645		751		4,131		4,882		103		751		4,234		4,985		981	9/17/08	10-40
7000 Riverport	Louisville, KY	1		2,593		1,124		6,821		7,945		429		1,124		7,250		8,374		1,971	9/17/08	3-40
7050 Riverport	Louisville, KY	1		1,424		672		3,862		4,534		252		672		4,114		4,786		1,254	9/17/08	5-40
7201 Riverport	Louisville, KY	1		2,636		1,130		6,614		7,744		225		1,130		6,839		7,969		1,769	9/17/08	3-40
East Maple Avenue	Los Angeles, CA	1		16,924		6,400		71,761		78,161		(1)		6,400		71,760		78,160		7,063	6/25/10	16-40
N. Glenville Drive	Dallas, TX	1		3,563		1,580		6,610		8,190		(1)		1,580		6,609		8,189		1,709	6/25/10	6-40
South Columbia	Central Kentucky	1		11,579		730		25,092		25,822		(2)		730		25,090		25,820		8,682	6/25/10	4-40
Columbia Road	Cleveland, OH	1		8,684		2,525		17,337		19,862		3,943		2,525		21,280		23,805		3,423	6/25/10	6-40
200 Corporate Drive	Chicago, IL	1		8,907		925		18,937		19,862		798		925		19,735		20,660		4,097	6/25/10	8-40
Vickery Drive	Houston, TX	1		18,537		3,700		37,639		41,339		(1)		3,700		37,638		41,338		7,514	6/25/10	8-40
East 28th Avenue	Denver, CO	1		2,794		800		5,431		6,231		1		800		5,432		6,232		1,348	6/25/10	8-40
Total Industrial Properties		29		196,663		52,543		409,379		461,922		16,434		51,678		426,678		478,356		105,578

						Initial Cost to Company								Gross Amount Carried at December 31, 2013
												Cost Capitalized
												or Adjustments
		No. of						Buildings and				Subsequent to				Buildings and				Accumulated	Acquisition	Depreciable
Property	Market	Buildings		Encumbrances (1)		Land		Improvements (2)		Total Costs		Acquisition (4)		Land		Improvements (2)		Total Costs   (3, 4)		Depreciation (4)	Date	Life (years)
Retail Properties:
Bandera Road	San Antonio, TX	1	$	21,500	$	8,221	$	23,472	$	31,693	$	367	$	8,221	$	23,839	$	32,060	$	5,883	2/1/07	5-45
Beaver Creek	Raleigh, NC	1		26,200		13,017		31,375		44,392		792		13,017		32,167		45,184		7,386	5/11/07	3-40
Centerton Square	Philadelphia, PA	1		67,800		26,488		76,838		103,326		831		26,488		77,669		104,157		19,359	5/11/07	4-57
Mt. Nebo	Pittsburgh, PA	1		16,000		9,371		16,214		25,585		(1,117)		9,502		14,966		24,468		1,984	5/11/07	4-40
CB Square	Jacksonville, FL	1		-		3,768		16,660		20,428		(929)		3,768		15,731		19,499		3,149	6/27/07	7-40
Braintree	Boston	1		-		9,270		31,266		40,536		520		9,270		31,786		41,056		8,328	8/1/07	5-40
Holbrook	Boston	1		-		4,590		14,724		19,314		191		4,590		14,915		19,505		4,511	8/1/07	5-40
Kingston	Boston	1		10,574		8,580		12,494		21,074		742		8,580		13,236		21,816		4,109	8/1/07	5-40
Manomet	Boston	1		-		1,890		6,480		8,370		353		1,890		6,833		8,723		1,949	8/1/07	5-40
Orleans	Boston	1		14,070		8,780		23,683		32,463		178		8,780		23,861		32,641		5,321	8/1/07	4-40
Sandwich	Boston	1		15,825		7,380		25,778		33,158		65		7,380		25,843		33,223		5,515	8/1/07	3-40
Wareham	Boston	1		24,400		13,130		27,030		40,160		1,658		13,130		28,688		41,818		6,904	8/1/07	2-40
Abington	Boston	1		4,817		14,396		594		14,990		-		14,396		594		14,990		497	8/1/07	8-63
Hyannis	Boston	1		4,770		10,405		917		11,322		-		10,405		917		11,322		319	8/1/07	18-68
Rockland 201 Market	Boston	1		-		2,417		86		2,503		-		2,417		86		2,503		86	8/1/07	35
Mansfield	Boston	1		8,600		5,340		16,490		21,830		-		5,340		16,490		21,830		3,247	8/1/07	16-86
Meriden	Boston	1		-		6,560		22,013		28,573		-		6,560		22,013		28,573		4,570	8/1/07	13-43
Weymouth	Boston	1		-		5,170		19,396		24,566		(257)		4,913		19,396		24,309		4,958	8/1/07	19-40
Whitman 475 Bedford Street	Boston	1		7,459		3,610		11,682		15,292		-		3,610		11,682		15,292		2,377	8/1/07	16-56
Brockton Eastway Plaza	Boston	1		-		2,530		2,074		4,604		214		2,530		2,288		4,818		1,076	8/1/07	3-40
Cohasset	Boston	1		-		3,920		7,765		11,685		433		3,920		8,198		12,118		2,165	8/1/07	3-40
Cranston	Boston	1		-		1,810		4,233		6,043		109		1,810		4,342		6,152		1,884	8/1/07	2-40
Hanover	Boston	1		-		1,490		5,084		6,574		388		1,490		5,472		6,962		1,394	8/1/07	5-40
Rockland 360-372 Market	Boston	1		-		1,200		2,437		3,637		-		1,200		2,437		3,637		944	8/1/07	6-40
Brockton Westgate Plaza	Boston	1		-		3,650		6,507		10,157		5		3,650		6,512		10,162		2,066	8/1/07	11-40
Harwich	Boston	1		5,896		5,290		8,814		14,104		-		5,290		8,814		14,104		1,696	10/18/07	21-40
New Bedford	Boston	1		8,237		3,790		11,152		14,942		-		3,790		11,152		14,942		2,055	10/18/07	22-40
Norwell	Boston	1		6,061		5,850		14,547		20,397		-		5,850		14,547		20,397		2,868	10/18/07	15-65
Greater DC Retail	Washington, DC	1		38,926		19,779		42,515		62,294		330		19,781		42,843		62,624		12,866	4/6/09	5-40
Springdale	Boston	1		-		8,850		-		8,850		3,744		11,867		727		12,594		187	2/18/11	6-62
Saugus	Boston	1		-		3,783		9,677		13,460		100		3,783		9,777		13,560		2,884	3/17/11	3-40
Total Retail Properties		31		281,135		224,325		491,997		716,322		8,717		227,218		497,821		725,039		122,537
Land held
Inverness land	Denver, CO	0		-		5,200		-		5,200		-		5,200		153		5,353		-	6/25/10	N/A
Total land held		0		-	-	5,200		-	-	5,200		-		5,200	-	153		5,353		-
Grand Total		97		977,007	$	508,984	$	1,998,890	$	2,507,874	$	62,453	$	511,013	$	2,059,467	$	2,570,480	$	502,847

(1)Encumbrances represents mortgage debt principal balances encumbering each property as of December 31, 2013.

(2)Building and improvements include intangible lease assets.

(3)As of December 31, 2013, the aggregate cost for federal income tax purposes of investments in real property was approximately $2.2 billion (unaudited).

(4)Amount is presented net of impairments and other write-offs of tenant-related assets that were recorded at acquisition as part of our purchase price accounting. Such write-offs are the results of lease expirations and terminations.

The following table summarizes activity for real estate and accumulated depreciation for the years ended December 31, 2013, 2012, and 2011. The balance of investments in real estate at the end of the year ended December 31, 2013 includes amounts related to properties classified as held for sale (amounts in thousands):

	For the Year Ended December 31,
	2013		2012		2011
Investments in real estate:
Balance at the beginning of the year	$	2,819,550	$	2,724,684	$	2,858,307
Acquisitions of operating properties		114,827		128,258		21,825
Improvements		26,680		18,405		18,944
Basis of operating properties disposed of		(387,977)		(46,097)		(150,892)
Impairment of real property		(2,600)		(5,700)		(23,500)
Balance at the end of the year	$	2,570,480	$	2,819,550	$	2,724,684
Accumulated depreciation:
Balance at the beginning of the year	$	482,782	$	361,357	$	247,608
Net additions charged to costs and expenses		20,065		121,425		113,749
Balance at the end of the year	$	502,847	$	482,782	$	361,357

XML

Investments in Real Property (Summary of Disposed Properties) (Details) (USD $)				12 Months Ended			12 Months Ended																		1 Months Ended
	Dec. 31, 2013 sqft	Dec. 31, 2012 sqft	Dec. 31, 2011 sqft	Dec. 31, 2013 Office Property; Dallas, TX Market [Member] sqft	Dec. 31, 2012 Office Property; Dallas, TX Market [Member]	Mar. 31, 2013 Office Property; Dallas, TX Market [Member]	Dec. 31, 2013 Industrial Portfolio Properties; Various Markets [Member] sqft property		Dec. 31, 2013 Office (2) Property; Dallas TX Market [Member] sqft		Dec. 31, 2013 Office Property; New England Market [Member] sqft	Dec. 31, 2013 Office Property; Denver, CO Market [Member] sqft	Dec. 31, 2013 Office Property (2); Denver, CO Market [Member] sqft	Dec. 31, 2013 Office Property; Chicago, IL Market [Member] sqft	Dec. 31, 2012 Retail Property, New England Market [Member] sqft	Dec. 31, 2011 Retail Property, New England Market [Member] sqft	Dec. 31, 2012 Office Property, Silicon Valley Market [Member] sqft	Dec. 31, 2011 Office Property, Silicon Valley Market [Member] sqft	Dec. 31, 2012 Industrial Property, Louisville, KY Market [Member] sqft	Dec. 31, 2011 Industrial Property, Cincinnati OH Market [Member] sqft	Dec. 31, 2011 Office Property (2), Silicon Valley, CA Market [Member] sqft	Dec. 31, 2011 Industrial Property, Kansas City, MO Market [Member] sqft	Dec. 31, 2013 Industrial Portfolio Properties (2), Various Markets [Member] property	Jan. 22, 2014 Subsequent Event [Member] sqft	Jan. 22, 2014 Subsequent Event [Member] Industrial Portfolio Properties (2), Various Markets [Member] sqft
Significant Acquisitions and Disposals [Line Items]
DPF Ownership				100.00%	100.00%		96.40%	[1]	100.00%	[2]	100.00%	100.00%	100.00%	100.00%	100.00%	100.00%	90.00%	97.50%	90.00%	95.60%	100.00%	88.60%			92.50%	[3]
Square feet	4,111,000	610,000	1,069,000	62,000			1,918,000	[1]	1,509,000	[2]	132,000	257,000	133,000	100,000	19,000	46,000	427,000	52,000	164,000	604,000	187,000	180,000		3,387,000	3,387,000	[3]
Disposition Date				Jan. 13, 2013			May 10, 2013	[1]	May 31, 2013	[2]	Jun. 06, 2013	Jul. 31, 2013	Sep. 13, 2013	Oct. 15, 2013	Feb. 27, 2012	Dec. 21, 2011	Jul. 31, 2012	Sep. 23, 2011	Jun. 05, 2012	Oct. 17, 2011	Nov. 18, 2011	Nov. 21, 2011			Jan. 22, 2014	[3]
Gain (Loss)	$ 74,286,000	$ 21,113,000	$ 10,782,000	$ 1,217,000			$ (311,000)	[1]	$ 15,462,000	[2]	$ 6,734,000	$ 35,371,000	$ 10,233,000	$ 5,580,000	$ (328,000)	$ 2,266,000	$ 19,584,000	$ 1,187,000	$ 1,857,000	$ (1,046,000)	$ 8,305,000	$ 70,000
Number of properties							7																12
Unpaid principal balance	$ 57,900,000				$ 179,800,000	$ 177,400,000
Interest bearing on mortgage note	6.01%	5.80%

[1] Industrial portfolio included seven properties located in the following markets: Philadelphia, PA, Sacramento, CA, Central Pennsylvania, Charlotte, NC, Atlanta, GA, and Chicago, IL.

[2] During the year ended December 31, 2012, we became the 100% owner of the titleholder of a 1.5 million square foot office property in the Dallas, TX market (“Comerica Bank Tower”), as the result of our foreclosure of a non-performing mezzanine loan for which such ownership interest had served as collateral. Comerica Bank Tower was subject to a mortgage note with a principal balance of $179.8 million as of the acquisition date bearing interest at 5.8%, which matures in January 2017. On September 10, 2012, we were notified that a receiver (the “Receiver”) had been appointed for the Comerica Bank Tower. As of March 31, 2013, the unpaid principal balance of this mortgage note was $177.4 million. On May 31, 2013, Comerica Bank Tower was sold by the Receiver pursuant to court order to a purchaser unaffiliated with us. Because of the outstanding principal balance of the mortgage note, we did not receive any proceeds from the sale of Comerica Bank Tower.

[3] Industrial portfolio included 12 properties located in the following markets: Atlanta, GA, Central Pennsylvania, Cincinnati, OH, Columbus, OH, Dallas, TX, Indianapolis, IN, and Minneapolis/St. Paul, MN.

XML

Organization (Details) (USD $) Share data in Thousands, unless otherwise specified	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2013 NAV Offering [Member]	Jul. 12, 2012 NAV Offering [Member]
Organization [Line Items]
Percentage of proceeds received from public offerings of common stock contributed to our Operating Partnership	100.00%
Maximum NAV share value total				$ 2,967,700,000	$ 3,000,000,000
Maximum NAV share value primary offering					2,250,000,000
Maximum share value, DRIP				749,900,000	750,000,000
Gross proceeds from sale of shares in the Offering				32,300,000
Shares issued				4,700
Proceeds from issuance, DRIP	$ 21,473,000	$ 34,491,000	$ 45,732,000	$ 121,000

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (Paid to Advisor [Member], USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Acquisition fees paid to the Advisor	$ 0	$ 0	$ 218,000
Discontinued Operations [Member]
Asset management fees related to discontinued operations	$ 2,600,000	$ 101,000	$ 1,600,000

XML

Schedule III - Real Estate and Accumulated Depreciation (Details) (USD $)	12 Months Ended
	Dec. 31, 2013 property
Real Estate and Accumulated Depreciation [Line Items]
Number of Buildings	97
Encumbrances	$ 977,007,000	[1]
Initial Cost to Company, Land	508,984,000
Initial Cost to Company, Building & Improvements	1,998,890,000	[2]
Initial Cost to Company, Total	2,507,874,000
Cost Capitalized or Adjustments Subsequent to Acquisition	62,453,000	[3]
Gross Amount Carried, Land	511,013,000
Gross Amount Carried, Building and Improvements	2,059,467,000	[2]
Gross Amount Carried, Total Costs	2,570,480,000	[3],[4]
Accumulated Depreciation	502,847,000	[3]
Aggregate cost of investments in real property for federal income tax purposes	2,200,000,000
Office [Member]
Real Estate and Accumulated Depreciation [Line Items]
Number of Buildings	37
Encumbrances	499,209,000	[1]
Initial Cost to Company, Land	226,916,000
Initial Cost to Company, Building & Improvements	1,097,514,000	[2]
Initial Cost to Company, Total	1,324,430,000
Cost Capitalized or Adjustments Subsequent to Acquisition	37,302,000	[3]
Gross Amount Carried, Land	226,916,000
Gross Amount Carried, Building and Improvements	1,134,816,000	[2]
Gross Amount Carried, Total Costs	1,361,732,000	[3],[4]
Accumulated Depreciation	274,732,000	[3]
Office [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Silicon Valley, CA
Number of Buildings	3
Encumbrances	23,500,000	[1]
Initial Cost to Company, Land	13,859,000
Initial Cost to Company, Building & Improvements	21,974,000	[2]
Initial Cost to Company, Total	35,833,000
Cost Capitalized or Adjustments Subsequent to Acquisition	4,063,000	[3]
Gross Amount Carried, Land	13,859,000
Gross Amount Carried, Building and Improvements	26,037,000	[2]
Gross Amount Carried, Total Costs	39,896,000	[3],[4]
Accumulated Depreciation	7,139,000	[3]
Acquisition Date	Jun. 28, 2006
Office [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Philadelphia, PA
Number of Buildings	1
Encumbrances	24,000,000	[1]
Initial Cost to Company, Land	10,115,000
Initial Cost to Company, Building & Improvements	27,516,000	[2]
Initial Cost to Company, Total	37,631,000
Cost Capitalized or Adjustments Subsequent to Acquisition	3,418,000	[3]
Gross Amount Carried, Land	10,115,000
Gross Amount Carried, Building and Improvements	30,934,000	[2]
Gross Amount Carried, Total Costs	41,049,000	[3],[4]
Accumulated Depreciation	10,430,000	[3]
Acquisition Date	Aug. 28, 2006
Office [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Chicago, IL
Number of Buildings	1
Encumbrances	8,580,000	[1]
Initial Cost to Company, Land	2,611,000
Initial Cost to Company, Building & Improvements	7,797,000	[2]
Initial Cost to Company, Total	10,408,000
Cost Capitalized or Adjustments Subsequent to Acquisition	5,163,000	[3]
Gross Amount Carried, Land	2,611,000
Gross Amount Carried, Building and Improvements	12,960,000	[2]
Gross Amount Carried, Total Costs	15,571,000	[3],[4]
Accumulated Depreciation	5,767,000	[3]
Acquisition Date	Jan. 24, 2007
Office [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Chicago, IL
Number of Buildings	10
Encumbrances	21,300,000	[1]
Initial Cost to Company, Land	9,019,000
Initial Cost to Company, Building & Improvements	16,622,000	[2]
Initial Cost to Company, Total	25,641,000
Cost Capitalized or Adjustments Subsequent to Acquisition	4,634,000	[3]
Gross Amount Carried, Land	9,019,000
Gross Amount Carried, Building and Improvements	21,256,000	[2]
Gross Amount Carried, Total Costs	30,275,000	[3],[4]
Accumulated Depreciation	8,402,000	[3]
Acquisition Date	Feb. 01, 2007
Office [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Little Rock, AR
Number of Buildings	1
Encumbrances	13,650,000	[1]
Initial Cost to Company, Land	2,900,000
Initial Cost to Company, Building & Improvements	18,792,000	[2]
Initial Cost to Company, Total	21,692,000
Cost Capitalized or Adjustments Subsequent to Acquisition	323,000	[3]
Gross Amount Carried, Land	2,900,000
Gross Amount Carried, Building and Improvements	19,115,000	[2]
Gross Amount Carried, Total Costs	22,015,000	[3],[4]
Accumulated Depreciation	4,523,000	[3]
Acquisition Date	Mar. 20, 2007
Office [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Fayetteville, AR
Number of Buildings	1
Initial Cost to Company, Land	2,699,000
Initial Cost to Company, Building & Improvements	8,996,000	[2]
Initial Cost to Company, Total	11,695,000
Gross Amount Carried, Land	2,699,000
Gross Amount Carried, Building and Improvements	8,996,000	[2]
Gross Amount Carried, Total Costs	11,695,000	[3],[4]
Accumulated Depreciation	2,188,000	[3]
Acquisition Date	Sep. 28, 2007
Office [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Silicon Valley, CA
Number of Buildings	1
Encumbrances	7,498,000	[1]
Initial Cost to Company, Land	5,841,000
Initial Cost to Company, Building & Improvements	13,861,000	[2]
Initial Cost to Company, Total	19,702,000
Cost Capitalized or Adjustments Subsequent to Acquisition	1,038,000	[3]
Gross Amount Carried, Land	5,841,000
Gross Amount Carried, Building and Improvements	14,899,000	[2]
Gross Amount Carried, Total Costs	20,740,000	[3],[4]
Accumulated Depreciation	5,318,000	[3]
Acquisition Date	Nov. 21, 2007
Office [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Minneapolis/St Paul, MN
Number of Buildings	1
Initial Cost to Company, Land	3,538,000
Initial Cost to Company, Building & Improvements	25,865,000	[2]
Initial Cost to Company, Total	29,403,000
Cost Capitalized or Adjustments Subsequent to Acquisition	38,000	[3]
Gross Amount Carried, Land	3,538,000
Gross Amount Carried, Building and Improvements	25,903,000	[2]
Gross Amount Carried, Total Costs	29,441,000	[3],[4]
Accumulated Depreciation	4,908,000	[3]
Acquisition Date	Oct. 03, 2008
Office [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Austin, TX
Number of Buildings	1
Encumbrances	19,786,000	[1]
Initial Cost to Company, Land	2,663,000
Initial Cost to Company, Building & Improvements	42,315,000	[2]
Initial Cost to Company, Total	44,978,000
Gross Amount Carried, Land	2,663,000
Gross Amount Carried, Building and Improvements	42,315,000	[2]
Gross Amount Carried, Total Costs	44,978,000	[3],[4]
Accumulated Depreciation	8,108,000	[3]
Acquisition Date	Dec. 23, 2008
Office [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Washington, DC
Number of Buildings	1
Encumbrances	46,421,000	[1]
Initial Cost to Company, Land	25,177,000
Initial Cost to Company, Building & Improvements	41,250,000	[2]
Initial Cost to Company, Total	66,427,000
Cost Capitalized or Adjustments Subsequent to Acquisition	2,928,000	[3]
Gross Amount Carried, Land	25,177,000
Gross Amount Carried, Building and Improvements	44,178,000	[2]
Gross Amount Carried, Total Costs	69,355,000	[3],[4]
Accumulated Depreciation	14,373,000	[3]
Acquisition Date	Mar. 10, 2009
Office [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Princeton, NJ
Number of Buildings	1
Encumbrances	34,227,000	[1]
Initial Cost to Company, Land	5,302,000
Initial Cost to Company, Building & Improvements	45,773,000	[2]
Initial Cost to Company, Total	51,075,000
Cost Capitalized or Adjustments Subsequent to Acquisition	88,000	[3]
Gross Amount Carried, Land	5,302,000
Gross Amount Carried, Building and Improvements	45,861,000	[2]
Gross Amount Carried, Total Costs	51,163,000	[3],[4]
Accumulated Depreciation	7,690,000	[3]
Acquisition Date	Nov. 03, 2009
Office [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Dallas, TX
Number of Buildings	1
Encumbrances	22,807,000	[1]
Initial Cost to Company, Land	7,500,000
Initial Cost to Company, Building & Improvements	22,303,000	[2]
Initial Cost to Company, Total	29,803,000
Cost Capitalized or Adjustments Subsequent to Acquisition	4,688,000	[3]
Gross Amount Carried, Land	7,500,000
Gross Amount Carried, Building and Improvements	26,991,000	[2]
Gross Amount Carried, Total Costs	34,491,000	[3],[4]
Accumulated Depreciation	7,746,000	[3]
Acquisition Date	Dec. 16, 2009
Office [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Dallas, TX
Number of Buildings	1
Initial Cost to Company, Land	4,075,000
Initial Cost to Company, Building & Improvements	19,625,000	[2]
Initial Cost to Company, Total	23,700,000
Cost Capitalized or Adjustments Subsequent to Acquisition	5,383,000	[3]
Gross Amount Carried, Land	4,075,000
Gross Amount Carried, Building and Improvements	25,008,000	[2]
Gross Amount Carried, Total Costs	29,083,000	[3],[4]
Accumulated Depreciation	8,895,000	[3]
Acquisition Date	Dec. 16, 2009
Office [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Los Angeles, CA
Number of Buildings	1
Encumbrances	10,243,000	[1]
Initial Cost to Company, Land	9,700,000
Initial Cost to Company, Building & Improvements	13,142,000	[2]
Initial Cost to Company, Total	22,842,000
Cost Capitalized or Adjustments Subsequent to Acquisition	410,000	[3]
Gross Amount Carried, Land	9,700,000
Gross Amount Carried, Building and Improvements	13,552,000	[2]
Gross Amount Carried, Total Costs	23,252,000	[3],[4]
Accumulated Depreciation	7,431,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Fifteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Denver, CO
Number of Buildings	1
Initial Cost to Company, Land	3,925,000
Initial Cost to Company, Building & Improvements	8,607,000	[2]
Initial Cost to Company, Total	12,532,000
Cost Capitalized or Adjustments Subsequent to Acquisition	2,000	[3]
Gross Amount Carried, Land	3,925,000
Gross Amount Carried, Building and Improvements	8,609,000	[2]
Gross Amount Carried, Total Costs	12,534,000	[3],[4]
Accumulated Depreciation	6,072,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Los Angeles, CA
Number of Buildings	1
Encumbrances	8,907,000	[1]
Initial Cost to Company, Land	6,150,000
Initial Cost to Company, Building & Improvements	17,536,000	[2]
Initial Cost to Company, Total	23,686,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(1,000)	[3]
Gross Amount Carried, Land	6,150,000
Gross Amount Carried, Building and Improvements	17,535,000	[2]
Gross Amount Carried, Total Costs	23,685,000	[3],[4]
Accumulated Depreciation	4,647,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Los Angeles, CA
Number of Buildings	1
Encumbrances	12,469,000	[1]
Initial Cost to Company, Land	6,700,000
Initial Cost to Company, Building & Improvements	21,303,000	[2]
Initial Cost to Company, Total	28,003,000
Cost Capitalized or Adjustments Subsequent to Acquisition	1,957,000	[3]
Gross Amount Carried, Land	6,700,000
Gross Amount Carried, Building and Improvements	23,260,000	[2]
Gross Amount Carried, Total Costs	29,960,000	[3],[4]
Accumulated Depreciation	11,238,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Northern New Jersey
Number of Buildings	1
Encumbrances	114,424,000	[1]
Initial Cost to Company, Land	16,800,000
Initial Cost to Company, Building & Improvements	193,742,000	[2]
Initial Cost to Company, Total	210,542,000
Cost Capitalized or Adjustments Subsequent to Acquisition	1,415,000	[3]
Gross Amount Carried, Land	16,800,000
Gross Amount Carried, Building and Improvements	195,157,000	[2]
Gross Amount Carried, Total Costs	211,957,000	[3],[4]
Accumulated Depreciation	42,153,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Washington, DC
Number of Buildings	1
Initial Cost to Company, Land	21,100,000
Initial Cost to Company, Building & Improvements	157,983,000	[2]
Initial Cost to Company, Total	179,083,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(5,000)	[3]
Gross Amount Carried, Land	21,100,000
Gross Amount Carried, Building and Improvements	157,978,000	[2]
Gross Amount Carried, Total Costs	179,078,000	[3],[4]
Accumulated Depreciation	38,513,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Northern New Jersey
Number of Buildings	1
Encumbrances	16,344,000	[1]
Initial Cost to Company, Land	5,200,000
Initial Cost to Company, Building & Improvements	32,439,000	[2]
Initial Cost to Company, Total	37,639,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(1,000)	[3]
Gross Amount Carried, Land	5,200,000
Gross Amount Carried, Building and Improvements	32,438,000	[2]
Gross Amount Carried, Total Costs	37,638,000	[3],[4]
Accumulated Depreciation	4,794,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Washington, DC
Number of Buildings	1
Encumbrances	13,984,000	[1]
Initial Cost to Company, Land	2,700,000
Initial Cost to Company, Building & Improvements	31,915,000	[2]
Initial Cost to Company, Total	34,615,000
Cost Capitalized or Adjustments Subsequent to Acquisition	36,000	[3]
Gross Amount Carried, Land	2,700,000
Gross Amount Carried, Building and Improvements	31,951,000	[2]
Gross Amount Carried, Total Costs	34,651,000	[3],[4]
Accumulated Depreciation	9,949,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	East Bay, CA
Number of Buildings	1
Initial Cost to Company, Land	2,500,000
Initial Cost to Company, Building & Improvements	3,562,000	[2]
Initial Cost to Company, Total	6,062,000
Cost Capitalized or Adjustments Subsequent to Acquisition	33,000	[3]
Gross Amount Carried, Land	2,500,000
Gross Amount Carried, Building and Improvements	3,595,000	[2]
Gross Amount Carried, Total Costs	6,095,000	[3],[4]
Accumulated Depreciation	3,416,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	East Bay, CA
Number of Buildings	1
Initial Cost to Company, Land	8,400,000
Initial Cost to Company, Building & Improvements	136,797,000	[2]
Initial Cost to Company, Total	145,197,000
Cost Capitalized or Adjustments Subsequent to Acquisition	45,000	[3]
Gross Amount Carried, Land	8,400,000
Gross Amount Carried, Building and Improvements	136,842,000	[2]
Gross Amount Carried, Total Costs	145,242,000	[3],[4]
Accumulated Depreciation	34,463,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Miami, FL
Number of Buildings	1
Encumbrances	19,372,000	[1]
Initial Cost to Company, Land	12,700,000
Initial Cost to Company, Building & Improvements	35,483,000	[2]
Initial Cost to Company, Total	48,183,000
Cost Capitalized or Adjustments Subsequent to Acquisition	49,000	[3]
Gross Amount Carried, Land	12,700,000
Gross Amount Carried, Building and Improvements	35,532,000	[2]
Gross Amount Carried, Total Costs	48,232,000	[3],[4]
Accumulated Depreciation	6,247,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Dallas, TX
Number of Buildings	1
Encumbrances	23,870,000	[1]
Initial Cost to Company, Land	3,110,000
Initial Cost to Company, Building & Improvements	50,121,000	[2]
Initial Cost to Company, Total	53,231,000
Cost Capitalized or Adjustments Subsequent to Acquisition	112,000	[3]
Gross Amount Carried, Land	3,110,000
Gross Amount Carried, Building and Improvements	50,233,000	[2]
Gross Amount Carried, Total Costs	53,343,000	[3],[4]
Accumulated Depreciation	9,233,000	[3]
Acquisition Date	Jun. 25, 2010
Office [Member] | Real Estate Property Twenty Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	San Francisco, CA
Number of Buildings	1
Encumbrances	57,827,000	[1]
Initial Cost to Company, Land	32,632,000
Initial Cost to Company, Building & Improvements	82,195,000	[2]
Initial Cost to Company, Total	114,827,000
Cost Capitalized or Adjustments Subsequent to Acquisition	1,486,000	[3]
Gross Amount Carried, Land	32,632,000
Gross Amount Carried, Building and Improvements	83,681,000	[2]
Gross Amount Carried, Total Costs	116,313,000	[3],[4]
Accumulated Depreciation	1,089,000	[3]
Acquisition Date	Nov. 07, 2013
Office [Member] | Minimum [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Office [Member] | Minimum [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Office [Member] | Minimum [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	1 year
Office [Member] | Minimum [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	2 years
Office [Member] | Minimum [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Office [Member] | Minimum [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	10 years
Office [Member] | Minimum [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Office [Member] | Minimum [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	15 years
Office [Member] | Minimum [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	11 years
Office [Member] | Minimum [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Office [Member] | Minimum [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Office [Member] | Minimum [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Office [Member] | Minimum [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Office [Member] | Minimum [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	4 years
Office [Member] | Minimum [Member] | Real Estate Property Fifteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	4 years
Office [Member] | Minimum [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	10 years
Office [Member] | Minimum [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	10 years
Office [Member] | Minimum [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	7 years
Office [Member] | Minimum [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	7 years
Office [Member] | Minimum [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	13 years
Office [Member] | Minimum [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Office [Member] | Minimum [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Office [Member] | Minimum [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	7 years
Office [Member] | Minimum [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	12 years
Office [Member] | Minimum [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	9 years
Office [Member] | Maximum [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	35 years
Office [Member] | Maximum [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Fifteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Office [Member] | Maximum [Member] | Real Estate Property Twenty Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member]
Real Estate and Accumulated Depreciation [Line Items]
Number of Buildings	29
Encumbrances	196,663,000	[1]
Initial Cost to Company, Land	52,543,000
Initial Cost to Company, Building & Improvements	409,379,000	[2]
Initial Cost to Company, Total	461,922,000
Cost Capitalized or Adjustments Subsequent to Acquisition	16,434,000	[4]
Gross Amount Carried, Land	51,678,000
Gross Amount Carried, Building and Improvements	426,678,000	[2]
Gross Amount Carried, Total Costs	478,356,000	[3],[4]
Accumulated Depreciation	105,578,000	[3]
Industrial [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Silicon Valley, CA
Number of Buildings	3
Encumbrances	14,250,000	[1]
Initial Cost to Company, Land	5,982,000
Initial Cost to Company, Building & Improvements	15,459,000	[2]
Initial Cost to Company, Total	21,441,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(2,542,000)	[4]
Gross Amount Carried, Land	5,117,000
Gross Amount Carried, Building and Improvements	13,872,000	[2]
Gross Amount Carried, Total Costs	18,989,000	[3],[4]
Accumulated Depreciation	5,752,000	[3]
Acquisition Date	Sep. 28, 2006
Industrial [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Dallas, TX
Number of Buildings	3
Encumbrances	22,700,000	[1]
Initial Cost to Company, Land	5,162,000
Initial Cost to Company, Building & Improvements	30,192,000	[2]
Initial Cost to Company, Total	35,354,000
Cost Capitalized or Adjustments Subsequent to Acquisition	79,000	[4]
Gross Amount Carried, Land	5,162,000
Gross Amount Carried, Building and Improvements	30,271,000	[2]
Gross Amount Carried, Total Costs	35,433,000	[3],[4]
Accumulated Depreciation	9,389,000	[3]
Acquisition Date	Dec. 21, 2006
Industrial [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Columbus, OH
Number of Buildings	1
Encumbrances	6,926,000	[1]
Initial Cost to Company, Land	1,249,000
Initial Cost to Company, Building & Improvements	13,308,000	[2]
Initial Cost to Company, Total	14,557,000
Cost Capitalized or Adjustments Subsequent to Acquisition	699,000	[4]
Gross Amount Carried, Land	1,249,000
Gross Amount Carried, Building and Improvements	14,007,000	[2]
Gross Amount Carried, Total Costs	15,256,000	[3],[4]
Accumulated Depreciation	4,562,000	[3]
Acquisition Date	Oct. 16, 2006
Industrial [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Cincinnati, OH
Number of Buildings	1
Encumbrances	5,164,000	[1]
Initial Cost to Company, Land	1,653,000
Initial Cost to Company, Building & Improvements	9,597,000	[2]
Initial Cost to Company, Total	11,250,000
Cost Capitalized or Adjustments Subsequent to Acquisition	805,000	[4]
Gross Amount Carried, Land	1,653,000
Gross Amount Carried, Building and Improvements	10,402,000	[2]
Gross Amount Carried, Total Costs	12,055,000	[3],[4]
Accumulated Depreciation	3,872,000	[3]
Acquisition Date	Oct. 16, 2006
Industrial [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Minneapolis/St Paul, MN
Number of Buildings	1
Encumbrances	4,298,000	[1]
Initial Cost to Company, Land	1,644,000
Initial Cost to Company, Building & Improvements	7,676,000	[2]
Initial Cost to Company, Total	9,320,000
Cost Capitalized or Adjustments Subsequent to Acquisition	392,000	[4]
Gross Amount Carried, Land	1,644,000
Gross Amount Carried, Building and Improvements	8,068,000	[2]
Gross Amount Carried, Total Costs	9,712,000	[3],[4]
Accumulated Depreciation	2,827,000	[3]
Acquisition Date	Oct. 16, 2006
Industrial [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Cincinnati, OH
Number of Buildings	1
Encumbrances	3,587,000	[1]
Initial Cost to Company, Land	902,000
Initial Cost to Company, Building & Improvements	7,393,000	[2]
Initial Cost to Company, Total	8,295,000
Cost Capitalized or Adjustments Subsequent to Acquisition	333,000	[4]
Gross Amount Carried, Land	902,000
Gross Amount Carried, Building and Improvements	7,726,000	[2]
Gross Amount Carried, Total Costs	8,628,000	[3],[4]
Accumulated Depreciation	2,380,000	[3]
Acquisition Date	Oct. 31, 2006
Industrial [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Minneapolis/St Paul, MN
Number of Buildings	1
Encumbrances	4,869,000	[1]
Initial Cost to Company, Land	1,910,000
Initial Cost to Company, Building & Improvements	8,474,000	[2]
Initial Cost to Company, Total	10,384,000
Cost Capitalized or Adjustments Subsequent to Acquisition	506,000	[4]
Gross Amount Carried, Land	1,910,000
Gross Amount Carried, Building and Improvements	8,980,000	[2]
Gross Amount Carried, Total Costs	10,890,000	[3],[4]
Accumulated Depreciation	2,801,000	[3]
Acquisition Date	Oct. 31, 2006
Industrial [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Minneapolis/St Paul, MN
Number of Buildings	1
Encumbrances	6,091,000	[1]
Initial Cost to Company, Land	2,223,000
Initial Cost to Company, Building & Improvements	12,462,000	[2]
Initial Cost to Company, Total	14,685,000
Cost Capitalized or Adjustments Subsequent to Acquisition	1,107,000	[4]
Gross Amount Carried, Land	2,223,000
Gross Amount Carried, Building and Improvements	13,569,000	[2]
Gross Amount Carried, Total Costs	15,792,000	[3],[4]
Accumulated Depreciation	4,223,000	[3]
Acquisition Date	Oct. 31, 2006
Industrial [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Indianapolis, IN
Number of Buildings	1
Encumbrances	12,000,000	[1]
Initial Cost to Company, Land	2,101,000
Initial Cost to Company, Building & Improvements	18,424,000	[2]
Initial Cost to Company, Total	20,525,000
Cost Capitalized or Adjustments Subsequent to Acquisition	2,469,000	[4]
Gross Amount Carried, Land	2,101,000
Gross Amount Carried, Building and Improvements	20,893,000	[2]
Gross Amount Carried, Total Costs	22,994,000	[3],[4]
Accumulated Depreciation	5,769,000	[3]
Acquisition Date	Mar. 28, 2007
Industrial [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Dallas, TX
Number of Buildings	1
Encumbrances	4,625,000	[1]
Initial Cost to Company, Land	1,034,000
Initial Cost to Company, Building & Improvements	5,548,000	[2]
Initial Cost to Company, Total	6,582,000
Cost Capitalized or Adjustments Subsequent to Acquisition	1,186,000	[4]
Gross Amount Carried, Land	1,034,000
Gross Amount Carried, Building and Improvements	6,734,000	[2]
Gross Amount Carried, Total Costs	7,768,000	[3],[4]
Accumulated Depreciation	2,003,000	[3]
Acquisition Date	Mar. 28, 2007
Industrial [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Dallas, TX
Number of Buildings	1
Encumbrances	18,375,000	[1]
Initial Cost to Company, Land	3,166,000
Initial Cost to Company, Building & Improvements	23,072,000	[2]
Initial Cost to Company, Total	26,238,000
Cost Capitalized or Adjustments Subsequent to Acquisition	5,137,000	[4]
Gross Amount Carried, Land	3,166,000
Gross Amount Carried, Building and Improvements	28,209,000	[2]
Gross Amount Carried, Total Costs	31,375,000	[3],[4]
Accumulated Depreciation	7,645,000	[3]
Acquisition Date	Mar. 28, 2007
Industrial [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Columbus, OH
Number of Buildings	1
Encumbrances	4,725,000	[1]
Initial Cost to Company, Land	764,000
Initial Cost to Company, Building & Improvements	5,628,000	[2]
Initial Cost to Company, Total	6,392,000
Cost Capitalized or Adjustments Subsequent to Acquisition	18,000	[4]
Gross Amount Carried, Land	764,000
Gross Amount Carried, Building and Improvements	5,646,000	[2]
Gross Amount Carried, Total Costs	6,410,000	[3],[4]
Accumulated Depreciation	2,029,000	[3]
Acquisition Date	Jun. 15, 2007
Industrial [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Atlanta, GA
Number of Buildings	1
Initial Cost to Company, Land	2,040,000
Initial Cost to Company, Building & Improvements	20,830,000	[2]
Initial Cost to Company, Total	22,870,000
Cost Capitalized or Adjustments Subsequent to Acquisition	402,000	[4]
Gross Amount Carried, Land	2,040,000
Gross Amount Carried, Building and Improvements	21,232,000	[2]
Gross Amount Carried, Total Costs	23,272,000	[3],[4]
Accumulated Depreciation	6,098,000	[3]
Acquisition Date	Oct. 29, 2007
Industrial [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Central PA
Number of Buildings	1
Encumbrances	9,767,000	[1]
Initial Cost to Company, Land	2,376,000
Initial Cost to Company, Building & Improvements	27,081,000	[2]
Initial Cost to Company, Total	29,457,000
Cost Capitalized or Adjustments Subsequent to Acquisition	7,000	[4]
Gross Amount Carried, Land	2,376,000
Gross Amount Carried, Building and Improvements	27,088,000	[2]
Gross Amount Carried, Total Costs	29,464,000	[3],[4]
Accumulated Depreciation	6,417,000	[3]
Acquisition Date	Jan. 09, 2008
Industrial [Member] | Real Estate Property Fifteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Louisville, KY
Number of Buildings	1
Encumbrances	1,645,000	[1]
Initial Cost to Company, Land	751,000
Initial Cost to Company, Building & Improvements	4,131,000	[2]
Initial Cost to Company, Total	4,882,000
Cost Capitalized or Adjustments Subsequent to Acquisition	103,000	[4]
Gross Amount Carried, Land	751,000
Gross Amount Carried, Building and Improvements	4,234,000	[2]
Gross Amount Carried, Total Costs	4,985,000	[3],[4]
Accumulated Depreciation	981,000	[3]
Acquisition Date	Sep. 17, 2008
Industrial [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Louisville, KY
Number of Buildings	1
Encumbrances	2,593,000	[1]
Initial Cost to Company, Land	1,124,000
Initial Cost to Company, Building & Improvements	6,821,000	[2]
Initial Cost to Company, Total	7,945,000
Cost Capitalized or Adjustments Subsequent to Acquisition	429,000	[4]
Gross Amount Carried, Land	1,124,000
Gross Amount Carried, Building and Improvements	7,250,000	[2]
Gross Amount Carried, Total Costs	8,374,000	[3],[4]
Accumulated Depreciation	1,971,000	[3]
Acquisition Date	Sep. 17, 2008
Industrial [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Louisville, KY
Number of Buildings	1
Encumbrances	1,424,000	[1]
Initial Cost to Company, Land	672,000
Initial Cost to Company, Building & Improvements	3,862,000	[2]
Initial Cost to Company, Total	4,534,000
Cost Capitalized or Adjustments Subsequent to Acquisition	252,000	[4]
Gross Amount Carried, Land	672,000
Gross Amount Carried, Building and Improvements	4,114,000	[2]
Gross Amount Carried, Total Costs	4,786,000	[3],[4]
Accumulated Depreciation	1,254,000	[3]
Acquisition Date	Sep. 17, 2008
Industrial [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Louisville, KY
Number of Buildings	1
Encumbrances	2,636,000	[1]
Initial Cost to Company, Land	1,130,000
Initial Cost to Company, Building & Improvements	6,614,000	[2]
Initial Cost to Company, Total	7,744,000
Cost Capitalized or Adjustments Subsequent to Acquisition	225,000	[4]
Gross Amount Carried, Land	1,130,000
Gross Amount Carried, Building and Improvements	6,839,000	[2]
Gross Amount Carried, Total Costs	7,969,000	[3],[4]
Accumulated Depreciation	1,769,000	[3]
Acquisition Date	Sep. 17, 2008
Industrial [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Los Angeles, CA
Number of Buildings	1
Encumbrances	16,924,000	[1]
Initial Cost to Company, Land	6,400,000
Initial Cost to Company, Building & Improvements	71,761,000	[2]
Initial Cost to Company, Total	78,161,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(1,000)	[4]
Gross Amount Carried, Land	6,400,000
Gross Amount Carried, Building and Improvements	71,760,000	[2]
Gross Amount Carried, Total Costs	78,160,000	[3],[4]
Accumulated Depreciation	7,063,000	[3]
Acquisition Date	Jun. 25, 2010
Industrial [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Dallas, TX
Number of Buildings	1
Encumbrances	3,563,000	[1]
Initial Cost to Company, Land	1,580,000
Initial Cost to Company, Building & Improvements	6,610,000	[2]
Initial Cost to Company, Total	8,190,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(1,000)	[4]
Gross Amount Carried, Land	1,580,000
Gross Amount Carried, Building and Improvements	6,609,000	[2]
Gross Amount Carried, Total Costs	8,189,000	[3],[4]
Accumulated Depreciation	1,709,000	[3]
Acquisition Date	Jun. 25, 2010
Industrial [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Central Kentucky
Number of Buildings	1
Encumbrances	11,579,000	[1]
Initial Cost to Company, Land	730,000
Initial Cost to Company, Building & Improvements	25,092,000	[2]
Initial Cost to Company, Total	25,822,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(2,000)	[4]
Gross Amount Carried, Land	730,000
Gross Amount Carried, Building and Improvements	25,090,000	[2]
Gross Amount Carried, Total Costs	25,820,000	[3],[4]
Accumulated Depreciation	8,682,000	[3]
Acquisition Date	Jun. 25, 2010
Industrial [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Cleveland, OH
Number of Buildings	1
Encumbrances	8,684,000	[1]
Initial Cost to Company, Land	2,525,000
Initial Cost to Company, Building & Improvements	17,337,000	[2]
Initial Cost to Company, Total	19,862,000
Cost Capitalized or Adjustments Subsequent to Acquisition	3,943,000	[4]
Gross Amount Carried, Land	2,525,000
Gross Amount Carried, Building and Improvements	21,280,000	[2]
Gross Amount Carried, Total Costs	23,805,000	[3],[4]
Accumulated Depreciation	3,423,000	[3]
Acquisition Date	Jun. 25, 2010
Industrial [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Chicago, IL
Number of Buildings	1
Encumbrances	8,907,000	[1]
Initial Cost to Company, Land	925,000
Initial Cost to Company, Building & Improvements	18,937,000	[2]
Initial Cost to Company, Total	19,862,000
Cost Capitalized or Adjustments Subsequent to Acquisition	798,000	[4]
Gross Amount Carried, Land	925,000
Gross Amount Carried, Building and Improvements	19,735,000	[2]
Gross Amount Carried, Total Costs	20,660,000	[3],[4]
Accumulated Depreciation	4,097,000	[3]
Acquisition Date	Jun. 25, 2010
Industrial [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Houston, TX
Number of Buildings	1
Encumbrances	18,537,000	[1]
Initial Cost to Company, Land	3,700,000
Initial Cost to Company, Building & Improvements	37,639,000	[2]
Initial Cost to Company, Total	41,339,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(1,000)	[4]
Gross Amount Carried, Land	3,700,000
Gross Amount Carried, Building and Improvements	37,638,000	[2]
Gross Amount Carried, Total Costs	41,338,000	[3],[4]
Accumulated Depreciation	7,514,000	[3]
Acquisition Date	Jun. 25, 2010
Industrial [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Denver, CO
Number of Buildings	1
Encumbrances	2,794,000	[1]
Initial Cost to Company, Land	800,000
Initial Cost to Company, Building & Improvements	5,431,000	[2]
Initial Cost to Company, Total	6,231,000
Cost Capitalized or Adjustments Subsequent to Acquisition	1,000	[4]
Gross Amount Carried, Land	800,000
Gross Amount Carried, Building and Improvements	5,432,000	[2]
Gross Amount Carried, Total Costs	6,232,000	[3],[4]
Accumulated Depreciation	1,348,000	[3]
Acquisition Date	Jun. 25, 2010
Industrial [Member] | Minimum [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	19 years
Industrial [Member] | Minimum [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	10 years
Industrial [Member] | Minimum [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Industrial [Member] | Minimum [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Industrial [Member] | Minimum [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Industrial [Member] | Minimum [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	2 years
Industrial [Member] | Minimum [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Industrial [Member] | Minimum [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	10 years
Industrial [Member] | Minimum [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	9 years
Industrial [Member] | Minimum [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Industrial [Member] | Minimum [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Industrial [Member] | Minimum [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	8 years
Industrial [Member] | Minimum [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	10 years
Industrial [Member] | Minimum [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	10 years
Industrial [Member] | Minimum [Member] | Real Estate Property Fifteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	10 years
Industrial [Member] | Minimum [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Industrial [Member] | Minimum [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Industrial [Member] | Minimum [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Industrial [Member] | Minimum [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	16 years
Industrial [Member] | Minimum [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	6 years
Industrial [Member] | Minimum [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	4 years
Industrial [Member] | Minimum [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	6 years
Industrial [Member] | Minimum [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	8 years
Industrial [Member] | Minimum [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	8 years
Industrial [Member] | Minimum [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	8 years
Industrial [Member] | Maximum [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Fifteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Industrial [Member] | Maximum [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member]
Real Estate and Accumulated Depreciation [Line Items]
Number of Buildings	31
Encumbrances	281,135,000	[1]
Initial Cost to Company, Land	224,325,000
Initial Cost to Company, Building & Improvements	491,997,000	[2]
Initial Cost to Company, Total	716,322,000
Cost Capitalized or Adjustments Subsequent to Acquisition	8,717,000	[3]
Gross Amount Carried, Land	227,218,000
Gross Amount Carried, Building and Improvements	497,821,000	[2]
Gross Amount Carried, Total Costs	725,039,000	[3],[4]
Accumulated Depreciation	122,537,000	[3]
Retail [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	San Antonio, TX
Number of Buildings	1
Encumbrances	21,500,000	[1]
Initial Cost to Company, Land	8,221,000
Initial Cost to Company, Building & Improvements	23,472,000	[2]
Initial Cost to Company, Total	31,693,000
Cost Capitalized or Adjustments Subsequent to Acquisition	367,000	[3]
Gross Amount Carried, Land	8,221,000
Gross Amount Carried, Building and Improvements	23,839,000	[2]
Gross Amount Carried, Total Costs	32,060,000	[3],[4]
Accumulated Depreciation	5,883,000	[3]
Acquisition Date	Feb. 01, 2007
Retail [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Raleigh, NC
Number of Buildings	1
Encumbrances	26,200,000	[1]
Initial Cost to Company, Land	13,017,000
Initial Cost to Company, Building & Improvements	31,375,000	[2]
Initial Cost to Company, Total	44,392,000
Cost Capitalized or Adjustments Subsequent to Acquisition	792,000	[3]
Gross Amount Carried, Land	13,017,000
Gross Amount Carried, Building and Improvements	32,167,000	[2]
Gross Amount Carried, Total Costs	45,184,000	[3],[4]
Accumulated Depreciation	7,386,000	[3]
Acquisition Date	May 11, 2007
Retail [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Philadelphia, PA
Number of Buildings	1
Encumbrances	67,800,000	[1]
Initial Cost to Company, Land	26,488,000
Initial Cost to Company, Building & Improvements	76,838,000	[2]
Initial Cost to Company, Total	103,326,000
Cost Capitalized or Adjustments Subsequent to Acquisition	831,000	[3]
Gross Amount Carried, Land	26,488,000
Gross Amount Carried, Building and Improvements	77,669,000	[2]
Gross Amount Carried, Total Costs	104,157,000	[3],[4]
Accumulated Depreciation	19,359,000	[3]
Acquisition Date	May 11, 2007
Retail [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Pittsburgh, PA
Number of Buildings	1
Encumbrances	16,000,000	[1]
Initial Cost to Company, Land	9,371,000
Initial Cost to Company, Building & Improvements	16,214,000	[2]
Initial Cost to Company, Total	25,585,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(1,117,000)	[3]
Gross Amount Carried, Land	9,502,000
Gross Amount Carried, Building and Improvements	14,966,000	[2]
Gross Amount Carried, Total Costs	24,468,000	[3],[4]
Accumulated Depreciation	1,984,000	[3]
Acquisition Date	May 11, 2007
Retail [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Jacksonville, FL
Number of Buildings	1
Initial Cost to Company, Land	3,768,000
Initial Cost to Company, Building & Improvements	16,660,000	[2]
Initial Cost to Company, Total	20,428,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(929,000)	[3]
Gross Amount Carried, Land	3,768,000
Gross Amount Carried, Building and Improvements	15,731,000	[2]
Gross Amount Carried, Total Costs	19,499,000	[3],[4]
Accumulated Depreciation	3,149,000	[3]
Acquisition Date	Jun. 27, 2007
Retail [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	9,270,000
Initial Cost to Company, Building & Improvements	31,266,000	[2]
Initial Cost to Company, Total	40,536,000
Cost Capitalized or Adjustments Subsequent to Acquisition	520,000	[3]
Gross Amount Carried, Land	9,270,000
Gross Amount Carried, Building and Improvements	31,786,000	[2]
Gross Amount Carried, Total Costs	41,056,000	[3],[4]
Accumulated Depreciation	8,328,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	4,590,000
Initial Cost to Company, Building & Improvements	14,724,000	[2]
Initial Cost to Company, Total	19,314,000
Cost Capitalized or Adjustments Subsequent to Acquisition	191,000	[3]
Gross Amount Carried, Land	4,590,000
Gross Amount Carried, Building and Improvements	14,915,000	[2]
Gross Amount Carried, Total Costs	19,505,000	[3],[4]
Accumulated Depreciation	4,511,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	10,574,000	[1]
Initial Cost to Company, Land	8,580,000
Initial Cost to Company, Building & Improvements	12,494,000	[2]
Initial Cost to Company, Total	21,074,000
Cost Capitalized or Adjustments Subsequent to Acquisition	742,000	[3]
Gross Amount Carried, Land	8,580,000
Gross Amount Carried, Building and Improvements	13,236,000	[2]
Gross Amount Carried, Total Costs	21,816,000	[3],[4]
Accumulated Depreciation	4,109,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	1,890,000
Initial Cost to Company, Building & Improvements	6,480,000	[2]
Initial Cost to Company, Total	8,370,000
Cost Capitalized or Adjustments Subsequent to Acquisition	353,000	[3]
Gross Amount Carried, Land	1,890,000
Gross Amount Carried, Building and Improvements	6,833,000	[2]
Gross Amount Carried, Total Costs	8,723,000	[3],[4]
Accumulated Depreciation	1,949,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	14,070,000	[1]
Initial Cost to Company, Land	8,780,000
Initial Cost to Company, Building & Improvements	23,683,000	[2]
Initial Cost to Company, Total	32,463,000
Cost Capitalized or Adjustments Subsequent to Acquisition	178,000	[3]
Gross Amount Carried, Land	8,780,000
Gross Amount Carried, Building and Improvements	23,861,000	[2]
Gross Amount Carried, Total Costs	32,641,000	[3],[4]
Accumulated Depreciation	5,321,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	15,825,000	[1]
Initial Cost to Company, Land	7,380,000
Initial Cost to Company, Building & Improvements	25,778,000	[2]
Initial Cost to Company, Total	33,158,000
Cost Capitalized or Adjustments Subsequent to Acquisition	65,000	[3]
Gross Amount Carried, Land	7,380,000
Gross Amount Carried, Building and Improvements	25,843,000	[2]
Gross Amount Carried, Total Costs	33,223,000	[3],[4]
Accumulated Depreciation	5,515,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	24,400,000	[1]
Initial Cost to Company, Land	13,130,000
Initial Cost to Company, Building & Improvements	27,030,000	[2]
Initial Cost to Company, Total	40,160,000
Cost Capitalized or Adjustments Subsequent to Acquisition	1,658,000	[3]
Gross Amount Carried, Land	13,130,000
Gross Amount Carried, Building and Improvements	28,688,000	[2]
Gross Amount Carried, Total Costs	41,818,000	[3],[4]
Accumulated Depreciation	6,904,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	4,817,000	[1]
Initial Cost to Company, Land	14,396,000
Initial Cost to Company, Building & Improvements	594,000	[2]
Initial Cost to Company, Total	14,990,000
Gross Amount Carried, Land	14,396,000
Gross Amount Carried, Building and Improvements	594,000	[2]
Gross Amount Carried, Total Costs	14,990,000	[3],[4]
Accumulated Depreciation	497,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	4,770,000	[1]
Initial Cost to Company, Land	10,405,000
Initial Cost to Company, Building & Improvements	917,000	[2]
Initial Cost to Company, Total	11,322,000
Gross Amount Carried, Land	10,405,000
Gross Amount Carried, Building and Improvements	917,000	[2]
Gross Amount Carried, Total Costs	11,322,000	[3],[4]
Accumulated Depreciation	319,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Fifteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	2,417,000
Initial Cost to Company, Building & Improvements	86,000	[2]
Initial Cost to Company, Total	2,503,000
Gross Amount Carried, Land	2,417,000
Gross Amount Carried, Building and Improvements	86,000	[2]
Gross Amount Carried, Total Costs	2,503,000	[3],[4]
Accumulated Depreciation	86,000	[3]
Acquisition Date	Aug. 01, 2007
Depreciable Life (years)	35 years
Retail [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	8,600,000	[1]
Initial Cost to Company, Land	5,340,000
Initial Cost to Company, Building & Improvements	16,490,000	[2]
Initial Cost to Company, Total	21,830,000
Gross Amount Carried, Land	5,340,000
Gross Amount Carried, Building and Improvements	16,490,000	[2]
Gross Amount Carried, Total Costs	21,830,000	[3],[4]
Accumulated Depreciation	3,247,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	6,560,000
Initial Cost to Company, Building & Improvements	22,013,000	[2]
Initial Cost to Company, Total	28,573,000
Gross Amount Carried, Land	6,560,000
Gross Amount Carried, Building and Improvements	22,013,000	[2]
Gross Amount Carried, Total Costs	28,573,000	[3],[4]
Accumulated Depreciation	4,570,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	5,170,000
Initial Cost to Company, Building & Improvements	19,396,000	[2]
Initial Cost to Company, Total	24,566,000
Cost Capitalized or Adjustments Subsequent to Acquisition	(257,000)	[3]
Gross Amount Carried, Land	4,913,000
Gross Amount Carried, Building and Improvements	19,396,000	[2]
Gross Amount Carried, Total Costs	24,309,000	[3],[4]
Accumulated Depreciation	4,958,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	7,459,000	[1]
Initial Cost to Company, Land	3,610,000
Initial Cost to Company, Building & Improvements	11,682,000	[2]
Initial Cost to Company, Total	15,292,000
Gross Amount Carried, Land	3,610,000
Gross Amount Carried, Building and Improvements	11,682,000	[2]
Gross Amount Carried, Total Costs	15,292,000	[3],[4]
Accumulated Depreciation	2,377,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	2,530,000
Initial Cost to Company, Building & Improvements	2,074,000	[2]
Initial Cost to Company, Total	4,604,000
Cost Capitalized or Adjustments Subsequent to Acquisition	214,000	[3]
Gross Amount Carried, Land	2,530,000
Gross Amount Carried, Building and Improvements	2,288,000	[2]
Gross Amount Carried, Total Costs	4,818,000	[3],[4]
Accumulated Depreciation	1,076,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	3,920,000
Initial Cost to Company, Building & Improvements	7,765,000	[2]
Initial Cost to Company, Total	11,685,000
Cost Capitalized or Adjustments Subsequent to Acquisition	433,000	[3]
Gross Amount Carried, Land	3,920,000
Gross Amount Carried, Building and Improvements	8,198,000	[2]
Gross Amount Carried, Total Costs	12,118,000	[3],[4]
Accumulated Depreciation	2,165,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	1,810,000
Initial Cost to Company, Building & Improvements	4,233,000	[2]
Initial Cost to Company, Total	6,043,000
Cost Capitalized or Adjustments Subsequent to Acquisition	109,000	[3]
Gross Amount Carried, Land	1,810,000
Gross Amount Carried, Building and Improvements	4,342,000	[2]
Gross Amount Carried, Total Costs	6,152,000	[3],[4]
Accumulated Depreciation	1,884,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	1,490,000
Initial Cost to Company, Building & Improvements	5,084,000	[2]
Initial Cost to Company, Total	6,574,000
Cost Capitalized or Adjustments Subsequent to Acquisition	388,000	[3]
Gross Amount Carried, Land	1,490,000
Gross Amount Carried, Building and Improvements	5,472,000	[2]
Gross Amount Carried, Total Costs	6,962,000	[3],[4]
Accumulated Depreciation	1,394,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	1,200,000
Initial Cost to Company, Building & Improvements	2,437,000	[2]
Initial Cost to Company, Total	3,637,000
Gross Amount Carried, Land	1,200,000
Gross Amount Carried, Building and Improvements	2,437,000	[2]
Gross Amount Carried, Total Costs	3,637,000	[3],[4]
Accumulated Depreciation	944,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	3,650,000
Initial Cost to Company, Building & Improvements	6,507,000	[2]
Initial Cost to Company, Total	10,157,000
Cost Capitalized or Adjustments Subsequent to Acquisition	5,000	[3]
Gross Amount Carried, Land	3,650,000
Gross Amount Carried, Building and Improvements	6,512,000	[2]
Gross Amount Carried, Total Costs	10,162,000	[3],[4]
Accumulated Depreciation	2,066,000	[3]
Acquisition Date	Aug. 01, 2007
Retail [Member] | Real Estate Property Twenty Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	5,896,000	[1]
Initial Cost to Company, Land	5,290,000
Initial Cost to Company, Building & Improvements	8,814,000	[2]
Initial Cost to Company, Total	14,104,000
Gross Amount Carried, Land	5,290,000
Gross Amount Carried, Building and Improvements	8,814,000	[2]
Gross Amount Carried, Total Costs	14,104,000	[3],[4]
Accumulated Depreciation	1,696,000	[3]
Acquisition Date	Oct. 18, 2007
Retail [Member] | Real Estate Property Twenty Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	8,237,000	[1]
Initial Cost to Company, Land	3,790,000
Initial Cost to Company, Building & Improvements	11,152,000	[2]
Initial Cost to Company, Total	14,942,000
Gross Amount Carried, Land	3,790,000
Gross Amount Carried, Building and Improvements	11,152,000	[2]
Gross Amount Carried, Total Costs	14,942,000	[3],[4]
Accumulated Depreciation	2,055,000	[3]
Acquisition Date	Oct. 18, 2007
Retail [Member] | Real Estate Property Twenty Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Encumbrances	6,061,000	[1]
Initial Cost to Company, Land	5,850,000
Initial Cost to Company, Building & Improvements	14,547,000	[2]
Initial Cost to Company, Total	20,397,000
Gross Amount Carried, Land	5,850,000
Gross Amount Carried, Building and Improvements	14,547,000	[2]
Gross Amount Carried, Total Costs	20,397,000	[3],[4]
Accumulated Depreciation	2,868,000	[3]
Acquisition Date	Oct. 18, 2007
Retail [Member] | Real Estate Property Twenty Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Washington, DC
Number of Buildings	1
Encumbrances	38,926,000	[1]
Initial Cost to Company, Land	19,779,000
Initial Cost to Company, Building & Improvements	42,515,000	[2]
Initial Cost to Company, Total	62,294,000
Cost Capitalized or Adjustments Subsequent to Acquisition	330,000	[3]
Gross Amount Carried, Land	19,781,000
Gross Amount Carried, Building and Improvements	42,843,000	[2]
Gross Amount Carried, Total Costs	62,624,000	[3],[4]
Accumulated Depreciation	12,866,000	[3]
Acquisition Date	Apr. 06, 2009
Retail [Member] | Real Estate Property Thirty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	8,850,000
Initial Cost to Company, Total	8,850,000
Cost Capitalized or Adjustments Subsequent to Acquisition	3,744,000	[3]
Gross Amount Carried, Land	11,867,000
Gross Amount Carried, Building and Improvements	727,000	[2]
Gross Amount Carried, Total Costs	12,594,000	[3],[4]
Accumulated Depreciation	187,000	[3]
Acquisition Date	Feb. 18, 2011
Retail [Member] | Real Estate Property Thirty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Boston
Number of Buildings	1
Initial Cost to Company, Land	3,783,000
Initial Cost to Company, Building & Improvements	9,677,000	[2]
Initial Cost to Company, Total	13,460,000
Cost Capitalized or Adjustments Subsequent to Acquisition	100,000	[3]
Gross Amount Carried, Land	3,783,000
Gross Amount Carried, Building and Improvements	9,777,000	[2]
Gross Amount Carried, Total Costs	13,560,000	[3],[4]
Accumulated Depreciation	2,884,000	[3]
Acquisition Date	Mar. 17, 2011
Retail [Member] | Minimum [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Retail [Member] | Minimum [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Retail [Member] | Minimum [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	4 years
Retail [Member] | Minimum [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	4 years
Retail [Member] | Minimum [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	7 years
Retail [Member] | Minimum [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Retail [Member] | Minimum [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Retail [Member] | Minimum [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Retail [Member] | Minimum [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Retail [Member] | Minimum [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	4 years
Retail [Member] | Minimum [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Retail [Member] | Minimum [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	2 years
Retail [Member] | Minimum [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	8 years
Retail [Member] | Minimum [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	18 years
Retail [Member] | Minimum [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	16 years
Retail [Member] | Minimum [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	13 years
Retail [Member] | Minimum [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	19 years
Retail [Member] | Minimum [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	16 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	2 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	6 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	11 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	21 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	22 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	15 years
Retail [Member] | Minimum [Member] | Real Estate Property Twenty Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	5 years
Retail [Member] | Minimum [Member] | Real Estate Property Thirty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	6 years
Retail [Member] | Minimum [Member] | Real Estate Property Thirty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	3 years
Retail [Member] | Maximum [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	45 years
Retail [Member] | Maximum [Member] | Real Estate Property Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	57 years
Retail [Member] | Maximum [Member] | Real Estate Property Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Ten [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Eleven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twelve [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Thirteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	63 years
Retail [Member] | Maximum [Member] | Real Estate Property Fourteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	68 years
Retail [Member] | Maximum [Member] | Real Estate Property Sixteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	86 years
Retail [Member] | Maximum [Member] | Real Estate Property Seventeen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	43 years
Retail [Member] | Maximum [Member] | Real Estate Property Eighteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Nineteen [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	56 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty Two [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty Three [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty Four [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty Five [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty Six [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty Seven [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty Eight [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	65 years
Retail [Member] | Maximum [Member] | Real Estate Property Twenty Nine [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Retail [Member] | Maximum [Member] | Real Estate Property Thirty [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	62 years
Retail [Member] | Maximum [Member] | Real Estate Property Thirty One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Depreciable Life (years)	40 years
Land [Member]
Real Estate and Accumulated Depreciation [Line Items]
Number of Buildings	0
Initial Cost to Company, Land	5,200,000
Initial Cost to Company, Total	5,200,000
Gross Amount Carried, Land	5,200,000
Gross Amount Carried, Building and Improvements	153,000	[2]
Gross Amount Carried, Total Costs	5,353,000	[3],[4]
Land [Member] | Real Estate Property One [Member]
Real Estate and Accumulated Depreciation [Line Items]
Market	Denver, CO
Number of Buildings	0
Initial Cost to Company, Land	5,200,000
Initial Cost to Company, Total	5,200,000
Gross Amount Carried, Land	5,200,000
Gross Amount Carried, Building and Improvements	153,000	[2]
Gross Amount Carried, Total Costs	$ 5,353,000	[3],[4]
Acquisition Date	Jun. 25, 2010

[1] Encumbrances represents mortgage debt principal balances encumbering each property as of December 31, 2013.

[2] Building and improvements include intangible lease assets.

[3] Amount is presented net of impairments and other write-offs of tenant-related assets that were recorded at acquisition as part of our purchase price accounting. Such write-offs are the results of lease expirations and terminations.

[4] As of December 31, 2013, the aggregate cost for federal income tax purposes of investments in real property was approximately $2.2 billion (unaudited).

XML

Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2013

Summary Of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation

Due to our control of our Operating Partnership through our sole general partnership interest and the limited rights of the limited partners, we consolidate our Operating Partnership, and limited partner interests not held by us are reflected as noncontrolling interests in the accompanying consolidated financial statements (herein referred to as “financial statements”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Our financial statements also include the accounts of our consolidated subsidiaries and joint ventures through which we are the primary beneficiary, when such subsidiaries and joint ventures are variable interest entities, or through which we have a controlling interest. In determining whether we have a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which we have the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses that could potentially be significant to the entity or the right to receive benefits that could potentially be significant to the entity.

All joint ventures in which we have investments are variable interest entities. All of our investments in joint ventures represent our interests in real estate partnerships, formed for the purpose of acquiring, leasing, managing, holding for investment, selling and otherwise dealing with real property investments. Our involvement with our joint ventures affects our financial position, financial performance and cash flows in ways similar to direct ownership of real property investment. We own a significantly disproportionate majority of the ownership interests of our joint ventures. In each of our joint ventures, our joint venture partner performs the day-to-day management of the real properties owned by the respective joint ventures. However, in each of our joint ventures, we approve the activities that most significantly impact the joint venture’s economic performance. Due to our substantive approval rights and our exposure to the economic returns and losses of each of the joint ventures, we are the primary beneficiary of each of our joint ventures. Based on these considerations, we consolidate all of our investments in joint ventures. See our consolidated balance sheets for disclosure of the amount of real property and mortgage note borrowings that we consolidated through our investments in variable interest entities as of December 31, 2013 and 2012.

Judgments made by us with respect to our level of influence or control of an entity and whether we are the primary beneficiary of a variable interest entity involve consideration of various factors, including the form of our ownership interest, the size of our investment (including loans), our ability to direct the activities of the entity, and our obligation to absorb the losses of, or, our right to receive benefits from the entity. Our ability to correctly assess our influence or control over an entity affects the presentation of these investments in our financial statements and, consequently, our financial position and specific items in our results of operations that are used by our stockholders, lenders and others in their evaluation of us. The maximum risk of loss related to our investment in these consolidated variable interest entities is limited to our recorded investments in such entities. The creditors of the consolidated variable interest entities do not have recourse to our general credit.

Generally, we consolidate real estate partnerships and other entities that are not variable interest entities when we own, directly or indirectly, a majority voting interest in the entity.

Reclassifications

Certain amounts included in the accompanying financial statements for 2012 and 2011 have been reclassified to conform to the 2013 financial statement presentation. Balance sheet amounts for properties classified as held for sale have been reclassified as of December 31, 2013. Statement of operations amounts for properties disposed of or classified as held for sale have been reclassified to discontinued operations for all periods presented. Amounts in our segment and quarterly financial data disclosures inNotes 13and 16 reflect the reclassification of amounts related to properties that have been disposed of or classified as held for sale as of December 31, 2013.  

Investments

Real Property

Costs associated with the acquisition of real property, including acquisition fees paid to our Advisor, are expensed as incurred. In addition, we estimate the fair value of contingent consideration and contingencies related to acquisitions of real property in determining the total cost of the property acquired. Subsequent changes in the fair value of such contingent consideration are recorded either as a gain or loss in our statement of operations. Contingencies are subsequently adjusted through the statement of operations when new information becomes available indicating that settlement of a contingent liability is probable and can be estimated at an amount greater than the acquisition date fair value, or the contingency is resolved, in which case the contingent asset or liability is derecognized.

Costs associated with the development and improvement of our real property assets are capitalized as incurred. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred. During the land development and construction periods, we capitalize interest costs, insurance, real estate taxes and certain general and administrative costs if such costs are incremental and identifiable to a specific activity to get the asset ready for its intended use. The results of operations for acquired real property are included in our accompanying statements of operations from their respective acquisition dates.

Upon acquisition, the total cost of a property is allocated to land, building, building and land improvements, tenant improvements and intangible lease assets and liabilities. The purchase price allocation of the total cost to land, building, building improvements, tenant improvements, intangible lease assets and intangible lease liabilities is based on our estimate of the property’s as-if vacant fair value. The as-if vacant fair value is calculated by using all available information such as the replacement cost of such asset, appraisals, property condition reports, market data and other related information. The difference between the fair value and the face value of debt assumed in an acquisition is recorded as an adjustment to the purchase price allocation. The allocation of the total cost of a property to an intangible lease asset includes the value associated with the in-place leases, which may include lost rent, leasing commissions, tenant improvements, legal and other costs.

We record acquired “above-market” and “below-market” leases at their fair value equal to the difference between the contractual amounts to be paid pursuant to each in-place lease and our estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the remaining term of the lease plus the term of any below-market fixed-rate renewal option periods for below-market leases. In addition, we allocate a portion of the purchase price of an acquired property to the estimated value of customer relationships, if any. As of December 31, 2013, we had not recognized any estimated value to customer relationships.

Intangible in-place lease assets are amortized over the corresponding lease term. Above-market lease assets are amortized as a reduction in rental revenue over the corresponding lease term. Below-market lease liabilities are amortized as an increase in rental revenue over the corresponding lease term, plus any applicable below-market fixed-rate renewal option periods. The following table summarizes the amounts that we have incurred in amortization expense for intangible lease assets and adjustments to rental revenue for above-market lease assets and below-market lease liabilities for the years ended December 31, 2013, 2012 and 2011 (amounts in thousands).

	For the Year Ended December 31,
	2013		2012		2011
Above-market lease assets	$	(7,293)	$	(8,050)	$	(8,393)
Below-market lease liabilities		7,537		9,567		9,756
Net increase to rental revenue	$	244	$	1,517	$	1,363
Intangible lease asset amortization	$	(62,325)	$	(80,739)	$	(77,452)

We expense any unamortized intangible lease asset or record an adjustment to rental revenue for any unamortized above-market lease asset or below-market lease liability when a tenant terminates a lease before the stated lease expiration date. We recorded an insignificant amount of adjustments related to write-offs of unamortized intangible lease assets and liabilities due to early lease terminations during the years ended December 31, 2013, 2012 and 2011.

Real property assets, including land, building, building and land improvements, tenant improvements, lease commissions, and intangible lease assets and liabilities are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization are computed on a straight-line basis over their estimated useful lives as described in the following table.

Description	Depreciable Life
Land	Not depreciated
Building	40 years
Building and land improvements	5-20 years
Tenant improvements	Lesser of useful life or lease term
Lease commissions	Over lease term
Intangible in-place lease assets	Over lease term
Above-market lease assets	Over lease term
Below-market lease liabilities	Over lease term, including below-market fixed-rate renewal options

The following table presents expected amortization during the next five years and thereafter related to the acquired above-market lease assets, below-market lease liabilities and acquired in-place lease intangibles, for properties owned (including properties classified as held for sale) as of December 31, 2013 (amounts in thousands).

	For the Year Ended December 31,
	2014		2015		2016		2017		2018		Thereafter		Total
Acquired below-market lease liabilities	$	7,125	$	5,895	$	5,201	$	4,975	$	4,920	$	49,433	$	77,549
Acquired above-market lease assets		(6,716)		(6,315)		(6,248)		(3,711)		(1,418)		(1,897)		(26,305)
Net rental revenue increase (decrease)	$	409	$	(420)	$	(1,047)	$	1,264	$	3,502	$	47,536	$	51,244
Acquired in-place lease intangible amortization	$	47,544	$	40,203	$	37,527	$	22,382	$	12,099	$	29,002	$	188,757

Discontinued Operations and Held for Sale

Discontinued operations represent properties that we have either disposed of or have classified as held for sale if both the operations and cash flows of the property have been or will be eliminated from our ongoing operations as a result of the disposal transaction and if we will not have any significant continuing involvement in the operations of the property after the disposal transaction. The results of operations of properties that have been classified as discontinued operations are also reported as discontinued operations for all periods presented. We classify real property as held for sale when ourmanagement commits to a plan to sell the property, the plan has appropriate approvals, the sale of the property is probable, and certain other criteria are met. At such time, the respective assets and liabilities are presented separately on our balance sheets and depreciation is no longer recognized. Assets held for sale are reported at the lower of their carrying amount or their estimated fair value less the costs to sell the assets. We recognize an impairment loss if the current net book value of the property exceeds its fair value less selling costs.  As of December 31, 2013 and 2012, 12and zeroof our properties were classified as held for sale, respectively.

Debt Related Investments

Debt related investments are considered to be held for investment, as we have both the intent and ability to hold these investments until maturity. Accordingly, these assets are carried at cost, net of unamortized loan origination costs and fees, discounts, repayments and unfunded commitments unless such loans or investments are deemed to be impaired.

Revenue Recognition

Revenue Recognition — Real Property

We record rental revenue for the full term of each lease on a straight-line basis. Certain properties have leases that offer the tenant a period of time where no rent is due or where rent payments increase during the term of the lease. Accordingly, we record a receivable from tenants for rent that we expect to collect over the remaining lease term rather than currently, which is recorded as straight-line rents receivable. When we acquire a property, the term of existing leases is considered to commence as of the acquisition date for purposes of this calculation. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as rental revenue.

The following table summarizes straight-line rental adjustments and tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands):

	For the Year Ended December 31,
	2013		2012		2011
Straight-line rent adjustments	$	8,864	$	8,107	$	9,902
Tenant recovery income	$	33,029	$	33,585	$	33,445

Revenue Recognition — Debt Related Investments

Interest income on debt related investments is recognized over the life of the investment using the effective interest method and is recognized on an accrual basis. Fees received in connection with loan commitments are deferred until the loan is funded and are then recognized over the term of the loan. Anticipated exit fees, where collection is expected, are also recognized over the term of the debt related investment. A debt related investment is considered to be non-performing and is placed on non-accrual status when it becomes delinquent and management determines it is probable that it will be unable to collect all amounts due according to contractual terms. While on non-accrual status, debt related investments are accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash. Non-accrual debt investments are returned to accrual status when they become contractually current and management believes it will collect all amounts contractually due.

Impairment

Impairment — Real Property

We review our investments in real property that are classified as held and used individually on a quarterly basis, and more frequently when such an evaluation is warranted, to determine their appropriate classification, as well as whether there are indicators of impairment.

As of December 31, 2013, 70 of our properties are classified as held and used. These held and used assets are reviewed for indicators of impairment, which may include, among others, each tenant’s inability to make rent payments, operating losses or negative operating trends at the property level, notification by a tenant that it will not renew its lease, a decision to dispose of a property, including a change in estimated holding periods, or adverse changes in the fair value of any of our properties. If indicators of impairment exist on a held and used asset, we compare the future estimated undiscounted cash flows from the expected use of the property to its net book value to determine if impairment exists. If the sum of the future estimated undiscounted cash flows is greater than the current net book value, we conclude no impairment exists. If the sum of the future estimated undiscounted cash flows is less than its current net book value, we recognize an impairment loss for the difference between the net book value of the property and its estimated fair value. If our assumptions, projections or estimates regarding a property change in the future, we may have to record an impairment charge to reduce or further reduce the net book value of the property. See Note 3 for a discussion of impairment charges relating to our real properties recorded during the years ended December 31, 2013, 2012, and 2011.

Impairment — Debt Related Investments

We review our debt related investments on a quarterly basis, and more frequently when such an evaluation is warranted, to determine if impairment exists. 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 our 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 investment or to measure impairment based on an observable market price for the impaired investment as an alternative to discounting expected future cash flows. Regardless of the measurement method, we measure impairment based on the fair value of the collateral when it is determined that foreclosure is probable. A debt related investment is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). A TDR occurs when we grant a concession to a borrower in financial difficulty by modifying the original terms of the loan. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loan. See Note 4 for a discussion of impairment charges relating to our debt related investments recorded during the years ended December 31, 2013, 2012, and 2011.

Impairment — Real Estate Securities

As of both December 31, 2013 and 2012, we held investments in real estate securities of approximately $0.5 million. Real estate securities are included in other assets, net, in the accompanying balance sheets.

During the years ended December 31, 2013, 2012, and 2011, we recorded approximately $0,  $0 and $3.4 million, respectively, related to other-than-temporary impairment of our CMBS and CRE-CDO securities. Due to volatility with the credit market and its unpredictable impact for such securities, we determined that we cannot reliably predict the timing and amount of cash flows that we expect to receive related to the majority of our CMBS and CRE-CDO securities. Therefore, we account for such securities under the cost recovery method of accounting. The application of the cost recovery method of accounting requires that we cease recognizing interest income related to these securities until the amortized cost of each respective security is depleted or until we can reliably estimate cash flows. Once the amortized cost of each security is depleted or we can reasonably estimate cash flows, cash payments will be recorded to interest income. Under the cost recovery method of accounting, if the fair value of a security falls below the amortized cost of that security and we do not anticipate that the receipt of near term cash flows will sufficiently reduce the security’s amortized cost below its fair value, then we recognize an other-than-temporary impairment in an amount equal to the difference between that security’s fair value and its amortized cost.

Credit Losses

A credit loss represents the difference between the present value of expected future cash flows and the amortized cost basis of a debt security. As of both December 31, 2013 and 2012, we had recognized approximately $140.1 million of cumulative credit losses in other-than-temporary impairment related to our investments in debt securities. We recorded impairment losses of $0,  $0, and $3.4 million for each of the years ended December 31, 2013, 2012, and 2011, respectively.

Derivative Instruments and Hedging Activities

We record all derivative instruments in the accompanying balance sheets at fair value. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. Derivative instruments used to hedge exposure to changes in the fair value of an asset, liability, or firm commitments attributable to a particular risk, such as interest rate risk, are considered “fair value” hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, such as future interest payments, or other types of forecasted transactions, are considered “cash flow” hedges. We do not have any fair value hedges.

For derivative instruments designated as cash flow hedges, the changes in the fair value of the derivative instrument that represent changes in expected future cash flows, which are effectively hedged by the derivative instrument, are initially reported as other comprehensive income (loss) in the statement of equity until the derivative instrument is settled. Upon settlement, the effective portion of the hedge is recognized as other comprehensive income (loss) and amortized over the term of the designated cash flow or transaction the derivative instrument was intended to hedge. The change in value of any derivative instrument that is deemed to be ineffective is charged directly to earnings when the determination of hedge ineffectiveness is made. We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative instrument with the changes in fair value or cash flows of the designated hedged item or transaction. For purposes of determining hedge ineffectiveness, management estimates the timing and potential amount of future fixed-rate debt issuances each quarter in order to estimate the cash flows of the designated hedged item or transaction. Management considers the likelihood of the timing and amount of entering into such forecasted transactions when determining the expected future fixed-rate debt issuances. We do not use derivative instruments for trading or speculative purposes. We classify cash paid to settle our forward starting swaps as financing activities in our statements of cash flows.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less such as money market mutual funds or certificates of deposits. As of both December 31, 2013 and 2012, we have not realized any losses in such cash accounts or investments and believe that we are not exposed to any significant credit risk.

Restricted Cash

Restricted cash consists primarily of lender and property-related escrow accounts. As of both December 31, 2013 and 2012, we had not realized any losses in such restricted cash accounts or investments related to, and believe that we are not exposed to any significant credit risk.

Collectability of Receivables

We evaluate the collectability of our rent and other receivables on a regular basis based on factors including, among others, payment history, the financial strength of the tenant or borrower and any guarantors. Specifically with regards to our debt related investments, we evaluate the collectability of our receivables based on factors including, among others, the value of the underlying collateral, the operations and operating trends of the underlying collateral, if any, the asset type and current economic conditions. If our evaluation of these factors indicates we may not recover the full amount of the receivable, we provide a reserve against the portion of the receivable that we estimate may not be recovered. This analysis requires us to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected. As of December 31, 2013 and 2012, we had allowances included in the caption other assets, net, in our accompanying balance sheets of approximately $251,000 and $510,000, respectively, related to our rent and other receivables. If our assumptions or estimates regarding the collectability of a receivable change in the future, we may have to record allowances to reduce or further reduce the carrying value of the receivable.

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) as reported in the accompanying statements of equity primarily consists of the cumulative loss related to our derivatives of $8.8 million, before attribution to noncontrolling interests of $1.0 million, and cumulative gain related to our real estate securities of approximately $411,000, before attribution of a cumulative loss to noncontrolling interests of $1.3 million. 

Basic and Diluted Net Income (Loss) per Common Share

Basic net income (loss) per common share is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share includes the effects of potentially issuable common stock, but only if dilutive, including the presumed exchange of OP Units.

Income Taxes

We operate in a manner intended to qualify as a REIT for U.S. federal income tax purposes. As a REIT, we generally will not be subject to federal income taxes on net income that we distribute to our stockholders. We intend to make timely distributions sufficient to satisfy the annual distribution requirements. We believe we are organized and operate in such a manner and intend to operate in the foreseeable future in such a manner to qualify as a REIT for federal income tax purposes. We are, however, subject to certain state and local taxes. Our taxable REIT subsidiary, DCTRT Leasing Corporation, is also subject to federal, state, and local taxes.

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the periods they are determined to be necessary.

New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued accounting standards update (“ASU”) 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date, (“ASU 2013-04”) which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date.  This will require an entity to measure those obligations as the sum of the amount the entity agreed to pay on the basis of its arrangement among its co-obligors as well as any additional amount the entity expects to pay on behalf of its co-obligors.  ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations.  The amendments in this ASU are effective for reporting periods beginning after December 15, 2013, with early adoption permitted.  Retrospective application is required.  We do not believe that the adoption of ASU 2013-04 will have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, 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.

XML

Debt Related Investments (Recorded Investment in Debt Related Investments before Allowance for Loan Loss, and Related Allowance for Loan Loss) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012	Dec. 31, 2011
Debt Related Investments [Abstract]
Debt investments	$ 126,935	$ 205,321
Less: Allowance for loan losses	(3,000)	(18,000)
Total	$ 123,935	$ 187,321	$ 92,247

XML

Segment Information (Revenue and Components of Net Operating Income) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended								12 Months Ended
	Dec. 31, 2013	Sep. 30, 2013	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2012	Sep. 30, 2012	Jun. 30, 2012	Mar. 31, 2012	Dec. 31, 2013 segment		Dec. 31, 2012		Dec. 31, 2011
Segment Reporting Information [Line Items]
Number of operating segments									4
Revenues	$ 56,170	$ 54,422	$ 53,814	$ 53,371	$ 54,838	$ 54,609	$ 53,041	$ 53,837	$ 217,777		$ 216,325		$ 218,857
Net operating income									174,105		175,790		177,059
Real Property [Member]
Segment Reporting Information [Line Items]
Number of operating segments									3
Real Property [Member] | Office [Member]
Segment Reporting Information [Line Items]
Revenues									123,838	[1]	122,264	[1]	124,438	[1]
Net operating income									95,618	[1]	95,625	[1]	97,551	[1]
Real Property [Member] | Industrial [Member]
Segment Reporting Information [Line Items]
Revenues									26,108	[2]	26,715	[2]	26,305	[2]
Net operating income									23,893	[2]	24,782	[2]	24,416	[2]
Real Property [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Revenues									57,382		57,937		57,007
Net operating income									44,145		45,974		43,985
Debt Related Investments [Member]
Segment Reporting Information [Line Items]
Number of operating segments									1
Revenues									10,449		9,409		11,107
Net operating income									10,449		9,409		11,107
Reclassified Properties from Office Segment to Industrial Segment [Member]
Segment Reporting Information [Line Items]
Revenues	13,000				13,700								13,600
Net operating income	$ 11,600				$ 12,500								$ 12,400
Number of Real Estate Properties	4				4				4		4

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

[2] Amounts reported for our industrial segment for the years ended December 31, 2013, 2012 and 2011 include revenue of approximately $13.0 million, $13.7 million, and $13.6 million, respectively, and NOI of approximately $11.6 million, $12.5 million, and $12.4 million, respectively, relating to four properties that we reclassified from our office segment into our industrial segment during 2013.

XML

Fair Value Disclosures (Assets and Liabilities Measured at Fair Value on Recurring Basis) (Details) (Fair Value, Measurements, Recurring [Member], USD $) In Thousands, unless otherwise specified	Dec. 31, 2013	Dec. 31, 2012
Assets
Real estate securities	$ 461	$ 461
Derivative instruments	748
Total assets	1,209	461
Liabilities
Mortgage notes carried at fair value		(122,995)
Derivative instruments	(43)	(416)
Total liabilities	(43)	(123,411)
Fair Value, Inputs, Level 1 [Member]
Assets
Real estate securities
Derivative instruments
Total assets
Liabilities
Mortgage notes carried at fair value
Derivative instruments
Total liabilities
Fair Value, Inputs, Level 2 [Member]
Assets
Derivative instruments	748
Total assets	748
Liabilities
Derivative instruments	(43)	(416)
Total liabilities	(43)	(416)
Fair Value, Inputs, Level 3 [Member]
Assets
Real estate securities	461	461
Total assets	461	461
Liabilities
Mortgage notes carried at fair value		(122,995)
Total liabilities		$ (122,995)

XML

Summary of Significant Accounting Policies (Policy)

12 Months Ended

Dec. 31, 2013

Summary Of Significant Accounting Policies [Abstract]

Principles of Consolidation

Principles of Consolidation

Due to our control of our Operating Partnership through our sole general partnership interest and the limited rights of the limited partners, we consolidate our Operating Partnership, and limited partner interests not held by us are reflected as noncontrolling interests in the accompanying consolidated financial statements (herein referred to as “financial statements”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Our financial statements also include the accounts of our consolidated subsidiaries and joint ventures through which we are the primary beneficiary, when such subsidiaries and joint ventures are variable interest entities, or through which we have a controlling interest. In determining whether we have a controlling interest in a joint venture and the requirement to consolidate the accounts of that entity, we consider factors such as ownership interest, board representation, management representation, authority to make decisions, and contractual and substantive participating rights of the partners/members as well as whether the entity is a variable interest entity in which we have the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses that could potentially be significant to the entity or the right to receive benefits that could potentially be significant to the entity.

All joint ventures in which we have investments are variable interest entities. All of our investments in joint ventures represent our interests in real estate partnerships, formed for the purpose of acquiring, leasing, managing, holding for investment, selling and otherwise dealing with real property investments. Our involvement with our joint ventures affects our financial position, financial performance and cash flows in ways similar to direct ownership of real property investment. We own a significantly disproportionate majority of the ownership interests of our joint ventures. In each of our joint ventures, our joint venture partner performs the day-to-day management of the real properties owned by the respective joint ventures. However, in each of our joint ventures, we approve the activities that most significantly impact the joint venture’s economic performance. Due to our substantive approval rights and our exposure to the economic returns and losses of each of the joint ventures, we are the primary beneficiary of each of our joint ventures. Based on these considerations, we consolidate all of our investments in joint ventures. See our consolidated balance sheets for disclosure of the amount of real property and mortgage note borrowings that we consolidated through our investments in variable interest entities as of December 31, 2013 and 2012.

Judgments made by us with respect to our level of influence or control of an entity and whether we are the primary beneficiary of a variable interest entity involve consideration of various factors, including the form of our ownership interest, the size of our investment (including loans), our ability to direct the activities of the entity, and our obligation to absorb the losses of, or, our right to receive benefits from the entity. Our ability to correctly assess our influence or control over an entity affects the presentation of these investments in our financial statements and, consequently, our financial position and specific items in our results of operations that are used by our stockholders, lenders and others in their evaluation of us. The maximum risk of loss related to our investment in these consolidated variable interest entities is limited to our recorded investments in such entities. The creditors of the consolidated variable interest entities do not have recourse to our general credit.

Generally, we consolidate real estate partnerships and other entities that are not variable interest entities when we own, directly or indirectly, a majority voting interest in the entity.

Reclassifications

Reclassifications

Certain amounts included in the accompanying financial statements for 2012 and 2011 have been reclassified to conform to the 2013 financial statement presentation. Balance sheet amounts for properties classified as held for sale have been reclassified as of December 31, 2013. Statement of operations amounts for properties disposed of or classified as held for sale have been reclassified to discontinued operations for all periods presented. Amounts in our segment and quarterly financial data disclosures inNotes 13and 16 reflect the reclassification of amounts related to properties that have been disposed of or classified as held for sale as of December 31, 2013.  

Investments

Investments

Real Property

Costs associated with the acquisition of real property, including acquisition fees paid to our Advisor, are expensed as incurred. In addition, we estimate the fair value of contingent consideration and contingencies related to acquisitions of real property in determining the total cost of the property acquired. Subsequent changes in the fair value of such contingent consideration are recorded either as a gain or loss in our statement of operations. Contingencies are subsequently adjusted through the statement of operations when new information becomes available indicating that settlement of a contingent liability is probable and can be estimated at an amount greater than the acquisition date fair value, or the contingency is resolved, in which case the contingent asset or liability is derecognized.

Costs associated with the development and improvement of our real property assets are capitalized as incurred. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred. During the land development and construction periods, we capitalize interest costs, insurance, real estate taxes and certain general and administrative costs if such costs are incremental and identifiable to a specific activity to get the asset ready for its intended use. The results of operations for acquired real property are included in our accompanying statements of operations from their respective acquisition dates.

Upon acquisition, the total cost of a property is allocated to land, building, building and land improvements, tenant improvements and intangible lease assets and liabilities. The purchase price allocation of the total cost to land, building, building improvements, tenant improvements, intangible lease assets and intangible lease liabilities is based on our estimate of the property’s as-if vacant fair value. The as-if vacant fair value is calculated by using all available information such as the replacement cost of such asset, appraisals, property condition reports, market data and other related information. The difference between the fair value and the face value of debt assumed in an acquisition is recorded as an adjustment to the purchase price allocation. The allocation of the total cost of a property to an intangible lease asset includes the value associated with the in-place leases, which may include lost rent, leasing commissions, tenant improvements, legal and other costs.

We record acquired “above-market” and “below-market” leases at their fair value equal to the difference between the contractual amounts to be paid pursuant to each in-place lease and our estimate of fair market lease rates for each corresponding in-place lease, measured over a period equal to the remaining term of the lease for above-market leases and the remaining term of the lease plus the term of any below-market fixed-rate renewal option periods for below-market leases. In addition, we allocate a portion of the purchase price of an acquired property to the estimated value of customer relationships, if any. As of December 31, 2013, we had not recognized any estimated value to customer relationships.

Intangible in-place lease assets are amortized over the corresponding lease term. Above-market lease assets are amortized as a reduction in rental revenue over the corresponding lease term. Below-market lease liabilities are amortized as an increase in rental revenue over the corresponding lease term, plus any applicable below-market fixed-rate renewal option periods. The following table summarizes the amounts that we have incurred in amortization expense for intangible lease assets and adjustments to rental revenue for above-market lease assets and below-market lease liabilities for the years ended December 31, 2013, 2012 and 2011 (amounts in thousands).

	For the Year Ended December 31,
	2013		2012		2011
Above-market lease assets	$	(7,293)	$	(8,050)	$	(8,393)
Below-market lease liabilities		7,537		9,567		9,756
Net increase to rental revenue	$	244	$	1,517	$	1,363
Intangible lease asset amortization	$	(62,325)	$	(80,739)	$	(77,452)

We expense any unamortized intangible lease asset or record an adjustment to rental revenue for any unamortized above-market lease asset or below-market lease liability when a tenant terminates a lease before the stated lease expiration date. We recorded an insignificant amount of adjustments related to write-offs of unamortized intangible lease assets and liabilities due to early lease terminations during the years ended December 31, 2013, 2012 and 2011.

Real property assets, including land, building, building and land improvements, tenant improvements, lease commissions, and intangible lease assets and liabilities are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization are computed on a straight-line basis over their estimated useful lives as described in the following table.

Description	Depreciable Life
Land	Not depreciated
Building	40 years
Building and land improvements	5-20 years
Tenant improvements	Lesser of useful life or lease term
Lease commissions	Over lease term
Intangible in-place lease assets	Over lease term
Above-market lease assets	Over lease term
Below-market lease liabilities	Over lease term, including below-market fixed-rate renewal options

The following table presents expected amortization during the next five years and thereafter related to the acquired above-market lease assets, below-market lease liabilities and acquired in-place lease intangibles, for properties owned (including properties classified as held for sale) as of December 31, 2013 (amounts in thousands).

	For the Year Ended December 31,
	2014		2015		2016		2017		2018		Thereafter		Total
Acquired below-market lease liabilities	$	7,125	$	5,895	$	5,201	$	4,975	$	4,920	$	49,433	$	77,549
Acquired above-market lease assets		(6,716)		(6,315)		(6,248)		(3,711)		(1,418)		(1,897)		(26,305)
Net rental revenue increase (decrease)	$	409	$	(420)	$	(1,047)	$	1,264	$	3,502	$	47,536	$	51,244
Acquired in-place lease intangible amortization	$	47,544	$	40,203	$	37,527	$	22,382	$	12,099	$	29,002	$	188,757

Discontinued Operations and Held for Sale

Discontinued operations represent properties that we have either disposed of or have classified as held for sale if both the operations and cash flows of the property have been or will be eliminated from our ongoing operations as a result of the disposal transaction and if we will not have any significant continuing involvement in the operations of the property after the disposal transaction. The results of operations of properties that have been classified as discontinued operations are also reported as discontinued operations for all periods presented. We classify real property as held for sale when ourmanagement commits to a plan to sell the property, the plan has appropriate approvals, the sale of the property is probable, and certain other criteria are met. At such time, the respective assets and liabilities are presented separately on our balance sheets and depreciation is no longer recognized. Assets held for sale are reported at the lower of their carrying amount or their estimated fair value less the costs to sell the assets. We recognize an impairment loss if the current net book value of the property exceeds its fair value less selling costs.  As of December 31, 2013 and 2012, 12and zeroof our properties were classified as held for sale, respectively.

Debt Related Investments

Debt related investments are considered to be held for investment, as we have both the intent and ability to hold these investments until maturity. Accordingly, these assets are carried at cost, net of unamortized loan origination costs and fees, discounts, repayments and unfunded commitments unless such loans or investments are deemed to be impaired.

Revenue Recognition

Revenue Recognition

Revenue Recognition — Real Property

We record rental revenue for the full term of each lease on a straight-line basis. Certain properties have leases that offer the tenant a period of time where no rent is due or where rent payments increase during the term of the lease. Accordingly, we record a receivable from tenants for rent that we expect to collect over the remaining lease term rather than currently, which is recorded as straight-line rents receivable. When we acquire a property, the term of existing leases is considered to commence as of the acquisition date for purposes of this calculation. Tenant recovery income includes payments from tenants for real estate taxes, insurance and other property operating expenses and is recognized as rental revenue.

The following table summarizes straight-line rental adjustments and tenant recovery income received from tenants for real estate taxes, insurance and other property operating expenses and recognized as rental revenue for the years ended December 31, 2013, 2012, and 2011 (amounts in thousands):

	For the Year Ended December 31,
	2013		2012		2011
Straight-line rent adjustments	$	8,864	$	8,107	$	9,902
Tenant recovery income	$	33,029	$	33,585	$	33,445

Revenue Recognition — Debt Related Investments

Interest income on debt related investments is recognized over the life of the investment using the effective interest method and is recognized on an accrual basis. Fees received in connection with loan commitments are deferred until the loan is funded and are then recognized over the term of the loan. Anticipated exit fees, where collection is expected, are also recognized over the term of the debt related investment. A debt related investment is considered to be non-performing and is placed on non-accrual status when it becomes delinquent and management determines it is probable that it will be unable to collect all amounts due according to contractual terms. While on non-accrual status, debt related investments are accounted for on a cash basis, where interest income is recognized only upon actual receipt of cash. Non-accrual debt investments are returned to accrual status when they become contractually current and management believes it will collect all amounts contractually due.

Impairment

Impairment

Impairment — Real Property

We review our investments in real property that are classified as held and used individually on a quarterly basis, and more frequently when such an evaluation is warranted, to determine their appropriate classification, as well as whether there are indicators of impairment.

As of December 31, 2013, 70 of our properties are classified as held and used. These held and used assets are reviewed for indicators of impairment, which may include, among others, each tenant’s inability to make rent payments, operating losses or negative operating trends at the property level, notification by a tenant that it will not renew its lease, a decision to dispose of a property, including a change in estimated holding periods, or adverse changes in the fair value of any of our properties. If indicators of impairment exist on a held and used asset, we compare the future estimated undiscounted cash flows from the expected use of the property to its net book value to determine if impairment exists. If the sum of the future estimated undiscounted cash flows is greater than the current net book value, we conclude no impairment exists. If the sum of the future estimated undiscounted cash flows is less than its current net book value, we recognize an impairment loss for the difference between the net book value of the property and its estimated fair value. If our assumptions, projections or estimates regarding a property change in the future, we may have to record an impairment charge to reduce or further reduce the net book value of the property. See Note 3 for a discussion of impairment charges relating to our real properties recorded during the years ended December 31, 2013, 2012, and 2011.

Impairment — Debt Related Investments

We review our debt related investments on a quarterly basis, and more frequently when such an evaluation is warranted, to determine if impairment exists. 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 our 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 investment or to measure impairment based on an observable market price for the impaired investment as an alternative to discounting expected future cash flows. Regardless of the measurement method, we measure impairment based on the fair value of the collateral when it is determined that foreclosure is probable. A debt related investment is also considered impaired if its terms are modified in a troubled debt restructuring (“TDR”). A TDR occurs when we grant a concession to a borrower in financial difficulty by modifying the original terms of the loan. Impairments on TDR loans are generally measured based on the present value of expected future cash flows discounted at the effective interest rate of the original loan. See Note 4 for a discussion of impairment charges relating to our debt related investments recorded during the years ended December 31, 2013, 2012, and 2011.

Impairment — Real Estate Securities

As of both December 31, 2013 and 2012, we held investments in real estate securities of approximately $0.5 million. Real estate securities are included in other assets, net, in the accompanying balance sheets.

During the years ended December 31, 2013, 2012, and 2011, we recorded approximately $0,  $0 and $3.4 million, respectively, related to other-than-temporary impairment of our CMBS and CRE-CDO securities. Due to volatility with the credit market and its unpredictable impact for such securities, we determined that we cannot reliably predict the timing and amount of cash flows that we expect to receive related to the majority of our CMBS and CRE-CDO securities. Therefore, we account for such securities under the cost recovery method of accounting. The application of the cost recovery method of accounting requires that we cease recognizing interest income related to these securities until the amortized cost of each respective security is depleted or until we can reliably estimate cash flows. Once the amortized cost of each security is depleted or we can reasonably estimate cash flows, cash payments will be recorded to interest income. Under the cost recovery method of accounting, if the fair value of a security falls below the amortized cost of that security and we do not anticipate that the receipt of near term cash flows will sufficiently reduce the security’s amortized cost below its fair value, then we recognize an other-than-temporary impairment in an amount equal to the difference between that security’s fair value and its amortized cost.

Credit Losses

Credit Losses

A credit loss represents the difference between the present value of expected future cash flows and the amortized cost basis of a debt security. As of both December 31, 2013 and 2012, we had recognized approximately $140.1 million of cumulative credit losses in other-than-temporary impairment related to our investments in debt securities. We recorded impairment losses of $0,  $0, and $3.4 million for each of the years ended December 31, 2013, 2012, and 2011, respectively.

Derivative Instruments and Hedging Activities

Derivative Instruments and Hedging Activities

We record all derivative instruments in the accompanying balance sheets at fair value. Accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative instrument and the designation of the derivative instrument. Derivative instruments used to hedge exposure to changes in the fair value of an asset, liability, or firm commitments attributable to a particular risk, such as interest rate risk, are considered “fair value” hedges. Derivative instruments used to hedge exposure to variability in expected future cash flows, such as future interest payments, or other types of forecasted transactions, are considered “cash flow” hedges. We do not have any fair value hedges.

For derivative instruments designated as cash flow hedges, the changes in the fair value of the derivative instrument that represent changes in expected future cash flows, which are effectively hedged by the derivative instrument, are initially reported as other comprehensive income (loss) in the statement of equity until the derivative instrument is settled. Upon settlement, the effective portion of the hedge is recognized as other comprehensive income (loss) and amortized over the term of the designated cash flow or transaction the derivative instrument was intended to hedge. The change in value of any derivative instrument that is deemed to be ineffective is charged directly to earnings when the determination of hedge ineffectiveness is made. We assess the effectiveness of each hedging relationship by comparing the changes in fair value or cash flows of the derivative instrument with the changes in fair value or cash flows of the designated hedged item or transaction. For purposes of determining hedge ineffectiveness, management estimates the timing and potential amount of future fixed-rate debt issuances each quarter in order to estimate the cash flows of the designated hedged item or transaction. Management considers the likelihood of the timing and amount of entering into such forecasted transactions when determining the expected future fixed-rate debt issuances. We do not use derivative instruments for trading or speculative purposes. We classify cash paid to settle our forward starting swaps as financing activities in our statements of cash flows.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand and highly liquid investments with original maturities of three months or less such as money market mutual funds or certificates of deposits. As of both December 31, 2013 and 2012, we have not realized any losses in such cash accounts or investments and believe that we are not exposed to any significant credit risk.

Restricted Cash

Restricted Cash

Restricted cash consists primarily of lender and property-related escrow accounts. As of both December 31, 2013 and 2012, we had not realized any losses in such restricted cash accounts or investments related to, and believe that we are not exposed to any significant credit risk.

Collectability of Receivables

Collectability of Receivables

We evaluate the collectability of our rent and other receivables on a regular basis based on factors including, among others, payment history, the financial strength of the tenant or borrower and any guarantors. Specifically with regards to our debt related investments, we evaluate the collectability of our receivables based on factors including, among others, the value of the underlying collateral, the operations and operating trends of the underlying collateral, if any, the asset type and current economic conditions. If our evaluation of these factors indicates we may not recover the full amount of the receivable, we provide a reserve against the portion of the receivable that we estimate may not be recovered. This analysis requires us to determine whether there are factors indicating a receivable may not be fully collectible and to estimate the amount of the receivable that may not be collected. As of December 31, 2013 and 2012, we had allowances included in the caption other assets, net, in our accompanying balance sheets of approximately $251,000 and $510,000, respectively, related to our rent and other receivables. If our assumptions or estimates regarding the collectability of a receivable change in the future, we may have to record allowances to reduce or further reduce the carrying value of the receivable.

Accumulated Other Comprehensive Income (Loss)

Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) as reported in the accompanying statements of equity primarily consists of the cumulative loss related to our derivatives of $8.8 million, before attribution to noncontrolling interests of $1.0 million, and cumulative gain related to our real estate securities of approximately $411,000, before attribution of a cumulative loss to noncontrolling interests of $1.3 million. 

Basic and Diluted Net Income (Loss) per Common Share

Basic and Diluted Net Income (Loss) per Common Share

Basic net income (loss) per common share is determined by dividing net income (loss) attributable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per common share includes the effects of potentially issuable common stock, but only if dilutive, including the presumed exchange of OP Units.

Income Taxes

Income Taxes

We operate in a manner intended to qualify as a REIT for U.S. federal income tax purposes. As a REIT, we generally will not be subject to federal income taxes on net income that we distribute to our stockholders. We intend to make timely distributions sufficient to satisfy the annual distribution requirements. We believe we are organized and operate in such a manner and intend to operate in the foreseeable future in such a manner to qualify as a REIT for federal income tax purposes. We are, however, subject to certain state and local taxes. Our taxable REIT subsidiary, DCTRT Leasing Corporation, is also subject to federal, state, and local taxes.

Use of Estimates

Use of Estimates

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions relating to the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ materially from those estimates. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the periods they are determined to be necessary.

New Accounting Pronouncements

New Accounting Pronouncements

In February 2013, the Financial Accounting Standards Board (the “FASB”) issued accounting standards update (“ASU”) 2013-04, Obligations Resulting from Joint and Several Liability Arrangements for which the Total Amount of the Obligation Is Fixed at the Reporting Date, (“ASU 2013-04”) which provides guidance for the recognition, measurement and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this guidance is fixed at the reporting date.  This will require an entity to measure those obligations as the sum of the amount the entity agreed to pay on the basis of its arrangement among its co-obligors as well as any additional amount the entity expects to pay on behalf of its co-obligors.  ASU 2013-04 also requires an entity to disclose the nature and amount of those obligations.  The amendments in this ASU are effective for reporting periods beginning after December 15, 2013, with early adoption permitted.  Retrospective application is required.  We do not believe that the adoption of ASU 2013-04 will have a material impact on our consolidated financial statements.

In February 2013, the FASB issued ASU 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, 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

XML

Stockholders' Equity (Details) (Class E [Member], USD $)	12 Months Ended
	Dec. 31, 2013	Dec. 31, 2012	Oct. 23, 2009
Class E [Member]
Stockholders Equity Note Disclosure [Line Items]
Common stock, shares authorized value			$ 237,500,000
Shares redeemed	10,000,000	9,200,000
Value of common stock shares redeemed	68,400,000	64,800,000
Stock redemption additional authorized amount	$ 32,800,000	$ 25,000,000

XML

Net Income (Loss) Per Common Share (Tables)

12 Months Ended

Dec. 31, 2013

Net Income (Loss) Per Common Share [Abstract]

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

	For the Year Ended December 31,
Numerator	2013		2012		2011
Loss from continuing operations	$	(9,084)	$	(14,961)	$	(43,056)
Loss from continuing operations attributable to noncontrolling interests		558		1,081		2,997
Loss from continuing operations attributable to common stockholders		(8,526)		(13,880)		(40,059)
Dilutive noncontrolling interests share of loss from continuing operations		(652)		(1,160)		(2,959)
Numerator for diluted earnings per share – adjusted loss from continuing operations		(9,178)		(15,040)		(43,018)
Income (loss) from discontinued operations		65,554		(7,410)		(21,510)
(Income) loss from discontinued operations attributable to noncontrolling interests		(4,560)		(971)		3,889
Income (loss) from discontinued operations attributable to common stockholders		60,994		(8,381)		(17,621)
Dilutive noncontrolling interests share of income (loss) from discontinued operations		4,662		(701)		(1,301)
Numerator for diluted earnings per share – adjusted income (loss) from discontinued operations	$	65,656	$	(9,082)	$	(18,922)
Denominator
Weighted average shares outstanding-basic		178,196		181,982		183,813
Incremental weighted average shares effect of conversion of OP units		13,736		15,262		13,564
Weighted average shares outstanding-diluted		191,932		197,244		197,377
INCOME (LOSS) PER COMMON SHARE-BASIC AND DILUTED
Net loss from continuing operations	$	(0.05)	$	(0.08)	$	(0.22)
Net income (loss) from discontinued operations		0.34		(0.04)		(0.09)
Net income (loss)	$	0.29	$	(0.12)	$	(0.31)

XML

Net Income (Loss) Per Common Share

12 Months Ended

Dec. 31, 2013

Net Income (Loss) Per Common Share [Abstract]

Net Income (Loss) Per Common Share

12. 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 years ended December 31, 2013, 2012 and 2011 are described in the following table (amounts in thousands, except per share information):

	For the Year Ended December 31,
Numerator	2013		2012		2011
Loss from continuing operations	$	(9,084)	$	(14,961)	$	(43,056)
Loss from continuing operations attributable to noncontrolling interests		558		1,081		2,997
Loss from continuing operations attributable to common stockholders		(8,526)		(13,880)		(40,059)
Dilutive noncontrolling interests share of loss from continuing operations		(652)		(1,160)		(2,959)
Numerator for diluted earnings per share – adjusted loss from continuing operations		(9,178)		(15,040)		(43,018)
Income (loss) from discontinued operations		65,554		(7,410)		(21,510)
(Income) loss from discontinued operations attributable to noncontrolling interests		(4,560)		(971)		3,889
Income (loss) from discontinued operations attributable to common stockholders		60,994		(8,381)		(17,621)
Dilutive noncontrolling interests share of income (loss) from discontinued operations		4,662		(701)		(1,301)
Numerator for diluted earnings per share – adjusted income (loss) from discontinued operations	$	65,656	$	(9,082)	$	(18,922)
Denominator
Weighted average shares outstanding-basic		178,196		181,982		183,813
Incremental weighted average shares effect of conversion of OP units		13,736		15,262		13,564
Weighted average shares outstanding-diluted		191,932		197,244		197,377
INCOME (LOSS) PER COMMON SHARE-BASIC AND DILUTED
Net loss from continuing operations	$	(0.05)	$	(0.08)	$	(0.22)
Net income (loss) from discontinued operations		0.34		(0.04)		(0.09)
Net income (loss)	$	0.29	$	(0.12)	$	(0.31)