10-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the fiscal year ended December 31, 2005

OR

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

For the transition period from                     to                    

Commission file numbers:	1-13130 (Liberty Property Trust)
	1-13132 (Liberty Property Limited Partnership)

LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP

(Exact Names of Registrants as Specified in Their Governing Documents)

MARYLAND (Liberty Property Trust) PENNSYLVANIA (Liberty Property Limited Partnership)	23-7768996 23-2766549
(State or Other Jurisdiction	(I.R.S. Employer
of Incorporation or Organization)	Identification Number)
500 Chesterfield Parkway Malvern, Pennsylvania	19355
(Address of Principal Executive Offices)	(Zip Code)
Registrants’ Telephone Number, including Area Code (610)648-1700
Securities registered pursuant to Section 12(b) of the Act:

TITLE OF EACH CLASS	NAME OF EACH EXCHANGE ON WHICH REGISTERED
Common Shares of Beneficial Interest, $0.001 par value (Liberty Property Trust)	New York Stock Exchange
Preferred Share Purchase Rights, $0.0001 par value (Liberty Property Trust)	New York Stock Exchange

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

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

YES þ NO o

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

YES o NO þ

Indicate by check mark whether the Registrants (1) have 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 Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past ninety (90) days.

YES þ NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of the Registrants’ 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. þ

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

LARGE ACCELERATED FILER þ ACCELERATED FILER o NON-ACCELERATED FILER o

Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o NO þ

The aggregate market value of the Common Shares of Beneficial Interest, $0.001 par value (the “Common Shares”), of Liberty Property Trust held by non-affiliates of Liberty Property Trust was $3.9 billion, based upon the closing price of $44.31 on the New York Stock Exchange composite tape on June 30, 2005. Non-affiliate ownership is calculated by excluding all Common Shares that may be deemed to be beneficially owned by executive officers and trustees, without conceding that any such persons is an “affiliate” for purposes of the federal securities laws.

Number of Common Shares outstanding as of March 9, 2006: 88,661,156

Documents Incorporated by Reference

Portions of the proxy statement for the annual meeting of shareholders of Liberty Property Trust to be held in 2006 are incorporated by reference into Part III of this Form 10-K.

INDEX

	PAGE
PART I
Item 1. Business		4
Item 1A. Risk Factors		8
Item 1B. Unresolved Staff Comments		16
Item 2. Properties		16
Item 3. Legal Proceedings		18
Item 4. Submission of Matters to a Vote of Security Holders		18
PART II
Item 5. Market for Registrants’ Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities		18
Item 6. Selected Financial Data		19
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		32
Item 8. Financial Statements and Supplementary Data		32
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		107
Item 9A. Controls and Procedures		107
Item 9B. Other Information		107
PART III
Item 10. Trustees and Executive Officers of the Registrants		108
Item 11. Executive Compensation		108
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters		108
Item 13. Certain Relationships and Related Transactions		108
Item 14. Principal Accountant Fees and Services		108
PART IV
Item 15. Exhibits and Financial Statement Schedules		109
Signatures for Liberty Property Trust		117
Signatures for Liberty Property Limited Partnership		118
Exhibit Index		119
Amended and Restated Schedule A
Amended and Restated Credit Agreement
Statement re: Computation of Ratios
Subsidiaries
Consent of Ernst & Young LLP relating to financial statements of the Trust
Consent of Ernst & Young LLP relating to financial statements of the Operting Partnership
Certifications of the Chief Executive Officer
Certifications of the Chief Financial Officer
Certifications of the Chief Executive Officer, in his capacity as the general partner
Certification of the Chief Financial Officer, in his capacity as the general partner
Certifications of the Chief Executive Officer, required under Rule 13a-14(b)
Certifications of the Chief Financial Officer, required under Rule 13a-14(b)
Certifications of the Chief Executive Officer, in his capacity as the general partner, required by Rule 13a-14(b)
Certifications of the Chief Financial Officer, in his capacity as the general partner, required by Rule 13a-14(b)

2

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this Annual Report on Form 10-K and other materials filed or to be filed by the Company (as defined herein) with the Securities and Exchange Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made by the Company) contain statements that are or will be forward-looking, such as statements relating to rental operations, development activities, joint venture relationships, acquisitions, dispositions, future capital expenditures, financing sources and availability, and the effects of regulation (including environmental regulation) and competition. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve important risks, uncertainties and other factors that could cause actual results to differ materially from the expected results and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of the Company. The Company assumes no obligation to update or supplement forward looking statements that become untrue because of subsequent events. These risks, uncertainties and other factors include, without limitation, uncertainties affecting real estate businesses generally (such as entry into new leases, renewals of leases and dependence on tenants’ business operations), risks relating to our ability to maintain and increase property occupancy and rental rates, risks relating to construction and development activities, risks relating to acquisition and disposition activities, risks relating to joint venture relationships and any possible need to perform under certain guarantees that we have issued or may issue in connection with such relationships, possible environmental liabilities, risks relating to leverage and debt service (including availability of financing terms acceptable to the Company and sensitivity of the Company’s operations and financing arrangements to fluctuations in interest rates), dependence on the primary markets in which the Company’s properties are located, the existence of complex regulations relating to status as a REIT and the adverse consequences of the failure to qualify as a REIT, and the potential adverse impact of market interest rates on the market price for the Company’s securities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements.”

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PART I

ITEM 1. BUSINESS

The Company

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”).

The Company completed its initial public offering in 1994 to continue and expand the commercial real estate business of Rouse & Associates, a Pennsylvania general partnership, and certain affiliated entities (collectively, the “Predecessor”) which was founded in 1972. As of December 31, 2005, the Company’s portfolio consisted of 718 industrial and office properties (the “Properties in Operation”) totaling 64.4 million square feet. In addition, at that date, the Company had 29 properties under development, which when completed are expected to add 5.6 million square feet to the Company’s portfolio, (the “Properties Under Development” and, together with the Properties in Operation, the “Properties”), and owned 1,410 acres of land, substantially all of which was zoned for commercial use. Included above are 42 properties comprising 3.8 million square feet and 268 acres of developable land owned by unconsolidated joint ventures.

The Company provides leasing, property management, development, acquisition and other tenant-related services for the Properties in Operation. The Company’s industrial Properties consist of a variety of warehouse, distribution, service, assembly, light manufacturing and research and development facilities. They include both single-tenant and multi-tenant facilities, with most designed flexibly to accommodate various types of tenants, space requirements and industrial uses. The Company’s office Properties are multi-story and single-story office buildings located principally in suburban mixed-use developments or office parks. Substantially all of the Company’s Properties are located in prime business locations within established business communities. In January 2005, the Company commenced construction of a 1.25 million square foot office tower in Philadelphia’s central business district.

The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 96.2% of the common equity of the Operating Partnership at December 31, 2005. The common units of limited partnership interest in the Operating Partnership (the “Common Units”) other than those owned by the Trust are exchangeable on a one-for-one basis (subject to anti-dilution protections) for the Trust’s Common Shares of Beneficial Interest, $0.001 par value per share (the “Common Shares”). The Common Units held by the limited partners were exchangeable for 3.5 million Common Shares on December 31, 2005. The Company has issued Cumulative Redeemable Preferred Units of the Operating Partnership (the “Preferred Units”). The outstanding Preferred Units are exchangeable on a one-for-one basis after a stated date into Cumulative Redeemable Preferred Shares of the Trust. Collectively, the ownership of the holders of Common and Preferred Units is reflected on the Trust’s financial statements as minority interest.

In addition to this annual report on Form 10-K, the Company files periodic and current reports, proxy statements and other information with the SEC. The Company makes these documents available on its website, www.libertyproperty.com, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. You may also read and copy any document the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. Please call the SEC at (800) SEC-0330 for further information about the public reference facilities. These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system (“EDGAR”) via electronic means, including the SEC’s home page on the Internet, www.sec.gov.

Also posted on the Company’s website is the Company’s Code of Conduct, which applies to all of its employees and also serves as a code of ethics for its chief executive officer, chief financial officer and persons performing similar functions. The Company will send the Code of Conduct, free of charge, to anyone who requests a copy in writing from its Investor Relations Department at the address set forth on the cover of this filing. The Company may provide information regarding any amendments to or waivers of the Code of Conduct in the Corporate Governance area of its website.

4

Management and Employees

The Company’s 470 employees (as of March 9, 2006) are under the direction of 21 senior executives, who, on average, have been affiliated with the Company and the Predecessor for 16 years. The Company and the Predecessor have developed and managed commercial real estate for the past 33 years. The Company’s in-house leasing and property management staff operates in markets where it has a significant presence. This structure enables the Company to better understand the characteristics of the local markets in which it operates, to respond quickly and directly to tenant needs and to better identify local real estate opportunities. At December 31, 2005, the Company’s reportable segments were based on the Company’s method of internal reporting and are as follows:

Reportable Segments	Markets
Delaware Valley	Southeastern Pennsylvania; New Jersey
Midwest	Lehigh Valley, Pennsylvania; Michigan; Minnesota; Milwaukee; Chicago
Mid-Atlantic	Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida	Jacksonville; Orlando; Boca Raton; Tampa; Texas
United Kingdom	County of Kent

Business Objective and Strategies for Growth

The Company’s business objective is to maximize long-term profitability for its shareholders by being a recognized leader in commercial real estate through the ownership, management, development and acquisition of superior office and industrial properties. The Company intends to achieve this objective through offering office and industrial properties in multiple markets and operating as a leading landlord in the industry. The Company believes that this objective will provide the benefits of enhanced investment opportunities, economies of scale, risk diversification both in terms of geographic market and real estate product type, access to capital, and the ability to attract and retain personnel. The Company also strives to be a leading provider of customer service, providing an exceptional and positive customer experience. In pursuing its business objective, the Company seeks to achieve a combination of internal and external growth, maintain a conservative balance sheet and pursue a strategy of financial flexibility.

Products

The Company strives to be a recognized quality provider of five products (industrial properties, including big box warehouse, multi-tenant industrial, and flex/R&D; and office properties, including single-story office and multi-story office). When the Company’s marketing efforts identify opportunities, the Company will, in appropriate instances, pursue other office and industrial product types including high rise office towers. In January 2005, the Company commenced construction of a 1.25 million square foot office tower in Philadelphia’s central business district.

Markets

The Company operates primarily in the Mid-Atlantic, Southeastern and Midwestern United States. Additionally, the Company owns certain assets in the United Kingdom. The Company’s goal is to operate in each of its markets with an appropriate product mix of office and industrial properties. The Company seeks to have a presence that allows it to be viewed as a significant participant in each market. The Company’s efforts emphasize business park development and asset aggregation. The Company gathers information from internal sources and independent third parties and analyzes this information to support its evaluation of markets and market conditions.

Organizational Plan

The Company seeks to maintain a management organization which facilitates efficient execution of the Company’s strategy. As part of this effort, the Company pursues a human resources plan designed to create and maintain a highly regarded real estate company through recruiting, training and retaining capable people. The structure is designed to support a local office entrepreneurial platform operating within a value-added corporate structure. The Company upgrades its information technology periodically to keep pace with advances in available technology.

Internal Growth Strategies

The Company seeks to maximize the profitability of its Properties by endeavoring to maintain high occupancy levels while obtaining competitive rental rates, controlling costs and focusing on customer service efforts.

5

Maintain High Occupancies

The Company believes that the quality and diversity of its tenant base and its strategy of operating in multiple markets is integral to achieving its goal of attaining high occupancy levels for its portfolio. The Company targets financially stable tenants in an effort to minimize uncertainty relating to the ability of the tenants to meet their lease obligations.

Cost Controls

The Company seeks to identify best practices to apply throughout the Company in order to enhance cost savings and other efficiencies. The Company also employs an annual capital improvement and preventative maintenance program designed to reduce the operating costs of the Properties and maintain the long-term value of the Properties.

Customer Service Initiatives

The Company seeks to achieve high tenant retention through a comprehensive customer service program, which is designed to provide an exceptional and positive customer experience. The customer service program establishes best practices and provides an appropriate customer feedback process. The Company believes that the program has been helpful in increasing customer satisfaction.

External Growth Strategies

The Company seeks to enhance its long-term profitability through the development, acquisition and disposition of properties.

Development

The Company pursues attractive development opportunities, focusing primarily on high-quality suburban industrial and office properties within its existing markets. When the Company’s marketing efforts identify opportunities, the Company will consider pursuing urban opportunities and development opportunities outside of the Company’s established markets. The Company and its Predecessor have developed over 48 million square feet of commercial real estate during the past 33 years. The Company’s development activities generally fall into two categories: build-to-suit projects and projects built for inventory (projects that are less than 75% leased prior to commencement of construction). The Company develops build-to-suit projects for existing and new tenants. The Company also builds properties for inventory where the Company has identified sufficient demand at market rental rates to justify such construction.

During the year ended December 31, 2005, the Company completed four build-to-suit projects and seven inventory projects totaling 1.8 million square feet of leaseable space and representing an aggregate Total Investment, as defined below, of $126.2 million. As of December 31, 2005, these completed development properties were 97.8% leased. The “Total Investment” for a Property is defined as the Property’s purchase price plus closing costs and management’s estimate, as determined at the time of acquisition, of the cost of necessary building improvements in the case of acquisitions, or land costs and land and building improvement costs in the case of development projects, and, where appropriate, other development costs and carrying costs.

As of December 31, 2005 the Company had 29 Properties Under Development which are expected to generate, upon completion, 5.6 million leaseable square feet and are expected to represent a Total Investment of $815.5 million. These Properties Under Development were 43.5% pre-leased as of December 31, 2005. The scheduled deliveries of the 5.6 million square feet of leaseable space in Properties Under Development are as follows (in thousands, except percentages):

	Square Feet
									Percent Leased			Total
Scheduled In-Service Date	Ind-Dist.		Ind-Flex		Office		Total		December 31, 2005			Investment
1st Quarter 2006		608		129		102		839		92.3	%	$	48,111
2nd Quarter 2006		25		134		198		357		86.8	%		51,801
3rd Quarter 2006		130		—		192		322		86.8	%		38,740
4th Quarter 2006		—		48		170		218		39.4	%		35,573
1st Quarter 2007		—		79		77		156		33.9	%		17,705
2nd Quarter 2007		1,300		—		208		1,508		0.3	%		107,733
3rd Quarter 2007		800		—		110		910		—			56,273
3rd Quarter 2008		—		—		1,253		1,253		72.8	%		459,566
Total		2,863		390		2,310		5,563		43.5	%	$	815,502

The table above reflects the 1.25 million square foot office tower which the Company is constructing in Philadelphia’s central business district. Comcast Corporation has signed a 15¹/2 year lease for 874,000 square feet of space. The office tower, to be known as Comcast Center is expected to be shell complete in late 2007.

6

The Company believes that, because it is a fully integrated real estate firm, its base of commercially zoned land in existing industrial and office business parks provides a competitive advantage for future development activities. As of December 31, 2005, the Company wholly owns 1,142 acres of land held for development and jointly owns 268 acres, substantially all of which was zoned for commercial use. Substantially all of the land is located adjacent to or within existing industrial or business parks with site improvements, such as public sewers, water and utilities, available for service. The Company anticipates that its land holdings would support, as and when developed, 14.1 million leaseable square feet. The Company’s investment in land held for development as of December 31, 2005 was $158.7 million.

Acquisitions/Dispositions

The Company seeks to acquire properties consistent with its business objectives and strategies. The Company executes its acquisition strategy by purchasing properties which management believes will create shareholder value over the long-term.

During the year ended December 31, 2005, the Company acquired 23 properties comprising 3.7 million leaseable square feet for a Total Investment of $300.1 million.

The Company disposes of Properties and land held for development which no longer fit within the Company’s strategic plan, or with respect to which the Company believes it can optimize cash proceeds. During the year ended December 31, 2005, the Company sold 36 Properties in Operation, which contained 2.4 million square feet of leaseable space, and four parcels of land, for an aggregate of $203.9 million. The Company also sold 15 Properties in Operation in the United Kingdom to an unconsolidated joint venture in which the Company retained a 20% interest for $219.9 million. See Joint Ventures below. In addition, an unconsolidated joint venture in which the Company has a 25% interest sold three properties which contained 397,000 square feet of leaseable space, for $21.1 million.

Joint Ventures

The Company, from time to time, considers joint venture opportunities with institutional investors or other real estate companies. Joint venture partnerships provide the Company with additional sources of capital to share investment risk and fund capital requirements. In some instances, joint venture partnerships provide the Company with additional local market or product type expertise.

In December 2005, the Company partnered with Doughty Hanson & Co. Real Estate on a $219.9 million joint venture consisting of the majority of the Company’s office and flex portfolio at Kings Hill in the County of Kent, England. The Company sold 15 Properties in Operation totaling 535,000 square feet to this joint venture. The joint venture was financed with $163.4 million of secured debt and the Company retained a 20% interest in the joint venture. The Company will receive fees for managing the assets and may receive a promoted interest if certain return thresholds are met. The joint venture will have the option to purchase further completed and leased commercial buildings in the first phase of the Kings Hill development.

As of December 31, 2005, the Company had investments in unconsolidated joint ventures, totaling $33.5 million.

United Kingdom Operations

The Company has an agreement with the County of Kent, England, for the development of a 650 acre, mixed commercial and residential community in the County of Kent. The community known as “Kings Hill” is located approximately 25 miles southeast of London. The community has been developed over the past decade pursuant to the development agreement between the County of Kent and the Company. The development agreement allows the Company to develop commercial space and to participate in proceeds from the sale of residential land parcels to home builders. The Company is presently developing one office building in Kings Hill and has received planning consent, which it is currently evaluating, for an additional one million square feet of future development.

The Company has also invested in two joint ventures to develop projects in separate locations in England. The Company believes that its development expertise, its access to capital and its relationship with tenants engaged in international business will create opportunities to service the needs of these tenants in both the United States and the United Kingdom.

The Company continues to pursue its development in Kings Hill and to identify other development and acquisition opportunities in the United Kingdom.

7

ITEM 1A. RISK FACTORS

The Company’s results from operations and the ability to make distributions to our shareholders and pay debt service on our indebtedness may be affected by the risk factors set forth below. (The Company refers to itself as “we”, “us” or “our” in the following risk factors.) This section contains some forward looking statements. You should refer to the explanation of the qualifications and limitations on forward looking statements on page 3.

Risks Related to Our Business

Unfavorable events affecting our existing tenants, or negative market conditions that may affect our existing tenants, could have an adverse impact on our ability to attract new tenants, relet space, collect rent or renew leases, and thus could have a negative effect on our cash flow from operations and inhibit growth.

Our cash flow from operations depends on our ability to lease space to tenants on economically favorable terms. Therefore, we could be adversely affected by various facts and events over which we have limited control, such as:

• lack of demand for space in the areas where our Properties are located

• inability to retain existing tenants and attract new tenants

• oversupply of or reduced demand for space and changes in market rental rates

• defaults by our tenants or their failure to pay rent on a timely basis

• the need to periodically renovate and repair our space

• physical damage to our Properties

• economic or physical decline of the areas where our Properties are located

• potential risk of functional obsolescence of our Properties over time

At any time, any of our tenants may experience a downturn in its business that may weaken its financial condition. As a result, a tenant may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. Any tenant bankruptcy or insolvency, leasing delay or failure to make rental payments when due could result in the termination of the tenant’s lease and material losses to our Company.

If our tenants do not renew their leases as they expire, we may not be able to rent the space. Furthermore, leases that are renewed, and some new leases for space that is relet, may have terms that are less economically favorable to us than current lease terms, or may require us to incur significant costs, such as for renovations, tenant improvements or lease transaction costs.

Any of these events could adversely affect our cash flow from operations and our ability to make expected distributions to our shareholders and service our indebtedness.

A significant portion of our costs, such as real estate taxes, insurance costs, and debt service payments, generally are not reduced when circumstances cause a decrease in cash flow from our Properties.

We may not be able to compete successfully with other entities that operate in our industry.

We experience a great deal of competition in attracting tenants for our Properties and in locating land to develop and properties to acquire.

In our effort to lease our Properties, we compete for tenants with a broad spectrum of other landlords in each of our markets. These competitors include, among others, publicly-held REITs, privately-held entities, individual property owners and tenants who wish to sublease their space. Some of these competitors may be able to offer prospective tenants more attractive financial or other terms than we are able to offer.

We may experience increased operating costs, which could adversely affect our operations.

Our Properties are subject to increases in operating expenses such as insurance, cleaning, electricity, heating, ventilation and air conditioning, general and administrative costs and other costs associated with security, landscaping, repairs and maintenance. While our current tenants generally are obligated to pay a significant portion of these costs, there is no assurance that these tenants will make such payments or agree to pay these costs upon renewal or that new tenants will agree to pay these costs. If operating expenses increase in our markets, we may not be able to increase rents or reimbursements in all of these markets so as to meet increased expenses without at the same time decreasing occupancy rates. If this occurs, our ability to make distributions to shareholders and service our indebtedness could be adversely affected.

8

Our ability to achieve growth in operating income depends in part on our ability to develop properties which may suffer under certain circumstances.

We intend to continue to develop properties where warranted by market conditions. We have a number of ongoing development projects and a number of land projects being readied for development. These projects include the Comcast Center, a 1.25 million square foot office tower in Philadelphia’s central business district, which is discussed below.

Additionally, our general construction and development activities include the risks that:

• construction and leasing of a property may not be completed on schedule, which could result in increased expenses and construction costs, and would result in reduced profitability for that property

• construction costs may exceed our original estimates due to increases in interest rates and increased materials, labor or other costs, possibly making the property unprofitable because we may not be able to increase rents to compensate for the increase in construction costs

• some developments may fail to achieve expectations, possibly making them unprofitable

• we may be unable to obtain, or may face delays in obtaining, required zoning, land-use, building, occupancy, and other governmental permits and authorizations, which could result in increased costs and could require us to abandon our activities entirely with respect to a project

• we may abandon development opportunities after we begin to explore them and as a result, we may fail to recover costs already incurred. If we alter or discontinue our development efforts, past and future costs of the investment may need to be expensed rather than capitalized and we may determine the investment is impaired, resulting in a loss

• we may expend funds on and devote management’s time to projects that we do not complete

• occupancy rates and rents at newly completed properties may fluctuate depending on a number of factors, including market and economic conditions, and may result in lower than projected rental rates with the result that our investment is not profitable

Our Comcast Center project is subject to a number of risks related to its development, construction, financing and leasing.

We commenced construction of a 1.25 million square foot office tower in Philadelphia in January 2005. The office tower, known as the Comcast Center, is expected to be shell complete in late 2007. Comcast Corporation has signed a 15¹/2 year lease for 874,000 square feet, or 69.7%, of the building’s leasable space. Including the lease with Comcast Corporation and leases with other tenants, there are signed leases for 72.8% of the Comcast Center’s leasable space. The total project cost to be incurred by us is expected to be $459.6 million.

The project is subject to substantial leasing risk as to the portion of the building not leased to Comcast. The Philadelphia office market generally contains substantial vacancy and has experienced a highly competitive leasing environment. Many of the premier office properties in the central business district contain significant vacancy. These conditions have had an adverse impact on market rental rates. Nevertheless, we believe that because of the unique features of this state-of-the-art commercial office building, sufficient demand exists from lease expirations of large commercial tenants in Philadelphia’s central business district during the 2006 to 2009 time frame and from prospective new tenants to the market to lease the remainder of the building at suitable rental rates.

Development of a project such as Comcast Center is subject to the general development and construction risks noted above. Those risks are magnified by the size of the project, and include construction risks associated with undertaking a construction project with the engineering and design complexities of an office tower. If we fail to achieve the completion deadlines set forth in the lease with Comcast, we will be responsible for damages incurred by Comcast.

The project also bears the investment risk that the market value of this 1.25 million square foot office tower may not support the construction costs of $360 per square foot. Sales that occurred in the past few years of a few Philadelphia office towers, which were constructed on average 15 years ago, were estimated to be for an average price of $183 per square foot.

9

We face risks associated with property acquisitions.

We acquire individual properties and portfolios of properties, and intend to continue to do so. Our acquisition activities and their success are subject to the following risks:

• when we are able to locate a desirable property, competition from other real estate investors may significantly increase the purchase price

• acquired properties may fail to perform as expected

• the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates

• acquired properties may be located in new markets where we face risks associated with an incomplete knowledge or understanding of the local market, a limited number of established business relationships in the area and a relative unfamiliarity with local governmental and permitting procedures

• we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and as a result, our results of operations and financial condition could be adversely affected

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

Many of our Properties are concentrated in our primary markets, and we therefore may suffer economic harm as a result of adverse conditions in those markets.

Our Properties are located principally in specific geographic areas in the Mid-Atlantic, Southeastern and Midwestern United States and the United Kingdom. Due to the concentration of our Properties in these areas, performance is dependent on economic conditions in these areas. These areas have experienced periods of economic decline.

We may not be able to access financial markets to obtain capital on a timely basis, or on acceptable terms.

In order to qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our taxable income to shareholders each year, and thus cannot reinvest this portion of income in the business. As a result, retained cash flows are somewhat limited and we rely on proceeds from Property dispositions and third party capital sources for a portion of our capital needs, including capital for acquisitions and development. The public debt and equity markets are among the sources we rely on. There is no guarantee that we will be able to access these markets, or any other source of capital, on attractive terms or at all. The ability to access the public debt and equity markets depends on a variety of factors, including:

• general economic conditions affecting these markets

• our own financial structure and performance

• the market’s opinion of REITs in general

• the market’s opinion of REITs that own properties like ours

We may suffer adverse effects as a result of the terms of and covenants relating to our indebtedness.

Required payments on our indebtedness generally are not reduced if the economic performance of the portfolio declines. If the economic performance declines, net income, cash flow from operations and cash available for distribution to shareholders will be reduced. If payments on debt cannot be made, we could sustain a loss, or in the case of mortgages, suffer foreclosures by mortgagees or suffer judgments. Further, some obligations, including our $600 million credit facility and unsecured notes, as well as, at December 31, 2005, $55.5 million in outstanding mortgage indebtedness, contain cross-default and/or cross-acceleration provisions, which means that a default on one obligation may constitute a default on other obligations.

We anticipate that only a small portion of the principal of our debt will be repaid prior to maturity. Therefore, we generally need to refinance our outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of our existing debt. If principal payments due at maturity cannot be refinanced, extended or repaid with proceeds from other sources, such as the proceeds of sales of assets or new equity securities, our cash flow will not be sufficient to repay all maturing debt in years when significant “balloon” payments come due.

Our credit facility and unsecured debt securities contain customary restrictions, requirements and other limitations on our ability to incur indebtedness, including total debt to asset ratios, secured debt to total asset ratios, debt service coverage ratios and minimum ratios of unencumbered assets to unsecured debt which we must maintain. Our continued ability to borrow under our $600 million credit facility is subject to compliance with our financial and other covenants. In addition, our failure to comply with such covenants could cause a default under this credit

10

facility, and we may then be required to repay such debt with capital from other sources. Under those circumstances, other sources of capital may not be available to us, or be available only on unattractive terms.

Our degree of leverage could limit our ability to obtain additional financing or affect the market price of our common stock.

Our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. Our senior unsecured debt is currently rated investment grade by the three major rating agencies. However, there can be no assurance we will be able to maintain this rating, and in the event our senior debt is downgraded from its current rating, we would likely incur higher borrowing costs. Our degree of leverage could also make us more vulnerable to a downturn in business or the economy generally.

Further issuances of equity securities may be dilutive to current shareholders.

The interests of our existing shareholders could be diluted if we issue additional equity securities to finance future developments, acquisitions, or repay indebtedness. Our Board of Trustees may authorize the issuance of additional securities without shareholder approval. Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including issuances of common and preferred equity.

An increase in interest rates would increase our interest costs on variable rate debt and could adversely impact our ability to refinance existing debt.

We currently have, and may incur more, indebtedness that bears interest at variable rates. Accordingly, if interest rates increase, so will our interest costs, which would adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our shareholders. Further, rising interest rates could limit our ability to refinance existing debt when it matures.

Property ownership through joint ventures will limit our ability to act exclusively in our interests.

From time to time we invest in joint ventures in which we do not hold a controlling interest. These investments involve risks that do not exist with properties in which we own a controlling interest, including the possibility that our partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives. In instances where we lack a controlling interest, our partners may be in a position to require action that is contrary to our objectives. While we seek to negotiate the terms of these joint ventures in a way that secures our ability to act in our best interests, there can be no assurance that those terms will be sufficient to fully protect us against actions contrary to our interests. If the objectives of our co-venturers are inconsistent with ours, we may not in every case be able to act exclusively in our interests.

Risks Related to the Real Estate Industry

Real estate investments are illiquid, and we may not be able to sell our Properties if and when we determine it is appropriate to do so.

Real estate generally cannot be sold quickly. We may not be able to dispose of Properties promptly in response to economic or other conditions. In addition, provisions of the Internal Revenue Code (the “Code”) limit a REIT’s ability to sell properties in some situations when it may be economically advantageous to do so, thereby adversely affecting returns to shareholders and adversely impacting our ability to meet our obligations to the holders of other securities.

We may experience economic harm if any damage to our Properties is not covered by insurance.

We believe all of our Properties are adequately insured. However, we cannot guarantee that the limits of our current policies will be sufficient in the event of a catastrophe to our Properties. Our existing property and liability policies expire during 2006. We cannot guarantee that we will be able to renew or duplicate our current coverages in adequate amounts or at reasonable prices.

We may suffer losses that are not covered under our comprehensive liability, fire, extended coverage and rental loss insurance policies. For example, we may not be insured for losses resulting from acts of war, certain acts of terrorism, or from environmental liabilities. If an uninsured loss or a loss in excess of insured limits should occur, we would nevertheless remain liable for the loss which could adversely affect cash flow from operations.

Potential liability for environmental contamination could result in substantial costs.

Under federal, state and local environmental laws, ordinances and regulations, we may be required to investigate and clean up the effects of releases of hazardous or toxic substances or petroleum products at our Properties simply because of our current or past ownership or operation of the real estate. If unidentified environmental problems arise,

11

we may have to make substantial payments which could adversely affect our cash flow and our ability to make distributions to our shareholders because:

• as owner or operator, we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination

• the law typically imposes clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination

• even if more than one person may be responsible for the contamination, each person who shares legal liability under the environmental laws may be held responsible for all of the clean-up costs

• governmental entities and third parties may sue the owner or operator of a contaminated site for damages and costs

These costs could be substantial. The presence of hazardous or toxic substances or petroleum products or the failure to properly remediate contamination may materially and adversely affect our ability to borrow against, sell or rent an affected property. In addition, applicable environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination. Changes in laws increasing the potential liability for environmental conditions existing at our Properties may result in significant unanticipated expenditures.

It is our policy to retain independent environmental consultants to conduct Phase I environmental site assessments and asbestos surveys with respect to our acquisition of properties. These assessments generally include a visual inspection of the properties and the surrounding areas, an examination of current and historical uses of the properties and the surrounding areas and a review of relevant state, federal and historical documents, but do not involve invasive techniques such as soil and ground water sampling. Where appropriate, on a property-by-property basis, our practice is to have these consultants conduct additional testing, including sampling for asbestos, for lead in drinking water, for soil contamination where underground storage tanks are or were located or where other past site usages create a potential environmental problem, and for contamination in groundwater. Even though these environmental assessments are conducted, there is still the risk that:

• the environmental assessments and updates will not identify all potential environmental liabilities

• a prior owner created a material environmental condition that is not known to us or the independent consultants preparing the assessments

• new environmental liabilities have developed since the environmental assessments were conducted

• future uses or conditions such as changes in applicable environmental laws and regulations could result in environmental liability for us

While we test indoor air quality on a regular basis and have an ongoing maintenance program in place to address this aspect of property operations, inquiries about indoor air quality may necessitate special investigation and, depending on the results, remediation. Indoor air quality issues can stem from inadequate ventilation, chemical contaminants from indoor or outdoor sources, pollen, viruses and bacteria. Indoor exposure to chemical or biological contaminants above certain levels can be alleged to be connected to allergic reactions or other health effects and symptoms in susceptible individuals. If these conditions were to occur at one of our Properties, we may need to undertake a targeted remediation program, including without limitation, steps to increase indoor ventilation rates and eliminate sources of contaminants. Such remediation programs could be costly, necessitate the temporary relocation of some or all of the property’s tenants or require rehabilitation of the affected property.

12

Our Properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold at any of our Properties could require us to undertake a costly remediation program to contain or remove the mold from the affected property. In addition, the presence of significant mold could expose us to liability from our tenants, employees of our tenants and others if property damage or health concerns arise.

Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make expenditures that adversely impact our operating results.

All of our Properties are required to comply with the Americans with Disabilities Act (“ADA”). The ADA generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the United States government or an award of damages to private litigants, or both. Expenditures related to complying with the provisions of the ADA could adversely affect our results of operations and financial condition and our ability to make distributions to shareholders. In addition, we are required to operate our Properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our Properties. We may be required to make substantial capital expenditures to comply with those requirements and these expenditures could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to shareholders.

Terrorist attacks and other acts of violence or war may adversely impact our operating results and may affect markets on which our securities are traded.

Terrorist attacks against our Properties, or against the United States or United States interests generally, may negatively affect our operations and your investment in our securities. Attacks or armed conflicts could have a direct adverse impact on our Properties or operations through damage, destruction, loss or increased security costs. Any terrorism insurance that we obtain may be insufficient to cover the loss for damages to our Properties as a result of terrorist attacks.

Furthermore, any terrorist attacks or armed conflicts could result in increased volatility in or damage to the United States and worldwide financial markets and economy. Adverse economic conditions could affect the ability of our tenants to pay rent, which could have an adverse impact on our operating results.

Risks Related to Our Organization and Structure

We have elected REIT status under the federal tax laws, and could suffer adverse consequences if we fail to qualify as a REIT.

We have elected REIT status under federal tax laws and have taken the steps known to us to perfect that status, but we cannot be certain that we qualify, or that we will remain qualified. Qualification as a REIT involves the application of highly technical and complex provisions of the Code, as to which there are only limited judicial or administrative interpretations. The complexity of these provisions and of the related income tax regulations is greater in the case of a REIT that holds its assets in partnership form, as we do. Moreover, no assurance can be given that new tax laws will not significantly affect our qualification as a REIT or the federal income tax consequences of such qualification. New laws could be applied retroactively, which means that past operations could be found to be in violation, which would have a negative effect on the business.

If we fail to qualify as a REIT in any taxable year, the distributions to shareholders would not be deductible when computing taxable income. If this happened, we would be subject to federal income tax on our taxable income at regular corporate rates. Also, we could be prevented from qualifying as a REIT for the four years following the year in which we were disqualified. Further, if we requalified as a REIT after failing to qualify, we might have to pay the full corporate-level tax on any unrealized gain in our assets during the period we were not qualified as a REIT. We would then have to distribute to our shareholders the earnings we accumulated while we were not qualified as a REIT. These additional taxes would reduce our funds available for distribution to our shareholders. In addition, while we were disqualified as a REIT, we would not be required by the Code to make distributions to our shareholders. A failure by the Company to qualify as a REIT and the resulting requirement to pay taxes and interest (and perhaps penalties) would cause us to default under various agreements to which we are a party, including under our credit facility, and would have a material adverse effect on our business, prospects, results of operations, earnings, financial condition and our ability to make distributions to shareholders.

13

Future economic, market, legal, tax or other considerations may lend our Board of Trustees to authorize the revocation of our election to qualify as a REIT. A revocation of our REIT status would require the consent of the holders of a majority of the voting interests of all of our outstanding Common Shares.

Risks associated with potential borrowings necessary to make distributions to qualify as a REIT.

We intend to make distributions to shareholders to comply with the distribution provisions of the Code necessary to maintain qualification as a REIT and to avoid income taxes and the non-deductible excise tax. Under certain circumstances, we may be required to borrow funds to meet the distribution requirements necessary to achieve the tax benefits associated with qualifying as a REIT. In such circumstances, we might need to borrow funds to avoid adverse tax consequences, even if our management believes that the prevailing market conditions are not generally favorable for such borrowings or that such borrowings would not be advisable in the absence of such tax considerations.

Certain officers of the Trust may not have the same interests as shareholders as to certain tax laws.

Certain officers of the Trust own Common Units. These units may be exchanged for our Common Shares. The officers who own those units and have not yet exchanged them for our Common Shares may suffer different and more adverse tax consequences than holders of our Common Shares suffer in certain situations:

• when certain of our Properties are sold

• when debt on those Properties is refinanced

• if we are involved in a tender offer or merger

Because these officers own units and face different consequences than shareholders do, the Trust and those officers may have different objectives as to these transactions than shareholders do.

Certain aspects of our organization could have the effect of restricting or preventing a change of control of our Company, which could have an adverse effect on the price of our shares.

Our charter contains an ownership limit on shares. To qualify as a REIT, five or fewer individuals cannot own, directly or indirectly, more than 50% in value of the outstanding shares of beneficial interest. To this end, our Declaration of Trust, among other things, generally prohibits any holder of the Trust’s shares from owning more than 5% of the Trust’s outstanding shares of beneficial interest, unless that holder gets the consent from the Board of Trustees. This limitation could prevent the acquisition of control of the Company by a third party without the consent from the Board of Trustees.

We have a staggered board and certain restrictive nominating procedures. The Board of Trustees has three classes of trustees. The term of office of one class expires each year. Trustees for each class are elected for three-year terms as that class’ term expires. The terms of the Class III, Class I, and Class II trustees expire in 2006, 2007, and 2008, respectively. Any nominee for trustee must be selected under the nominating provisions contained in our Declaration of Trust and By-Laws. The staggered terms for trustees and the nominating procedures may affect shareholders’ ability to take control of the Company, even if a change in control were in the shareholders’ interest.

We can issue preferred shares. Our Declaration of Trust authorizes the Board of Trustees to establish the preferences and rights of any shares issued. The issuance of preferred shares could have the effect of delaying, making more difficult or preventing a change of control of the Company, even if a change in control were in the shareholder’s interest.

We have a poison pill. Under the shareholder rights plan, rights are issued along with each of the Trust’s Common Shares. Holders of these rights can purchase, under certain conditions, a portion of a preferred share of beneficial interest, or receive Common Shares, or common shares of an entity acquiring us, or other consideration, having a value equal to twice the exercise price of the right. The exercise price of the right is $200. This arrangement is often called a “poison pill.” Our poison pill could have the effect of delaying or preventing a change of control of the Company, even if a change in control were in the shareholders’ interest.

There are limitations on acquisition of and changes in control pursuant to, and fiduciary protections of The Board under Maryland law. The Maryland General Corporation Law (“MGCL”) contains provisions which are applicable to the Trust as if the Trust were a corporation. Among these provisions is a section, referred to as the “control share acquisition statute,” which eliminates the voting rights of shares acquired in quantities so as to constitute “control shares,” as defined under the MGCL. The MGCL also contains provisions applicable to us that are referred to as the “business combination statute,” which would generally limit business combinations between the Company and any 10% owners of the Trust’s shares or any affiliate thereof. Further, Maryland law provides broad discretion to the Board with respect to its fiduciary duties in considering a change in control of our Company, including that the Board

14

is subject to no greater level of scrutiny in considering a change in control transaction than with respect to any other act by the Board. Finally, the “unsolicited takeovers” provisions of the MGCL permit the Board, without shareholder approval and regardless of what is currently provided in our Declaration of Trust or By-Laws, to implement takeover defenses that our Company does not yet have, including: permitting only the Board to fix the size of the Board and permitting only the Board to fill a vacancy on the Board. All of these provisions may have the effect of inhibiting a third party from making an acquisition proposal for our Company or of delaying, deferring or preventing a change in control of the Company under circumstances that otherwise could provide the holders of Common Shares with the opportunity to realize a premium over the then current market price.

Various factors out of our control could hurt the market value of our publicly traded securities.

General market conditions could worsen. The value of our publicly traded securities depends on various market conditions, which may change from time to time. In addition to general economic and market conditions and our particular financial condition and performance, the value of our publicly traded securities could be affected by, among other things, the extent of institutional investor interest in us and the market’s opinion of REITs in general and, in particular, REITs that own and operate properties similar to ours.

The market value of the equity securities of a REIT may be based primarily upon the market’s perception of the REIT’s growth potential and its current and future cash distributions, and may be secondarily based upon the real estate market value of the underlying assets. The failure to meet the market’s expectations with regard to future earnings and cash distributions likely would adversely affect the market price of publicly traded securities.

Rising market interest rates could make an investment in publicly traded securities less attractive. If market interest rates increase, purchasers of publicly traded securities may demand a higher annual yield on the price they pay for their securities. This could adversely affect the market price of publicly traded securities.

Transactions by the Trust or the Operating Partnership could adversely affect debt holders.

Except with respect to several covenants limiting the incurrence of indebtedness and a covenant requiring the Operating Partnership to maintain a certain unencumbered total asset value, our indentures do not contain any additional provisions that would protect holders of the Operating Partnership’s debt securities in the event of (i) a highly leveraged transaction involving the Operating Partnership, (ii) a change of control, or (iii) certain reorganizations, restructurings, mergers or similar transactions involving the Operating Partnership or the Trust.

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ITEM 1B. UNRESOLVED STAFF COMMENTS

     None.

ITEM 2. PROPERTIES

The Properties in Operation, as of December 31, 2005, consisted of 426 industrial and 292 office properties. Single tenants completely occupy 239 Properties in Operation. These tenants generally require a reduced level of service in connection with the operation or maintenance of these properties. The remaining 479 of the Company’s Properties in Operation are multi-tenant properties for which the Company renders a range of building, operating and maintenance services.

As of December 31, 2005, the industrial Properties in Operation were 93.8% leased. The average building size for the industrial Properties in Operation is approximately 104,000 square feet. As of December 31, 2005, the office Properties in Operation were 88.7% leased. The average building size for the office Properties in Operation is approximately 69,000 square feet.

A complete listing of the Properties in Operation appears as Schedule III to the financial statements of the Company included in this report. The table below sets forth certain information on the Company’s Properties in Operation as of December 31, 2005 (in thousands, except percentages).

	Type		Net Rent (1)		Square Feet		% Leased
Delaware Valley	Industrial	-Distribution	$	12,488		1,887		97.4	%
		-Flex		28,374		2,948		93.6	%
	Office			109,106		7,867		92.1	%
	Total			149,968		12,702		93.2	%
Midwest	Industrial	-Distribution		56,030		14,869		97.0	%
		-Flex		41,456		5,503		92.3	%
	Office			52,712		4,446		69.0	%
	Total			150,198		24,818		94.7	%
Mid-Atlantic	Industrial	-Distribution		24,717		7,401		81.4	%
		-Flex		8,724		1,074		94.9	%
	Office			51,339		4,920		85.2	%
	Total			84,780		13,395		83.9	%
Florida	Industrial	-Distribution		16,219		4,029		98.2	%
		-Flex		22,346		3,021		92.9	%
	Office			29,271		2,613		86.4	%
	Total			67,836		9,663		93.3	%
United Kingdom	Industrial	-Distribution		—		—		—
		-Flex		—		—		—
	Office			668		35		77.4	%
	Total			668		35		77.4	%
Joint Ventures (2)	Industrial	-Distribution		12,319		3,223		99.8	%
		Flex		3,636		170		78.5	%
	Office			11,339		365		98.1	%
	Total			27,294		3,758		98.6	%
TOTAL	Industrial	-Distribution		121,773		31,409		93.8	%
		-Flex		104,536		12,716		93.8	%
	Office			254,435		20,246		88.7	%
	Total		$	480,744		64,371		92.2	%

(1)	Net rent represents the contractual rent per square foot times the tenant’s square feet leased at December 31, 2005 for tenants in occupancy. Net rent does not include the tenant’s obligation to pay property operating expenses and real estate taxes.
(2)	Joint Ventures represent the 42 properties owned by unconsolidated joint ventures.

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The expiring square feet and annual net rent by year for the above Properties in Operation as of December 31, 2005 are as follows (in thousands except percentages):

Total Properties In Operation

Wholly Owned Properties:

	Industrial-
	Distribution					Industrial-Flex					Office					Total
	Square		Annual			Square		Annual			Square		Annual			Square		Annual
Year	Feet		Net Rent (1)			Feet		Net Rent (1)			Feet		Net Rent (1)			Feet		Net Rent (1)
2006		2,698	$	10,193			1,669	$	14,236			1,585	$	21,938			5,952	$	46,367
2007		3,787		16,617			2,104		19,051			2,215		30,932			8,106		66,600
2008		3,653		14,441			2,229		20,534			2,732		39,934			8,614		74,909
2009		3,692		17,296			1,646		15,333			2,842		43,846			8,180		76,475
2010		2,129		10,717			1,531		13,890			2,292		34,784			5,952		59,391
2011		1,647		8,207			603		6,880			1,523		24,088			3,773		39,175
Thereafter		8,634		47,483			2,006		21,568			4,421		77,949			15,061		147,000
Total		26,240	$	124,954			11,788	$	111,492			17,610	$	273,471			55,638	$	509,917
Total Square Feet		28,186					12,546					19,881					60,613
Percent of Total Annual Net Rent				24.5	%				21.9	%				53.6	%				100.0	%

Joint Venture Properties:

	Industrial-
	Distribution					Industrial-Flex					Office					Total
	Square		Annual			Square		Annual			Square		Annual			Square		Annual
Year	Feet		Net Rent (1)			Feet		Net Rent (1)			Feet		Net Rent (1)			Feet		Net Rent (1)
2006		525	$	1,469			15	$	400			5	$	150			545	$	2,019
2007		321		1,258			51		1,324			25		772			397		3,354
2008		663		3,138			9		268			30		951			702		4,357
2009		30		215			11		286			61		1,990			102		2,491
2010		36		183			20		655			65		2,237			121		3,075
2011		337		1,414			10		301			86		2,688			433		4,403
Thereafter		1,303		6,941			18		500			85		2,726			1,406		10,167
Total		3,215	$	14,618			134	$	3,734			357	$	11,514			3,706	$	29,866
Total Square Feet		3,223					170					365					3,758
Percent of Total Annual Net Rent				48.9	%				12.5	%				38.6	%				100.0	%

(1) Annual net rent equals the contractual rent per square foot at the time of lease expiration for those tenants in occupancy at December 31, 2005 times the tenant’s square feet leased at December 31, 2005.

The table below highlights the Company’s top ten office tenants and the top ten industrial tenants as of December 31, 2005.

	Percentage				Percentage
Top 10 Office Tenants	of Net Rent			Top 10 Industrial Tenants	of Net Rent
The Vanguard Group, Inc		3.3	%	TJX Corp.		1.2	%
GlaxoSmithKline, LLC		2.0	%	Kellogg USA, Inc.		1.0	%
PPL Energy Plus, LLC		1.5	%	Wakefern Food Corp.		1.0	%
GMAC Mortgage Corporation		1.3	%	The Government of the United States of America		0.7	%
Sanofi Winthrop, Inc.		1.3	%	DSC Logistics		0.6	%
PNC Bank, National Association		1.1	%	LTD Commodities, Inc.		0.5	%
Express Scripts, Inc.		1.1	%	Menlo Logistics		0.5	%
Aetna Life Insurance Company		0.9	%	Whirlpool Corporation		0.5	%
Cendant Operations, Inc.		0.8	%	Nexus Distribution Corp.		0.5	%
Sungard Data Systems, Inc.		0.7	%	Dial Corporation		0.5	%
		14.0	%			7.0	%

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ITEM 3. LEGAL PROCEEDINGS

The ownership of property and provision of services to the public entails an inherent risk of liability. Although the Company is engaged in litigation incidental to its business, there is no legal proceeding to which it is a party which, in the opinion of management, will materially adversely affect the results of the Company’s operations. The Company carries liability insurance against certain types of claims that management believes meets industry standards; however, there can be no assurance that any future legal proceedings (including any related judgments, settlements or costs) will not materially adversely affect the Company’s financial condition, liquidity, or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2005.

PART II

ITEM 5. MARKET FOR THE REGISTRANTS’ COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND RELATED ISSUER PURCHASES OF EQUITY SECURITIES

The Common Shares are traded on the New York Stock Exchange under the symbol “LRY.” There is no established public trading market for the Common Units. The following table sets forth, for the calendar quarters indicated, the high and low closing prices of the Common Shares on the New York Stock Exchange, and the dividends declared per Common Share for such calendar quarter.

					Dividends
					Declared Per
	High		Low		Common Share
2005
Fourth Quarter	$	43.98	$	39.15	$	0.615
Third Quarter		45.80		40.80		0.615
Second Quarter		44.77		38.19		0.61
First Quarter		43.09		38.77		0.61
2004
Fourth Quarter	$	43.20	$	39.83	$	0.61
Third Quarter		41.72		38.31		0.61
Second Quarter		45.35		35.05		0.605
First Quarter		45.47		36.82		0.605

As of March 9, 2006, the Common Shares were held by 1,276 holders of record. Since its initial public offering, the Company has paid regular and uninterrupted quarterly dividends.

Although the Company currently anticipates that comparable cash dividends will continue to be paid in the future, the payment of future dividends by the Company will be at the discretion of the Board of Trustees and will depend on numerous factors including the Company’s cash flow, its financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, and such other factors as the Board of Trustees deems relevant.

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ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth Selected Financial Data for Liberty Property Trust and Liberty Property Limited Partnership as of and for the years ended December 31, 2005, 2004, 2003, 2002 and 2001. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto appearing elsewhere in this report. Certain amounts from prior years have been reclassified to conform to current-year presentation.

	Year Ended December 31,
Operating Data
In thousands, except per share data	2005		2004		2003		2002		2001
Total operating revenue	$	680,730	$	628,327	$	593,886	$	561,578	$	541,941
Income from continuing operations	$	213,838	$	145,539	$	143,375	$	143,052	$	154,596
Income available to common shareholders	$	249,351	$	161,443	$	163,610	$	150,237	$	155,537
Basic:
Income from continuing operations	$	2.46	$	1.72	$	1.82	$	1.75	$	2.02
Income from discontinued operations	$	0.41	$	0.19	$	0.26	$	0.25	$	0.17
Income per common share — basic	$	2.87	$	1.91	$	2.08	$	2.00	$	2.19
Diluted:
Income from continuing operations	$	2.42	$	1.70	$	1.80	$	1.73	$	1.99
Income from discontinued operations	$	0.40	$	0.18	$	0.25	$	0.24	$	0.16
Income per common share — diluted	$	2.82	$	1.88	$	2.05	$	1.97	$	2.15
Distributions paid per common share	$	2.445	$	2.425	$	2.405	$	2.37	$	2.30
Distributions paid per preferred share	$	—	$	—	$	—	$	1.82	$	2.20
Weighted average number of shares outstanding — basic(1)		86,986		84,534		78,575		75,041		71,184
Weighted average number of shares outstanding — diluted (2)		88,376		86,024		79,868		76,272		73,580

Balance Sheet Data	December 31,
In thousands	2005		2004		2003		2002		2001
Net real estate	$	4,095,202	$	3,798,763	$	3,544,234	$	3,374,491	$	3,227,135
Total assets		4,497,529		4,162,827		3,832,553		3,625,099		3,552,825
Total indebtedness		2,249,178		2,133,171		1,885,866		1,866,187		1,753,131
Shareholders’ equity		1,709,182		1,596,259		1,544,897		1,354,431		1,419,321

Other Data	Year Ended December 31,
Dollars in thousands	2005			2004			2003			2002			2001
Cash provided by operating activities	$	359,697		$	293,336		$	263,811		$	288,243		$	303,846
Cash used in investing activities		(286,633	)		(373,975	)		(195,133	)		(165,604	)		(233,856	)
Cash (used in) provided by financing activities		(38,418	)		89,618			(58,111	)		(131,818	)		(55,747	)
Funds from operations available to common shareholders (3)		293,973			291,144			280,921			260,750			262,782
Total leaseable square footage of properties at end of period (in thousands) (4)		64,371			61,655			57,149			54,166			49,771
Number of properties at end of period (4)		718			723			702			680			645
Percentage leased at end of period (4)		92	%		92	%		92	%		91	%		94	%

(1)	Basic weighted average number of shares includes only vested Common Shares outstanding during the year.
(2)	Diluted weighted average number of shares outstanding includes the vested and unvested Common Shares outstanding during the year as well as the dilutive effect of outstanding options for the year ended December 31, 2005, 2004, 2003 and 2002. For the year ended December 31, 2001 such number includes the dilutive effect of outstanding options and the dilutive effect of Convertible Debentures (the “Convertible Debentures”). The Convertible Debentures matured in July 2001.
(3)	The National Association of Real Estate Investment Trusts (“NAREIT”) has issued a standard definition for Funds from operations (as defined below). The Securities and Exchange Commission has agreed to the disclosure of this non-GAAP financial measure on a per share basis in its Release No. 34-47226, Conditions for Use of Non-GAAP Financial Measures. The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company’s operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company’s financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with

19

generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company’s operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP. A reconciliation of Funds from operations to Net Income may be found on page 31.

(4)

Leasing statistics include 42 properties equaling 3.8 million square feet owned by joint ventures in which the Company has an ownership interest. The joint venture properties are 98.6% leased at December 31, 2005.

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

Overview

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, collectively with the Trust and their consolidated subsidiaries, the “Company”).

The Company has an ownership interest in and operates 426 industrial and 292 office properties located primarily in the Mid-Atlantic, Southeastern and Midwestern United States and the United Kingdom (the “Properties in Operation”) totaling 64.4 million square feet. In addition, as of December 31, 2005, the Company has 29 properties under development (the “Properties under Development” and, collectively with the Properties in Operation the “Properties”) and owns 1,410 acres of land, substantially all of which is zoned for commercial use. Included within the Properties and land above are 32 industrial and 10 office properties comprising 3.8 million square feet and 268 acres of developable land owned by unconsolidated joint ventures.

The Company focuses on creating value for shareholders and increasing profitability and cash flow. With respect to its Properties in Operation, the Company endeavors to maintain high occupancy levels while increasing rental rates. The Company pursues development opportunities that it believes will create value and yield acceptable returns. The Company also acquires properties that it believes will create long-term value, and disposes of Properties that no longer fit within the Company’s strategic objectives or in situations where it can optimize cash proceeds. The Company’s operating results depend primarily upon income from rental operations and are substantially influenced by rental demand for the Properties in Operation.

In 2005, the Company continued to experience the effects of the generally slow real estate economy that has persisted since 2002. This economy has presented a particularly difficult real estate market for landlords. These circumstances impacted many aspects of the Company’s business.

Revenue from the Properties in Operation, which represents over 95% of the Company’s revenue, was subjected in many of its markets to market conditions characterized by an oversupply of leaseable space and soft demand. These conditions resulted in downward pressure on rental rates and upward pressure on lease transaction costs. In the face of these conditions, the Company successfully leased 14.5 million square feet during the year ended December 31, 2005 and attained occupancy of 92.2% as of that date. The Company believes that these trends for the Properties in Operation (i.e., oversupply of leaseable space, downward pressure on rents, upward pressure on transaction costs and rent concessions), which have persisted since 2002, will continue in the aggregate in 2006, notwithstanding improvements in some markets. Although rental rates in certain markets are starting to stabilize and the Company expects that there will be selected increases in rents on renewal or replacement leases, the Company believes that rents on renewal or replacement leases for 2006 generally will be less than rents on expiring leases.

Conditions in 2005 for the acquisition of properties were very competitive. The Company, however, acquired 23 buildings representing 3.7 million square feet and a Total Investment of $300.1 million. These acquisitions generally served to increase the Company’s presence or balance its product mix in markets the Company believes to have significant potential. For 2006, the Company believes that property acquisitions will be in the $250 to $325 million range and, similar to 2005, many of the acquired properties will be either vacant or underleased. The Company believes there is less competition for such properties, consequently they are more attractively priced and will positively contribute to earnings upon lease up and stabilization.

Dispositions of Properties that no longer fit within the Company’s strategic objectives or in situations where it can optimize cash proceeds continued in 2005. During 2005, the Company realized proceeds of $203.9 million from the sale of 36 operating properties representing 2.4 million square feet and 107 acres of land. The Company also sold 15 Properties in Operation in the United Kingdom, totaling 535,000 square feet to an unconsolidated joint venture in which the Company retained a 20% interest for $219.9 million. In addition, during the year ended December 31, 2005, an unconsolidated joint venture in which the Company has a 25% interest, sold three properties representing 397,000 square feet for proceeds to the joint venture of $21.1 million. The Company anticipates that dispositions will be in the $325 to $375 million range in 2006.

The Company periodically enters into joint venture relationships in connection with the execution of its real estate operating strategy. The Company is presently pursuing certain joint venture opportunities.

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In 2005, the Company continued to pursue development opportunities. During the year ended December 31, 2005, the Company brought into service 11 development properties representing 1.8 million square feet and a Total Investment of $126.2 million and initiated $799.9 million in real estate development. One of the development properties that was initiated was the Comcast Center, which is a 1.25 million square feet office tower projected to cost $459.6 million. As of December 31, 2005, the total projected cost of the development properties is expected to be $815.5 million. The Company believes that in 2006, it will continue to pursue development opportunities and that in 2006 it will bring into service from its development pipeline approximately $175 million of investment in operating real estate.

Forward-Looking Statements

When used throughout this report, the words “believes,” “anticipates,” “hopes” and “expects” and similar expressions are intended to identify forward-looking statements. Such statements indicate that assumptions have been used that are subject to a number of risks and uncertainties which could cause actual financial results or management plans and objectives to differ materially from those projected or expressed herein, including: the effect of national and regional economic conditions; rental demand; the Company’s ability to identify and secure additional properties and sites that meet its criteria for acquisition or development; the availability and cost of capital; the effect of prevailing market interest rates; and other risks described from time to time in the Company’s filings with the SEC. Given these uncertainties, readers are cautioned not to place undue reliance on such statements.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases these estimates, judgments and assumptions on historical experience and on other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical policies affect its more significant estimates and assumptions used in the preparation of its consolidated financial statements.

Capitalized Costs

Expenditures directly related to the acquisition, or improvement of real estate, including interest and other costs capitalized on development projects and land being readied for development, are included in net real estate and are stated at cost. The Company considers a development property substantially complete upon the completion of tenant build-out, but no later than one year from the completion of major construction activity. The capitalized costs include pre-construction costs essential to the development of the property, construction costs, interest costs, real estate taxes, development related salaries and other costs incurred during the period of development. Capitalized development related salaries and benefits, excluding costs relating to the Comcast Center, historically represent approximately 1-2% of the cost of developed properties brought into service. Capitalization of development related salaries and benefits for the Comcast Center are less that 1% of the cost of the project. The determination to capitalize rather than expense costs requires the Company to evaluate the status of the development activity. Capitalized interest for the years ended December 31, 2005, 2004 and 2003 was $17.7 million, $13.2 million and $10.9 million, respectively.

Revenue Recognition

Rental revenue is recognized on a straight line basis over the terms of the respective leases. Deferred rent receivable represents the amount by which straight line rental revenue exceeds rents currently billed in accordance with the lease agreements. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease. The capitalized above or below-market lease values are amortized as a reduction of rental revenue over the remaining term of the respective leases.

Allowance for Doubtful Accounts

The Company monitors the liquidity and creditworthiness of its tenants on an on-going basis. Based on these reviews, provisions are established, and an allowance for doubtful accounts for estimated losses resulting from the inability of its tenants to make required rental payments is maintained. As of December 31, 2005 and 2004, the Company’s allowance for doubtful accounts totaled $6.7 million and $6.0 million, respectively. The Company’s bad debt

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expense was $2.6 million, $2.4 million and $1.8 million for the years ended December 31, 2005, 2004 and 2003, respectively.

Impairment of Real Estate

The Company evaluates its real estate investments and investments in unconsolidated joint ventures upon occurrence of significant adverse changes in operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If any real estate investment is considered impaired, the carrying value of the property is written down to its estimated fair value. During the years ended December 31, 2005 and 2004, the Company recognized impairment losses of $5.3 million and $1.4 million, respectively. The 2005 impairment loss was primarily related to a 615,000 square feet portfolio of operating properties in the Midwest region. A portion of these properties equaling 295,000 square feet were sold prior to December 31, 2005. The 2004 impairment loss of $1.4 million was on a parcel of land in the Midwest region. The determination of whether impairment exists requires the Company to make estimates, judgments and assumptions about the future utility of the assets. The Company has evaluated each of its Properties and land held for development and investments in unconsolidated joint ventures and has determined that there are no additional valuation adjustments that need to be made at December 31, 2005.

Intangibles

In accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Standards (“SFAS”) No. 141, “Business Combinations,” the Company allocates the purchase price of real estate acquired to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to the Company’s estimate of the fair market lease rates for leases of similar terms and present valuing the difference based on an interest rate which reflects the risks associated with the leases acquired. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. Origination cost estimates include the costs to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. Additionally, the Company estimates carrying costs during the expected lease-up periods including real estate taxes, other operating expenses and lost rentals at contractual rates. The Company depreciates the amounts allocated to building and improvements over 40 years and the amounts allocated to intangible assets relating to in-place leases, which are included in deferred financing and leasing costs in the accompanying balance sheets, over the remaining term of the related leases. In the event that a tenant terminates its lease, the unamortized portion of the intangible is charged to expense.

Results of Operations

The following discussion is based on the consolidated financial statements of the Company. It compares the results of operations of the Company for the year ended December 31, 2005 with the results of operations of the Company for the year ended December 31, 2004, and the results of operations of the Company for the year ended December 31, 2004 with the results of operations of the Company for the year ended December 31, 2003. As a result of the varying level of development, acquisition and disposition activities by the Company in 2005 and 2004, the overall operating results of the Company during such periods are not directly comparable. However, certain data, including the Same Store comparison, do lend themselves to direct comparison.

This information should be read in conjunction with the accompanying consolidated financial statements and notes included elsewhere in this report.

Comparison of Year Ended December 31, 2005 to Year Ended December 31, 2004.

Overview

The Company’s average gross investment in operating real estate owned (including assets held for sale) for the year ended December 31, 2005 increased to $4,335.5 million from $4,064.2 million for the year ended December 31, 2004. This increase resulted from the increased investment in real estate acquired or developed, partially offset by property dispositions. This increased investment in operating real estate resulted in increases in rental revenue, rental property operating expenses and real estate taxes, and depreciation and amortization expense.

Total operating revenue increased to $680.7 million for the year ended December 31, 2005 from $628.3 million for the year ended December 31, 2004. This $52.4 million increase was primarily due to the net increase in investment in real estate. Contributing to this increase was an increase in “Termination Fees,” which totaled $16.6 million for the year ended December 31, 2005 as compared to $10.9 million for the same period in 2004. “Termination Fees” are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their leases prior to the contractual expiration date. Termination Fees are included in rental revenue.

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Segments

The Company evaluates the performance of the Properties in Operation by reportable segment (see Note 13 to the Company’s financial statements). The following table identifies changes in reportable segments (dollars in thousands):

Property level operating income:

	Year Ended				% Increase
	December 31, 2005		December 31, 2004		(Decrease)
Delaware Valley
– SE Pennsylvania	$	137,802	$	131,369		4.9	%
– Other		24,910		22,027		13.1	%(1)
Midwest
– Lehigh Valley		66,000		54,930		20.2	%(2)
– Other		75,047		71,234		5.4	%
Mid-Atlantic		83,432		81,608		2.2	%
Florida		65,186		59,779		9.0	%(3)
United Kingdom		16,650		16,566		0.5	%
Total property level operating income (4)	$	469,027	$	437,513		7.2	%

(1)	The increase for the year ended December 31, 2005 versus the year ended December 31, 2004 is primarily due to the delivery of $30.0 million of completed development during 2004. Completed development in 2004 contributed to property level income for a partial period in 2004 as compared to a full year in 2005.
(2)	The increase for the year ended December 31, 2005 versus the year ended December 31, 2004 is primarily due to the delivery of $85.7 million in completed development and property acquisitions of $121.1 million during 2004 and 2005. Acquisitions and completed development in 2004 contributed to property level operating income for a partial period in 2004 as compared to a full year in 2005.
(3)	The increase for the year ended December 31, 2005 versus the year ended December 31, 2004 is primarily due to the delivery of $31.7 million in completed development and property acquisitions of $86.0 million during 2004 and 2005. Acquisitions and completed development in 2004 contributed to property level operating income for a partial period in 2004 as compared to a full year in 2005.
(4)	See a reconciliation of property level operating income to net income in the Same Store comparison below.

Same Store

Property level operating income, exclusive of Termination Fees, for the Same Store properties decreased to $397.7 million for the year ended December 31, 2005 from $402.6 million for the year ended December 31, 2004, on a straight line basis (which recognizes rental revenue evenly over the life of the lease), and decreased to $391.7 million for the year ended December 31, 2005 from $392.6 million for the year ended December 31, 2004 on a cash basis. These decreases of 1.2% and 0.3%, respectively, are primarily due to a decrease in the occupancy of the office properties, which is the higher rent paying portion of the portfolio.

Management generally considers the performance of the Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event specific and are not representative of ordinary performance results. In addition, Same Store property level operating income exclusive of Termination Fees is considered, by management, to be a more reliable indicator of the portfolio’s baseline performance. The Same Store properties consist of the 611 properties totaling 50.0 million square feet owned since January 1, 2004.

Set forth below is a schedule comparing the property level operating income, on a straight line basis and on a cash basis, for the Same Store properties for the years ended December 31, 2005 and 2004. Same Store property level income is a non-GAAP measure and does not represent income before property dispositions, income taxes and minority interest because it does not reflect the consolidated operations of the Company. Investors should review Same Store results, along with Funds from operations (see Liquidity and Capital Resources section), GAAP net income and cash flow from operating activities, investing activities and financing activities when considering the Company’s operating performance. Also, set forth below is a reconciliation of Same Store property level operating income to net income.

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	Year Ended December 31,
	2005			2004
	(in thousands)
Same Store:
Rental revenue	$	411,465		$	416,292
Operating expenses:
Rental property expense		130,713			122,963
Real estate taxes		62,000			60,826
Operating expense recovery		(178,953	)		(170,126	)
Unrecovered operating expenses		13,760			13,663
Property level operating income		397,705			402,629
Less straight line rent		6,046			9,986
Cash basis property level operating income	$	391,659		$	392,643
Reconciliation of non-GAAP financial measure:
Property level operating income — same store	$	397,705		$	402,629
Property level operating income — properties purchased or developed subsequent to January 1, 2004		54,677			24,007
Termination fees		16,645			10,877
Total property level operating income		469,027			437,513
General and administrative expense		(38,138	)		(33,759	)
Depreciation and amortization expense		(146,526	)		(129,298	)
Other income (expense)		(120,995	)		(109,340	)
Gain on property dispositions		84,295			496
Income taxes		(14,827	)		(1,820	)
Minority interest		(21,538	)		(17,478	)
Equity in earnings (loss) of unconsolidated joint ventures		2,540			(775	)
Discontinued operations, net of minority interest		35,513			15,904
Net income	$	249,351		$	161,443

General and Administrative

General and administrative expenses increased to $38.1 million for the year ended December 31, 2005 from $33.8 million for the year ended December 31, 2004. These increases were primarily due to increases in salaries and increases in personnel consistent with the increase in the size of the Company. The increase in general and administrative expenses was also due to the expensing of stock options and related long term incentive compensation and increased costs relating to compliance with the requirements of the Sarbanes-Oxley legislation and related regulatory requirements.

Depreciation and Amortization

Depreciation and amortization increased to $146.5 million for the year ended December 31, 2005 from $129.3 million for the year ended December 31, 2004. The increase was primarily due to the increase in gross investment in operating real estate during the respective periods and particularly the increased investment in leasing costs, which are amortized over a relatively shorter period than buildings and improvements.

Interest Expense

Interest expense increased to $129.6 million for the year ended December 31, 2005 from $116.6 million for the year ended December 31, 2004. This increase was due to an increase in the average debt outstanding for the respective periods, which was $2,241.1 million in 2005 and $1,990.3 million in 2004. The effect of the increases in the average debt outstanding was offset by decreases in the weighted average interest rates for the periods, to 6.58% in 2005 from 6.70% in 2004.

Other

Costs directly related to the development of rental properties and land being readied for development are capitalized. Capitalized development costs include interest, development related salaries, property taxes, insurance and other directly identifiable costs during the period of development. Capitalized interest for the year ended December 31, 2005 was $17.7 million as compared to $13.2 million for the year ended December 31, 2004. Capitalized development related salaries and benefits, excluding costs relating to the Comcast Center, historically represent

25

approximately 1-2% of the cost of developed properties brought into service. Capitalized development related salaries and benefits for the Comcast Center are less than 1% of the cost of the project.

Gain on property dispositions and income taxes increased to $84.3 million and $14.8 million, respectively for the year ended December 31, 2005 from $0.5 million and $1.8 million, respectively for the year ended December 31, 2004. These increases are due to the $89.6 million gain realized on the sale of the United Kingdom Properties in Operation to the Kings Hill Unit Trust joint venture and resultant $14.5 million tax on this gain.

Income from discontinued operations increased to $35.5 million from $15.9 million for the year ended December 31, 2005 compared to the year ended December 31, 2004. The increase is due to the increase in the gains realized on property dispositions, which were primarily due to the increase in dispositions activity for 2005 compared to 2004. For the year ended December 31, 2005, there was $37.9 million in net gains on $200.9 million in dispositions and for the year ended December 31, 2004, there was $59.6 million in dispositions resulting in $11.6 million in net gains.

As a result of the foregoing, the Company’s net income increased to $249.4 million for the year ended December 31, 2005 from $161.4 million for the year ended December 31, 2004.

Comparison of Year Ended December 31, 2004 to Year Ended December 31, 2003.

Overview

The Company’s average gross investment in operating real estate owned (including assets held for sale) for the year ended December 31, 2004 increased to $4,064.2 million from $3,733.2 million for the year ended December 31, 2003. This increase resulted from the increased investment in real estate acquired or developed, partially offset by Property dispositions. This increased investment in operating real estate resulted in increases in rental revenue, rental property operating expenses and real estate taxes, and depreciation and amortization expense.

Total operating revenue increased to $628.3 million for the year ended December 31, 2004 from $593.9 million for the year ended December 31, 2003. This $34.4 million increase was primarily due to the net increase in investment in real estate as discussed above. Partially offsetting this increase was a decrease in Termination Fees which totaled $10.9 million for the year ended December 31, 2004 as compared to $14.1 million for the same period in 2003. Termination Fees are included in rental revenue.

Segments

The Company evaluates the performance of the Properties in Operation by reportable segment (see Note 13 to the Company’s financial statements). The following table identifies changes in reportable segments (dollars in thousands):

Property level operating income:

	Year Ended				% Increase
	December 31, 2004		December 31, 2003		(Decrease)
Delaware Valley
– SE Pennsylvania	$	131,369	$	131,160		0.2	%
– Other		22,027		21,847		0.8	%
Midwest
– Lehigh Valley		54,930		50,607		8.5	%(1)
– Other		71,234		71,739		(0.7	%)
Mid-Atlantic		81,608		74,457		9.6	%(2)
Florida		59,779		57,710		3.6	%
United Kingdom		16,566		10,127		63.6	%(3)
Total property level operating income (4)	$	437,513	$	417,647		4.8	%

(1)	The increase for the year ended December 31, 2004 versus the year ended December 31, 2003 is primarily due to the delivery of $99.2 million in completed development during 2003 and 2004 and property acquisitions of $71.8 million in 2004. Acquisitions and completed development in 2003 contributed to property level operating income for a partial period in 2003 as compared to a full year in 2004.
(2)	The increase for the year ended December 31, 2004 versus the year ended December 31, 2003 is due to $131.9 million in property acquisitions that were made during 2003 and 2004. Acquisitions in 2003 contributed to property level operating income for a partial period in 2003 as compared to a full year in 2004.
(3)	The increase for the year ended December 31, 2004 versus the year ended December 31, 2003 is primarily due to the purchase of six properties equalling approximately 210,000 square feet on July 1, 2003.
(4)	See a reconciliation of property level operating income to net income in the Same Store comparison below.

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Same Store

Property level operating income, exclusive of Termination Fees, for the “Prior Year Same Store” (as defined below) properties decreased to $399.8 million for the year ended December 31, 2004 from $404.6 million for the year ended December 31, 2003, on a straight line basis and decreased to $391.1 million for the year ended December 31, 2004 from $395.6 million for the year ended December 31, 2003 on a cash basis. These decreases of 1.2% and 1.1%, respectively, were primarily due to decreases in rental rates. At December 31, 2004, the occupancy of the Prior Year Same Store portfolio was 93.2% as compared to 92.4% at December 31, 2003.

Management generally considers the performance of the Prior Year Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event specific and are not representative of ordinary performance results. In addition, Prior Year Same Store property level operating income exclusive of Termination Fees is considered, by management, to be a more reliable indicator of the portfolio’s baseline performance. The Prior Year Same Store properties consist of the 631 properties totaling 49.7 million square feet owned since January 1, 2003.

Set forth below is a schedule comparing the property level operating income, on a straight line basis and on a cash basis, for the Prior Year Same Store properties for the years ended December 31, 2004 and 2003. Prior Year Same Store property level income is a non-GAAP measure and does not represent income before property dispositions, income taxes and minority interest because it does not reflect the consolidated operations of the Company. Investors should review Prior Year Same Store results, along with Funds from operations (see Liquidity and Capital Resources section), GAAP net income and cash flow from operating activities, investing activities and financing activities when considering the Company’s operating performance. Also, set forth below is a reconciliation of Prior Year Same Store property level operating income to net income.

	Year Ended December 31,
	2004			2003
	(in thousands)
Prior Year Same Store:
Rental revenue	$	413,299		$	414,743
Operating expenses:
Rental property expense		123,778			118,628
Real estate taxes		59,657			58,898
Operating expense recovery		(169,914	)		(167,387	)
Unrecovered operating expenses		13,521			10,139
Property level operating income		399,778			404,604
Less straight line rent		8,724			9,037
Cash basis property level operating income	$	391,054		$	395,567
Reconciliation of non-GAAP financial measure:
Property level operating income — prior year same store	$	399,778		$	404,604
Property level operating income — properties purchased or developed subsequent to January 1, 2003		26,858			(1,035	)
Termination fees		10,877			14,078
Total property level operating income		437,513			417,647
General and administrative expense		(33,759	)		(28,316	)
Depreciation and amortization expense		(129,298	)		(116,557	)
Other income (expense)		(109,340	)		(109,469	)
Gain on property dispositions		496			447
Income taxes		(1,820	)		(2,326	)
Minority interest		(17,478	)		(19,795	)
Equity in (loss) earnings of unconsolidated joint ventures		(775	)		1,744
Discontinued operations, net of minority interest		15,904			20,235
Net income	$	161,443		$	163,610

General and Administrative

General and administrative expenses increased to $33.8 million for the year ended December 31, 2004 from $28.3 million for the year ended December 31, 2003. These increases were primarily due to increases in salaries and increases in personnel consistent with the increase in the number of properties and the size of the Company. The

27

increase in general and administrative expenses was also due to the expensing of stock options and related long term incentive compensation, an increase in cancelled project costs and increased costs relating to compliance with the requirements of the Sarbanes-Oxley legislation and related regulatory requirements.

Depreciation and Amortization

Depreciation and amortization increased to $129.3 million for the year ended December 31, 2004 from $116.6 million for the year ended December 31, 2003. The increase is primarily due to the increase in gross investment in operating real estate during the respective periods and particularly the increased investment in leasing costs, which are amortized over a relatively shorter period than buildings and improvements.

Interest Expense

Interest expense decreased to $116.6 million for the year ended December 31, 2004 from $117.8 million for the year ended December 31, 2003. This decrease is due to a decrease in the weighted average interest rates for the periods, to 6.70% in 2004 from 6.93% in 2003. Partially offsetting this decrease was an increase in interest expense relating to the increase in the average debt outstanding for the respective periods, which was $1,990.3 million in 2004 and $1,881.5 million in 2003.

Other

Costs directly related to the development of rental properties and land being readied for development are capitalized. Capitalized development costs include interest, development-related salaries, property taxes, insurance and other directly identifiable costs during the period of development. Capitalized interest for the year ended December 31, 2004 was $13.2 million as compared to $10.9 million for the year ended December 31, 2003. Capitalized development salaries and benefits historically represent approximately 1-2% of the cost of developed properties brought into service.

Income from discontinued operations decreased to $15.9 million from $20.2 million for the year ended December 31, 2004 compared to the year ended December 31, 2003. The decrease is due to a decrease in the period of time the properties were owned during the respective periods.

As a result of the foregoing, the Company’s net income decreased to $161.4 million for the year ended December 31, 2004 from $163.6 million for the year ended December 31, 2003.

Liquidity and Capital Resources

As of December 31, 2005, the Company had cash and cash equivalents of $90.7 million, including $29.1 million in restricted cash.

Net cash flow provided by operating activities increased to $359.7 million for the year ended December 31, 2005 from $293.3 million for the year ended December 31, 2004. This $66.4 million increase was due to fluctuations in operating assets and liabilities during the respective periods. The cash flow from the operating properties was relatively unchanged between 2005 and 2004. The $34.1 million increase in other liabilities is due to the income tax payable on the sale of the United Kingdom properties and increases in construction related accruals. Net cash flow provided by operations is the primary source of liquidity to fund distributions to shareholders and for the recurring capital expenditures and leasing transaction costs for the Company’s Properties in Operation.

Net cash used in investing activities decreased to $286.6 million for the year ended December 31, 2005 from $374.0 million for the year ended December 31, 2004. This $87.4 million decrease was primarily due to increased disposition activity for 2005 compared to 2004 partially offset by an increased investment in properties and an increased investment in development in progress.

Net cash used in financing activities was $38.4 million for the year ended December 31, 2005 compared to net cash provided by financing activities of $89.6 million for the year ended December 31, 2004. This $128.0 million change was due to an increase in repayment of mortgage loans and net repayments under the credit facility for 2005 compared to 2004 partially offset by an increase in net proceeds from the issuance of preferred units and an increase in unsecured note borrowings during 2005 compared to 2004. Net cash provided by or used in financing activities includes proceeds from the issuance of equity and debt, net of debt repayments and shareholder distributions, and the redemption of preferred shares. Cash provided by financing activities is a source of capital utilized by the Company to fund investment activities.

The Company funds its development and acquisitions with long-term capital sources including proceeds from the disposition of Properties. For the year ended December 31, 2003, these activities were funded through a $350 million

28

Credit Facility (the “$350 million Credit Facility”). In December 2004, the borrowing capacity of the $350 million Credit Facility was increased to $450 million (the “$450 million Credit Facility”). In December 2005, the Company obtained a new $600 million unsecured revolving credit facility (the “$600 million Credit Facility”). The interest rate on borrowings under the credit facilities fluctuate based upon ratings from Moody’s Investors Service, Inc. (“Moody’s”), Standard and Poor’s Ratings Group (“S&P”) and Fitch, Inc. (“Fitch”). The current ratings for the Company’s senior unsecured debt are Baa2, BBB and BBB from Moody’s, S&P and Fitch, respectively. At these ratings, the interest rate for borrowings under the $600 million Credit Facility is 65 basis points over LIBOR. The $600 million Credit Facility contains an accordion feature whereby the Company may borrow an additional $200 million. The $600 million Credit Facility expires in January 2010, and has a one year extension option.

The Company uses debt financing to lower its overall cost of capital in an attempt to increase the return to shareholders. The Company staggers its debt maturities and maintains debt levels it considers to be prudent. In determining its debt levels, the Company considers various financial measures including the debt to gross assets ratio and the earnings to fixed charge coverage ratio. As of December 31, 2005 the Company’s debt to gross assets ratio was 42.9%, and for the year ended December 31, 2005, the earnings to fixed charge coverage ratio was 2.6x. Debt to gross assets equals total long-term debt and borrowings under the $600 million Credit Facility divided by total assets plus accumulated depreciation. Earnings to fixed charges equals income from continuing operations before property dispositions and minority interest, including operating activity from discontinued operations, plus interest expense and depreciation and amortization, divided by interest expense, including capitalized interest, plus distributions on preferred units.

As of December 31, 2005, $238.7 million in mortgage loans and $1,755.0 million in unsecured notes were outstanding with a weighted average interest rate of 6.8%. The interest rates on $1,978.5 million of mortgage loans and unsecured notes are fixed and range from 4.6% to 8.8%. Interest rates on $15.2 million of mortgage loans float with the base rate of the respective lending bank or LIBOR. The weighted average remaining term for the mortgage loans and unsecured notes is 6.0 years.

In 2006, $40.9 million in mortgage loans with various interest rates and $100 million in unsecured notes will mature. The Company anticipates that it will refinance or retire these maturities through its available sources of capital.

The Company’s contractual obligations, as of December 31, 2005, are as follows (in thousands):

	Payments Due By Period
			Less than 1						More than
Contractual Obligations	Total		year		1-3 years		3-5 years		5 years
Long-term debt (1)	$	2,945,782	$	280,341	$	393,373	$	943,125	$	1,328,943
Capital lease obligations		5,819		162		336		630		4,691
Operating lease obligations		11,382		618		1,044		634		9,086
Share of mortgage debt of unconsolidated joint ventures		52,145		—		—		52,145		—
Property development commitments		490,578		54,747		435,831		—		—
Joint venture capital commitments		2,464		1,509		955		—		—
Letter of credit		1,343		1,343		—		—		—
Purchase obligations (2)		54,250		54,250		—		—		—
Master lease obligation		2,727		1,318		1,409		—		—
Total	$	3,566,490	$	394,288	$	832,948	$	996,534	$	1,342,720

(1)	Includes principal and interest payments. Interest payments assume current credit facility borrowings and interest rates remain at the December 31, 2005 level until maturity.
(2)	Purchase obligations include obligations to acquire property.

General

The Company believes that its existing sources of capital will provide sufficient funds to finance its continued development and acquisition activities. The Company’s existing sources of capital include the public debt and equity markets, proceeds from Property dispositions, equity capital from joint venture partners and net cash provided from operating activities. Additionally, the Company expects to incur variable rate debt, including borrowings under the $600 million Credit Facility from time to time.

In August 2004, the Company issued $200 million of ten year 5.65% senior unsecured notes. The proceeds from this issuance were used to repay $100 million of 7.1% senior unsecured notes which matured on August 15, 2004, pay

29

down outstanding borrowings under the Company’s $350 million Credit Facility, acquire properties and for general corporate purposes.

In February 2005, the Company issued $300 million principal amount of 5.125% senior unsecured notes due 2015. The aggregate net proceeds from such issuance was $296.4 million. The Company used the aggregate net proceeds to pay down outstanding borrowings under the $450 million Credit Facility and for general corporate purposes.

In June 2005, the Company redeemed for $20 million its outstanding 9.125% Series C Cumulative Redeemable Preferred Units and issued $20 million of 7.0% Series E Cumulative Redeemable Preferred Units.

During 2005, the Company raised a total of $50 million through private placements of 6.65% Series F Cumulative Redeemable Preferred Units. The proceeds from these offerings were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

In September 2005, the quarterly Common Share dividend was increased to $0.615 per share from $0.61 per share. The Company’s annual Common Share dividend paid was $2.445 per share, $2.425 per share, and $2.405 per share in 2005, 2004, and 2003, respectively. In 2005, the Company’s dividend payout ratio was approximately 76% of Funds from operations (as defined below).

The Company has an effective S-3 shelf registration statement on file with the SEC (the “Shelf Registration Statement”). As of March 9, 2006, pursuant to the Shelf Registration Statement, the Trust had the capacity to issue up to $586.1 million in equity securities and the Operating Partnership had the capacity to issue up to $806.2 million in debt securities.

Off-Balance Sheet Arrangements

As of December 31, 2005, the Company had investments in unconsolidated joint ventures totaling $33.5 million.

Calculation of Funds from Operations

The National Association of Real Estate Investment Trusts (“NAREIT”) has issued a standard definition for Funds from operations (as defined below). The SEC has agreed to the disclosure of this non-GAAP financial measure on a per share basis in its Release No. 34-47226, Conditions for Use of Non-GAAP Financial Measures. The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company’s operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company’s financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company’s operating performance or to cash flows as a measure of liquidity.

30

Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP. Funds from operations (“FFO”) available to common shareholders for the years ended December 31, 2005, 2004, and 2003 are as follows (in thousands, except per share amounts):

	Year Ended December 31,
	2005			2004			2003
Reconciliation of net income to FFO — basic:
Net income	$	249,351		$	161,443		$	163,610
Basic — income available to common shareholders		249,351			161,443			163,610
Basic — income available to common shareholders per weighted average share	$	2.87		$	1.91		$	2.08
Adjustments:
Depreciation and amortization of unconsolidated joint ventures		1,316			2,566			663
Depreciation and amortization		147,669			133,682			120,826
Gain on property dispositions, net of income tax		(114,381	)		(13,502	)		(11,822	)
Minority interest share in addback for depreciation and amortization, gain on property dispositions, net of income tax		(1,363	)		(5,093	)		(4,858	)
Funds from operations available to common shareholders — basic	$	282,592		$	279,096		$	268,419
Basic Funds from operations available to common shareholders per weighted average share	$	3.25		$	3.30		$	3.42
Reconciliation of net income to FFO — diluted:
Net income	$	249,351		$	161,443		$	163,610
Diluted — income available to common shareholders		249,351			161,443			163,610
Diluted — income available to common shareholders per weighted average share	$	2.82		$	1.88		$	2.05
Adjustments:
Depreciation and amortization of unconsolidated joint ventures		1,316			2,566			663
Depreciation and amortization		147,669			133,682			120,826
Gain on property dispositions, net of income tax		(114,381	)		(13,502	)		(11,822	)
Minority interest less preferred share distributions		10,018			6,955			7,644
Funds from operations available to common shareholders — diluted	$	293,973		$	291,144		$	280,921
Diluted Funds from operations available to common shareholders per weighted average share	$	3.20		$	3.25		$	3.36
Reconciliation of weighted average shares:
Weighted average common shares — all basic calculations		86,986			84,534			78,575
Dilutive shares for long term compensation plans		1,390			1,490			1,293
Diluted shares for net income calculations		88,376			86,024			79,868
Weighted average common units		3,555			3,676			3,693
Diluted shares for Funds from operations calculations		91,931			89,700			83,561

Inflation

Inflation has remained relatively low during the last three years, and as a result, it has not had a significant impact on the Company during this period. The $600 million Credit Facility bears interest at a variable rate; therefore, the amount of interest payable under the $600 million Credit Facility will be influenced by changes in short-term interest rates, which tend to be sensitive to inflation. To the extent an increase in inflation would result in increased operating costs, such as in insurance, real estate taxes and utilities, substantially all of the tenants’ leases require the tenants to absorb these costs as part of their rental obligations. In addition, inflation also may have the effect of increasing market rental rates.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion about the Company’s risk management includes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from the results discussed in the forward-looking statements.

The Company’s primary market risk exposure is to changes in interest rates.

The Company is exposed to market risk related to its $600 million Credit Facility and certain other indebtedness as discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.” The interest on the $600 million Credit Facility and certain other indebtedness is subject to fluctuations in the market.

The Company also uses long-term and medium-term debt as a source of capital. These debt instruments are typically issued at fixed interest rates. When these debt instruments mature, the Company typically refinances such debt at then-existing market interest rates which may be more or less than the interest rates on the maturing debt. In addition, the Company may attempt to reduce interest rate risk associated with a forecasted issuance of new debt. In order to reduce interest rate risk associated with these transactions, the Company occasionally enters into interest rate protection agreements.

If the interest rates for variable rate debt were 100 basis points higher or lower during 2005, the Company’s interest expense would have been increased or decreased by $3.3 million. If the interest rate for the fixed rate debt maturing in 2006 was 100 basis points higher or lower than its current rate of 7.2%, the Company’s interest expense would be increased or decreased by $1.0 million.

The sensitivity analysis above assumes no changes in the Company’s financial structure. It also does not consider future fluctuations in interest rates or the specific actions that might be taken by management to mitigate the impact of such fluctuations.

The Company is also exposed to currency risk on its net investment in the United Kingdom. The Company does not believe that this currency risk exposure is material to its financial statements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The dual presentation of financial statements for the Company is required by the SEC. The Company is comprised of two SEC registrants: Liberty Property Trust and Liberty Property Limited Partnership. Accordingly, financial statements are required for each registrant. The financial information contained within the two sets of financial statements is essentially the same.

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Management’s Annual Report on Internal Control Over Financial Reporting

To the Shareholders of Liberty Property Trust:

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a — 15 (f) and 15d — 15(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Trustees regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) in Internal Control – Integrated Framework. Based on our assessment we believe that, as of December 31, 2005, the Company’s internal control over financial reporting is effective based on those criteria.

Management’s assertion regarding its assessment of internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, whose reports appears on the following pages.

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

March 10, 2006

33

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of Liberty Property Trust

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, that Liberty Property Trust (the “Trust”) maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Trust’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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

In our opinion, management’s assessment that Liberty Property Trust maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Liberty Property Trust as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the each of the three years in the period ended December 31, 2005 of the Trust and our report dated March 10, 2006 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
March 10, 2006

34

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of Liberty Property Trust

We have audited the accompanying consolidated balance sheets of Liberty Property Trust (the “Trust”) as of December 31, 2005 and 2004, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and schedule 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 consolidated financial position of Liberty Property Trust at December 31, 2005 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Liberty Property Trust’s internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated
March 10, 2006 expressed an unqualified opinion thereon.

/s/Ernst & Young LLP

Philadelphia, Pennsylvania
March 10, 2006

35

CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)

	DECEMBER 31,
	2005			2004
ASSETS
Real estate:
Land and land improvements	$	629,962		$	622,987
Buildings and improvements		3,730,481			3,616,204
Less accumulated depreciation		(748,818	)		(692,649	)
Operating real estate		3,611,625			3,546,542
Development in progress		324,924			81,099
Land held for development		158,653			171,122
Net real estate		4,095,202			3,798,763
Cash and cash equivalents		61,629			33,667
Restricted cash		29,085			34,626
Accounts receivable, net of allowance		19,529			21,502
Deferred rent receivable		72,818			66,528
Deferred financing and leasing costs, net of accumulated amortization (2005, $106,752; 2004, $91,117)		121,085			106,940
Investments in unconsolidated joint ventures		33,522			24,372
Assets held for sale, net		12,654			12,799
Prepaid expenses and other assets		52,005			63,630
Total assets	$	4,497,529		$	4,162,827
LIABILITIES
Mortgage loans	$	238,728		$	366,171
Unsecured notes		1,755,000			1,455,000
Credit facility		255,450			312,000
Accounts payable		32,919			24,288
Accrued interest		34,892			34,994
Dividend payable		56,490			54,485
Other liabilities		161,735			111,764
Total liabilities		2,535,214			2,358,702
Minority interest		253,133			207,866
SHAREHOLDERS’ EQUITY
Common shares of beneficial interest, $.001 par value, 191,200,000 shares authorized, 88,415,764 (includes 59,100 in treasury) and 85,734,380 (includes 59,100 in treasury) shares issued and outstanding as of December 31, 2005 and 2004, respectively		88			86
Additional paid-in capital		1,799,068			1,705,913
Accumulated other comprehensive income		9,906			25,105
Distributions in excess of net income		(98,553	)		(133,518	)
Common shares held in treasury, at cost, 59,100 shares as of December 31, 2005 and 2004		(1,327	)		(1,327	)
Total shareholders’ equity		1,709,182			1,596,259
Total liabilities and shareholders’ equity	$	4,497,529		$	4,162,827

See accompanying notes.

36

CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

	YEAR ENDED DECEMBER 31,
	2005			2004			2003
OPERATING REVENUE
Rental	$	486,121		$	452,753		$	430,435
Operating expense reimbursement		194,609			175,574			163,451
Total operating revenue		680,730			628,327			593,886
OPERATING EXPENSE
Rental property		142,838			128,005			116,505
Real estate taxes		68,865			62,809			59,734
General and administrative		38,138			33,759			28,316
Depreciation and amortization		146,526			129,298			116,557
Total operating expenses		396,367			353,871			321,112
Operating Income		284,363			274,456			272,774
OTHER INCOME (EXPENSE)
Interest and other income		8,622			7,290			8,285
Interest expense		(129,617	)		(116,630	)		(117,754	)
Total other income (expense)		(120,995	)		(109,340	)		(109,469	)
Income before property dispositions, income taxes, minority interest and equity in earnings (loss) of unconsolidated joint ventures		163,368			165,116			163,305
Gain on property dispositions		84,295			496			447
Income taxes		(14,827	)		(1,820	)		(2,326	)
Minority interest		(21,538	)		(17,478	)		(19,795	)
Equity in earnings (loss) of unconsolidated joint ventures		2,540			(775	)		1,744
Income from continuing operations		213,838			145,539			143,375
Discontinued operations, net of minority interest (including net gain on property dispositions of $37,915, $11,603, and $11,958 for the years ended December 31, 2005, 2004 and 2003, respectively)		35,513			15,904			20,235
Net income	$	249,351		$	161,443		$	163,610
Earnings per share
Basic:
Income from continuing operations	$	2.46		$	1.72		$	1.82
Income from discontinued operations		0.41			0.19			0.26
Income per common share — basic	$	2.87		$	1.91		$	2.08
Diluted:
Income from continuing operations	$	2.42		$	1.70		$	1.80
Income from discontinued operations		0.40			0.18			0.25
Income per common share — diluted	$	2.82		$	1.88		$	2.05
Weighted average number of common shares outstanding
Basic		86,986			84,534			78,575
Diluted		88,376			86,024			79,868

See accompanying notes.

37

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY OF LIBERTY PROPERTY TRUST
(IN THOUSANDS)

	COMMON					ACCUMULATED						COMMON
	SHARES OF		ADDITIONAL			OTHER			DISTRIBUTIONS			SHARES			TOTAL
	BENEFICIAL		PAID-IN			COMPREHENSIVE			IN EXCESS OF NET			HELD IN			SHAREHOLDERS’
	INTEREST		CAPITAL			INCOME			INCOME			TREASURY			EQUITY
Balance at January 1, 2003	$	76	$	1,413,336		$	2,842		$	(60,496	)	$	(1,327	)	$	1,354,431
Net proceeds from the issuance of common shares		7		206,377			—			—			—			206,384
Net income		—		—			—			163,610			—			163,610
Distributions on common shares		—		—			—			(191,632	)		—			(191,632	)
Noncash compensation		—		2,877			—			—			—			2,877
Minority interest reclassification		—		(2,641	)		—			—			—			(2,641	)
Foreign currency translation adjustment		—		—			11,868			—			—			11,868
Balance at December 31, 2003		83		1,619,949			14,710			(88,518	)		(1,327	)		1,544,897
Net proceeds from the issuance of common shares		3		85,168			—			—			—			85,171
Net income		—		—			—			161,443			—			161,443
Distributions on common shares		—		—			—			(206,443	)		—			(206,443	)
Noncash compensation		—		2,388			—			—			—			2,388
Minority interest reclassification		—		(1,592	)		—			—			—			(1,592	)
Foreign currency translation adjustment		—		—			10,395			—			—			10,395
Balance at December 31, 2004		86		1,705,913			25,105			(133,518	)		(1,327	)		1,596,259
Net proceeds from the issuance of common shares		2		86,460			—			—			—			86,462
Net income		—		—			—			249,351			—			249,351
Distributions on common shares		—		—			—			(214,386	)		—			(214,386	)
Noncash compensation		—		5,032			—			—			—			5,032
Minority interest reclassification		—		1,663			—			—			—			1,663
Foreign currency translation adjustment		—		—			(15,199	)		—			—			(15,199	)
Balance at December 31, 2005	$	88	$	1,799,068		$	9,906		$	(98,553	)	$	(1,327	)	$	1,709,182

See accompanying notes.

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CONSOLIDATED STATEMENTS OF CASH FLOWS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS)

	YEAR ENDED DECEMBER 31,
	2005			2004			2003
OPERATING ACTIVITIES
Net income	$	249,351		$	161,443		$	163,610
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		150,722			136,700			123,102
Amortization of deferred financing costs		4,758			4,315			4,013
Equity in (earnings) loss of unconsolidated joint ventures		(2,540	)		775			(1,744	)
Distributions from unconsolidated joint ventures		4,651			682			3,145
Minority interest in net income		22,965			18,167			20,733
Gain on property dispositions		(122,210	)		(12,099	)		(12,405	)
Noncash compensation		3,980			2,388			2,877
Changes in operating assets and liabilities:
Restricted cash		3,849			(19,334	)		(12,154	)
Accounts receivable		1,804			(8,449	)		5,125
Deferred rent receivable		(6,290	)		(8,513	)		(9,240	)
Prepaid expenses and other assets		(12,488	)		(12,046	)		(3,638	)
Accounts payable		8,894			8,859			(11,848	)
Accrued interest		(102	)		2,166			257
Other liabilities		52,353			18,282			(8,022	)
Net cash provided by operating activities		359,697			293,336			263,811
INVESTING ACTIVITIES
Investment in properties		(324,340	)		(253,017	)		(145,997	)
Cash paid for business, net of cash acquired		—			—			16,627
Investments in unconsolidated joint ventures		(13,790	)		(6,198	)		(4,918	)
Proceeds from disposition of properties/land		415,144			54,140			49,744
Investment in development in progress		(235,078	)		(105,208	)		(59,953	)
Investment in land held for development		(91,436	)		(34,132	)		(27,650	)
Increase in deferred leasing costs		(37,133	)		(29,560	)		(22,986	)
Net cash used in investing activities		(286,633	)		(373,975	)		(195,133	)
FINANCING ACTIVITIES
Net proceeds from issuance of common shares		87,514			85,171			206,384
Net proceeds from issuance of preferred units		48,686			—			—
Net proceeds from issuance of unsecured notes		296,424			197,517			3,683
Repayments of unsecured notes		—			(100,000	)		(73,739	)
Proceeds from mortgage loans		—			9,618			1,223
Repayments of mortgage loans		(173,926	)		(23,592	)		(15,436	)
Proceeds from credit facility		784,800			477,800			453,950
Repayments on credit facility		(841,350	)		(332,800	)		(418,950	)
Increase in deferred financing costs		(3,465	)		(199	)		(2,640	)
Distributions paid on common shares		(212,305	)		(204,339	)		(187,293	)
Contributions from minority interests		—			1,158			637
Distributions to minority interests		(3,937	)		—			—
Distributions paid on units		(20,859	)		(20,716	)		(25,930	)
Net cash (used in) provided by financing activities		(38,418	)		89,618			(58,111	)
Increase in cash and cash equivalents		34,646			8,979			10,567
(Decrease) increase in cash and cash equivalents related to foreign currency translation		(6,684	)		2,879			3,309
Cash and cash equivalents at beginning of year		33,667			21,809			7,933
Cash and cash equivalents at end of year	$	61,629		$	33,667		$	21,809
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Write-off of fully depreciated property and deferred costs	$	83,794		$	27,990		$	13,187
Issuance of operating partnership units		—			—			1,151
Acquisition of properties		(51,716	)		(11,305	)		(56,083	)
Assumption of mortgage loans		51,716			11,305			56,083

See accompanying notes.

39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF LIBERTY PROPERTY TRUST

1. ORGANIZATION

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by Liberty Property Limited Partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”). The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 96.2% of the common equity of the Operating Partnership at December 31, 2005. The Company provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties which are located principally within the Mid-Atlantic, Southeastern and Midwestern United States and the United Kingdom.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles, (“US GAAP”) requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements of the Company include the Trust, the Operating Partnership and wholly owned subsidiaries and those subsidiaries in which the Company owns a majority voting interest with the ability to control operations of the subsidiaries and where no approval, veto or other important rights have been granted to the minority shareholders. All significant intercompany transactions and accounts have been eliminated.

Reclassifications

Certain amounts from prior years have been reclassified to conform to current-year presentation.

Real Estate and Depreciation

The properties are recorded at the lower of cost or fair value and are depreciated using the straight line method over their estimated useful lives. The estimated useful lives are as follows:

Buildings and improvements	40 years (blended)
Equipment	5-10 years
Tenant improvements	Term of the related lease

Expenditures directly related to acquisition, or improvement of real estate, including interest and other costs capitalized during development, are included in net real estate and are stated at cost. The capitalized costs include pre-construction costs essential to the development of the property, development and construction costs, and interest costs, real estate taxes, salaries and other costs incurred during the period of development. Expenditures for maintenance and repairs are charged to operations as incurred.

In accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Standards (“SFAS”) No. 141, “Business Combinations,” the Company allocates the purchase price of real estate to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to market rent for leases of similar terms and present valuing the difference based on market interest rates. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. The Company depreciates the amounts allocated to building and improvements over 40 years and the amounts allocated to intangible assets relating to in-place leases, which are included in deferred financing and leasing costs in the accompanying balance sheet, over the remaining term of the related leases. Once a property is designated as held for sale, no further depreciation expense is recorded. Properties identified as held for sale and/or sold are presented in discontinued operations for all periods presented.

The Company evaluates its real estate investments and its investments in unconsolidated joint ventures upon occurrence of a significant adverse change in its operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If any real estate investment or investment in unconsolidated joint ventures is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value.

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Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. Under the equity method of accounting the net equity investment of the Company is reflected in the consolidated balance sheets and the Company’s share of net income from the joint ventures is included on the consolidated statements of operations.

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.

Restricted Cash

Restricted cash includes tenant security deposits and escrow funds that the Company maintains pursuant to certain mortgage loans. Restricted cash also includes the undistributed proceeds from the sale of residential land in Kent County, United Kingdom.

Accounts Receivable

The Company’s accounts receivable are comprised of rents and charges for property operating costs due from tenants. The Company periodically performs a detailed review of amounts due from tenants to determine if accounts receivable balances are collectible. Based on this review accounts receivable are reduced by an allowance for doubtful accounts. The Company considers tenant credit quality and payment history and general economic conditions in determining the allowance for doubtful accounts. If the accounts receivable balance is subsequently deemed uncollectible, the receivable and allowance for doubtful account balance is written off.

The allowance for doubtful accounts at December 31, 2005 and 2004 was $6.7 million and $6.0 million, respectively.

Deferred Rent Receivable

The Company’s deferred rent receivable represents the cumulative difference between rent revenue recognized on a straight line basis and contractual payments under the terms of tenant leases.

Revenues

The Company earns rental income under operating leases with tenants. Rental income is recognized on a straight line basis over the applicable lease term. Operating expense reimbursements consisting of amounts due from tenants for real estate taxes, utilities and other recoverable costs are recognized as revenue in the period in which the corresponding expenses are incurred.

Termination fees (included in rental revenue) are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. The Company recognizes termination fees in accordance with Staff Accounting Bulletin 104 when the following conditions are met:

a)	the termination agreement is executed,
b)	the termination fee is determinable,
c)	all landlord services, pursuant to the terminated lease, have been rendered, and
d)	collectibility of the termination fee is assured.

Deferred Financing and Leasing Costs

Costs incurred in connection with financing or leasing are capitalized and amortized over the term of the related loan or lease. Deferred financing cost amortization is reported as interest expense. Intangible assets related to acquired in-place leases are amortized over the terms of the related leases.

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Income per Common Share

The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts):

			2005						2004
			Weighted						Weighted
			Average						Average
	Income		Shares		Per		Income		Shares		Per
	(Numerator)		(Denominator)		Share		(Numerator)		(Denominator)		Share
Income from continuing operations	$	213,838					$	145,539
Basic income from continuing operations
Income from continuing operations available to common shareholders		213,838		86,986	$	2.46		145,539		84,534	$	1.72
Dilutive shares for long-term compensation plans		—		1,390				—		1,490
Diluted income from continuing operations
Income from continuing operations available to common shareholders and assumed conversions		213,838		88,376	$	2.42		145,539		86,024	$	1.70
Basic income from discontinued operations
Discontinued operations net of minority interest		35,513		86,986	$	0.41		15,904		84,534	$	0.19
Dilutive shares for long-term compensation plans		—		1,390				—		1,490
Diluted income from discontinued operations
Discontinued operations net of minority interest		35,513		88,376	$	0.40		15,904		86,024	$	0.18
Basic income per common share
Income available to common shareholders		249,351		86,986	$	2.87		161,443		84,534	$	1.91
Dilutive shares for long-term compensation plans		—		1,390				—		1,490
Diluted income per common share
Income available to common shareholders and assumed conversions	$	249,351		88,376	$	2.82	$	161,443		86,024	$	1.88

			2003
			Weighted
			Average
	Income		Shares		Per
	(Numerator)		(Denominator)		Share
Income from continuing operations	$	143,375
Basic income from continuing operations
Income from continuing operations available to common shareholders		143,375		78,575	$	1.82
Dilutive shares for long-term compensation plans		—		1,293
Diluted income from continuing operations
Income from continuing operations available to common shareholders and assumed conversions		143,375		79,868	$	1.80
Basic income from discontinued operations
Discontinued operations net of minority interest		20,235		78,575	$	0.26
Dilutive shares for long-term compensation plans		—		1,293
Diluted income from discontinued operations
Discontinued operations net of minority interest		20,235		79,868	$	0.25
Basic income per common share
Income available to common shareholders		163,610		78,575	$	2.08
Dilutive shares for long-term compensation plans		—		1,293
Diluted income per common share
Income available to common shareholders and assumed conversions	$	163,610		79,868	$	2.05

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, deferred rent receivable, accounts payable, accrued interest, dividends payable and other liabilities are reasonable estimates of fair values because of the short-term maturities of these investments. The fair value of the Company’s long-term debt, which is based on estimates by management and on rates quoted on December 31, 2005 for comparable loans, exceeds the aggregate carrying value by approximately $92 million at December 31, 2005.

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Income Taxes

The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, the Company generally is not subject to federal income taxation at the corporate level to the extent it distributes annually at least 90% of its REIT taxable income, as defined in the Code, to its shareholders and satisfies certain other organizational and operational requirements. The Company has met these requirements and, accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

Several of the Company’s subsidiaries are taxable REIT subsidiaries (each a “TRS”) and are subject to federal income taxes. In general, a TRS may perform additional services for tenants and generally may engage in real estate or non real estate business that are not permitted REIT activities. The Company is also taxed in certain states and the United Kingdom. Accordingly, the Company has recognized federal, state and United Kingdom income taxes in accordance with US GAAP, as applicable. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate rates.

The Federal tax cost basis of the real estate at December 31, 2005 was $4.8 billion.

Stock-Based Compensation

At December 31, 2005, the Company had a share-based employee compensation plan as fully described in Note 10. Prior to 2003, the Company accounted for the plan under the recognition and measurement provisions of APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. Effective January 1, 2003, the Company adopted the fair value recognition provisions of the Financial Accounting Standards Board’s (“FASB”) Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation,” prospectively for all employee option awards granted, modified, or settled after January 1, 2003. Option awards under the Company’s plan vest over three years. Therefore, the cost related to share-based employee compensation included in the determination of net income for 2005, 2004 and 2003 is less than that which would have been recognized if the fair value based method had been applied to all option awards since the original effective date of SFAS No. 123.

Foreign Currency Translation

The functional currency of the Company’s United Kingdom operations is pounds sterling. The Company translates its financial statements into US dollars. Gains and losses resulting from this translation do not impact the results of operations and are included in accumulated other comprehensive income as a separate component of shareholders’ equity. Other comprehensive income (loss) was ($15.2 million), $10.4 million and $11.9 million for the years ended December 31, 2005, 2004 and 2003, respectively. Upon sale or upon complete or substantially complete liquidation of a foreign investment, the gain or loss on the sale will include a portion of the cumulative translation adjustments that have been previously recorded in other comprehensive income.

Recently Issued Accounting Standards
 
SFAS No. 123 (revised 2004)

In December 2004, the Financial Accounting Standard Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows (“SFAS No. 123R”). SFAS No. 123R requires the compensation cost relating to share-based payment transactions be recognized in financial statements and be measured based on the fair value of the equity instrument issued. SFAS No. 123R is effective as of the first annual reporting period beginning after June 15, 2005. Awards issued, modified, or settled after the effective date will be measured and recorded in accordance with SFAS No. 123R. Certain restricted share awards and option awards are subject to accelerated vesting upon retirement. The Company accounts for these awards over the explicit service period. Upon adoption of SFAS No. 123R, the Company will expense awards to individuals qualifying for stock acceleration. Compensation cost relating to this accelerated vesting for the years ended December 31, 2005, 2004 and 2003 would have increased by $.2 million, $.5 million and $.3 million, respectively. Effective January 1, 2003, the Company adopted the fair value recognition provisions of Statement No. 123. The Company does not anticipate that adoption of SFAS No. 123R will have a material impact on its results of operations or its financial position.

SFAS No. 153

In December 2004, the FASB issued SFAS No. 153, “Accounting for Non-monetary Transactions” (“SFAS No. 153”). SFAS 153 requires non-monetary exchanges to be accounted for at fair value, recognizing any gain or loss, if the transactions meet a commercial-substance criterion and fair value is determinable. SFAS NO. 153 is effective for non-monetary transactions occurring in fiscal years beginning after June 15, 2005. The Company does not expect

43

that the implementation of this standard will have a material effect on the Company’s consolidated financial position or results of operations.

Emerging Issues Task Force (“EITF”) Issue No. 04-5

In June 2005, the FASB ratified its consensus in EITF Issue 04-5, “Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights” (Issue 04-5). The effective date for Issue 04-5 is June 29, 2005 for all new or modified partnerships and January 1, 2006 for all other partnerships. The adoption of the provisions of Issue 04-5 is not anticipated to have a material impact on the Company’s financial position or results of operations.

Interpretation of FASB Statement No. 143 (“FIN 47”)

Issued in March 2005, FIN 47 clarifies that the term conditional asset retirement obligation as used in SFAS No. 143, Accounting for Asset Retirement Obligations (“SFAS No. 143”) refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. Thus, the timing and/or method of settlement may be conditional on a future event. An entity is required to recognize a liability for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. The fair value of a liability for the conditional asset retirement obligation should be recognized when incurred – generally upon acquisition, construction, or development and/or through the normal operation of the asset. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the measurement of a liability when sufficient information exists. SFAS No. 143 acknowledges that in some cases, sufficient information may not be available to reasonably estimate the fair value of an asset retirement obligation. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective for the year ended December 31, 2005 and did not have a material effect on the Company’s consolidated financial position or results of operations for 2005.

3. REAL ESTATE

The Company owns and operates industrial and office properties located principally in suburban mixed-use developments or business parks. The carrying value of these properties by type as of December 31, 2005 and 2004 are as follows (in thousands):

	Land		Buildings
	And Land		And				Accumulated
	Improvements		Improvements		Total		Depreciation
2005:
Industrial properties	$	308,404	$	1,669,294	$	1,977,698	$	339,465
Office properties		321,558		2,061,187		2,382,745		409,353
2005 Total	$	629,962	$	3,730,481	$	4,360,443	$	748,818
2004:
Industrial properties	$	293,282	$	1,588,513	$	1,881,795	$	308,963
Office properties		329,705		2,027,691		2,357,396		383,686
2004 Total	$	622,987	$	3,616,204	$	4,239,191	$	692,649

Depreciation expense was $123.3 million in 2005, $114.2 million in 2004 and $105.1 million in 2003.

As of December 31, 2005, the Company has commenced development on 29 properties, which upon completion are expected to comprise 5.6 million square feet of leaseable space. As of December 31, 2005, $324.9 million had been expended for the development of these projects and an additional $490.6 million is estimated to be required for completion.

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Information on the operating properties the Company has sold for the year ended December 31, 2005 and 2004 are as follows:

2005 Sales

	Number of		Leasable
	Buildings		Square Feet		Proceeds
			(in thousands)
Segment
Delaware Valley
Southeastern Pennsylvania		2		139,760	$	7,864
Other		3		177,733		12,333
Midwest
Lehigh Valley		2		142,204		8,676
Other		18		400,262		23,236
Mid-Atlantic		4		727,732		51,570
Florida		6		726,632		53,834
United Kingdom		16		602,175		263,343
Total		51		2,916,498	$	420,856

2004 Sales

	Number of		Leasable
	Buildings		Square Feet		Proceeds
			(in thousands)
Segment
Delaware Valley
Southeastern Pennsylvania		3		248,073	$	30,814
Other		1		45,390		1,950
Midwest
Lehigh Valley		—		—		—
Other		3		303,723		13,150
Mid-Atlantic		—		—		—
Florida		3		163,330		5,205
United Kingdom		—		—		—
Total		10		760,516	$	51,119

4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

On November 18, 2002, the Company entered into a joint venture agreement (“Liberty Venture I, LP”) with the Public Employees’ Retirement Association of Colorado. The Company sold or contributed 28 properties with a net book value of $127.5 million to the joint venture in exchange for a 25% ownership interest in the joint venture and $108.8 million in cash. The properties are industrial distribution properties in New Jersey (the Delaware Valley segment). The Company provides development, leasing and property management services for a fee, and may receive a promoted interest if certain return thresholds are met.

During the year ended December 31, 2004, the joint venture purchased additional industrial distribution properties with net book value of $5.5 million. During the year ended December 31, 2005. The joint venture disposed of three properties for proceeds of $21.1 million.

On December 14, 2005, the Company entered into a joint venture agreement (“Kings Hill Unit Trust”) with Doughty Hanson & Co. Real Estate. The Company sold 15 properties with a net book value of $125.8 million to the joint venture for proceeds of $219.9 million. In addition, the Company holds a $7.6 million note receivable from the Kings Hill United Trust and retained a 20% ownership interest in the joint venture. The note receivable bears interest at a 9% rate. The Company recognized a $75.1 million gain net of $14.5 million of tax on the sale of its United Kingdom Properties in Operation to the Kings Hill Unit Trust. Due to the Company’s continuing involvement in this joint venture, the operations to the date of sale, as well as the gain on sale and related taxes are included in income from continuing operations in the consolidated statements of operations. The properties which were sold are industrial-flex and office properties and are included in the Company’s United Kingdom segment. The Company

45

provides property management services for a fee, and may receive a promoted interest if certain return thresholds are met.

As of December 31, 2005, the Company has a 50% ownership interest in three additional unconsolidated joint ventures. These joint ventures have investments in land or in leaseholds and do not operate or own operating properties.

The Company’s share of each of the joint ventures’ earnings is included in equity in earnings (loss) of unconsolidated joint ventures in the accompanying consolidated statements of operations.

The condensed balance sheets as of December 31, 2005 and 2004 and statements of operations for Liberty Venture I, LLC, Kings Hill Unit Trust and other unconsolidated joint ventures for the years ended December 31, 2005, 2004 and 2003 are as follows (in thousands):

Balance Sheets:

	December 31, 2005
	Liberty Venture			Kings Hill
	Venture I, LLC			Unit Trust			Other		Total
Real estate assets	$	121,092		$	202,200		$	—	$	323,292
Accumulated depreciation		(7,579	)		(284	)		—		(7,863	)
Real estate assets, net		113,513			201,916			—		315,429
Land held for development		2,750			—			37,812		40,562
Other assets		14,922			18,499			9,980		43,401
Total assets	$	131,185		$	220,415		$	47,792	$	399,392
Debt	$	77,826		$	163,448		$	—	$	241,274
Other liabilities		2,284			44,028			678		46,990
Equity		51,075			12,939			47,114		111,128
Total liabilities and equity	$	131,185		$	220,415		$	47,792	$	399,392
Company’s net investment in unconsolidated joint ventures	$	12,310		$	—		$	21,212	$	33,522

	December 31, 2004
	Liberty Venture			Kings Hill
	Venture I, LLC			Unit Trust		Other		Total
Real estate assets	$	128,727		$	—	$	—	$	128,727
Accumulated depreciation		(5,183	)		—		—		(5,183	)
Real estate assets, net		123,544			—		—		123,544
Land held for development		2,686			—		22,543		25,229
Other assets		16,945			—		2,747		19,692
Total assets	$	143,175		$	—	$	25,290	$	168,465
Debt	$	86,585		$	—	$	—	$	86,585
Other liabilities		3,183			—		391		3,574
Equity		53,407		$	—		24,899		78,306
Total liabilities and equity	$	143,175		$	—	$	25,290	$	168,465
Company’s net investment in unconsolidated joint ventures	$	13,035		$	—	$	11,337	$	24,372

Statements of Operations:

	Year Ended December 31, 2005
	Liberty Venture			Kings Hill
	Venture I, LLC			Unit Trust			Other			Total
Total revenue	$	18,592		$	745		$	—		$	19,337
Operating expense		5,859			201			32			6,092
		12,733			544			(32	)		13,245
Interest		4,569			634			—			5,203
Depreciation and amortization		4,933			386			—			5,319
Other (income)/expense		184			33			(3,066	)		(2,849	)
(Gain)/loss on sale		(7,555	)		—			—			(7,555	)
Net income (loss)	$	10,602		$	(509	)	$	3,034		$	13,127
Company’s equity in earnings (loss) of unconsolidated joint ventures	$	2,650		$	(110	)	$	—		$	2,540

	Year Ended December 31, 2004
	Liberty Venture			Kings Hill
	Venture I, LLC			Unit Trust		Other		Total
Total revenue	$	18,746		$	—	$	—	$	18,746
Operating expense		6,736			—		—		6,736
		12,010			—		—		12,010
Interest		4,426			—		—		4,426
Depreciation and amortization		10,683			—		—		10,683
Net loss	$	(3,099	)	$	—	$	—	$	(3,099	)
Company’s equity in loss of unconsolidated joint ventures	$	(775	)	$	—	$	—	$	(775	)

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	Year Ended December 31, 2003
	Liberty Venture		Kings Hill
	Venture I, LLC		Unit Trust		Other		Total
Total revenue	$	19,400	$	—	$	—	$	19,400
Operating expense		6,276		—		—		6,276
		13,124		—		—		13,124
Interest		3,870		—		—		3,870
Depreciation and amortization		4,401		—		—		4,401
Net income	$	4,853	$	—	$	—	$	4,853
Company’s equity in earnings of unconsolidated joint ventures	$	1,744	$	—	$	—	$	1,744

5. RELATED PARTY TRANSACTIONS

During the year ended December 31, 2003, the Company exercised its option to purchase Rouse Kent Limited (“RKL”) for nominal consideration. As a result of the purchase, the Company’s assets and liabilities increased by approximately $60 million. The operations of RKL are included in the consolidated financial statements beginning July 1, 2003. The transaction was accounted for under the purchase method of accounting.

RKL owned six buildings which contain 210,000 square feet of leaseable space and has planning permission for the development of additional commercial space. These six buildings together with other buildings which the Company owned in the United Kingdom, were sold in December 2005 to the Kings Hill Unit Trust joint venture. (See Investments in Unconsolidated Joint Ventures above.) RKL is party to a contract with the County of Kent which contract entitles RKL to participate in proceeds realized from the sale of residential land parcels to homebuilders.

Pursuant to agreements, the Company provided management services with respect to RKL for the six months ended June 30, 2003 for $300,000. In addition, the Company paid a fee to RKL for management services which it provided for the Company’s properties owned in the United Kingdom. For six months ended June 30, 2003 the fees for these services were $223,000. The Company recognized interest income on notes receivable from RKL of $1.9 million for the six months ended June 30, 2003.

6. INDEBTEDNESS

Indebtedness consists of mortgage loans, unsecured notes, and borrowings under the credit facility. The weighted average interest rates for the years ended December 31, 2005, 2004 and 2003, were 6.6%, 6.7% and 6.9%, respectively. Interest costs during the years ended December 31, 2005, 2004 and 2003 in the amount of $17.7 million, $13.2 million and $10.9 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2005, 2004 and 2003, was $148.8 million, $130.4 million and $132.5 million, respectively.

During the year ended December 31, 2005, the Company issued $300 million of 5.125% senior unsecured notes due March 2, 2015. The Company used the proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

During the year ended December 31, 2004, the Company issued $200 million of 5.65% senior unsecured notes due August 15, 2014. The proceeds from this issuance were used to repay $100 million of 7.1% senior unsecured notes which matured on August 15, 2004, pay down outstanding borrowings under the Company’s unsecured credit facility, acquire properties and for general corporate purposes.

The Company is subject to financial covenants contained in some of the debt agreements, the most restrictive of which are detailed below under the heading “Credit Facility.” As of December 31, 2005 the Company was in compliance with all financial covenants.

Mortgage Loans, Unsecured Notes

Mortgage loans with maturities ranging from 2006 to 2016 are collateralized by and in some instances cross-collateralized by properties with a net book value of $406.1 million.

The interest rates on $1,978.5 million of mortgage loans and unsecured notes are fixed and range from 4.6% to 8.8%. Interest rates on $15.2 million of mortgage loans float with the base rate of the respective lending bank or LIBOR. The weighted average remaining term for the mortgage loans and unsecured notes is 6.0 years.

47

Credit Facility

During the fourth quarter of 2005, the Company obtained a new, four-year, $600 million unsecured revolving credit facility (the “$600 million Credit Facility”) replacing a $450 million unsecured revolving credit facility due January 16, 2006. Based on the Company’s present ratings, borrowings under the credit facility are priced at LIBOR plus 65 basis points. The $600 million Credit Facility contains a competitive bid option, whereby participating lenders bid on the interest rate to be charged. This feature is available for up to 50% of the amount of the facility. The interest rate on the $255.5 million of borrowings outstanding as of December 31, 2005 was 4.39%. The current ratings for the Company’s senior unsecured debt are Baa2, BBB, and BBB from Moody’s, S&P and Fitch, respectively. The credit facility has an accordion feature for an additional $200 million. There is also a 15 basis point facility fee on the current borrowing capacity. The $600 million Credit Facility expires on January 16, 2010 and may be extended for a one year period. The $600 million Credit Facility contains financial covenants, certain of which are set forth below:

• total debt to total assets may not exceed 0.60:1;

• earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;

• unsecured debt to unencumbered asset value must equal or be less than 60%; and

• unencumbered net operating income to unsecured interest expense must equal or exceed 200%.

The scheduled principal amortization and maturities of the Company’s mortgage loans, $600 million Credit Facility and the unsecured notes outstanding and the related weighted average interest rates are as follows (in thousands, except percentages):

											Weighted
	Mortgages										Average
	Principal		Principal		Unsecured		Credit				Interest
	Amortization		Maturities		Notes		Facility		Total		Rate
2006	$	9,323	$	40,895	$	100,000	$	—	$	150,218		7.1	%
2007		8,748		1,553		100,000		—		110,301		7.2	%
2008		8,053		45,259		—		—		53,312		6.6	%
2009		5,652		46,148		270,000		—		321,800		7.8	%
2010		4,827		4,738		200,000		255,450		465,015		6.4	%
2011		4,101		10,730		250,000		—		264,831		7.3	%
2012		3,219		32,910		235,000		—		271,129		6.5	%
2013		2,691		—		—		—		2,691		6.0	%
2014		2,857		—		200,000		—		202,857		5.7	%
2015		3,033		—		300,000		—		303,033		5.1	%
2016 & thereafter		3,991		—		100,000		—		103,991		7.4	%
	$	56,495	$	182,233	$	1,755,000	$	255,450	$	2,249,178		6.6	%

7. LEASING ACTIVITY

Future minimum rental payments due from tenants under noncancelable operating leases as of December 31, 2005 are as follows (in thousands):

2006	$	448,098
2007		400,091
2008		343,492
2009		271,306
2010		211,230
Thereafter		593,904
TOTAL	$	2,268,121

In addition to minimum rental payments, most leases require the tenants to pay for their pro rata share of specified operating expenses. These payments are included as operating expense reimbursement in the accompanying consolidated statements of operations.

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8. SHAREHOLDERS’ EQUITY

Common Shares

The Company paid to holders of its common shares and holders of its common units distributions of $220.8 million, $213.3 million, and $196.2 million, during the years ended December 31, 2005, 2004, and 2003, respectively. On a per share basis, the Company paid Common Share and Unit distributions of $2.445, $2.425, and $2.405, during the years ended December 31, 2005, 2004, and 2003, respectively.

For federal income tax purposes, the following table summarizes the portions of the Common Share distributions relating to return of capital, ordinary income, and capital gains:

	2005			2004			2003
Return of capital		—			8.0	%		—
Ordinary income		62.8	%		87.3	%		96.0	%
Capital gains		37.2	%		4.7	%		4.0	%

The Company’s federal income tax returns are subject to examination by taxing authorities. Because the application of tax laws and regulations is susceptible to varying interpretations, the taxability of distributions could be changed at a later date upon final determination by taxing authorities.

Treasury Shares

The Company’s Board of Trustees authorized a share repurchase plan under which the Company may purchase up to $100 million of the Company’s Common Shares and preferred shares (as defined below).

Minority Interest

Minority interest in the accompanying consolidated financial statements represents the interests of the common and preferred units in Liberty Property Limited Partnership not held by the Trust. Minority interest is adjusted at each period end to reflect the ownership percentage of the common and preferred unitholders at that time. A minority interest reclassification occurs between minority interest and shareholders’ equity each period there is a transaction involving ownership interests in Liberty Property Limited Partnership. In addition, minority interest includes third-party ownership interests in two consolidated joint venture investments in the United Kingdom. No common units were issued in connection with acquisitions in 2005 or 2004. During 2003, 33,682 common units were issued in connection with an acquisition. The common units outstanding as of December 31, 2005 have the same economic characteristics as common shares. The 3,517,837 common units share proportionately in the net income or loss and in any distributions of the Operating Partnership and are exchangeable into the same number of common shares of the Trust.

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The Company has outstanding the following Cumulative Redeemable Preferred Units of the Operating Partnership, (the “Preferred Units”):

Date
of						Liquidation		Dividend			Redeemable
Issue	Issue	Amount		Units		Preference		Rate			As of	Exchangeable after
		(in ooo’s)
7/28/99	Series B	$	95,000		3,800	$	25		7.45	%	8/31/09	1/1/14 into Series B Cumulative Redeemable Preferred Shares of the Trust
6/10/02	Series D	$	23,650		473	$	50		7.625	%	6/10/07	6/10/12 into Series D Cumulative Redeemable Preferred Shares of the Trust
6/16/05	Series E	$	20,000		400	$	50		7.00	%	6/16/10	6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust
6/30/05	Series F	$	44,000		880	$	50		6.65	%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust
8/23/05	Series F	$	6,000		120	$	50		6.65	%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust

Effective August 31, 2004, the rate on $95 million Series B preferred units was reduced from 9.25% to 7.45%.

During the year ended December 31, 2005, the Company redeemed for $20 million its outstanding 9.125% Series C Cumulative Redeemable Preferred Units.

The Company paid the following Preferred Unit distributions for the year ended December 31:

	2005		2004		2003
Distributions (in millions)	$	12.1	$	11.8	$	12.4
Distribution per unit:
Series B	$	1.86	$	2.16	$	2.31
Series C	$	1.05	$	2.28	$	2.28
Series D	$	3.81	$	3.81	$	3.81
Series E	$	1.90		—		—
Series F	$	1.61		—		—

Shareholder Rights Plan

In December 1997, the Board of Trustees of the Company adopted a shareholder rights plan (the “Shareholder Rights Plan”). Under the Shareholder Rights Plan, one Right (as defined in the Shareholder Rights Plan) was attached to each outstanding common share at the close of business on December 31, 1997. In addition, a Right will be attached to each share of common stock issued in the future. Each Right entitles the registered holder to purchase from the Company, under certain conditions, a unit (a “Rights Plan Unit”) consisting of one one-thousandth of a share of a Series A Junior Participating Preferred Share, $0.0001 par value, (the “Junior Preferred Stock”), of the Company, for $100 per Rights Plan Unit, subject to adjustment. The Rights become exercisable only if a person or group of affiliated or associated persons (an “Acquiring Person”) acquires, or obtains the right to acquire, beneficial ownership of common shares or other voting securities (“Voting Stock”) that have 10% or more of the voting power of the outstanding shares of Voting Stock, or if an Acquiring Person commences to make a tender offer or exchange offer to acquire beneficial ownership of Voting Stock that has 10% or more of the voting power of the outstanding shares of Voting Stock. The Rights are redeemable by the Company at a price of $0.0001 per Right. If not exercised or redeemed, all Rights will expire on December 31, 2007.

Dividend Reinvestment and Share Purchase Plan

The Company has a Dividend Reinvestment and Share Purchase Plan under which holders of common shares may elect to automatically reinvest their distributions in additional common shares and may make optional cash payments for additional common shares. The Company may issue additional common shares or repurchase common shares in

50

the open market for purposes of financing its obligations under the Dividend Reinvestment and Share Purchase Plan. During the years ended December 31, 2005, 2004, and 2003, 1,767,187, 1,590,488, and 2,056,482, common shares, respectively, were issued through the Dividend Reinvestment and Share Purchase Plan.

9. EMPLOYEE BENEFIT PLANS

The Company maintains a 401(k) plan for the benefit of its full-time employees. The Company matches the employees’ contributions up to 3% of the employees’ salary and may also make annual discretionary contributions. Total 401(K) expense recognized by the Company was $716,000, $739,000, and $550,000 for the years ended 2005, 2004, and 2003, respectively.

The Company registered 750,000 common shares under the Securities Act of 1933, as amended, in connection with an employee share purchase plan (“ESPP”). The ESPP enables eligible employees to purchase shares of the Company, in amounts up to 10% of the employee’s salary, at a 15% discount to fair market value. A total of 8,814, 9,227 and 9,766 common shares were issued, in accordance with the ESPP, during the years ended December 31, 2005, 2004 and 2003, respectively.

10. SHARE OPTIONS

The Company’s Share Incentive Plan (“Share Incentive Plan”), as amended, has authorized the grant of options to executive officers, other key employees, non-employee trustees and consultants of up to 11.4 million shares of the Company’s Common Shares. All options granted have 10-year terms and vest over a 3-year period, with options to purchase up to 20% of the shares exercisable after the first anniversary, up to 50% after the second anniversary and 100% after the third anniversary of the date of grant.

The cost related to share-based employee compensation included in the determination of net income for 2005, 2004, and 2003 is less than that which would have been recognized if the fair value based method had been applied to all option awards since the original effective date of SFAS No. 123.

The fair value for the employee option awards was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted-average assumptions for 2005, 2004 and 2003:

	2005			2004			2003
Risk-free interest rate		4.4	%		4.0	%		5.0	%
Dividend yield		5.9	%		6.2	%		7.5	%
Volatility factor		0.184			0.172			0.175
Weighted-average expected life	8 years			8 years			8 years

The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested option awards in each period (in thousands, except per share amounts).

	Year Ended December 31,
	2005			2004			2003
Income available to common shareholders	$	249,351		$	161,443		$	163,610
Add: Share-based compensation expense included in reported net income available to common shareholders		616			349			395
Deduct: Total share-based employee compensation expense determined under fair value based methods for all awards		(746	)		(1,199	)		(1,842	)
Pro forma income available to common shareholders	$	249,221		$	160,593		$	162,163
Income per common share:
Basic — as reported	$	2.87		$	1.91		$	2.08
Basic — pro forma	$	2.87		$	1.90		$	2.06
Diluted — as reported	$	2.82		$	1.88		$	2.05
Diluted — pro forma	$	2.82		$	1.87		$	2.03

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Pro forma disclosures are not likely to be representative of the effects on reported net income for future years because of the staggered vesting periods of the options.

A summary of the Company’s share option activity, and related information for the years ended December 31, 2005, 2004 and 2003 follows:

	2005					2004					2003
				Weighted					Weighted					Weighted
				Average					Average					Average
	Options			Exercise		Options			Exercise		Options			Exercise
	(000s)			Price		(000s)			Price		(000s)			Price
Outstanding-beginning of year		3,902		$	28.26		4,453		$	26.88		5,766		$	25.89
Granted		228			41.34		292			43.07		336			31.56
Exercised		(592	)		26.74		(841	)		25.89		(1,611	)		24.26
Forfeited		(17	)		40.57		(2	)		30.31		(38	)		29.00
Outstanding-end of year		3,521		$	29.31		3,902		$	28.26		4,453		$	26.88
Exercisable at end of year		2,909		$	27.19		2,556		$	25.62		2,816		$	23.30
Weighted-average fair value of options granted during the year	$	3.86				$	3.15				$	1.91

Exercise prices for options outstanding as of December 31, 2005 ranged from $20.75 to $44.21. The weighted-average remaining contractual life of those options is 5.4 years.

Grants of 96,849, 103,918 and 115,987 restricted shares were made under the Share Incentive Plan during the years ended December 31, 2005, 2004, and 2003, respectively. These restricted shares vest ratably over a 5-year period beginning with the first anniversary date of the grant. The weighted average fair value of the restricted shares granted during the years ended December 31, 2005, 2004 and 2003 was $41.14 per share, $42.47 per share and $31.22 per share, respectively.

An additional 1,935,042, 2,309,159, and 1,241,632 common shares were reserved for issuance for future grants under the Share Incentive Plan at December 31, 2005, 2004, and 2003, respectively.

11. COMMITMENTS AND CONTINGENCIES

Substantially all of the Properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (collectively, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company. The Environmental Assessments consisted of, among other activities, a visual inspection of each Property and its neighborhood and a check of pertinent public records. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

Although the Company is engaged in litigation incidental to its business, there is no legal proceeding to which it is a party which, in the opinion of management, will materially adversely affect the results of the Company’s operations.

The Company is obligated to make additional capital contributions to unconsolidated joint ventures of $2.5 million.

The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.

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12. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

A summary of quarterly results of operations for the years ended December 31, 2005 and 2004 follows. Certain 2005 and 2004 amounts have been reclassified to conform to the current presentation of discontinued operations (in thousands, except per share amounts).

	Quarter Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,
	2005		2005		2005		2005		2004		2004		2004		2004
Operating revenue	$	171,888	$	169,552	$	174,026	$	165,264	$	160,863	$	157,168	$	155,729	$	154,567
Income from continuing operations		104,769		33,405		37,025		38,639		38,126		35,447		36,285		35,681
Discontinued operations		2,547		18,470		7,532		6,964		7,813		4,031		1,070		2,990
Income available to common shareholders		107,316		51,875		44,557		45,603		45,939		39,478		37,355		38,671
Income per common share — basic	$	1.22	$	0.59	$	0.51	$	0.53	$	0.54	$	0.47	$	0.44	$	0.46
Income per common share — diluted	$	1.20	$	0.58	$	0.51	$	0.52	$	0.53	$	0.46	$	0.44	$	0.45

13. SEGMENT INFORMATION

The Company operates its portfolio of properties primarily throughout the Mid-Atlantic, Southeastern and Midwestern United States. Additionally, the Company owns certain assets in the United Kingdom. The Company reviews the performance of the portfolio on a geographical basis, as such, the following regions are considered the Company’s reportable segments:

Reportable Segments	Markets
Delaware Valley	Southeastern Pennsylvania; New Jersey
Midwest	Lehigh Valley, Pennsylvania; Michigan; Minnesota; Milwaukee/Chicago
Mid-Atlantic	Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida	Jacksonville; Orlando; Boca Raton; Tampa; Texas
United Kingdom	County of Kent

The Company’s reportable segments are distinct business units which are each managed separately in order to concentrate market knowledge within a geographic area. Within these reportable segments, the Company derives its revenues from its two product types: industrial properties and office properties.

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The Company evaluates performance of the reportable segments based on property level operating income, which is calculated as rental revenue and operating expense reimbursement less rental property expenses and real estate taxes. The accounting policies of the reportable segments are the same as those for the Company on a consolidated basis. The operating information by segment is as follows (in thousands):

FOR THE YEAR ENDED DECEMBER 31, 2005

	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	194,710	$	38,774	$	89,155	$	119,723	$	120,892	$	97,145	$	20,331	$	680,730
Rental property expenses and real estate taxes		56,908		13,864		23,155		44,676		37,460		31,959		3,681		211,703
Property level operating income	$	137,802	$	24,910	$	66,000	$	75,047	$	83,432	$	65,186	$	16,650		469,027
Interest and other income																8,622
Interest expense																(129,617	)
General and administrative																(38,138	)
Depreciation and amortization																(146,526	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																163,368
Gain on property dispositions																84,295
Income taxes																(14,827	)
Minority interest																(21,538	)
Equity in earnings of unconsolidated joint ventures																2,540
Discontinued operations net of minority interest																35,513
Income available to common shareholders															$	249,351

FOR THE YEAR ENDED DECEMBER 31, 2004

	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	184,704	$	33,643	$	75,427	$	113,347	$	114,307	$	87,165	$	19,734	$	628,327
Rental property expenses and real estate taxes		53,335		11,616		20,497		42,113		32,699		27,386		3,168		190,814
Property level operating income	$	131,369	$	22,027	$	54,930	$	71,234	$	81,608	$	59,779	$	16,566		437,513
Interest and other income																7,290
Interest expense																(116,630	)
General and administrative																(33,759	)
Depreciation and amortization																(129,298	)
Income before property dispositions, income taxes, minority interest and equity in loss of unconsolidated joint ventures																165,116
Gain on property dispositions																496
Income taxes																(1,820	)
Minority interest																(17,478	)
Equity in loss of unconsolidated joint ventures																(775	)
Discontinued operations net of minority interest																15,904
Income available to common shareholders															$	161,443

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FOR THE YEAR ENDED DECEMBER 31, 2003

	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	183,110	$	32,725	$	67,902	$	112,355	$	103,105	$	82,312	$	12,377	$	593,886
Rental property expenses and real estate taxes		51,950		10,878		17,295		40,616		28,648		24,602		2,250		176,239
Property level operating income	$	131,160	$	21,847	$	50,607	$	71,739	$	74,457	$	57,710	$	10,127		417,647
Interest and other income																8,285
Interest expense																(117,754	)
General and administrative																(28,316	)
Depreciation and amortization																(116,557	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																163,305
Gain on property dispositions																447
Income taxes																(2,326	)
Minority interest																(19,795	)
Equity in earnings of unconsolidated joint ventures																1,744
Discontinued operations net of minority interest																20,235
Income available to common shareholders															$	163,610

Product Type Information	Real Estate Related Revenues
	Year Ended December 31,
	2005		2004		2003
Industrial	$	285,894	$	262,529	$	246,247
Office		394,836		365,798		347,639
Total operating revenue	$	680,730	$	628,327	$	593,886

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT

	Delaware Valley						Midwest
	Southeastern						Lehigh						Mid-						United
	Pennsylvania			Other			Valley			Other			Atlantic			Florida			Kingdom			Total
January 1, 2005	$	1,020,714		$	193,784		$	566,194		$	800,611		$	828,809		$	659,775		$	169,304		$	4,239,191
Additions		44,071			15,191			84,698			115,619			115,341			37,796			10,832			423,548
Dispositions		(4,587	)		(21,953	)		(5,987	)		(26,842	)		(30,415	)		(42,214	)		(170,298	)		(302,296	)
December 31, 2005	$	1,060,198		$	187,022		$	644,905		$	889,388		$	913,735		$	655,357		$	9,838			4,360,443
Accumulated depreciation																							(748,818	)
Development in progress																							324,924
Land held for development																							158,653
Assets held for sale, net																							12,654
Other assets																							389,673
Total assets at December 31, 2005																						$	4,497,529

55

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT

	Delaware Valley						Midwest
	Southeastern						Lehigh					Mid-					United
	Pennsylvania			Other			Valley		Other			Atlantic		Florida			Kingdom		Total
January 1, 2004	$	1,014,562		$	164,224		$	446,738	$	778,036		$	739,202	$	608,089		$	159,067	$	3,909,918
Additions		29,824			31,082			119,456		35,484			89,607		55,667			10,237		371,357
Dispositions		(23,672	)		(1,522	)		—		(12,909	)		—		(3,981	)		—		(42,084	)
December 31, 2004	$	1,020,714		$	193,784		$	566,194	$	800,611		$	828,809	$	659,775		$	169,304		4,239,191
Accumulated depreciation																				(692,649	)
Development in progress																				81,099
Land held for development																				171,122
Assets held for sale, net																				12,799
Other assets																				351,265
Total assets at December 31, 2004																			$	4,162,827

14. SFAS NO. 144, “ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS”

Discontinued Operations

In accordance with SFAS No. 144 net income and gain/(loss) on disposition of real estate for properties sold and held for sale are reflected in the accompanying consolidated statements of operations as discontinued operations. The proceeds from dispositions of Operating Properties were $200.9 million and $51.1 million for the years ended December 31, 2005 and 2004, respectively.

The held for sale properties consist of four properties totaling 132,000 square feet in the Company’s Mid-Atlantic segment. The properties held for sale as of December 31, 2005 were sold in January 2006.

Below is a summary of the results of operations of the properties disposed of and held for sale through the respective disposition dates (in thousands):

	December 31,
	2005			2004			2003
Revenues	$	12,352		$	26,513		$	28,888
Operating expenses		(3,822	)		(6,439	)		(6,549	)
Interest expense		(5,811	)		(7,867	)		(6,579	)
Depreciation and amortization		(3,694	)		(7,217	)		(6,545	)
Income before property dispositions and minority interest	$	(975	)	$	4,990		$	9,215

Sales of land and development properties and Properties in Operation where the Company has continuing involvement, are reflected as a component of income from continuing operations.

Interest expense is allocated to discontinued operations as permitted under EITF 87-24, “Allocation of Interest to Discontinued Operations,” and have included such interest expense in computing net income from discontinued operations. The allocation of interest expense to discontinued operations was based on the ratio of net assets sold (without continuing involvement) or held for sale to the sum of total net assets plus consolidated debt.

Asset Impairment

In accordance with SFAS No. 144, during the years ended December 31, 2005 and 2004, the Company recognized impairment losses of $5.3 million and $1.4 million, respectively. The 2005 impairment loss of $5.3 million was related to a portfolio of operating properties equaling 615,000 square feet in the Midwest – other segment. The 2004 impairment loss of $1.4 million was on a parcel of land in the Midwest – other segment. Asset impairments are included in the caption gain on property dispositions as a component of income from continuing operations. The Company determined this impairment through a comparison of the aggregate future undiscounted cash flows (including quoted offer prices) to be generated by the properties to the carrying value of the properties. The Company has evaluated each of the properties and land held for development and has determined that there are no additional valuation adjustments necessary at December 31, 2005.

56

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
1501 Perryman Road	Aberdeen, MD	$	—		$	5,813,324	$	18,874,059	$	84	$	5,813,080	$	18,874,387	$	24,687,467	$	—		2005	40 yrs.
2196 Avenue C	Allentown, PA		—			101,159		—		1,347,970		107,307		1,341,822		1,449,129		704,986		1980	40 yrs.
2202 Hanger Place	Allentown, PA			*		137,439		—		1,341,155		138,127		1,340,466		1,478,594		785,363		1981	40 yrs.
7437 Industrial Boulevard	Allentown, PA		—			717,488		5,022,413		1,872,180		726,651		6,885,429		7,612,080		2,223,838		1976	40 yrs.
7339 Industrial Boulevard	Allentown, PA			*		1,187,776		—		6,049,516		1,197,447		6,039,845		7,237,293		1,605,166		1996	40 yrs.
400 Nestle Way	Allentown, PA		24,080,572			8,065,500		—		26,870,897		8,184,096		26,752,301		34,936,397		6,429,317		1997	40 yrs.
7248 Industrial Boulevard	Allentown, PA		—			2,670,849		13,307,408		1,097,573		2,670,673		14,405,156		17,075,829		3,351,205		1988	40 yrs.
700 Nestle Way	Allentown, PA		—			3,473,120		—		18,085,441		4,174,970		17,383,591		21,558,561		3,503,834		1998	40 yrs.
7562 Penn Drive	Allentown, PA		—			269,614		844,069		131,443		269,614		975,512		1,245,126		202,120		1989	40 yrs.
7277 Williams Avenue	Allentown, PA		—			462,964		1,449,009		315,821		463,123		1,764,671		2,227,794		442,488		1989	40 yrs.
7355 Williams Avenue	Allentown, PA		—			489,749		1,658,091		304,294		489,749		1,962,385		2,452,134		407,004		1998	40 yrs.
794 Roble Road	Allentown, PA		—			1,147,541		6,088,041		1,125,815		1,147,541		7,213,857		8,361,398		1,564,453		1985	40 yrs.
6923 Schantz Spring Road	Allentown, PA			*		1,127,805		3,309,132		348,419		1,127,805		3,657,551		4,785,355		722,630		1993	40 yrs.
7132 Daniels Drive	Allentown, PA		—			1,623,326		3,464,626		4,070,191		1,695,610		7,462,532		9,158,142		1,375,466		1988	40 yrs.
8014 Industrial Boulevard	Allentown, PA		—			4,019,258		—		9,440,262		3,645,117		9,814,403		13,459,520		1,782,189		1999	40 yrs.
705 Boulder Drive	Allentown, PA		—			4,484,096		—		14,852,439		4,486,836		14,849,699		19,336,535		2,012,358		2001	40 yrs.
651 Boulder Drive	Allentown, PA		—			4,308,646		—		13,280,682		4,308,646		13,280,682		17,589,328		2,219,533		2000	40 yrs.
8150 Industrial Boulevard	Allentown, PA		—			2,564,167		—		8,703,838		2,571,466		8,696,539		11,268,005		1,114,060		2002	40 yrs.
8250 Industrial Boulevard	Allentown, PA		—			1,025,667		—		5,214,510		1,035,854		5,204,323		6,240,177		480,968		2002	40 yrs.
650 Boulder Drive	Allentown, PA		—			5,208,248		—		19,527,776		5,242,478		19,493,547		24,736,024		1,597,932		2002	40 yrs.
650 Boulder Drive Expansion	Allentown, PA		—			2,861,715		—		9,015,365		4,719,311		7,157,769		11,877,080		223,811		2001	40 yrs.
7165 Ambassador Drive	Allentown, PA		—			792,999		—		4,533,868		804,848		4,522,019		5,326,867		442,696		2002	40 yrs.
835 W Hamilton Street	Allentown, PA		—			—		—		59,269,393		1,233,597		58,035,796		59,269,393		4,284,836		2004	40 yrs.
200 Boulder Drive	Allentown, PA		—			4,722,683		18,922,645		178,925		4,722,683		19,101,570		23,824,253		593,798		2004	40 yrs.
250 Boulder Drive	Allentown, PA		—			2,600,622		12,099,145		130,329		2,600,622		12,229,474		14,830,096		381,617		2004	40 yrs.
6560 Stonegate Drive	Allentown, PA			*		458,281		—		2,411,971		458,945		2,411,307		2,870,252		992,783		1989	40 yrs.
6370 Hedgewood Drive	Allentown, PA		942,053			540,795		—		3,233,886		541,459		3,233,222		3,774,681		1,242,135		1990	40 yrs.
6390 Hedgewood Drive	Allentown, PA		—			707,203		—		2,801,290		707,867		2,800,625		3,508,493		1,216,709		1990	40 yrs.
6350 Hedgewood Drive	Allentown, PA		1,158,301			360,027		—		3,458,418		560,691		3,257,754		3,818,445		1,297,997		1989	40 yrs.
6330 Hedgewood Drive	Allentown, PA		—			531,268		—		4,905,648		532,047		4,904,869		5,436,916		2,171,204		1988	40 yrs.
6580 Snowdrift Road	Allentown, PA			*		388,328		—		3,284,907		389,081		3,284,155		3,673,235		1,326,388		1988	40 yrs.
6540 Stonegate Drive	Allentown, PA		1,458,938			422,042		—		3,893,307		422,730		3,892,620		4,315,349		1,687,429		1988	40 yrs.
974 Marcon Boulevard	Allentown, PA		—			143,500		—		2,462,419		144,248		2,461,672		2,605,919		1,083,837		1987	40 yrs.
964 Marcon Boulevard	Allentown, PA		—			138,816		—		1,667,008		139,480		1,666,344		1,805,824		837,998		1985	40 yrs.
764 Roble Road	Allentown, PA		—			141,069		—		864,405		141,746		863,728		1,005,474		415,161		1985	40 yrs.
3174 Airport Road	Allentown, PA		—			98,986		—		1,155,913		98,986		1,155,913		1,254,899		689,117		1979	40 yrs.
2201 Hanger Place	Allentown, PA		—			128,454		—		1,869,709		129,142		1,869,021		1,998,163		984,040		1987	40 yrs.
954 Marcon Boulevard	Allentown, PA		—			103,665		—		1,110,937		104,453		1,110,149		1,214,602		551,293		1981	40 yrs.
754 Roble Road	Allentown, PA		—			162,115		1,731,885		186,641		163,735		1,916,906		2,080,641		608,794		1986	40 yrs.
894 Marcon Boulevard	Allentown, PA		—			117,134		1,048,866		321,307		118,304		1,369,003		1,487,307		340,905		1986	40 yrs.
744 Roble Road	Allentown, PA		—			159,771		1,734,229		270,068		161,371		2,002,697		2,164,068		612,315		1986	40 yrs.
944 Marcon Boulevard	Allentown, PA		—			118,521		1,435,479		433,413		119,711		1,867,702		1,987,413		566,716		1986	40 yrs.
6520 Stonegate Drive	Allentown, PA		—			453,315		—		1,795,242		484,361		1,764,196		2,248,557		511,996		1996	40 yrs.
2041 Avenue C	Allentown, PA			*		213,599		1,095,217		83,135		213,879		1,178,072		1,391,951		324,353		1990	40 yrs.
7144 Daniels Drive	Allentown, PA		—			2,390,217		2,342,761		3,721,684		1,579,169		6,875,493		8,454,662		1,678,004		1975	40 yrs.
7620 Cetronia Road	Allentown, PA		—			1,091,806		3,851,456		353,007		1,093,724		4,202,545		5,296,269		1,258,767		1990	40 yrs.
939 Marcon Boulevard	Allentown, PA			*		2,220,414		4,524,393		858,451		2,220,548		5,382,710		7,603,257		1,434,359		1980	40 yrs.
180,190 Cochrane Drive	Annapolis, MD		—			3,670,256		—		20,870,918		3,752,293		20,788,881		24,541,174		7,864,852		1988	40 yrs.
10430 Lakeridge Parkway	Ashland, VA		—			421,267		3,770,870		282,587		421,267		4,053,457		4,474,724		824,454		1989	40 yrs.
10456 Lakeridge Parkway	Ashland, VA		—			409,261		3,663,754		418,398		409,261		4,082,152		4,491,413		857,776		1991	40 yrs.
2453 Prospect Street	Aurora, IL		—			1,780,395		6,608,091		435,893		1,563,076		7,261,304		8,824,379		1,484		2004	40 yrs.
1000 Bilter Road	Aurora, IL		—			5,136,177		22,491,870		1,902,155		5,120,004		24,410,199		29,530,202		590,155		2005	40 yrs.
101-121 N Raddant Road	Batavia, IL		6,130,347			986,912		9,984,405		46,363		986,912		10,030,769		11,017,681		585,008		2003	40 yrs.
1070 Swanson + 506-530 Kingsland	Batavia, IL		7,884,881			1,100,812		11,135,499		36,314		1,100,812		11,171,813		12,272,625		651,403		2003	40 yrs.
900 Douglas Road	Batavia, IL		—			308,586		3,116,469		9,635		308,586		3,126,104		3,434,690		182,278		2003	40 yrs.
4606 Richlynn Drive	Belcamp, MD		—			299,600		1,818,861		712,787		299,600		2,531,649		2,831,249		404,490		1985	40 yrs.
41199 Van Born Road	Bellville, MI		—			1,829,396		6,765,015		8,133		1,829,396		6,773,148		8,602,543		—		2005	40 yrs.
41133 Van Born Road	Bellville, MI		—			1,829,560		6,454,755		94,444		1,829,560		6,549,199		8,378,759		—		2005	40 yrs.
1655 Valley Center Parkway	Bethlehem, PA		—			214,431		—		1,994,597		215,095		1,993,932		2,209,028		866,099		1993	40 yrs.
100 Brodhead Road	Bethlehem, PA			*		429,416		2,919,588		725,250		429,456		3,644,798		4,074,254		906,161		1990	40 yrs.
1455 Valley Center Parkway	Bethlehem, PA		—			670,290		—		3,732,375		545,172		3,857,492		4,402,665		1,611,685		1997	40 yrs.
1640 Valley Center Parkway	Bethlehem, PA		—			359,000		—		2,412,280		190,728		2,580,553		2,771,280		1,044,485		1996	40 yrs.
1650 Valley Center Parkway	Bethlehem, PA		—			359,000		—		2,212,500		188,896		2,382,604		2,571,500		872,451		1997	40 yrs.

57

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
1660 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,257,716			188,721		2,427,995		2,616,716		672,667		1998	40 yrs.
83 South Commerce Way	Bethlehem, PA		—		143,661		888,128		513,515			212,744		1,332,560		1,545,304		440,910		1989	40 yrs.
85 South Commerce Way	Bethlehem, PA		—		236,708		987,949		157,065			237,078		1,144,644		1,381,722		281,971		1989	40 yrs.
87 South Commerce Way	Bethlehem, PA		—		253,886		1,062,881		217,298			253,886		1,280,179		1,534,065		336,003		1989	40 yrs.
89 South Commerce Way	Bethlehem, PA		—		320,000		—		2,003,316			367,706		1,955,611		2,323,316		620,848		1998	40 yrs.
95 Highland Avenue	Bethlehem, PA		—		430,593		3,182,080		1,387,950			430,593		4,570,029		5,000,623		1,067,777		1985	40 yrs.
1525 Valley Center Parkway	Bethlehem, PA		—		475,686		—		7,753,820			804,104		7,425,402		8,229,506		1,670,311		1999	40 yrs.
74 West Broad Street	Bethlehem, PA		—		1,096,127		—		13,350,023			1,099,079		13,347,071		14,446,150		1,877,308		2002	40 yrs.
1605 Valley Center Parkway	Bethlehem, PA		—		729,751		—		10,808,550			1,766,196		9,772,105		11,538,301		1,104,687		2000	40 yrs.
3400 High Point Boulevard	Bethlehem, PA		—		298,227		—		3,047,434			662,809		2,682,852		3,345,661		284,945		2002	40 yrs.
1495 Valley Center Parkway	Bethlehem, PA		—		434,640		—		3,803,574			435,303		3,802,911		4,238,214		1,391,226		1990	40 yrs.
1550 Valley Center Parkway	Bethlehem, PA		—		196,954		—		3,437,457			197,700		3,436,711		3,634,411		1,328,963		1988	40 yrs.
1560 Valley Center Parkway	Bethlehem, PA		—		240,069		—		4,413,646			240,732		4,412,983		4,653,715		1,872,674		1988	40 yrs.
1510 Valley Center Parkway	Bethlehem, PA		—		312,209		—		3,753,072			312,873		3,752,408		4,065,281		1,566,332		1988	40 yrs.
1530 Valley Center Parkway	Bethlehem, PA		—		211,747		—		2,987,198			212,492		2,986,453		3,198,945		1,135,268		1988	40 yrs.
57 South Commerce Way	Bethlehem, PA		—		390,839		2,701,161		662,728			395,459		3,359,269		3,754,728		1,000,978		1986	40 yrs.
1685 Valley Center Parkway	Bethlehem, PA		—		244,029		—		2,280,697			198,482		2,326,244		2,524,726		739,638		1996	40 yrs.
6601-6625 W. 78th Street	Bloomington, MN		—		2,263,060		—		38,629,236			2,310,246		38,582,050		40,892,296		6,929,276		1998	40 yrs.
4801 West 81st Street	Bloomington, MN		—		1,624,701		2,494,368		648,314			1,624,701		3,142,681		4,767,383		724,405		1984	40 yrs.
8100 Cedar Avenue	Bloomington, MN		—		501,313		3,675,416		971,824			501,313		4,647,240		5,148,553		1,001,604		1983	40 yrs.
6161 Green Valley Drive	Bloomington, MN		—		740,378		3,311,602		732,919			741,194		4,043,704		4,784,898		642,225		1992	40 yrs.
10801 Nesbitt Avenue South	Bloomington, MN		—		784,577		—		4,105,182			786,382		4,103,377		4,889,759		797,154		2001	40 yrs.
5775 West Old Shakopee Road	Bloomington, MN		—		2,052,018		3,849,649		3,288,993			2,060,644		7,130,015		9,190,660		2,054,843		2002	40 yrs.
5715 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,953,949			1,264,758		4,313,199		5,577,958		592,805		2002	40 yrs.
5735 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,089,483			1,264,758		3,448,732		4,713,491		338,168		2002	40 yrs.
1701 Clint Moore Boulevard	Boca Raton, FL		—		1,430,884		3,043,553		643,990			1,430,937		3,687,490		5,118,427		721,615		1985	40 yrs.
951 Broken Sound Parkway	Boca Raton, FL		—		1,426,251		6,098,952		845,468			1,426,251		6,944,420		8,370,670		1,775,105		1986	40 yrs.
777 Yamato Road	Boca Raton, FL		—		4,101,247		16,077,347		4,729,322			4,501,247		20,406,669		24,907,916		4,270,586		1987	40 yrs.
1801 Clint Moore Road	Boca Raton, FL		—		1,065,068		4,481,644		462,220			1,065,068		4,943,864		6,008,933		1,060,278		1986	40 yrs.
400 Boulder Drive	Breinigsville, PA		—		—		—		13,252,051			2,865,575		10,386,476		13,252,051		368,063		2003	40 yrs.
860 Nestle Way	Breinigsville, PA		—		8,118,881		18,885,486		1,390,794			8,118,881		20,276,280		28,395,161		167,113		2004	40 yrs.
602 Heron Drive	Bridgeport, NJ		—		524,728		2,240,478		7,650			524,728		2,248,128		2,772,856		435,284		1996	40 yrs.
245 Executive Drive	Brookfield, WI		—		577,067		5,197,903		2,517,341			577,067		7,715,244		8,292,311		1,171,101		1984	40 yrs.
16620-16650 W Bluemound Road	Brookfield, WI		—		586,665		4,289,907		641,920			586,665		4,931,828		5,518,492		790,717		1999	40 yrs.
15800 West Bluemound Road	Brookfield, WI		—		1,289,204		8,128,035		1,263,239			1,306,811		9,373,667		10,680,478		1,030,788		1994	40 yrs.
20700 Swenson Drive	Brookfield, WI		—		830,008		12,276,445		209,223			830,008		12,485,668		13,315,676		44,449		2005	40 yrs.
20800 Swenson Drive	Brookfield, WI		—		1,023,466		10,729,219		345,767			1,023,466		11,074,986		12,098,451		38,883		2005	40 yrs.
20935 Swenson Drive	Brookfield, WI		—		571,389		10,238,547		174,635			571,389		10,413,181		10,984,570		37,151		2005	40 yrs.
20975 Swenson Drive	Brookfield, WI		—		675,422		8,910,651		412,619			677,372		9,321,320		9,998,692		32,226		2005	40 yrs.
1485 W. Commerce Avenue	Carlisle, PA		—		4,249,868		13,886,039		49,205			4,253,027		13,932,086		18,185,112		348,233		2004	40 yrs.
3773 Corporate Parkway	Center Valley, PA		—		738,108		—		7,597,697			794,874		7,540,931		8,335,805		1,462,903		2001	40 yrs.
1309 Executive Boulevard	Cheaspeake, VA		—		926,125		—		5,086,632			955,374		5,057,383		6,012,757		690,591		2001	40 yrs.
1960 Cuthbert Boulevard	Cherry Hill, NJ		—		321,699		1,291,557		542,915			321,699		1,834,473		2,156,172		456,176		1985	40 yrs.
1970 Cuthbert Boulevard	Cherry Hill, NJ		—		321,699		1,291,558		233,697			321,699		1,525,255		1,846,954		283,559		1985	40 yrs.
7 Carnegie Plaza	Cherry Hill, NJ		—		2,000,000		3,493,983		3,217,287			2,005,475		6,705,794		8,711,270		208,263		2004	40 yrs.
1305 Executive Boulevard	Chesapeake, VA		—		861,020		—		4,874,601			1,129,850		4,605,771		5,735,621		527,850		2002	40 yrs.
1313 Executive Boulevard	Chesapeake, VA		—		1,180,036		—		4,629,615			1,708,050		4,101,602		5,809,652		443,799		2002	40 yrs.
500 Independence Parkway	Chesapeake, VA		3,890,463		864,150		4,427,285		66,501			866,609		4,491,328		5,357,937		228,169		2004	40 yrs.
700 Independence Parkway	Chesapeake, VA		7,204,561		1,950,375		8,273,910		(906,932	)		1,951,135		7,366,217		9,317,352		402,649		2004	40 yrs.
501 Independence Parkway	Chesapeake, VA		—		1,202,556		5,975,538		1,024,000			1,292,273		6,909,821		8,202,094		149,113		2005	40 yrs.
505 Independence Parkway	Chesapeake, VA		—		1,292,062		6,456,515		1,122,658			1,292,254		7,578,979		8,871,234		166,862		2005	40 yrs.
510 Independence Parkway	Chesapeake, VA		—		2,012,149		7,546,882		299,240			2,014,689		7,843,582		9,858,271		192,555		2005	40 yrs.
600 H P Way	Chester, VA		—		146,126		—		5,317,497			501,752		4,961,871		5,463,623		1,058,137		1997	40 yrs.
500 H P Way	Chester, VA		—		142,692		—		5,070,943			491,919		4,721,717		5,213,635		874,593		1997	40 yrs.
9101,9111,9115 Guilford Road	Columbia, MD		—		758,951		—		3,508,048			765,952		3,501,047		4,266,999		1,831,843		1984	40 yrs.
9125,9135,9145 Guilford Road	Columbia, MD		—		900,154		—		5,689,577			920,439		5,669,293		6,589,731		3,246,973		1983	40 yrs.
7178-80 Columbia Gateway	Columbia, MD		—		1,569,237		4,786,887		1,607,974			1,571,105		6,392,992		7,964,098		1,953,105		1987	40 yrs.
9770 Patuxent Woods Drive	Columbia, MD		—		341,663		3,033,309		142,055			341,663		3,175,364		3,517,027		677,183		1986	40 yrs.
9780 Patuxent Woods Drive	Columbia, MD		—		218,542		1,940,636		125,207			218,542		2,065,843		2,284,384		435,146		1986	40 yrs.
9790 Patuxent Woods Drive	Columbia, MD		—		243,791		2,164,094		183,044			243,791		2,347,138		2,590,929		599,732		1986	40 yrs.
9810 Patuxent Woods Drive	Columbia, MD		—		266,684		2,366,901		536,740			266,684		2,903,641		3,170,325		650,361		1986	40 yrs.
9800 Patuxent Woods Drive	Columbia, MD		—		299,099		2,654,069		474,398			299,099		3,128,467		3,427,567		716,219		1988	40 yrs.
9820 Patuxent Woods Drive	Columbia, MD		—		237,779		2,110,835		50,193			237,779		2,161,028		2,398,807		478,162		1988	40 yrs.

58

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
9830 Patuxent Woods Drive	Columbia, MD		—			296,262		2,628,933		143,928		296,262		2,772,861		3,069,124		636,470		1986	40 yrs.
9050 Red Branch Road	Columbia, MD		—			290,950		2,577,153		718,572		290,950		3,295,725		3,586,675		616,194		1972	40 yrs.
8945-8975 Guilford Road	Columbia, MD		—			2,428,795		7,493,740		822,282		2,427,065		8,317,752		10,744,817		1,636,438		1986	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—			958,105		—		3,529,318		1,295,000		3,192,423		4,487,423		485,845		2002	40 yrs.
6200 Old Dobbin Lane	Columbia, MD		—			958,105		—		3,726,880		1,295,000		3,389,986		4,684,986		414,939		2002	40 yrs.
6210 Old Dobbin Lane	Columbia, MD		—			958,105		—		3,722,092		1,307,300		3,372,898		4,680,198		483,713		2002	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—			958,105		—		3,780,749		1,599,259		3,139,595		4,738,854		211,557		2000	40 yrs.
5950 Symphony Woods Road	Columbia, MD		—			1,462,762		11,310,187		980,190		1,467,623		12,285,517		13,753,140		1,418,071		1986	40 yrs.
5150 International Drive	Cudahy, WI		—			739,673		5,108,025		250,327		741,858		5,356,167		6,098,024		252,995		2003	40 yrs.
3255 Neil Armstrong Boulevard	Eagan, MN		—			1,131,017		—		3,393,423		1,131,017		3,393,423		4,524,441		591,576		1998	40 yrs.
6321-6325 Bury Drive	Eden Prairie, MN		—			462,876		4,151,790		301,563		462,876		4,453,353		4,916,229		1,050,521		1988	40 yrs.
7660-7716 Golden Triangle Drive	Eden Prairie, MN		—			568,706		5,115,177		2,627,196		1,289,215		7,021,864		8,311,079		2,173,542		1988	40 yrs.
7400 Flying Cloud Drive	Eden Prairie, MN		—			195,982		1,762,027		136,431		195,982		1,898,459		2,094,440		394,855		1987	40 yrs.
10301-10305 West 70th Street	Eden Prairie, MN		—			120,622		1,085,226		109,698		118,300		1,197,246		1,315,546		267,707		1984	40 yrs.
10321 West 70th Street	Eden Prairie, MN		—			145,198		1,305,700		355,229		142,399		1,663,728		1,806,127		400,559		1984	40 yrs.
10333 West 70th Street	Eden Prairie, MN		—			110,746		995,868		32,756		108,610		1,030,760		1,139,370		225,138		1984	40 yrs.
10349-10357 West 70th Street	Eden Prairie, MN		—			275,903		2,481,666		584,392		270,584		3,071,377		3,341,961		619,935		1985	40 yrs.
10365-10375 West 70th Street	Eden Prairie, MN		—			291,077		2,618,194		506,997		285,464		3,130,804		3,416,267		639,068		1985	40 yrs.
10393-10394 West 70th Street	Eden Prairie, MN		—			269,618		2,423,318		775,855		264,419		3,204,372		3,468,791		640,365		1985	40 yrs.
7078 Shady Oak Road	Eden Prairie, MN		—			343,093		3,085,795		150,672		336,481		3,243,079		3,579,560		692,034		1985	40 yrs.
10400 Viking Drive	Eden Prairie, MN		—			2,912,391		—		22,662,863		2,938,372		22,636,882		25,575,254		4,954,367		1999	40 yrs.
7695-7699 Anagram Drive	Eden Prairie, MN		—			760,525		3,254,758		605,146		760,525		3,859,903		4,620,429		675,192		1997	40 yrs.
7800 Equitable Drive	Eden Prairie, MN		—			2,188,525		3,788,762		95,205		2,188,525		3,883,967		6,072,492		721,965		1993	40 yrs.
7905 Fuller Road	Eden Prairie, MN		—			1,229,862		4,075,167		25,345		1,230,965		4,099,409		5,330,374		730,033		1994	40 yrs.
9023 Columbine Road	Eden Prairie, MN		—			1,956,273		—		4,873,578		1,956,273		4,873,578		6,829,851		899,524		1999	40 yrs.
8967 Columbine Road	Eden Prairie, MN		—			1,450,000		—		3,575,107		1,450,000		3,575,107		5,025,107		616,893		2000	40 yrs.
7777 Golden Triangle Drive	Eden Prairie, MN		—			993,101		2,136,862		903,324		993,101		3,040,185		4,033,286		425,146		2000	40 yrs.
8937 Columbine Road	Eden Prairie, MN		—			1,325,829		—		4,287,274		1,739,966		3,873,137		5,613,103		578,525		2001	40 yrs.
7615 Smetana Lane	Eden Prairie, MN		—			1,011,517		—		8,665,025		3,000,555		6,675,988		9,676,542		1,146,158		2001	40 yrs.
8995 Columbine Road	Eden Prairie, MN		—			1,087,594		—		3,664,053		2,055,296		2,696,352		4,751,648		344,658		2001	40 yrs.
8911 Columbine Road (B2)	Eden Prairie, MN		—			916,687		—		3,608,469		1,718,407		2,806,748		4,525,156		213,862		2000	40 yrs.
8855 Columbine Road	Eden Prairie, MN		—			1,400,925		—		5,226,016		1,599,757		5,027,185		6,626,941		197,523		2000	40 yrs.
27260 Haggerty Road	Farmington Hills, MI		—			456,877		4,091,196		633,559		456,877		4,724,755		5,181,633		1,090,466		1983	40 yrs.
27200 Haggerty Road	Farmington Hills, MI		—			382,754		3,425,227		454,131		382,754		3,879,358		4,262,112		959,305		1983	40 yrs.
27280 Haggerty Road	Farmington Hills, MI		—			452,860		4,055,512		421,431		452,860		4,476,943		4,929,802		1,018,962		1983	40 yrs.
27220 Haggerty Road	Farmington Hills, MI		—			203,064		1,802,592		174,383		203,064		1,976,975		2,180,039		482,880		1985	40 yrs.
27240 Haggerty Road	Farmington Hills, MI		—			171,518		1,518,192		209,332		171,518		1,727,524		1,899,041		389,624		1985	40 yrs.
27300 Haggerty Road	Farmington Hills, MI		—			370,378		3,311,366		663,297		370,378		3,974,663		4,345,042		795,677		1985	40 yrs.
26442-26450 Haggerty Road	Farmington Hills, MI		—			237,687		2,143,478		151,776		237,691		2,295,251		2,532,941		468,876		1988	40 yrs.
26500 Haggerty Road	Farmington Hills, MI		—			311,093		2,791,804		433,197		311,097		3,224,997		3,536,094		636,041		1986	40 yrs.
26650 Haggerty Road	Farmington Hills, MI		—			173,166		1,562,704		142,562		173,170		1,705,262		1,878,432		334,224		1988	40 yrs.
26700 Haggerty Road	Farmington Hills, MI		—			253,338		2,290,696		103,104		253,341		2,393,797		2,647,138		479,514		1986	40 yrs.
26750 Haggerty Road	Farmington Hills, MI		—			292,717		2,638,688		249,370		292,720		2,888,055		3,180,775		678,657		1988	40 yrs.
26800 Haggerty Road	Farmington Hills, MI		—			175,489		1,583,362		243,144		175,492		1,826,503		2,001,995		435,691		1986	40 yrs.
26842-26850 Haggerty Road	Farmington Hills, MI		—			239,606		2,160,470		347,508		239,609		2,507,974		2,747,584		631,875		1988	40 yrs.
26600 Haggerty Road	Farmington Hills, MI		—			455,846		—		2,910,598		537,693		2,828,750		3,366,444		682,893		1999	40 yrs.
26550 Haggerty Road	Farmington Hills, MI		—			368,083		—		2,646,871		535,179		2,479,775		3,014,954		600,743		2000	40 yrs.
32991 Hamilton Court	Farmington Hills, MI		—			1,065,392		3,627,675		1,151,817		1,065,392		4,779,492		5,844,884		535,720		1989	40 yrs.
7028 Snowdrift Road	Fogelville, PA		—			520,473		959,279		260,567		524,390		1,215,930		1,740,319		212,044		1982	40 yrs.
414 Commerce Drive	Fort Washington, PA		—			1,267,194		2,217,460		151,499		1,267,937		2,368,216		3,636,153		—		2004	40 yrs.
275 Commerce Drive	Fort Washington, PA		—			1,775,894		2,160,855		121,017		1,789,023		2,268,742		4,057,766		—		2005	40 yrs.
1250 Virginia Drive	Fort Washington, PA		—			1,639,166		1,928,574		92,973		1,650,456		2,010,257		3,660,713		—		2005	40 yrs.
106 Southchase Boulevard	Fountain Inn, SC		—			201,944		—		5,124,478		703,280		4,623,142		5,326,422		9,821		2005	40 yrs.
9601 Cosner Drive	Fredericksburg, VA		—			475,262		3,917,234		214,221		475,262		4,131,454		4,606,716		1,071,091		1995	40 yrs.
5410 - 5430 Northwest 33rd Avenue	Ft. Lauderdale, FL		—			603,776		4,176,238		1,027,286		625,111		5,182,189		5,807,300		1,113,938		1985	40 yrs.
6500 NW 12th Avenue	Ft. Lauderdale, FL		—			7,099		3,046,309		243,266		—		3,296,674		3,296,674		767,686		1989	40 yrs.
6600 NW 12th Avenue	Ft. Lauderdale, FL		—			7,102		3,047,462		458,816		—		3,513,380		3,513,380		793,835		1989	40 yrs.
4880 Cox Road	Glen Allen, VA			*		743,898		4,499,807		1,168,482		743,898		5,668,289		6,412,187		1,040,769		1995	40 yrs.
5000 Cox Road	Glen Allen, VA		—			770,214		3,685,248		334,094		771,029		4,018,528		4,789,556		974,447		1990	40 yrs.
5500 Cox Road	Glen Allen, VA		—			443,485		—		2,743,086		483,263		2,703,308		3,186,571		662,748		1999	40 yrs.
4801 Cox Road	Glen Allen, VA		—			1,072,896		—		10,165,699		1,075,620		10,162,975		11,238,595		1,941,101		1998	40 yrs.
4198 Cox Road	Glen Allen, VA		—			670,292		3,839,245		939,693		670,292		4,778,938		5,449,229		1,120,326		1984	40 yrs.
4510 Cox Road	Glen Allen, VA		—			1,010,024		7,151,729		1,663,136		1,010,044		8,814,845		9,824,889		2,112,992		1990	40 yrs.

59

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
4121 Cox Road	Glen Allen, VA		—			1,083,006		6,035,653		422,899		1,083,006		6,458,552		7,541,558		222,712		2004	40 yrs.
200 Centreport Drive	Greensboro, NC			*		331,400		3,768,600		617,010		332,017		4,384,994		4,717,010		1,338,420		1986	40 yrs.
101 Centreport Drive	Greensboro, NC		—			826,237		—		7,973,119		826,237		7,973,119		8,799,355		1,690,873		1998	40 yrs.
7736 McCloud Road	Greensboro, NC		—			591,795		5,895,312		619,040		591,795		6,514,352		7,106,147		1,315,174		1986	40 yrs.
4300 Federal Drive Expansion	Greensboro, NC		—			—		—		463,523		—		463,523		463,523		20,770		2003	40 yrs.
202 Centreport Drive	Greensboro, NC			*		549,948		5,360,462		700,556		549,679		6,061,286		6,610,965		1,793,553		1990	40 yrs.
420 Park Avenue	Greenville, SC			*		522,548		2,730,261		960,232		522,548		3,690,493		4,213,041		993,177		1986	40 yrs.
One Independence Pointe	Greenville, SC		—			780,881		6,199,230		6,280,623		784,617		12,476,117		13,260,734		1,818,151		1982	40 yrs.
55 Beattie Place	Greenville, SC		—			2,643,105		23,439,801		9,599,090		2,645,238		33,036,758		35,681,996		5,890,713		1986	40 yrs.
75 Beattie Place	Greenville, SC			*		2,406,646		17,400,939		1,622,607		2,408,577		19,021,615		21,430,192		4,083,670		1987	40 yrs.
15 Brendan Way	Greenville, SC		—			614,192		3,012,019		1,265,102		614,192		4,277,121		4,891,313		1,284,775		1988	40 yrs.
4 Independence Pointe	Greenville, SC		—			—		—		3,509,503		467,438		3,042,065		3,509,503		463,107		2002	40 yrs.
5 Independence Pointe	Greenville, SC		—			—		—		3,286,404		467,438		2,818,966		3,286,404		507,478		2002	40 yrs.
200 Southchase Boulevard	Greenville, SC		—			512,911		—		6,273,615		515,542		6,270,984		6,786,525		322,423		2003	40 yrs.
6 Independence Pointe	Greenville, SC		—			—		—		3,061,966		545,698		2,516,268		3,061,966		115,829		2003	40 yrs.
1 Enterprise Parkway	Hampton, VA		—			974,675		5,579,869		799,060		974,675		6,378,929		7,353,604		1,521,211		1987	40 yrs.
22 Enterprise Parkway	Hampton, VA		—			1,097,368		6,760,778		830,894		1,097,368		7,591,672		8,689,040		1,820,507		1990	40 yrs.
5 Manhattan Square	Hampton, VA		—			207,368		—		1,663,695		212,694		1,658,368		1,871,063		374,309		1999	40 yrs.
21 Enterprise Parkway	Hampton, VA		454,608			263,668		8,167,118		464,956		265,719		8,630,024		8,895,743		1,095,055		1999	40 yrs.
521 Butler Farm Road	Hampton, VA		—			750,769		2,911,149		160,297		710,486		3,111,728		3,822,215		175,244		2003	40 yrs.
7317 Parkway Drive	Hanover, MD		—			1,104,359		1,959,671		79,319		1,104,359		2,038,990		3,143,349		372,288		1983	40 yrs.
500 McCarthy Drive	Harrisburg, PA		—			5,194,872		19,991,436		4,099,799		5,687,013		23,599,094		29,286,107		320,900		2005	40 yrs.
4170 Mendenhall Oaks Parkway	High Point , NC		—			143,699		—		2,205,698		373,502		1,975,894		2,349,397		487,978		1999	40 yrs.
4180 Mendenhall Oaks Parkway	High Point , NC		—			121,329		—		1,834,221		315,614		1,639,936		1,955,550		422,342		1999	40 yrs.
4050 Piedmont Parkway	High Point , NC		—			801,902		—		19,441,413		2,042,159		18,201,156		20,243,315		3,264,385		1998	40 yrs.
4523 Green Point Drive	High Point, NC		—			234,564		—		2,403,961		235,698		2,402,827		2,638,525		977,437		1988	40 yrs.
4501 Green Point Drive	High Point, NC		—			319,289		—		2,553,785		320,450		2,552,624		2,873,074		1,052,143		1989	40 yrs.
4500 Green Point Drive	High Point, NC		—			230,622		—		2,328,582		231,692		2,327,513		2,559,204		1,007,744		1989	40 yrs.
2427 Penny Road	High Point, NC		—			1,165,664		—		3,467,001		655,240		3,977,424		4,632,665		1,488,176		1990	40 yrs.
4524 Green Point Drive	High Point, NC			*		182,810		—		2,344,143		183,888		2,343,064		2,526,953		952,091		1989	40 yrs.
4328, 4336 Federal Drive	High Point, NC		5,014,776			521,122		—		7,237,290		825,092		6,933,319		7,758,412		3,022,263		1995	40 yrs.
4344 Federal Drive	High Point, NC			*		484,001		—		2,728,066		173,623		3,038,445		3,212,068		883,683		1996	40 yrs.
4000 Piedmont Parkway	High Point, NC			*		592,885		4,825,615		726,684		597,368		5,547,816		6,145,185		1,548,882		1989	40 yrs.
4380 Federal Drive	High Point, NC		—			282,996		—		2,210,549		283,368		2,210,177		2,493,545		659,365		1997	40 yrs.
4388 Federal Drive	High Point, NC		—			143,661		—		1,225,791		132,655		1,236,797		1,369,452		395,409		1997	40 yrs.
4160 Mendenhall Oaks Parkway	High Point, NC		—			285,882		—		3,351,143		545,627		3,091,398		3,637,025		587,826		1998	40 yrs.
4194 Mendenhall Oaks Parkway	High Point, NC		—			102,372		—		2,580,368		265,991		2,416,749		2,682,740		556,232		1999	40 yrs.
4196 Mendenhall Oaks Parkway	High Point, NC		—			66,731		—		2,241,658		173,889		2,134,500		2,308,389		637,482		1999	40 yrs.
4300 Federal Drive	High Point, NC		—			264,038		—		1,626,937		276,038		1,614,937		1,890,975		294,402		1998	40 yrs.
4135 Mendenall Oaks Parkway	High Point, NC		—			499,500		—		2,811,431		500,980		2,809,951		3,310,931		474,890		2000	40 yrs.
4183 Eagle Hill Drive	High Point, NC		—			122,203		—		3,748,139		526,266		3,344,076		3,870,342		914,771		2001	40 yrs.
4189 Eagle Hill Drive	High Point, NC		—			100,106		—		3,429,622		431,106		3,098,622		3,529,728		594,341		2001	40 yrs.
4020 Meeting Way	High Point, NC		—			94,232		—		1,682,549		378,101		1,398,680		1,776,781		278,138		2001	40 yrs.
1400 Mendenhall Oaks Parkway	High Point, NC		—			172,320		—		6,897,916		984,672		6,085,564		7,070,236		681,048		2002	40 yrs.
4191 Mendenhall Oaks Parkway	High Point, NC		—			217,943		—		3,119,682		611,166		2,726,459		3,337,625		400,445		2002	40 yrs.
4015 Meeting Way	High Point, NC		—			510,000		—		2,793,668		511,869		2,791,799		3,303,668		63,178		2003	40 yrs.
4195 Eagle Hill Drive	High Point, NC		—			107,586		—		3,348,110		505,700		2,949,996		3,455,696		29,740		2004	40 yrs.
100 Witmer Road	Horsham, PA		—			3,102,784		—		11,907,333		3,764,784		11,245,333		15,010,117		2,569,983		1996	40 yrs.
132 Welsh Road	Horsham, PA		—			1,333,642		—		4,219,965		1,408,041		4,145,566		5,553,607		1,142,261		1998	40 yrs.
111-195 Witmer Road	Horsham, PA		—			407,005		3,129,058		31,932		378,205		3,189,791		3,567,995		819,731		1987	40 yrs.
300 Welsh Road — Building 3	Horsham, PA		—			180,459		1,441,473		358,107		180,459		1,799,579		1,980,038		515,510		1983	40 yrs.
300 Welsh Road — Building 4	Horsham, PA		—			282,493		2,256,508		1,226,326		282,493		3,482,833		3,765,327		995,706		1983	40 yrs.
2 Walnut Grove Drive	Horsham, PA		—			1,281,870		7,767,374		1,283,643		1,265,363		9,067,523		10,332,887		2,544,131		1989	40 yrs.
5 Walnut Grove Drive	Horsham, PA		—			1,065,951		—		9,757,586		1,939,712		8,883,825		10,823,537		1,564,095		2000	40 yrs.
200 Gibraltar Road	Horsham, PA		—			638,513		5,811,323		1,278,883		638,513		7,090,205		7,728,719		1,935,192		1990	40 yrs.
220 Gibraltar Road	Horsham, PA		—			629,944		5,733,228		1,090,771		629,944		6,823,999		7,453,943		1,877,615		1990	40 yrs.
240 Gibraltar Road	Horsham, PA		—			629,944		5,733,234		1,648,022		629,944		7,381,256		8,011,200		1,933,734		1990	40 yrs.
1 Walnut Grove Drive	Horsham, PA		—			1,058,901		5,343,606		1,042,557		1,058,901		6,386,163		7,445,064		1,916,794		1986	40 yrs.
181-187 Gibraltar Road	Horsham, PA		—			360,549		3,259,984		506,596		360,549		3,766,580		4,127,129		969,633		1982	40 yrs.
104 Rock Road	Horsham, PA		—			330,111		2,981,669		233,299		330,111		3,214,968		3,545,079		625,032		1974	40 yrs.
123-135 Rock Road	Horsham, PA		—			292,360		2,411,677		871,675		393,019		3,182,693		3,575,712		899,589		1975	40 yrs.
111-159 Gibraltar Road	Horsham, PA		—			489,032		4,126,151		530,590		489,032		4,656,741		5,145,773		1,130,221		1981	40 yrs.
161-175 Gibraltar Road	Horsham, PA		—			294,673		2,663,722		764,367		294,673		3,428,089		3,722,762		738,619		1976	40 yrs.

60

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
103-109 Gibraltar Road	Horsham, PA		—			270,906		2,448,500		798,112		270,906		3,246,611		3,517,517		930,047		1978	40 yrs.
261-283 Gibraltar Road	Horsham, PA			*		464,871		3,951,972		118,797		464,871		4,070,769		4,535,640		838,375		1978	40 yrs.
210-223 Witmer Road	Horsham, PA		—			270,282		2,441,276		1,667,822		270,282		4,109,098		4,379,380		832,920		1972	40 yrs.
231-237 Gibraltar Road	Horsham, PA			*		436,952		3,948,963		553,574		436,952		4,502,537		4,939,489		1,056,121		1981	40 yrs.
100 Gibraltar Road	Horsham, PA		—			38,729		349,811		9,589		38,729		359,400		398,129		72,416		1975	40 yrs.
101 Gibraltar Road	Horsham, PA		—			651,990		5,888,989		1,348,413		732,552		7,156,840		7,889,392		1,473,017		1977	40 yrs.
506 Prudential Road	Horsham, PA		—			208,140		895,470		652,633		208,140		1,548,102		1,756,243		316,801		1973	40 yrs.
113-123 Rock Road	Horsham, PA		—			351,072		3,171,001		333,995		451,731		3,404,336		3,856,068		727,545		1975	40 yrs.
101-111 Rock Road	Horsham, PA		—			350,561		3,166,389		260,902		452,251		3,325,602		3,777,852		759,807		1975	40 yrs.
120 Gibraltar Road	Horsham, PA		—			533,142		4,830,515		600,104		558,142		5,405,620		5,963,761		1,229,822		1980	40 yrs.
110 Gibraltar Road	Horsham, PA		—			673,041		5,776,369		2,105,987		673,041		7,882,356		8,555,397		1,645,034		1979	40 yrs.
100-107 Lakeside Drive	Horsham, PA		—			239,528		2,163,498		658,861		255,528		2,806,359		3,061,887		775,985		1982	40 yrs.
200-264 Lakeside Drive	Horsham, PA		—			502,705		4,540,597		1,108,942		502,705		5,649,539		6,152,244		1,484,453		1982	40 yrs.
300-309 Lakeside Drive	Horsham, PA		—			369,475		3,338,761		1,718,544		376,475		5,050,304		5,426,780		1,531,806		1982	40 yrs.
400-445 Lakeside Drive	Horsham, PA		—			543,628		4,910,226		2,761,305		583,628		7,631,532		8,215,159		1,845,758		1981	40 yrs.
104 Witmer Road	Horsham, PA			*		1,248,148		—		1,133,690		189,793		2,192,045		2,381,838		637,974		1975	40 yrs.
201 Gibraltar Road	Horsham, PA		—			380,127		3,433,433		1,925,225		380,802		5,357,983		5,738,785		1,027,400		1983	40 yrs.
719 Dresher Road	Horsham, PA			*		493,426		2,812,067		205,125		495,112		3,015,506		3,510,618		598,685		1987	40 yrs.
4 Walnut Grove	Horsham, PA			*		2,515,115		—		7,329,299		2,515,115		7,329,299		9,844,415		1,221,857		1999	40 yrs.
300 Welsh Road	Horsham, PA		—			696,061		3,339,991		522,138		696,061		3,862,128		4,558,189		744,409		1985	40 yrs.
700 Dresher Road	Horsham, PA		—			2,551,777		3,020,638		4,433,228		2,565,140		7,440,503		10,005,643		2,987,753		1987	40 yrs.
680 Blair Mill Road	Horsham, PA		—			3,527,151		—		12,048,609		4,138,577		11,437,183		15,575,760		2,327,967		2001	40 yrs.
102 Rock Road	Horsham, PA		—			1,110,209		2,301,302		1,133,191		1,114,985		3,429,717		4,544,702		380,921		1985	40 yrs.
335 Commerce Drive	Horsham, PA		—			—		—		8,367,455		182,335		8,185,120		8,367,455		159,143		2002	40 yrs.
507 Prudential Road Expansion	Horsham, PA		—			357,565		—		2,089,100		478,406		1,968,259		2,446,666		73,025		2002	40 yrs.
255 Business Center Drive	Horsham, PA		—			1,086,356		2,007,214		416,718		1,078,769		2,431,519		3,510,287		119,701		2003	40 yrs.
355 Business Center Drive	Horsham, PA		—			483,045		898,798		265,466		479,200		1,168,110		1,647,310		73,000		2003	40 yrs.
455 Business Center Drive	Horsham, PA		—			1,351,011		2,503,449		907,019		1,343,370		3,418,109		4,761,479		95,825		2003	40 yrs.
555 Business Center Drive	Horsham, PA		—			727,420		1,353,650		172,448		723,016		1,530,503		2,253,519		129,467		2003	40 yrs.
747 Dresher Road	Horsham, PA		—			1,607,238		—		4,886,080		1,607,977		4,885,340		6,493,318		1,939,962		1988	40 yrs.
507 Prudential Road	Horsham, PA			*		644,900		5,804,100		6,337,783		652,974		12,133,809		12,786,783		3,219,265		1988	40 yrs.
767 Electronic Drive	Horsham, PA			*		1,229,685		—		2,773,209		1,241,970		2,760,924		4,002,893		1,365,414		1996	40 yrs.
16445 Air Center Boulevard	Houston, TX		—			363,339		2,509,186		538,075		363,339		3,047,261		3,410,600		803,325		1997	40 yrs.
16405 Air Center Boulevard	Houston, TX		—			438,853		3,030,396		409,107		438,853		3,439,502		3,878,355		699,139		1997	40 yrs.
16580 Air Center Boulevard	Houston, TX		—			289,000		3,559,857		258,107		289,000		3,817,964		4,106,965		685,016		1997	40 yrs.
1755 Trans Central Drive	Houston, TX		—			293,534		3,036,269		199,433		306,147		3,223,088		3,529,235		490,709		1999	40 yrs.
16605 Air Center Boulevard	Houston, TX		—			298,999		—		3,770,315		496,186		3,573,128		4,069,314		630,823		2002	40 yrs.
10739 West Little York Road	Houston, TX		—			797,931		5,950,894		390,237		799,560		6,339,502		7,139,062		589,823		1999	40 yrs.
10735 West Little York Road	Houston, TX		—			1,110,988		6,351,946		1,657,286		1,135,483		7,984,738		9,120,220		491,593		2000	40 yrs.
8801-19 & 8821-49 Fallbrook Drive	Houston, TX		—			2,290,001		15,297,141		1,524,283		2,290,002		16,821,423		19,111,425		1,135,046		2000	40 yrs.
16685 Air Center Boulevard	Houston, TX		—			—		—		2,935,268		414,691		2,520,577		2,935,268		106,656		2004	40 yrs.
8825-8839 N Sam Houston Pkwy	Houston, TX		—			638,453		3,258,815		244,728		638,477		3,503,518		4,141,995		34,913		2004	40 yrs.
8850-8872 Fallbrook Drive	Houston, TX		—			504,317		2,878,351		1,038,044		504,341		3,916,371		4,420,712		51,930		2004	40 yrs.
8802-8824 Fallbrook Drive	Houston, TX		—			1,114,406		6,364,767		637,096		1,114,433		7,001,836		8,116,269		233,693		2004	40 yrs.
16602 Central Green Boulevard	Houston, TX		—			284,403		—		4,528,739		503,779		4,309,363		4,813,142		45,201		2005	40 yrs.
20 Wright Avenue	Hunt Valley, MD		—			1,205,946		—		9,667,077		1,861,025		9,011,998		10,873,023		995,153		2001	40 yrs.
4 North Park Drive	Hunt Valley, MD		—			3,269,948		13,551,370		820,361		3,269,948		14,371,731		17,641,679		824,227		2003	40 yrs.
6 North Park Drive	Hunt Valley, MD		—			2,077,949		8,770,566		1,000,467		2,077,949		9,771,033		11,848,982		651,192		2003	40 yrs.
10 North Park Drive	Hunt Valley, MD		—			2,211,969		7,816,042		50,967		2,211,969		7,867,009		10,078,978		426,459		2003	40 yrs.
307 International Circle	Hunt Valley, MD		—			3,538,319		14,190,832		6,678,883		3,542,881		20,865,153		24,408,034		11,372		2004	40 yrs.
309 International Circle	Hunt Valley, MD		—			613,667		2,458,204		566,706		615,096		3,023,480		3,638,577		32,100		2004	40 yrs.
311 International Circle	Hunt Valley, MD		—			313,365		1,281,093		133,314		314,572		1,413,200		1,727,773		1,186		2004	40 yrs.
8775 Baypine Road	Jacksonville, FL		—			906,804		—		3,352,440		913,013		3,346,231		4,259,244		1,400,466		1989	40 yrs.
6255 Lake Gray Boulevard	Jacksonville, FL		—			813,067		—		3,917,635		812,634		3,918,068		4,730,702		1,899,761		1987	40 yrs.
8665,8667,8669 Baypine Road	Jacksonville, FL		—			966,552		—		5,750,503		974,959		5,742,096		6,717,055		2,270,711		1987	40 yrs.
7970 Bayberry Road	Jacksonville, FL		—			127,520		—		1,350,044		129,979		1,347,585		1,477,564		967,916		1978	40 yrs.
7898 Baymeadows Way	Jacksonville, FL		—			561,802		—		1,998,616		568,005		1,992,413		2,560,418		1,113,730		1978	40 yrs.
7910 & 7948 Baymeadows Way	Jacksonville, FL		—			210,299		—		2,666,923		211,449		2,665,773		2,877,222		1,481,846		1981	40 yrs.
7954 & 7960 Baymeadows Way	Jacksonville, FL		—			291,312		—		2,946,876		292,667		2,945,521		3,238,188		1,566,033		1982	40 yrs.
7077 Bonneval Road	Jacksonville, FL		—			768,000		5,789,000		1,994,584		774,020		7,777,564		8,551,584		2,956,960		1988	40 yrs.
4190 Belfort Road	Jacksonville, FL		—			821,000		5,866,000		3,499,284		827,420		9,358,864		10,186,284		3,484,746		1986	40 yrs.
7020 AC Skinner Parkway	Jacksonville, FL			*		398,257		—		2,741,010		749,811		2,389,456		3,139,267		899,968		1996	40 yrs.
7022 AC Skinner Parkway	Jacksonville, FL			*		706,934		—		3,593,671		853,981		3,446,624		4,300,605		1,221,731		1996	40 yrs.

61

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized											Date of
									Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
11777 Central Highway	Jacksonville, FL		—			92,207		429,997		1,275,050			140,426		1,656,828		1,797,254		935,684		1985	40 yrs.
4345 Southpoint Parkway	Jacksonville, FL		—			—		—		8,798,125			418,093		8,380,032		8,798,125		2,120,675		1998	40 yrs.
7016 AC Skinner Parkway	Jacksonville, FL		—			597,181		—		2,333,385			602,633		2,327,934		2,930,566		943,824		1996	40 yrs.
7018 AC Skinner Parkway	Jacksonville, FL		—			840,996		—		4,507,239			846,461		4,501,774		5,348,235		1,685,975		1997	40 yrs.
7014 AC Skinner Parkway	Jacksonville, FL		—			574,198		—		3,571,300			780,486		3,365,013		4,145,498		996,728		1999	40 yrs.
6620 Southpoint Drive	Jacksonville, FL		—			614,602		4,267,477		765,593			614,602		5,033,069		5,647,672		1,386,974		1984	40 yrs.
7980 Bayberry Road	Jacksonville, FL		—			330,726		1,338,101		32,776			330,726		1,370,877		1,701,603		294,337		1978	40 yrs.
6600 Southpoint Parkway	Jacksonville, FL		—			998,432		4,055,727		829,894			1,002,704		4,881,349		5,884,053		1,283,949		1986	40 yrs.
6700 Southpoint Parkway	Jacksonville, FL		—			620,719		2,989,746		750,311			624,215		3,736,561		4,360,776		1,209,894		1987	40 yrs.
4801 Executive Park Court — 100	Jacksonville, FL			*		554,993		2,993,277		861,429			554,542		3,855,157		4,409,699		1,067,174		1990	40 yrs.
4801 Executive Park Court — 200	Jacksonville, FL			*		370,017		1,995,518		348,862			370,039		2,344,358		2,714,397		476,094		1990	40 yrs.
4810 Executive Park Court	Jacksonville, FL			*		369,694		3,045,639		806,820			370,039		3,852,113		4,222,153		720,862		1990	40 yrs.
6602 Executive Park Court — 100	Jacksonville, FL			*		388,519		2,095,293		145,006			388,541		2,240,277		2,628,818		561,730		1993	40 yrs.
6602 Executive Park Court — 200	Jacksonville, FL			*		296,014		1,596,347		407,277			296,032		2,003,606		2,299,638		444,228		1993	40 yrs.
6631 Executive Park Court — 100	Jacksonville, FL			*		251,613		1,356,849		485,462			251,627		1,842,297		2,093,924		498,377		1994	40 yrs.
6631 Executive Park Court — 200	Jacksonville, FL			*		406,561		2,195,070		223,189			407,043		2,417,777		2,824,820		585,761		1994	40 yrs.
4815 Executive Park Court — 100	Jacksonville, FL			*		366,317		1,975,393		299,174			366,339		2,274,545		2,640,884		646,432		1995	40 yrs.
4815 Executive Park Court — 200	Jacksonville, FL			*		462,522		2,494,397		438,798			462,549		2,933,168		3,395,717		738,437		1995	40 yrs.
4825 Executive Park Court	Jacksonville, FL			*		601,278		3,242,491		278,174			601,401		3,520,542		4,121,943		772,873		1996	40 yrs.
4820 Executive Park Court	Jacksonville, FL			*		555,173		2,693,130		765,939			555,213		3,459,030		4,014,242		809,113		1997	40 yrs.
6601 Executive Park Circle North	Jacksonville, FL		—			551,250		3,128,361		1,130			551,250		3,129,491		3,680,741		625,531		1992	40 yrs.
4901 Belfort Road	Jacksonville, FL		—			877,964		2,360,742		1,926,500			877,964		4,287,242		5,165,206		1,504,672		1986	40 yrs.
4899 Belfort Road	Jacksonville, FL		—			1,299,201		—		7,870,616			1,207,751		7,962,066		9,169,817		1,533,178		2000	40 yrs.
4905 Belfort Street	Jacksonville, FL		—			638,154		—		3,461,609			641,272		3,458,491		4,099,763		763,747		2000	40 yrs.
7251 Salisbury Road	Jacksonville, FL		—			—		—		3,567,820			662,559		2,905,261		3,567,820		603,510		2000	40 yrs.
10245 Centurion Parkway North	Jacksonville, FL		—			852,644		3,510,889		997,845			853,704		4,507,673		5,361,378		807,437		1996	40 yrs.
4887 Belfort Road	Jacksonville, FL		—			1,299,202		—		7,876,809			1,665,915		7,510,096		9,176,011		1,165,848		2002	40 yrs.
7255 Salisbury Road	Jacksonville, FL		—			392,060		—		2,698,852			680,766		2,410,146		3,090,912		380,810		2002	40 yrs.
3200 Horizon Drive	King of Prussia, PA			*		928,637		—		7,094,141			1,210,137		6,812,640		8,022,777		2,213,089		1996	40 yrs.
440 East Swedesford Road	King of Prussia, PA		—			717,001		4,816,121		2,686,176			717,001		7,502,297		8,219,298		2,483,653		1988	40 yrs.
460 East Swedesford Road	King of Prussia, PA		—			705,317		4,737,487		1,560,144			705,317		6,297,632		7,002,948		1,696,501		1988	40 yrs.
151 South Warner Road	King of Prussia, PA		—			1,218,086		6,937,866		360,761			1,186,972		7,329,741		8,516,713		1,673,333		1980	40 yrs.
3604 Horizon Drive	King of Prussia, PA		—			397,178		—		1,628,512			350,874		1,674,816		2,025,690		653,537		1998	40 yrs.
3606 Horizon Drive	King of Prussia, PA		1,413,163			789,409		—		1,940,816			815,855		1,914,370		2,730,225		689,224		1997	40 yrs.
650 Swedesford Road	King of Prussia, PA		—			952,911		6,722,830		9,089,949			952,911		15,812,779		16,765,690		5,244,628		1971	40 yrs.
680 Swedesford Road	King of Prussia, PA		—			952,361		6,722,830		8,350,943			952,361		15,073,774		16,026,134		5,262,278		1971	40 yrs.
3600 Horizon Drive	King of Prussia, PA		—			236,432		1,856,252		78,474			236,432		1,934,726		2,171,158		379,334		1989	40 yrs.
3602 Horizon Drive	King of Prussia, PA		—			217,734		1,759,489		338,288			217,809		2,097,701		2,315,510		479,231		1989	40 yrs.
2700 Horizon Drive	King of Prussia, PA		—			764,370		—		3,682,257			867,815		3,578,812		4,446,627		988,562		1998	40 yrs.
2900 Horizon Drive	King of Prussia, PA		—			679,440		—		3,503,074			774,096		3,408,418		4,182,514		818,000		1998	40 yrs.
2500 Renaissance Boulevard	King of Prussia, PA		—			509,580		—		2,786,056			592,886		2,702,749		3,295,636		781,214		1999	40 yrs.
2300 Renaissance Boulevard	King of Prussia, PA		—			509,580		—		2,650,651			574,152		2,586,078		3,160,231		651,608		1999	40 yrs.
2100 Renaissance Boulevard	King of Prussia, PA		—			1,110,111		—		9,382,851			1,132,519		9,360,443		10,492,962		2,385,803		1999	40 yrs.
3400 Horizon Drive	King of Prussia, PA		—			776,496		3,139,068		976,258			776,496		4,115,325		4,891,821		1,014,959		1995	40 yrs.
2301 Renaissance Boulevard	King of Prussia, PA		—			1,645,246		—		30,056,189			4,581,649		27,119,785		31,701,434		3,132,370		2002	40 yrs.
2520 Renaissance Boulevard	King of Prussia, PA		—			1,020,000		—		4,970,045			978,402		5,011,643		5,990,045		1,614,544		1999	40 yrs.
2201 Renaissance Boulevard	King of Prussia, PA		—			—		—		15,548,161			2,413,514		13,134,647		15,548,161		2,818,115		2000	40 yrs.
2540 Renaissance Boulevard	King of Prussia, PA		—			—		—		1,625,497			274,341		1,351,156		1,625,497		294,618		2000	40 yrs.
2560 Renaissance Boulevard	King of Prussia, PA		—			—		—		3,729,254			649,792		3,079,462		3,729,254		645,260		2000	40 yrs.
170 South Warner Road	King of Prussia, PA		—			547,800		3,137,400		2,719,699			458,232		5,946,667		6,404,899		2,680,019		1980	40 yrs.
190 South Warner Road	King of Prussia, PA		—			552,200		3,162,600		1,738,565			461,909		4,991,455		5,453,365		2,012,776		1980	40 yrs.
3100 Horizon Drive	King of Prussia, PA			*		601,956		—		2,086,737			611,436		2,077,258		2,688,694		695,232		1995	40 yrs.
3300 Horizon Drive	King of Prussia, PA			*		566,403		—		3,404,307			687,878		3,282,831		3,970,709		832,455		1996	40 yrs.
3500 Horizon Drive	King of Prussia, PA		—			1,204,839		—		2,630,229			1,223,875		2,611,193		3,835,068		631,300		1996	40 yrs.
3000 Horizon Drive	King of Prussia, PA			*		1,191,449		—		2,309,358			946,703		2,554,103		3,500,806		495,987		1997	40 yrs.
800 Town Center Drive	Langhorne, PA		—			1,617,150		—		10,240,772			1,619,288		10,238,634		11,857,922		4,683,208		1987	40 yrs.
8301 Industrial Boulevard	Lehigh, PA		—			11,249,550		—		43,069,316			11,254,716		43,064,150		54,318,866		219,396		2005	40 yrs.
32853 Edward Avenue	Madison Heights, MI		—			138,121		784,426		(9,444	)		138,121		774,982		913,103		172,477		1973	40 yrs.
750 East Mandoline Avenue	Madison Heights, MI		—			151,458		741,185		(64,799	)		151,458		676,386		827,844		150,937		1969	40 yrs.
900 East Mandoline Avenue	Madison Heights, MI		—			157,729		771,872		(36,404	)		157,729		735,468		893,197		205,060		1972	40 yrs.
949 East Mandoline Avenue	Madison Heights, MI		—			137,049		778,338		(91,758	)		137,049		686,580		823,629		149,403		1974	40 yrs.
31700 Research Park Drive	Madison Heights, MI		—			373,202		1,824,721		(133,207	)		373,203		1,691,513		2,064,716		339,163		1988	40 yrs.
800 Tech Row	Madison Heights, MI		—			444,977		2,984,811		(79,329	)		444,977		2,905,482		3,350,459		575,827		1986	40 yrs.

62

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized											Date of
									Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
31771 Sherman Avenue	Madison Heights, MI		—			150,944		645,040		(5,334	)		150,944		639,705		790,650		185,874		1982	40 yrs.
31791 Sherman Avenue	Madison Heights, MI		—			105,606		649,891		(43,885	)		105,606		606,006		711,612		127,804		1983	40 yrs.
31811 Sherman Avenue	Madison Heights, MI		—			207,599		1,179,010		(124,831	)		207,599		1,054,179		1,261,778		225,302		1983	40 yrs.
31831 Sherman Avenue	Madison Heights, MI		—			158,483		900,064		(62,164	)		158,483		837,900		996,383		172,857		1984	40 yrs.
31900 Sherman Avenue	Madison Heights, MI		—			269,293		1,754,498		348,385			269,293		2,102,883		2,372,176		409,916		1984	40 yrs.
950 East Whitcomb Avenue	Madison Heights, MI		—			113,630		2,162,302		45,984			113,630		2,208,286		2,321,916		510,476		1988	40 yrs.
1201 East Whitcomb Avenue	Madison Heights, MI		—			302,567		1,213,232		(146,471	)		302,567		1,066,761		1,369,328		244,630		1980	40 yrs.
1210 East Whitcomb Avenue	Madison Heights, MI		—			121,298		329,051		(25,294	)		121,298		303,758		425,056		87,693		1983	40 yrs.
1901 Summit Tower Boulevard	Maitland, FL		—			6,078,791		12,348,567		420,175			6,083,206		12,764,327		18,847,534		2,402,364		1998	40 yrs.
45-67 Great Valley Parkway	Malvern, PA			*		795,143		—		3,237,185			795,831		3,236,497		4,032,328		2,003,355		1974	40 yrs.
11,15 Great Valley Parkway	Malvern, PA			*		1,837,050		—		15,005,064			1,837,878		15,004,237		16,842,114		9,667,868		1986	40 yrs.
27-43 Great Valley Parkway	Malvern, PA			*		448,775		—		2,546,102			449,447		2,545,430		2,994,877		1,473,355		1977	40 yrs.
1 Country View Road	Malvern, PA		—			400,000		3,600,000		1,004,993			406,421		4,598,572		5,004,993		1,189,429		1982	40 yrs.
200 Chesterfield Parkway	Malvern, PA		—			495,893		2,739,093		395,972			544,649		3,086,309		3,630,958		1,842,759		1989	40 yrs.
50 Morehall Road	Malvern, PA		—			849,576		—		13,043,717			1,337,076		12,556,217		13,893,293		3,878,780		1997	40 yrs.
1 Great Valley Parkway	Malvern, PA		4,661,040			419,460		3,792,570		333,900			419,460		4,126,469		4,545,930		960,954		1982	40 yrs.
5 Great Valley Parkway	Malvern, PA		—			684,200		6,181,661		1,137,394			684,200		7,319,055		8,003,255		1,619,395		1983	40 yrs.
1001 Cedar Hollow Road	Malvern, PA		—			1,436,814		—		16,047,698			1,646,984		15,837,528		17,484,512		4,381,995		1998	40 yrs.
3 Country View Road	Malvern, PA		—			814,278		—		4,946,433			1,128,881		4,631,830		5,760,711		868,510		1998	40 yrs.
425 Technology Drive	Malvern, PA		—			191,114		—		2,014,653			321,473		1,884,294		2,205,767		638,494		1998	40 yrs.
375 Technology Drive	Malvern, PA		—			191,114		—		1,958,524			234,922		1,914,715		2,149,638		627,157		1998	40 yrs.
45 Liberty Boulevard	Malvern, PA		—			4,380,221		—		15,313,598			4,749,748		14,944,071		19,693,819		3,842,589		1999	40 yrs.
100 Chesterfield Parkway	Malvern, PA		—			1,320,625		—		6,973,669			1,349,954		6,944,340		8,294,294		1,994,886		1998	40 yrs.
600 Chesterfield Parkway	Malvern, PA		—			2,013,750		—		8,135,324			2,050,555		8,098,519		10,149,074		2,052,929		1999	40 yrs.
700 Chesterfield Parkway	Malvern, PA		—			2,013,750		—		8,096,150			2,037,813		8,072,087		10,109,900		2,034,360		1999	40 yrs.
18 Great Valley Parkway	Malvern, PA		—			394,036		3,976,221		100,474			398,228		4,072,504		4,470,731		716,566		1980	40 yrs.
11 Great Valley Parkway	Malvern, PA		—			496,297		—		3,226,924			708,331		3,014,890		3,723,221		577,888		2001	40 yrs.
40 Liberty Boulevard	Malvern, PA		—			4,241,137		17,737,090		2,182,842			4,241,167		19,919,901		24,161,068		4,896,375		1989	40 yrs.
2 West Liberty Boulevard	Malvern, PA		—			5,405,041		—		10,622,545			5,405,042		10,622,545		16,027,587		21,632		2003	40 yrs.
10 Great Valley Parkway	Malvern, PA		—			823,540		1,341,376		177,288			832,244		1,509,959		2,342,203		81,811		2003	40 yrs.
10, 20 Liberty Boulevard	Malvern, PA		—			724,058		—		5,758,730			724,846		5,757,942		6,482,788		2,300,840		1985	40 yrs.
420 Lapp Road	Malvern, PA			*		1,054,418		—		6,995,372			1,055,243		6,994,547		8,049,790		2,831,754		1989	40 yrs.
14 Lee Boulevard	Malvern, PA			*		664,282		—		5,804,147			643,892		5,824,537		6,468,429		2,442,002		1988	40 yrs.
500 Chesterfield Parkway	Malvern, PA			*		472,364		—		3,209,021			473,139		3,208,246		3,681,385		1,590,141		1988	40 yrs.
300-400 Chesterfield Parkway	Malvern, PA			*		937,212		—		5,301,111			937,942		5,300,381		6,238,323		2,391,456		1988	40 yrs.
40 Valley Stream Parkway	Malvern, PA			*		322,918		—		3,226,218			325,775		3,223,361		3,549,136		1,142,135		1987	40 yrs.
50 Valley Stream Parkway	Malvern, PA		—			323,971		—		2,324,307			323,792		2,324,486		2,648,278		1,058,801		1987	40 yrs.
20 Valley Stream Parkway	Malvern, PA			*		465,539		—		5,655,563			466,413		5,654,689		6,121,102		2,658,736		1987	40 yrs.
257-275 Great Valley Parkway	Malvern, PA			*		504,611		—		4,989,196			505,458		4,988,349		5,493,807		2,771,418		1983	40 yrs.
300 Technology Drive	Malvern, PA		—			368,626		—		1,344,816			374,497		1,338,945		1,713,442		665,708		1985	40 yrs.
277-293 Great Valley Parkway	Malvern, PA		—			530,729		—		2,321,857			531,534		2,321,052		2,852,586		1,224,085		1984	40 yrs.
311 Technology Drive	Malvern, PA		—			397,131		—		2,672,846			397,948		2,672,029		3,069,977		1,310,656		1984	40 yrs.
7 Great Valley Parkway	Malvern, PA			*		176,435		—		4,890,532			177,317		4,889,650		5,066,967		2,632,459		1985	40 yrs.
55 Valley Stream Parkway	Malvern, PA		—			215,005		—		3,615,244			215,818		3,614,431		3,830,249		1,786,728		1983	40 yrs.
65 Valley Stream Parkway	Malvern, PA			*		381,544		—		7,032,009			382,361		7,031,193		7,413,553		3,463,697		1983	40 yrs.
508 Lapp Road	Malvern, PA			*		331,392		—		2,033,164			332,216		2,032,340		2,364,556		1,165,242		1984	40 yrs.
10 Valley Stream Parkway	Malvern, PA			*		509,075		—		3,089,935			509,899		3,089,111		3,599,010		1,621,446		1984	40 yrs.
333 Phoenixville Pike	Malvern, PA		—			523,530		—		2,917,373			524,230		2,916,673		3,440,903		1,502,374		1985	40 yrs.
30 Great Valley Parkway	Malvern, PA		—			128,126		—		385,634			128,783		384,977		513,760		298,378		1975	40 yrs.
75 Great Valley Parkway	Malvern, PA		436,318			143,074		—		772,076			143,811		771,338		915,150		503,959		1977	40 yrs.
77-123 Great Valley Parkway	Malvern, PA			*		887,664		—		5,435,544			888,359		5,434,849		6,323,208		3,174,678		1978	40 yrs.
256 Great Valley Parkway	Malvern, PA		—			161,098		—		1,785,717			161,949		1,784,866		1,946,815		1,107,351		1980	40 yrs.
205 Great Valley Parkway	Malvern, PA			*		1,368,259		—		10,620,333			1,369,003		10,619,589		11,988,592		6,405,095		1981	40 yrs.
12,14,16 Great Valley Parkway	Malvern, PA		—			130,689		—		1,560,924			128,767		1,562,846		1,691,613		811,850		1982	40 yrs.
155 Great Valley Parkway	Malvern, PA		—			625,147		—		2,627,280			626,068		2,626,359		3,252,427		1,462,181		1981	40 yrs.
333 Technology Drive	Malvern, PA			*		157,249		—		4,584,680			158,077		4,583,852		4,741,929		1,708,999		1987	40 yrs.
510 Lapp Road	Malvern, PA			*		356,950		—		926,587			357,751		925,786		1,283,537		541,042		1983	40 yrs.
60 Morehall Road	Malvern, PA		—			865,424		9,285,000		4,971,296			884,974		14,236,746		15,121,720		5,730,583		1989	40 yrs.
5 Country View Road	Malvern, PA			*		785,168		4,678,632		856,961			786,235		5,534,526		6,320,761		1,741,206		1985	40 yrs.
7550 Meridian Circle	Maple Grove, MN		—			513,250		2,901,906		146,306			513,250		3,048,211		3,561,461		609,420		1989	40 yrs.
8 Stow Road	Marlton, NJ		—			172,600		1,704,436		139,565			172,945		1,843,657		2,016,602		601,855		1988	40 yrs.
10 Stow Road	Marlton, NJ		—			147,000		1,451,536		526,803			147,318		1,978,021		2,125,339		899,963		1988	40 yrs.
12 Stow Road	Marlton, NJ		—			103,300		1,021,036		341,204			103,618		1,361,923		1,465,541		544,471		1988	40 yrs.

63

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
14 Stow Road	Marlton, NJ		—		93,100		920,336		431,684		93,418		1,351,703		1,445,120		524,126		1988	40 yrs.
701A Route 73 South	Marlton, NJ		—		264,387		3,772,000		3,386,416		271,743		7,151,060		7,422,803		3,031,119		1987	40 yrs.
701C Route 73 South	Marlton, NJ		—		84,949		1,328,000		401,665		96,161		1,718,453		1,814,614		626,395		1987	40 yrs.
400 Lippincott Drive	Marlton, NJ		—		69,402		—		3,671,296		317,799		3,422,899		3,740,699		759,649		1999	40 yrs.
406 Lippincott Drive	Marlton, NJ		—		321,455		1,539,871		895,587		327,554		2,429,358		2,756,912		901,488		1990	40 yrs.
301 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		1,264,020		1,069,838		6,044,183		7,114,020		1,842,156		1988	40 yrs.
303 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		1,753,857		1,069,838		6,534,019		7,603,857		2,025,357		1988	40 yrs.
901 Route 73	Marlton, NJ		—		334,411		2,733,314		828,076		334,411		3,561,390		3,895,801		903,061		1985	40 yrs.
404 Lippincott Drive	Marlton, NJ		—		131,896		—		1,650,431		131,896		1,650,431		1,782,327		588,015		1997	40 yrs.
402 Lippincott Drive	Marlton, NJ		—		131,896		—		1,721,965		131,896		1,721,965		1,853,861		580,999		1997	40 yrs.
9 Stow Road	Marlton, NJ		—		652,642		1,765,065		922,076		654,779		2,685,004		3,339,783		659,579		1989	40 yrs.
8301 West Parkland Court	Milwaukee, WI		—		358,442		3,233,707		532,454		358,442		3,766,161		4,124,602		842,371		1982	40 yrs.
7800 N. 113th Street	Milwaukee, WI		—		1,711,964		6,847,857		392,036		1,711,964		7,239,893		8,951,858		1,488,857		1991	40 yrs.
11950 W. Lake Park Drive	Milwaukee, WI		—		391,813		2,340,118		385,633		394,938		2,722,627		3,117,564		592,843		1986	40 yrs.
11400 W. Lake Park Drive	Milwaukee, WI		—		439,595		2,357,904		194,180		443,101		2,548,578		2,991,678		451,053		1986	40 yrs.
11425 W. Lake Park Drive	Milwaukee, WI		—		382,256		2,350,619		957,723		385,305		3,305,293		3,690,598		824,326		1987	40 yrs.
11301 W. Lake Park Drive	Milwaukee, WI		—		614,477		2,626,456		101,328		619,465		2,722,797		3,342,261		474,539		1987	40 yrs.
11900 W. Lake Park Drive	Milwaukee, WI		—		347,853		2,396,887		1,059,217		350,628		3,453,330		3,803,957		855,963		1987	40 yrs.
11414 West Park Place	Milwaukee, WI		—		234,443		—		11,022,640		491,531		10,765,552		11,257,083		1,947,442		2001	40 yrs.
11520 West Calumet Road	Milwaukee, WI		—		341,698		1,527,548		78,494		341,698		1,606,042		1,947,740		235,786		1995	40 yrs.
12100 West Park Place	Milwaukee, WI		—		534,470		3,239,389		483,040		532,370		3,724,529		4,256,899		634,224		1984	40 yrs.
10855 West Park Place	Milwaukee, WI		—		122,894		—		2,984,397		424,710		2,682,580		3,107,290		302,898		2002	40 yrs.
11100 West Liberty Drive	Milwaukee, WI		—		1,800,000		—		7,181,452		1,801,024		7,180,428		8,981,452		485,404		2003	40 yrs.
4700 Nathan Lane North	Minneapolis, MN		—		1,501,308		8,446,083		225,056		1,501,308		8,671,139		10,172,447		1,450,830		1996	40 yrs.
4600 Nathan Lane	Minneapolis, MN		—		1,063,558		—		6,683,083		1,038,197		6,708,444		7,746,641		949,850		2002	40 yrs.
12501 & 12701 Whitewater Drive	Minnegonka, MN		—		2,175,209		3,948,085		5,641,054		2,177,953		9,586,395		11,764,348		454,175		1986	40 yrs.
5600 & 5610 Rowland Road	Minnetonka, MN		—		828,650		7,399,409		1,579,087		829,263		8,977,882		9,807,146		2,488,832		1988	40 yrs.
5400-5500 Feltl Road	Minnetonka, MN		—		883,895		7,983,345		1,827,071		883,895		9,810,416		10,694,311		2,102,836		1985	40 yrs.
10300 Bren Road	Minnetonka, MN		—		344,614		3,110,477		339,685		344,614		3,450,162		3,794,776		745,347		1981	40 yrs.
3400 Lakeside Drive	Miramar, FL		—		2,022,153		11,345,881		1,206,694		2,022,153		12,552,575		14,574,728		2,758,940		1990	40 yrs.
3450 Lakeside Drive	Miramar, FL		—		2,022,152		11,357,143		1,972,320		2,022,152		13,329,463		15,351,615		2,979,767		1990	40 yrs.
3350 SW 148th Avenue	Miramar, FL		—		2,960,511		—		17,921,351		2,980,689		17,901,173		20,881,862		3,623,669		2000	40 yrs.
300 Fellowship Road	Mt Laurel, NJ		—		—		—		7,267,999		1,098,904		6,169,095		7,267,999		212,031		2004	40 yrs.
3001 Leadenhall Road	Mt Laurel, NJ		—		1,925,719		191,390		10,965,396		1,936,489		11,146,016		13,082,505		453,201		2003	40 yrs.
4001 Leadenhall Road	Mt. Laurel, NJ		—		3,207,885		391,167		18,844,592		2,784,694		19,658,950		22,443,644		2,044,056		2002	40 yrs.
3000 Atrium Way	Mt. Laurel, NJ		—		500,000		4,500,000		4,124,861		512,018		8,612,844		9,124,861		3,738,227		1987	40 yrs.
11000, 15000 Commerce Parkway	Mt. Laurel, NJ		—		310,585		4,394,900		252,018		311,950		4,645,553		4,957,503		1,703,636		1985	40 yrs.
12000, 14000 Commerce Parkway	Mt. Laurel, NJ		—		361,800		3,285,817		703,601		362,855		3,988,363		4,351,218		1,279,682		1985	40 yrs.
16000, 18000 Commerce Parkway	Mt. Laurel, NJ		—		289,700		2,512,683		578,994		290,545		3,090,832		3,381,377		1,045,910		1985	40 yrs.
1300 Route 73 North	Mt. Laurel, NJ		—		449,400		3,074,850		1,693,803		450,558		4,767,495		5,218,053		1,327,465		1988	40 yrs.
3000 Lincoln Drive	Mt. Laurel, NJ		—		284,052		2,458,155		1,680,241		284,052		4,138,396		4,422,448		1,253,011		1983	40 yrs.
6000 Commerce Parkway	Mt. Laurel, NJ		—		234,151		2,022,683		693,212		234,151		2,715,895		2,950,046		681,110		1985	40 yrs.
7000 Commerce Parkway	Mt. Laurel, NJ		—		260,014		2,236,684		429,449		260,014		2,666,133		2,926,147		664,422		1984	40 yrs.
8000 Commerce Parkway	Mt. Laurel, NJ		—		234,814		1,995,098		317,849		234,814		2,312,947		2,547,761		516,811		1983	40 yrs.
9000 Commerce Parkway	Mt. Laurel, NJ		—		286,587		2,474,820		577,045		286,587		3,051,865		3,338,452		915,454		1983	40 yrs.
1000 Briggs Road	Mt. Laurel, NJ		—		288,577		2,546,537		1,345,162		288,577		3,891,698		4,180,276		1,251,599		1986	40 yrs.
1025 Briggs Road	Mt. Laurel, NJ		1,189,115		430,990		3,714,828		1,295,796		430,990		5,010,624		5,441,614		1,296,661		1987	40 yrs.
1020 Briggs Road	Mt. Laurel, NJ		—		494,334		—		2,986,335		569,184		2,911,486		3,480,669		712,534		1999	40 yrs.
2000 Crawford Place	Mt. Laurel, NJ		—		310,831		2,797,744		2,366,269		310,831		5,164,013		5,474,844		1,845,462		1986	40 yrs.
5000 Dearborn Court	Mt. Laurel, NJ		—		1,057,763		4,191,827		329,209		1,057,763		4,521,037		5,578,799		973,990		1988	40 yrs.
1001 Briggs Road	Mt. Laurel, NJ		—		701,705		3,505,652		2,000,167		701,705		5,505,820		6,207,525		1,480,906		1986	40 yrs.
1015 Briggs Road	Mt. Laurel, NJ		—		356,987		—		3,466,980		470,659		3,353,307		3,823,967		656,280		2000	40 yrs.
17000 Commerce Parkway	Mt. Laurel, NJ		—		144,515		—		2,813,663		144,515		2,813,663		2,958,178		531,822		2001	40 yrs.
9401-9443 Science Center Drive	New Hope, MN		—		431,295		3,888,684		481,742		510,064		4,291,657		4,801,721		988,653		1989	40 yrs.
6 Terry Drive	Newtown, PA		—		622,029		2,228,851		828,769		622,205		3,057,443		3,679,648		658,178		1981	40 yrs.
22515 Heslip Drive	Novi, MI		—		144,477		338,277		16,653		144,477		354,930		499,407		120,200		1975	40 yrs.
550-590 Hale Avenue	Oakdale, MN		—		765,535		3,488,754		317,153		766,390		3,805,052		4,571,442		672,634		1996	40 yrs.
1879 Lamont Avenue	Odenton, MD		—		1,976,000		8,099,579		2,331,500		2,011,030		10,396,049		12,407,079		237,802		2004	40 yrs.
350 Winmeyer Avenue	Odenton, MD		—		1,778,400		7,289,165		791,323		1,809,927		8,048,960		9,858,888		121,962		2004	40 yrs.
9600 Satellite Boulevard	Orlando, FL		—		252,850		1,297,923		62,116		252,850		1,360,039		1,612,889		300,574		1989	40 yrs.
9700 Satellite Boulevard	Orlando, FL		—		405,362		1,146,546		350,093		405,362		1,496,639		1,902,001		339,374		1989	40 yrs.
1902 Cypress Lake Drive	Orlando, FL		—		523,512		3,191,790		880,341		538,512		4,057,131		4,595,643		965,687		1989	40 yrs.
9550 Satellite Boulevard	Orlando, FL		—		574,831		—		2,149,304		587,319		2,136,816		2,724,135		534,050		1999	40 yrs.

64

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
10511 & 10611 Satellite Boulevard	Orlando, FL		—			517,554		2,568,186		385,623		522,991		2,948,372		3,471,363		762,624		1985	40 yrs.
1400-1440 Central Florida Parkway	Orlando, FL		—			518,043		2,561,938		294,022		518,043		2,855,960		3,374,003		615,064		1962	40 yrs.
2216 Directors Row	Orlando, FL		—			453,918		2,572,202		25,865		453,918		2,598,067		3,051,985		491,031		1998	40 yrs.
3701-3727 Vineland Road	Orlando, FL		—			767,929		2,096,504		145,949		767,929		2,242,454		3,010,382		475,560		1985	40 yrs.
2400 South Lake Orange Drive	Orlando, FL		—			385,964		—		2,404,272		642,427		2,147,809		2,790,236		298,291		2001	40 yrs.
6501 Lee Vista Boulevard	Orlando, FL		—			903,701		—		5,541,791		925,671		5,519,821		6,445,492		609,015		2001	40 yrs.
2416 Lake Orange Drive	Orlando, FL		—			535,964		—		3,165,095		704,800		2,996,258		3,701,059		640,443		2002	40 yrs.
10771 Palm Bay Drive	Orlando, FL		—			664,605		—		2,362,814		685,383		2,342,035		3,027,419		341,034		2001	40 yrs.
10003 Satellite Boulevard	Orlando, FL		—			680,312		2,120,754		1,568,071		680,312		3,688,825		4,369,137		227,541		2003	40 yrs.
1090 Gills Drive	Orlando, FL		—			878,320		2,558,833		1,784,767		878,320		4,343,601		5,221,920		197,098		2003	40 yrs.
2202 Taft-Vineland Road	Orlando, FL		—			—		—		6,630,654		1,283,713		5,346,941		6,630,654		255,362		2004	40 yrs.
7315 Kingspointe Parkway	Orlando, FL		—			1,931,697		6,388,203		2,216,978		1,932,004		8,604,875		10,536,878		223,035		2004	40 yrs.
2351 Investors Row	Orlando, FL		—			2,261,924		7,496,249		10,608		2,263,211		7,505,570		9,768,781		187,699		2004	40 yrs.
2256 Taft-Vineland Road	Orlando, FL		—			467,296		—		2,461,652		825,673		2,103,275		2,928,948		39,684		2005	40 yrs.
1950 Summitt Park Drive	Orlando, FL		—			2,573,700		17,478,646		356,895		2,583,667		17,825,574		20,409,241		318,627		2005	40 yrs.
1958 Summit Park Drive	Orlando, FL		—			2,573,961		11,206,937		8,404,103		2,583,216		19,601,785		22,185,001		351,841		2005	40 yrs.
7500 West 110th Street	Overland Park, KS		—			2,380,493		9,575,474		3,105,049		2,380,493		12,680,523		15,061,015		2,551,895		1983	40 yrs.
N26 W23445 Paul Road	Pewaukee, WI		—			561,904		1,928,064		113,241		561,904		2,041,305		2,603,209		297,858		1985	40 yrs.
8801 Tinicum Boulevard	Philadelphia, PA		—			2,474,031		—		43,598,952		125,087		45,947,896		46,072,983		10,826,464		1997	40 yrs.
3 Franklin Plaza	Philadelphia, PA		—			2,483,144		—		32,150,134		2,514,519		32,118,759		34,633,278		5,288,182		1999	40 yrs.
2760 Red Lion Road	Philadelphia, PA		—			—		—		46,541,271		3,985,624		42,555,647		46,541,271		4,754,159		2001	40 yrs.
4751 League Island Boulevard	Philadelphia, PA		—			992,965		331,924		6,730,979		1,022,081		7,033,787		8,055,868		365,684		2003	40 yrs.
9801 80th Avenue	Pleasant Prairie, WI		—			1,692,077		7,934,794		62,495		1,689,726		7,999,640		9,689,366		1,517,661		1994	40 yrs.
2250 Hickory Road	Plymouth Meeting, PA		—			1,015,851		9,175,555		1,488,543		1,032,507		10,647,442		11,679,949		2,414,384		1985	40 yrs.
2905 Northwest Boulevard	Plymouth, MN		—			516,920		4,646,342		1,615,793		516,920		6,262,136		6,779,055		1,576,713		1983	40 yrs.
2800 Campus Drive	Plymouth, MN		—			395,366		3,554,512		866,525		395,366		4,421,037		4,816,403		1,112,379		1985	40 yrs.
2955 Xenium Lane	Plymouth, MN		—			151,238		1,370,140		401,075		151,238		1,771,215		1,922,453		551,389		1985	40 yrs.
2920 Northwest Boulevard	Plymouth, MN		—			392,026		3,433,678		655,417		384,235		4,096,886		4,481,121		1,062,974		1997	40 yrs.
14630-14650 28th Avenue North	Plymouth, MN		—			198,205		1,793,422		644,591		198,205		2,438,013		2,636,218		563,179		1978	40 yrs.
2800 Northwest Boulevard	Plymouth, MN		3,963,999			1,934,438		10,952,503		476,212		1,934,438		11,428,715		13,363,152		2,344,172		1995	40 yrs.
9600 54th Avenue	Plymouth, MN		—			332,317		3,077,820		1,053,822		332,317		4,131,642		4,463,959		658,927		1998	40 yrs.
1500 SW 5th Court	Pompano Beach, FL		—			972,232		3,892,085		186,080		972,232		4,078,165		5,050,397		868,958		1957	40 yrs.
1651 SW 5th Court	Pompano Beach, FL		—			203,247		811,093		126,108		203,247		937,202		1,140,449		218,072		1990	40 yrs.
1601 SW 5th Court	Pompano Beach, FL		—			203,247		811,093		403,403		203,247		1,214,496		1,417,743		238,976		1990	40 yrs.
1501 SW 5th Court	Pompano Beach, FL		—			203,247		811,093		34,338		203,247		845,431		1,048,679		182,175		1990	40 yrs.
1400 SW 6th Court	Pompano Beach, FL		—			1,157,049		4,620,956		263,427		1,157,049		4,884,382		6,041,432		998,636		1986	40 yrs.
1405 SW 6th Court	Pompano Beach, FL		—			392,138		1,565,787		78,994		392,138		1,644,781		2,036,920		347,683		1985	40 yrs.
595 SW 13th Terrace	Pompano Beach, FL		—			359,933		1,437,116		85,041		359,933		1,522,157		1,882,090		307,330		1984	40 yrs.
601 SW 13th Terrace	Pompano Beach, FL		—			164,413		655,933		40,501		164,413		696,434		860,846		134,187		1984	40 yrs.
605 SW 16th Terrace	Pompano Beach, FL		—			310,778		1,238,324		353,372		310,178		1,592,296		1,902,474		255,293		1965	40 yrs.
4300 Carolina Avenue	Richmond, VA		—			2,007,717		14,927,608		440,967		2,009,136		15,367,156		17,376,292		4,108,304		1985	40 yrs.
301 Hill Carter Parkway	Richmond, VA		—			659,456		4,836,010		625		659,456		4,836,635		5,496,091		1,309,815		1989	40 yrs.
4001 Carolina Avenue	Richmond, VA		—			29,443		215,914		305,691		29,443		521,605		551,048		98,697		1935	40 yrs.
5600-5626 Eastport Boulevard	Richmond, VA			*		489,941		3,592,900		199,379		489,941		3,792,279		4,282,220		1,110,878		1989	40 yrs.
5650-5674 Eastport Boulevard	Richmond, VA			*		644,384		4,025,480		210,079		644,384		4,235,559		4,879,943		1,281,114		1990	40 yrs.
5700 Eastport Boulevard	Richmond, VA			*		408,729		2,697,348		827,685		408,729		3,525,033		3,933,762		813,558		1990	40 yrs.
4101-4127 Carolina Avenue	Richmond, VA			*		310,854		2,279,597		567,636		310,854		2,847,233		3,158,087		669,779		1973	40 yrs.
4201-4261 Carolina Avenue	Richmond, VA			*		693,203		5,083,493		852,515		693,203		5,936,008		6,629,211		1,732,857		1975	40 yrs.
4263-4299 Carolina Avenue	Richmond, VA		—			256,203		2,549,649		1,539,234		256,203		4,088,883		4,345,086		1,024,433		1976	40 yrs.
4301-4335 Carolina Avenue	Richmond, VA		—			223,696		1,640,435		623,939		223,696		2,264,374		2,488,070		475,129		1978	40 yrs.
4337-4379 Carolina Avenue	Richmond, VA			*		325,303		2,385,557		858,723		325,303		3,244,280		3,569,583		1,170,470		1979	40 yrs.
4501-4549 Carolina Avenue	Richmond, VA			*		486,166		3,565,211		466,377		486,166		4,031,588		4,517,754		1,047,640		1981	40 yrs.
4551-4593 Carolina Avenue	Richmond, VA			*		474,360		3,478,646		251,242		474,360		3,729,888		4,204,248		990,449		1982	40 yrs.
4601-4643 Carolina Avenue	Richmond, VA			*		652,455		4,784,675		488,112		652,455		5,272,787		5,925,242		1,605,933		1985	40 yrs.
4645-4683 Carolina Avenue	Richmond, VA			*		404,616		2,967,187		1,077,200		404,616		4,044,387		4,449,003		1,672,722		1985	40 yrs.
4447-4491 Carolina Avenue	Richmond, VA		—			454,056		2,729,742		293,897		454,056		3,023,639		3,477,695		860,701		1987	40 yrs.
4401-4445 Carolina Avenue	Richmond, VA			*		615,038		4,510,272		397,983		615,038		4,908,255		5,523,293		1,315,034		1988	40 yrs.
2300 East Parham Road	Richmond, VA		—			221,947		1,011,088		2,443		221,947		1,013,531		1,235,478		291,544		1988	40 yrs.
5601-5659 Eastport Boulevard	Richmond, VA			*		705,660		—		4,687,838		720,100		4,673,398		5,393,498		1,545,623		1996	40 yrs.
5900 Eastport Boulevard	Richmond, VA		—			676,661		—		4,805,572		687,898		4,794,335		5,482,233		1,130,238		1997	40 yrs.
4717-4729 Eubank Road	Richmond, VA			*		449,447		3,294,697		464,789		452,263		3,756,669		4,208,932		977,794		1978	40 yrs.
4263F-N. Carolina Avenue	Richmond, VA		—			91,476		—		1,643,294		91,599		1,643,171		1,734,770		403,420		1975	40 yrs.
510 Eastpark Court	Richmond, VA		—			261,961		2,110,874		295,549		262,210		2,406,174		2,668,384		714,887		1989	40 yrs.

65

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized											Date of
									Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
520 Eastpark Court	Richmond, VA		—			486,118		4,083,582		223,503			486,598		4,306,606		4,793,203		1,047,303		1989	40 yrs.
13001 Kingston Avenue	Richmond, VA		—			376,584		—		2,032,172			376,701		2,032,055		2,408,756		465,543		1998	40 yrs.
5701-5799 Eastport Boulevard	Richmond, VA		—			694,644		—		5,627,694			700,503		5,621,836		6,322,338		1,491,794		1998	40 yrs.
701 Liberty Way	Richmond, VA			*		171,711		—		5,255,576			1,188,857		4,238,430		5,427,287		772,538		1999	40 yrs.
12730 Kingston Avenue	Richmond, VA		—			171,053		—		8,200,764			1,201,072		7,170,745		8,371,817		790,126		2001	40 yrs.
530 Eastpark Court	Richmond, VA		—			266,883		—		2,909,058			334,772		2,841,168		3,175,941		882,208		1999	40 yrs.
3829-3855 Gaskins Road	Richmond, VA		—			364,165		3,264,114		39,764			364,165		3,303,879		3,668,044		644,339		1988	40 yrs.
10800 Nuckols Boulevard	Richmond, VA		—			1,432,462		—		14,420,839			1,794,162		14,059,139		15,853,301		2,077,508		2000	40 yrs.
801 Liberty Way	Richmond, VA			*		780,000		—		6,408,701			785,059		6,403,642		7,188,701		1,309,444		1999	40 yrs.
100 Westgate Parkway	Richmond, VA		—			1,140,648		101,824		8,408,649			1,456,084		8,195,037		9,651,121		1,007,686		2001	40 yrs.
200 Westgate Parkway	Richmond, VA		—			1,623,612		—		5,900,379			1,072,797		6,451,195		7,523,992		643,127		2002	40 yrs.
1001 Boulders Parkway	Richmond, VA		—			2,073,739		5,634,796		251,657			2,079,643		5,880,549		7,960,191		73,860		2005	40 yrs.
7400 Beaufont Springs Drive	Richmond, VA		—			808,581		7,273,850		245,912			810,743		7,517,600		8,328,343		76,665		2005	40 yrs.
1100 Boulders Parkway	Richmond, VA		—			1,276,936		12,052,192		233,584			1,280,662		12,282,050		13,562,712		22		2005	40 yrs.
12 S. Third Street	Richmond, VA		—			40,539		184,682		14,061			40,539		198,743		239,282		52,216		1900	40 yrs.
6532 Judge Adams Road	Rock Creek, NC		—			354,903		—		3,718,126			399,988		3,673,042		4,073,029		854,530		1997	40 yrs.
6530 Judge Adams Road	Rock Creek, NC		—			305,821		—		4,458,196			335,061		4,428,955		4,764,016		793,188		1999	40 yrs.
6509 Franz Warner Parkway	Rock Creek, NC		—			360,494		—		2,829,679			372,494		2,817,679		3,190,173		407,971		2001	40 yrs.
38100 Ecorse Road	Romulus, MI		—			955,063		—		7,899,055			853,063		8,001,055		8,854,118		1,073,201		2000	40 yrs.
38000 Ecourse Road	Romulus, MI		—			807,660		—		12,732,027			1,053,337		12,486,350		13,539,687		2,097,585		2001	40 yrs.
26911-26957 Northwestern Highway	Southfield, MI		—			7,799,515		66,268,817		8,494,884			7,799,515		74,763,701		82,563,216		16,502,680		1985	40 yrs.
13650 NW 8th Street	Sunrise, FL		—			558,223		2,171,930		306,706			558,251		2,478,607		3,036,859		560,899		1991	40 yrs.
13630 NW 8th Street	Sunrise, FL		—			659,797		2,596,275		772,671			659,825		3,368,917		4,028,742		703,238		1991	40 yrs.
5501-5519 Pioneer Park Boulevard	Tampa, FL		—			162,000		1,613,000		258,142			262,416		1,770,726		2,033,142		547,688		1981	40 yrs.
5690-5694 Crenshaw Street	Tampa, FL		—			181,923		1,812,496		218,763			181,923		2,031,260		2,213,183		553,538		1979	40 yrs.
3102,3104,3110 Cherry Palm Drive	Tampa, FL		—			503,767		2,787,585		1,669,638			982,207		3,978,783		4,960,990		1,018,143		1986	40 yrs.
8401-8408 Benjamin Road	Tampa, FL		—			789,651		4,454,648		1,899,353			769,789		6,373,862		7,143,652		1,930,800		1986	40 yrs.
3501 Riga Boulevard	Tampa, FL		—			617,289		3,048,379		454,271			617,289		3,502,650		4,119,939		896,940		1987	40 yrs.
111 Kelsey Lane	Tampa, FL		—			359,540		1,461,850		908,769			359,540		2,370,619		2,730,159		620,004		1990	40 yrs.
7930, 8010-20 Woodland Center Boulevard	Tampa, FL			*		1,408,478		5,247,246		903,228			1,408,478		6,150,475		7,558,952		1,431,770		1990	40 yrs.
7920 Woodland Center Boulevard	Tampa, FL			*		1,382,648		2,445,444		(276,436	)		1,082,648		2,469,008		3,551,656		552,184		1997	40 yrs.
8154-8198 Woodland Center Boulevard	Tampa, FL			*		399,088		2,868,834		420,131			399,088		3,288,965		3,688,053		803,686		1988	40 yrs.
8112-42 Woodland Center Boulevard	Tampa, FL			*		513,263		3,230,239		533,544			513,263		3,763,784		4,277,046		761,297		1995	40 yrs.
8212 Woodland Center Boulevard	Tampa, FL			*		820,882		2,322,720		14,210			820,882		2,336,931		3,157,813		505,452		1996	40 yrs.
131 Kelsey Lane	Tampa, FL		—			511,463		—		4,455,291			559,527		4,407,227		4,966,754		1,495,878		1985	40 yrs.
7724 Woodland Center Boulevard	Tampa, FL		—			235,893		—		2,143,685			235,894		2,143,684		2,379,578		536,691		1998	40 yrs.
7802-50 Woodland Center Boulevard	Tampa, FL		—			357,364		—		2,711,761			506,949		2,562,177		3,069,125		940,408		1999	40 yrs.
7852-98 Woodland Center Boulevard	Tampa, FL		—			357,364		—		2,692,052			506,949		2,542,467		3,049,416		865,665		1999	40 yrs.
8921 Brittany Way	Tampa, FL		—			224,369		1,063,882		1,078,376			254,493		2,112,134		2,366,627		386,134		1998	40 yrs.
5250 Eagle Trail Drive	Tampa, FL		—			952,860		—		3,501,917			952,860		3,501,917		4,454,776		631,873		1998	40 yrs.
7725 Woodland Center Boulevard	Tampa, FL		—			553,335		—		3,345,476			771,501		3,127,310		3,898,811		540,286		1999	40 yrs.
8001 Woodland Center Boulevard	Tampa, FL		—			350,406		—		2,407,337			438,061		2,319,683		2,757,744		413,367		1999	40 yrs.
4630 Woodland Corporate Boulevard	Tampa, FL		—			943,169		—		12,592,708			1,560,099		11,975,778		13,535,877		1,961,943		2000	40 yrs.
701-725 South US Hwy 301	Tampa, FL		—			419,683		—		3,719,472			661,680		3,477,475		4,139,155		905,109		2000	40 yrs.
4502 Woodland Corporate Boulevard	Tampa, FL		—			—		—		4,005,900			1,071,535		2,934,365		4,005,900		454,996		1999	40 yrs.
9001-9015 Brittany Way	Tampa, FL		—			209,841		—		1,555,906			364,514		1,401,234		1,765,748		294,884		2000	40 yrs.
4508 Woodland Corporate Boulevard	Tampa, FL		—			498,598		—		3,057,752			556,887		2,999,463		3,556,350		481,275		2000	40 yrs.
7622 Bald Cypress Place	Tampa, FL		—			—		—		1,305,584			300,000		1,005,584		1,305,584		144,521		2000	40 yrs.
901-933 US Highway 301 South	Tampa, FL		—			500,391		—		4,023,528			840,314		3,683,605		4,523,919		795,906		2001	40 yrs.
4503 Woodland Corporate Boulevard	Tampa, FL		—			—		—		3,454,328			619,913		2,834,415		3,454,328		315,727		2002	40 yrs.
4505 Woodland Corporate Boulevard	Tampa, FL		—			—		—		2,891,079			716,594		2,174,485		2,891,079		365,159		2002	40 yrs.
4511 Woodland Corporate Boulevard	Tampa, FL		—			—		—		2,840,907			686,594		2,154,313		2,840,907		302,759		2002	40 yrs.
7621 Bald Cypress Place	Tampa, FL		—			—		—		1,482,613			447,498		1,035,115		1,482,613		89,641		2001	40 yrs.
4520 Seedling Circle	Tampa, FL		—			854,797		42,131		2,721,233			854,797		2,763,364		3,618,161		116,845		2003	40 yrs.
501 US Highway 301 South	Tampa, FL		—			898,884		—		3,499,853			900,508		3,498,229		4,398,737		92,280		2004	40 yrs.
9002-9036 Brittany Way	Tampa, FL		—			492,320		—		3,964,055			899,284		3,557,092		4,456,375		185,361		2004	40 yrs.
1650 Research Drive	Troy, MI		—			763,067		7,201,677		1,107,575			763,067		8,309,252		9,072,318		1,600,015		1985	40 yrs.
1775 Research Drive	Troy, MI		—			331,422		2,788,073		648,666			331,422		3,436,739		3,768,161		637,270		1985	40 yrs.
1875 Research Drive	Troy, MI		—			329,863		2,774,006		229,619			329,863		3,003,625		3,333,487		657,192		1986	40 yrs.
1850 Research Drive	Troy, MI		—			781,054		7,364,300		2,051,384			781,054		9,415,684		10,196,738		2,007,507		1986	40 yrs.
1965 Research Drive	Troy, MI		—			419,090		3,578,928		347,399			419,090		3,926,327		4,345,418		917,900		1987	40 yrs.
1960 Research Drive	Troy, MI		—			419,146		3,579,166		635,418			419,146		4,214,584		4,633,730		956,481		1987	40 yrs.
1101 Allen Drive	Troy, MI		—			98,144		887,935		326,837			98,148		1,214,768		1,312,916		328,596		1974	40 yrs.

66

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized											Date of
									Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
1151 Allen Drive	Troy, MI		—			164,483		1,486,220		209,271			164,486		1,695,487		1,859,974		466,361		1974	40 yrs.
1300 Rankin Street	Troy, MI		—			134,090		1,212,752		371,530			134,094		1,584,278		1,718,372		549,399		1979	40 yrs.
1350 Rankin Street	Troy, MI		—			111,776		1,011,497		181,054			111,779		1,192,547		1,304,327		270,056		1979	40 yrs.
1376-1400 Rankin Street	Troy, MI		—			134,292		1,213,626		274,369			134,296		1,487,992		1,622,287		331,077		1979	40 yrs.
1352-1374 Rankin Street	Troy, MI		—			153,275		1,385,098		285,361			153,279		1,670,455		1,823,734		407,580		1979	40 yrs.
1324-1346 Rankin Street	Troy, MI		—			134,090		1,212,214		124,406			134,094		1,336,616		1,470,710		271,915		1979	40 yrs.
1301-1307 Rankin Street	Troy, MI		—			111,776		1,011,121		138,922			111,779		1,150,040		1,261,819		245,086		1978	40 yrs.
1409 Allen Drive	Troy, MI		—			142,370		1,286,048		408,471			142,374		1,694,516		1,836,889		421,332		1978	40 yrs.
1304 E Maple Road	Troy, MI		—			211,233		1,906,786		349,157			211,236		2,255,940		2,467,176		482,604		1971	40 yrs.
1334 Maplelawn Road	Troy, MI		—			124,296		1,122,802		39,409			124,300		1,162,208		1,286,507		247,380		1983	40 yrs.
1290 Maplelawn Road	Troy, MI		—			85,321		771,621		223,628			85,325		995,245		1,080,570		188,319		1984	40 yrs.
1070 Maplelawn Road	Troy, MI		—			68,560		620,595		106,600			68,563		727,191		795,755		170,394		1982	40 yrs.
950 Maplelawn Road	Troy, MI		—			252,429		2,265,259		176,543			252,433		2,441,798		2,694,231		534,630		1982	40 yrs.
894 Maplelawn Road	Troy, MI		—			181,749		1,632,243		761,128			181,753		2,393,367		2,575,120		524,568		1986	40 yrs.
1940 Norwood Drive	Troy, MI		—			86,836		785,267		87,637			86,839		872,901		959,740		193,218		1983	40 yrs.
1311-1331 Maplelawn Road	Troy, MI		—			125,407		1,132,810		204,037			125,410		1,336,843		1,462,254		365,092		1986	40 yrs.
2354 Bellingham Street	Troy, MI		—			87,340		789,817		19,928			87,344		809,741		897,085		170,975		1990	40 yrs.
2360 Bellingham Street	Troy, MI		—			87,340		789,817		58,250			87,344		848,063		935,407		172,987		1985	40 yrs.
50 West Big Beaver Road	Troy, MI		—			2,159,678		19,481,454		2,053,901			2,159,678		21,535,355		23,695,033		4,578,446		1987	40 yrs.
100 West Big Beaver Road	Troy, MI		—			2,113,006		19,057,355		2,167,108			2,113,006		21,224,463		23,337,469		4,359,088		1987	40 yrs.
1600-1630 East Big Beaver Road	Troy, MI		—			1,454,406		2,952,884		53,694			1,458,737		3,002,247		4,460,984		462,592		1982	40 yrs.
2600 Bellingham Drive	Troy, MI		—			1,796,869		—		4,095,318			1,938,746		3,953,441		5,892,187		902,648		2002	40 yrs.
2710 Bellingham Drive	Troy, MI		—			1,796,869		—		4,721,835			1,938,746		4,579,958		6,518,704		911,389		2002	40 yrs.
3432 Holland Road	Virginia Beach, VA		—			173,527		790,515		2,462			173,527		792,977		966,504		214,298		1989	40 yrs.
2809 South Lynnhaven Road	Virginia Beach, VA		—			953,590		6,142,742		1,039,718			953,590		7,182,460		8,136,050		1,588,070		1987	40 yrs.
200 Golden Oak Court	Virginia Beach, VA			*		1,116,693		6,770,480		931,872			1,116,693		7,702,352		8,819,044		1,737,979		1988	40 yrs.
208 Golden Oak Court	Virginia Beach, VA			*		965,177		6,728,717		1,128,434			965,177		7,857,151		8,822,329		1,779,740		1989	40 yrs.
484 Viking Drive	Virginia Beach, VA		—			891,753		3,607,890		476,860			891,753		4,084,750		4,976,502		878,637		1987	40 yrs.
629 Phoenix Drive	Virginia Beach, VA		—			371,694		2,108,097		192,844			371,694		2,300,941		2,672,635		468,249		1996	40 yrs.
5700 Cleveland Street	Virginia Beach, VA		—			700,112		9,592,721		1,656,986			700,564		11,249,254		11,949,819		2,592,377		1989	40 yrs.
1457 Miller Store Road	Virginia Beach, VA		1,768,123			473,689		2,663,045		327,736			474,746		2,989,725		3,464,470		185,376		2003	40 yrs.
11020 West Plank Court	Wauwatosa, WI		—			464,246		3,230,511		(519,943	)		464,246		2,710,568		3,174,814		453,347		1985	40 yrs.
825 Duportail Road	Wayne, PA		—			5,536,619		16,179,213		575,491			5,539,281		16,752,043		22,291,324		2,424,182		1979	40 yrs.
1500 Liberty Ridge	Wayne, PA		—			8,287,555		—		31,221,790			11,636,499		27,872,847		39,509,346		3,126,431		2002	40 yrs.
1200 Liberty Ridge Drive	Wayne, PA		—			6,215,667		—		8,637,849			5,223,660		9,629,855		14,853,515		2,029,762		2001	40 yrs.
11300-90 West Theodore Trecker Way	West Allis, WI		—			500,565		1,591,678		103,028			504,996		1,690,275		2,195,271		—		2005	40 yrs.
11548 West Theodore Trecker Way	West Allis, WI		—			660,068		4,640,578		24,851			662,751		4,662,746		5,325,497		65,241		2005	40 yrs.
11420 West Theodore Trecker Way	West Allis, WI		—			348,146		2,057,483		12,510			349,728		2,068,411		2,418,139		28,932		2005	40 yrs.
400-500 Brandywine Parkway	West Chester, PA		—			845,846		6,809,025		451,726			845,846		7,260,751		8,106,597		1,545,518		1988	40 yrs.
600 Brandywine Parkway	West Chester, PA		—			664,899		5,352,410		716,066			664,899		6,068,476		6,733,375		1,372,613		1988	40 yrs.
905 Airport Road	West Chester, PA		—			1,715,000		5,185,000		866,637			1,735,012		6,031,625		7,766,637		2,164,900		1988	40 yrs.
Liberty Square	West Malling, UK		—			—		—		—			273,650		9,564,327		9,837,977		—		2005	40 yrs.
3612 La Grange Parkway	Williamsburg, VA		—			—		—		5,687,810			887,234		4,800,577		5,687,810		162,428		2003	40 yrs.
7805 Hudson Road	Woodbury, MN		—			1,279,834		—		10,338,324			1,385,739		10,232,420		11,618,158		1,498,600		2002	40 yrs.
Subtotal Operating Real Estate		$	71,651,258		$	573,622,674	$	1,777,453,153	$	2,009,367,173		$	629,962,000	$	3,730,481,000	$	4,360,443,000	$	748,818,000

67

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
DEVELOPMENT PROPERTIES
8400 Industrial Boulevard	Allentown, PA		—		7,531,500		—		6,438,875		—		13,970,375		13,970,375		—		2005		N/A
901 Bilter Road	Aurora, IL		—		5,649,052		—		13,484,249		—		19,133,301		19,133,301		—		2004		N/A
1301 Executive Boulevard	Chesapeake, VA		—		—		—		2,814,505		—		2,814,505		2,814,505		—		2005		N/A
6230 Old Dobbin Lane	Columbia, MD		—		3,004,075		—		6,833,827		—		9,837,902		9,837,902		—		2004		N/A
420 Deleware Drive	Fort Washington, PA		—		2,766,931		—		5,870,073		—		8,637,004		8,637,004		—		2004		N/A
200 W Cypress Creek Road	Ft Lauderdale, FL		—		3,414,989		2,399,738		6,852,963		—		12,667,690		12,667,690		—		2003		N/A
2 Independence Point	Greenville, SC		—		371,600		—		2,347,301		—		2,718,901		2,718,901		—		2005		N/A
600 Industrial Drive	Harrisburg, PA		—		7,743,800		—		4,206,745		—		11,950,545		11,950,545		—		2005		N/A
1498 Eagle Hill Drive	High Point, NC		—		94,274		—		1,118,564		—		1,212,838		1,212,838		—		1999		N/A
400 Mendenhall Oaks Parkway	High Point, NC		—		—		—		1,698,078		—		1,698,078		1,698,078		—		2004		N/A
5201 Gate Parkway	Jacksonville, FL		—		3,836,532		—		8,906,863		—		12,743,395		12,743,395		—		2005		N/A
7528 Walker Way	Lehigh Valley, PA		—		893,441		—		4,111,637		—		5,005,078		5,005,078		—		2004		N/A
75 Brookfield Oaks Drive	Mauldin, SC		—		419,731		—		1,751,644		—		2,171,375		2,171,375		—		2003		N/A
65 Brookfield Oaks Drive	Mauldin, SC		—		557,174		—		2,652,752		—		3,209,926		3,209,926		—		2004		N/A
11050 West Liberty Drive	Milvaukee, WI		—		—		—		2,468,136		—		2,468,136		2,468,136		—		2005		N/A
302 Fellowship Road	Mt Laurel, NJ		—		1,512,120		—		2,268,486		—		3,780,605		3,780,605		—		2001		N/A
17th & JFK Tower	Philadelphia, PA		—		22,430,038		—		101,594,438		—		124,024,476		124,024,476		—		2005		N/A
1 Crescent Drive	Philadelphia, PA		—		567,280		—		10,664,954		—		11,232,234		11,232,234		—		2004		N/A
3900 Westerre Parkway	Richmond, VA		—		392,184		—		8,220,581		—		8,612,765		8,612,765		—		2005		N/A
6505 Cogswell Road	Romulus, MI		—		594,523		—		7,087,829		—		7,682,353		7,682,353		—		2000		N/A
38100 Ecorse Road Expansion	Romulus, MI		—		—		—		49,703		—		49,703		49,703		—		2005		N/A
8501 East Raintree Drive	Scottsdale, AZ		—		4,076,412		—		11,281,969		—		15,358,381		15,358,381		—		2005		N/A
6950 Harbor View Blvd	Suffolk, VA		—		929,844		—		6,019,100		—		6,948,944		6,948,944		—		2004		N/A
8900-34 Brittany Way	Tampa, FL		—		537,194		—		2,285,528		—		2,822,723		2,822,723		—		2005		N/A
200-34 Kelsey Lane	Tampa, FL		—		330,097		—		3,539,403		—		3,869,500		3,869,500		—		2005		N/A
1646 Rankin Road	Houston, TX		—		329,961		—		3,108,463		—		3,438,423		3,438,423		—		2005		N/A
3701 Corporate Parkway	Upper Saucon, PA		—		1,078,674		—		3,362,688		—		4,441,362		4,441,362		—		2003		N/A
42 Kings Hill Avenue	West Malling, UK		—		—		—		12,864,051		—		12,864,051		12,864,051		—		2005		N/A
777 Township Line Road	Yardley, PA		—		3,436,013		—		6,123,418		—		9,559,431		9,559,431		—		2005		N/A
Subtotal Development in Progress		$	—	$	72,497,442	$	2,399,738	$	250,026,820	$	—	$	324,924,000	$	324,924,000	$	—

68

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
LAND HELD FOR DEVELOPMENT
Perryman Road Land	Aberdeen, MD	$	—	$	12,046,811	$	—	$	—		$	12,046,811	$	—	$	12,046,811	$	—		2005		N/A
West Ridge Corporate Center Land	Aurora, IL		—		826,547		—		10,626,723			11,453,270		—		11,453,270		—		2003		N/A
LVCC Phase 2 Land	Bethlehem, PA		—		3,741,506		—		2,418,375			6,159,881		—		6,159,881		—		1998		N/A
Lehigh Valley Corporate Center Land	Bethlehem, PA		—		309,058		—		(42,339	)		266,719		—		266,719		—		1987		N/A
5705 Old Shakopee Road	Bloomington, MN		—		2,113,223		—		50,087			2,163,310		—		2,163,310		—		2001		N/A
Boca Colannade Yamato Road	Boca Raton, FL		—		3,649,792		—		1,103,719			4,753,511		—		4,753,511		—		1998		N/A
Rivers’ Bend Land	Chesterfield, VA		—		1,695,415		—		3,807,147			5,502,561		—		5,502,561		—		1995		N/A
501 Hewlett Packard Way	Chesterfield, VA		—		165,042		—		484,965			650,007		—		650,007		—		1996		N/A
Columbia Crossing Land	Columbis, MD		—		3,865,848		—		417,920			4,283,768		—		4,283,768		—		2000		N/A
Liberty Place Land	Eden Prairie, MN		—		4,500,641		—		(2,308,762	)		2,191,880		—		2,191,880		—		1998		N/A
Independence Pointe Land	Greenville, SC		—		932,484		—		1,512,636			2,445,120		—		2,445,120		—		1997		N/A
Southchase Business Park Land	Greenville, SC		—		1,369,712		—		596,521			1,966,232		—		1,966,232		—		1998		N/A
Volvo Center Land	Hampton, VA		—		1,650,423		—		(515,359	)		1,135,065		—		1,135,065		—		2000		N/A
Lakefront Plaza II Land	Hampton, VA		—		132,785		—		92,583			225,368		—		225,368		—		2001		N/A
Patapsco Valley Business Center	Hanover, MD		—		4,299,366		—		1,694,367			5,993,733		—		5,993,733		—		2004		N/A
Mendenhall Land	High Point, NC		—		1,910,135		—		4,253,485			6,163,620		—		6,163,620		—		1995		N/A
Piedmont Centre Land	High Point, NC		—		1,621,044		—		241,932			1,862,976		—		1,862,976		—		2004		N/A
Horsham Business Center Land	Horsham, PA		—		9,620,495		—		(9,539,695	)		80,800		—		80,800		—		2005		N/A
Commonwealth Corporate Center Land	Horsham, PA		—		3,047,683		—		3,995			3,051,677		—		3,051,677		—		2005		N/A
Central Green Land	Houston, TX		—		481,229		—		13,185			494,414		—		494,414		—		2001		N/A
Noxell Land	Hunt Valley, MD		—		2,166,068		—		838,437			3,004,505		—		3,004,505		—		2001		N/A
Liberty Business Park Land	Jacksonville, FL		—		448,097		—		90,019			538,116		—		538,116		—		1995		N/A
7024 AC Skinner Parkway	Jacksonville, FL		—		468,643		—		356,309			824,952		—		824,952		—		1995		N/A
Belfort Road	Jacksonville, FL		—		468,643		—		109,850			578,493		—		578,493		—		1998		N/A
Butler Plaza Land	Jacksonville, FL		—		1,303,792		—		1,714,406			3,018,198		—		3,018,198		—		1998		N/A
Salisbury Road Land	Jacksonville, FL		—		880,828		—		698,516			1,579,344		—		1,579,344		—		2000		N/A
Skinner Land Parcel B	Jacksonville, FL		—		2,306,191		—		592			2,306,783		—		2,306,783		—		2005		N/A
Boulders Business Center Land	Lehigh, PA		—		25,581,432		—		(6,263,273	)		19,318,159		—		19,318,159		—		2004		N/A
Mill Run Land	Lehigh, PA		—		2,882,221		—		31,423			2,913,643		—		2,913,643		—		2005		N/A
Commodore Business Park	Logan, NJ		—		1,756,748		—		(60,293	)		1,696,455		—		1,696,455		—		1995		N/A
Quarry Ridge Land	Malvern, PA		—		8,398,708		—		2,803,093			11,186,285		15,515		11,201,800		—		2001		N/A
Park Place South Land	Milwaukee, WI		—		2,362,904		—		1,180,869			3,543,774		—		3,543,774		—		1999		N/A
306 & 330 Fellowship Road	Mount Laurel, NJ		—		3,730,570		—		—			3,730,570		—		3,730,570		—		2005		N/A
Orlando Corporate Center Land	Orlando, FL		—		903,701		—		(73,850	)		829,851		—		829,851		—		2000		N/A
Beeland Industrial Park Land	Orlando, FL		—		1,780,809		—		563,071			2,343,880		—		2,343,880		—		2004		N/A
South Center Land — Phase II	Orlando, FL		—		838,853		—		(77,577	)		761,276		—		761,276		—		2004		N/A
Maitland Summit Park Land	Orlando, FL		—		4,388,905		—		23,512			4,412,417		—		4,412,417		—		2005		N/A
JFK & Arch Parking Lots/Land (West)	Philadelphia, PA		—		4,700,222		—		(1,633,306	)		3,066,916		—		3,066,916		—		2000		N/A
Eastport VII	Richmond, VA		—		787,091		—		843,729			1,630,820		—		1,630,820		—		1997		N/A
Eastport VIII	Richmond, VA		—		379,836		—		6,187			386,023		—		386,023		—		1997		N/A
Eastport IX	Richmond, VA		—		209,856		—		5,096			214,952		—		214,952		—		1997		N/A
Westerre Land	Richmond, VA		—		725,109		—		267,056			992,165		—		992,165		—		2003		N/A
IRS Distribution Ctr Land	Richmond, VA		—		100,000		—		(87,019	)		12,981		—		12,981		—		1995		N/A
Romulus Land	Romulus, MI		—		788,338		—		624,330			1,412,668		—		1,412,668		—		1998		N/A
Woodlands Center Land	Sandston, VA		—		928,555		—		285,461			1,214,017		—		1,214,017		—		1996		N/A
Northsight Land	Scottsdale, AZ		—		7,247,107		—		—			7,247,107		—		7,247,107		—		2005		N/A
Woodlands Center Land	Suffolk, VA		—		678,039		—		11,461			689,500		—		689,500		—		2005		N/A
Woodlands Center Land	Suffolk, VA		—		904,052		—		14,245			918,297		—		918,297		—		2005		N/A
Silo Bend Land	Tampa, FL		—		81,802		—		1,660,245			1,742,047		—		1,742,047		—		1996		N/A
Woodland Corporate Center Land	Tampa, FL		—		2,002,231		—		(223,628	)		1,778,604		—		1,778,604		—		1998		N/A
6119 W. Linebaugh Avenue	Tampa, FL		—		175,886		—		22,320			198,205		—		198,205		—		2000		N/A
Big Beaver Airport Land	Troy, MI		—		6,604,631		—		(4,948,875	)		1,655,756		—		1,655,756		—		1999		N/A
Subtotal Land Held for Development		$	—	$	144,959,109	$	—	$	13,693,891		$	158,637,485	$	15,515	$	158,653,000	$	—
Total All Properties		$	71,651,258	$	791,079,225	$	1,779,852,892	$	2,273,087,885		$	788,599,485	$	4,055,420,515	$	4,844,020,000	$	748,818,000

* Denotes property is collateralized under mortgages with Nationwide, Principal Mutual, American General, New York Life, Manufacturer’s Life, USG Annuity and Life and Jackson National Life totalling $264.2 million.

69

SCHEDULE III

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
(In thousands)

A summary of activity for real estate and accumulated depreciation is as follows:

	FOR THE YEARS ENDED
	DECEMBER 31,
	2005			2004			2003
REAL ESTATE:
Balance at beginning of year	$	4,491,412		$	4,129,270		$	3,860,260
Additions		658,041			410,293			309,818
Disposition of property		(305,433	)		(48,151	)		(40,808	)
Balance at end of year	$	4,844,020		$	4,491,412		$	4,129,270
ACCUMULATED DEPRECIATION:
Balance at beginning of year	$	692,649		$	584,841		$	483,807
Depreciation expense		123,278			114,199			105,093
Disposition of property		(67,109	)		(6,391	)		(4,059	)
Balance at end of year	$	748,818		$	692,649		$	584,841

70

Management’s Annual Report on Internal Control Over Financial Reporting

To the Partners of Liberty Property Limited Partnership:

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a – 15 (f) and 15d – 15(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2005. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) in Internal Control – Integrated Framework. Based on our assessment we believe that, as of December 31, 2005, the Company’s internal control over financial reporting is effective based on those criteria.

Management’s assertion regarding its assessment of internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, whose reports appear on the following pages.

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

March 10, 2006

71

Report of Independent Registered Public Accounting Firm

The Partners of Liberty Property Limited Partnership

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, that Liberty Property Limited Partnership (the “Operating Partnership”) maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Operating Partnership’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

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

In our opinion, management’s assessment that Liberty Property Limited Partnership maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Liberty Property Limited Partnership as of December 31, 2005 and 2004, and the related consolidated statements of operations, owners’ equity, and cash flows for the each of the three years in the period ended December 31, 2005 of the Operating Partnership and our report dated March 10, 2006 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
March 10, 2006

72

Report of Independent Registered Public Accounting Firm

The Partners of Liberty Property Limited Partnership

We have audited the accompanying consolidated balance sheets of Liberty Property Limited Partnership (the “Operating Partnership”) as of December 31, 2005 and 2004, and the related consolidated statements of operations, owners’ equity, and cash flows for each of the three years in the period ended December 31, 2005. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on these financial statements and schedule 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 consolidated financial position of Liberty Property Limited Partnership at December 31, 2005 and 2004, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Liberty Property Limited Partnership’s internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 10, 2006 expressed an unqualified opinion thereon.

/s/Ernst & Young LLP

Philadelphia, Pennsylvania
March 10, 2006

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CONSOLIDATED BALANCE SHEETS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS)

	DECEMBER 31,
	2005			2004
ASSETS
Real estate:
Land and land improvements	$	629,962		$	622,987
Buildings and improvements		3,730,481			3,616,204
Less accumulated depreciation		(748,818	)		(692,649	)
Operating real estate		3,611,625			3,546,542
Development in progress		324,924			81,099
Land held for development		158,653			171,122
Net real estate		4,095,202			3,798,763
Cash and cash equivalents		61,629			33,667
Restricted cash		29,085			34,626
Accounts receivable, net of allowance		19,529			21,502
Deferred rent receivable		72,818			66,528
Deferred financing and leasing costs, net of accumulated amortization (2005, $106,752; 2004, $91,117)		121,085			106,940
Investments in unconsolidated joint ventures		33,522			24,372
Assets held for sale, net		12,654			12,799
Prepaid expenses and other assets		52,005			63,630
Total assets	$	4,497,529		$	4,162,827
LIABILITIES
Mortgage loans	$	238,728		$	366,171
Unsecured notes		1,755,000			1,455,000
Credit facility		255,450			312,000
Accounts payable		32,919			24,288
Accrued interest		34,892			34,994
Distribution payable		56,490			54,485
Other liabilities		161,735			111,764
Total liabilities		2,535,214			2,358,702
Minority interest		407			3,980
OWNERS’ EQUITY
General partner’s equity – common units		1,709,182			1,596,259
Limited partners’ equity – preferred units		184,657			135,471
– common units		68,069			68,415
Total owners’ equity		1,961,908			1,800,145
Total liabilities and owners’ equity	$	4,497,529		$	4,162,827

See accompanying notes.

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CONSOLIDATED STATEMENTS OF OPERATIONS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)

	YEAR ENDED DECEMBER 31,
	2005			2004			2003
OPERATING REVENUE
Rental	$	486,121		$	452,753		$	430,435
Operating expense reimbursement		194,609			175,574			163,451
Total operating revenue		680,730			628,327			593,886
OPERATING EXPENSES
Rental property		142,838			128,005			116,505
Real estate taxes		68,865			62,809			59,734
General and administrative		38,138			33,759			28,316
Depreciation and amortization		146,526			129,298			116,557
Total operating expenses		396,367			353,871			321,112
Operating Income		284,363			274,456			272,774
OTHER INCOME (EXPENSE)
Interest and other income		8,622			7,290			8,285
Interest expense		(129,617	)		(116,630	)		(117,754	)
Total other income(expense)		(120,995	)		(109,340	)		(109,469	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures		163,368			165,116			163,305
Gain (loss) on property dispositions		84,295			496			447
Income taxes		(14,827	)		(1,820	)		(2,326	)
Minority interest		(357	)		632			(673	)
Equity in earnings (loss) of unconsolidated joint ventures		2,540			(775	)		1,744
Income from continuing operations		235,019			163,649			162,497
Discontinued operations (including net gain on property dispositions of $37,915, $11,603 and $11,958 for the years ended December 31, 2005, 2004 and 2003, respectively)		36,940			16,593			21,173
Net income		271,959			180,242			183,670
Preferred unit distributions		12,095			11,844			12,416
Income available to common unitholders	$	259,864		$	168,398		$	171,254
Earnings per common unit
Basic:
Income from continuing operations	$	2.46		$	1.72		$	1.82
Income from discontinued operations		0.41			0.19			0.26
Income per common unit – basic	$	2.87		$	1.91		$	2.08
Diluted:
Income from continuing operations	$	2.42		$	1.70		$	1.80
Income from discontinued operations		0.40			0.18			0.25
Income per common unit – diluted	$	2.82		$	1.88		$	2.05
Weighted average number of common units outstanding
Basic		90,540			88,210			82,268
Diluted		91,931			89,700			83,561

See accompanying notes.

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CONSOLIDATED STATEMENTS OF OWNERS’ EQUITY OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS)

	GENERAL			LIMITED			TOTAL
	PARTNER’S			PARTNERS’			OWNERS’
	EQUITY			EQUITY			EQUITY
Balance at January 1, 2003	$	1,354,431		$	201,385		$	1,555,816
Contributions from partners		206,620			2,640			209,260
Distributions to partners		(191,632	)		(21,025	)		(212,657	)
Issuance of operating partnership units		—			1,151			1,151
Foreign currency translation adjustment		11,868			—			11,868
Net income		163,610			20,061			183,671
Balance at December 31, 2003		1,544,897			204,212			1,749,109
Contributions from partners		85,967			1,593			87,560
Distributions to partners		(206,443	)		(20,718	)		(227,161	)
Issuance of operating partnership units		—			—			—
Foreign currency translation adjustment		10,395			—			10,395
Net income		161,443			18,799			180,242
Balance at December 31, 2004		1,596,259			203,886			1,800,145
Contributions from partners		93,157			(1,665	)		91,492
Distributions to partners		(214,386	)		(21,290	)		(235,676	)
Issuance of operating partnership units		—			49,186			49,186
Foreign currency translation adjustment		(15,199	)		—			(15,199	)
Net income		249,351			22,609			271,960
Balance at December 31, 2005	$	1,709,182		$	252,726		$	1,961,908

See accompanying notes.

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CONSOLIDATED STATEMENTS OF CASH FLOWS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS)

	YEAR ENDED DECEMBER 31,
	2005			2004			2003
OPERATING ACTIVITIES
Net income	$	272,316		$	179,610		$	184,343
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		150,722			136,700			123,102
Amortization of deferred financing costs		4,758			4,315			4,013
Equity in (earnings) loss of unconsolidated joint ventures		(2,540	)		775			(1,744	)
Distributions from unconsolidated joint ventures		4,651			682			3,145
Gain on property dispositions		(122,210	)		(12,099	)		(12,405	)
Noncash compensation		3,980			2,388			2,877
Changes in operating assets and liabilities:
Restricted cash		3,849			(19,334	)		(12,154	)
Accounts receivable		1,804			(8,449	)		5,125
Deferred rent receivable		(6,290	)		(8,513	)		(9,240	)
Prepaid expenses and other assets		(12,488	)		(12,046	)		(3,638	)
Accounts payable		8,894			8,859			(11,848	)
Accrued interest		(102	)		2,166			257
Other liabilities		52,353			18,282			(8,022	)
Net cash provided by operating activities		359,697			293,336			263,811
INVESTING ACTIVITIES
Investment in properties		(324,340	)		(253,017	)		(145,997	)
Cash paid for business net of cash acquired		—			—			16,627
Investments in unconsolidated joint ventures		(13,790	)		(6,198	)		(4,918	)
Proceeds from disposition of properties/land		415,144			54,140			49,744
Investment in development in progress		(235,078	)		(105,208	)		(59,953	)
Increase in land held for development		(91,436	)		(34,132	)		(27,650	)
Increase in deferred leasing costs		(37,133	)		(29,560	)		(22,986	)
Net cash used in investing activities		(286,633	)		(373,975	)		(195,133	)
FINANCING ACTIVITIES
Net proceeds from issuance of unsecured notes		296,424			197,517			3,683
Repayment of unsecured notes		—			(100,000	)		(73,739	)
Proceeds from mortgage loans		—			9,618			1,223
Repayments of mortgage loans		(173,926	)		(23,592	)		(15,436	)
Proceeds from credit facility		784,800			477,800			453,950
Repayments on credit facility		(841,350	)		(332,800	)		(418,950	)
Increase in deferred financing costs		(3,465	)		(199	)		(2,640	)
Capital contributions		136,200			86,329			207,021
Distributions to partners		(237,101	)		(225,055	)		(213,223	)
Net cash (used in) provided by financing activities		(38,418	)		89,618			(58,111	)
Increase in cash and cash equivalents		34,646			8,979			10,567
(Decrease) increase in cash and cash equivalents related to foreign currency translation		(6,684	)		2,879			3,309
Cash and cash equivalents at beginning of year		33,667			21,809			7,933
Cash and cash equivalents at end of year	$	61,629		$	33,667		$	21,809
SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Write-off of fully depreciated property and deferred costs	$	83,794		$	27,990		$	13,187
Issuance of operating partnership units		—			—			1,151
Acquisition of properties		(51,716	)		(11,305	)		(56,083	)
Assumption of mortgage loans		51,716			11,305			56,083

See accompanying notes.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP

1. ORGANIZATION

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”). The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 96.2% of the common equity of the Operating Partnership at December 31, 2005. The Company provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties which are located principally within the Mid-Atlantic, Southeastern and Midwestern United States and the United Kingdom.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles, (“US GAAP”) requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Principles of Consolidation

The Consolidated Financial Statements of the Company include, the Trust, the Operating Partnership and wholly owned subsidiaries and those subsidiaries in which the Company owns a majority voting interest with the ability to control operations of the subsidiaries and where no approval, veto or other important rights have been granted to the minority shareholders. All significant intercompany transactions and accounts have been eliminated.

Reclassifications

Certain amounts from prior years have been reclassified to conform to current-year presentation.

Real Estate and Depreciation

The properties are recorded at the lower of cost or fair value and are depreciated using the straight line method over their estimated useful lives. The estimated lives are as follows:

Buildings and improvements	40 years (blended)
Equipment	5-10 years
Tenant improvements	Term of the related lease

Expenditures directly related to acquisition, or improvement of real estate, including interest and other costs capitalized during development, are included in net real estate and are stated at cost. The capitalized costs include pre-construction costs essential to the development of the property, development and construction costs, interest costs, real estate taxes, salaries and other costs incurred during the period of development. Expenditures for maintenance and repairs are charged to operations as incurred.

In accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Standards (‘SFAS”) No. 141, “Business Combinations,” the Company allocates the purchase price of real estate to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to market rent for leases of similar terms and present valuing the difference based on market interest rates. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. The Company depreciates the amounts allocated to building and improvements over 40 years and the amounts allocated to intangible assets relating to in-place leases, which are included in deferred financing and leasing costs in the accompanying balance sheet, over the remaining term of the related leases. Once a property is designated as held for sale, no further depreciation expense is recorded. Properties identified as held for sale and /or sold are presented in discontinued operations for all periods presented.

The Company evaluates its real estate investments and its investments in unconsolidated joint ventures upon occurrence of significant adverse changes in their operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If any real estate investment or investment in unconsolidated joint ventures is considered impaired, a loss is provided to reduce the carrying value of the property to its estimated fair value.

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Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. Under the equity method of accounting, the net equity investments of the Company is reflected in the consolidated balance sheets and the Company’s share of net income from the joint ventures is included on the consolidated statements of operations.

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.

Restricted Cash

Restricted cash includes tenant security deposits and escrow funds that the Company maintains pursuant to certain mortgage loans. Restricted cash also includes the undistributed proceeds from the sale of residential land in Kent County, United Kingdom.

Accounts Receivable

The Company’s accounts receivable are comprised of rents and charges for property operating costs due from tenants. The Company periodically performs a detailed review of amounts due from tenants to determine if account receivable balances are collectible. Based on this review, accounts receivable are reduced by an allowance for doubtful accounts. The Company considers tenant credit quality and payment history and general economic conditions in determining the allowance for doubtful accounts. If the accounts receivable balance is subsequently deemed uncollectible, the receivable and allowance for doubtful account balance is written off.

The allowance for doubtful accounts at December 31, 2005 and 2004 was $6.7 million and $6.0 million, respectively.

Deferred Rent Receivable

Deferred rent receivable represents the cumulative difference between rent revenue recognized on a straight line basis and contractual payments due under the terms of tenant leases.

Revenues

The Company earns rental income under operating leases with tenants. Rental income is recognized on a straight line basis over the applicable lease term. Operating expense reimbursements consisting of amounts due from tenants for real estate taxes, utilities and other recoverable costs are recognized as revenue in the period in which the corresponding expenses are incurred.

Termination fees (included in rental revenue) are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. The Company recognizes termination fees in accordance with Staff Accounting Bulletin 104 when the following conditions are met:

a) the termination agreement is executed,
b) the termination fee is determinable,
c) all landlord services, pursuant to the terminated lease, have been rendered, and
d) collectibility of the termination fee is assured.

Deferred Financing and Leasing Costs

Costs incurred in connection with financing or leasing are capitalized and amortized over the term of the related loan or lease. Deferred financing cost amortization is reported as interest expense. Intangible assets related to acquired in-place leases are amortized over the terms of the related leases.

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Income per Common Unit

The following table sets forth the computation of basic and diluted income per common unit (in thousands, except per unit amounts):

	2005							2004
				Weighted							Weighted
				Average							Average
	Income			Units		Per		Income			Units		Per
	(Numerator)			(Denominator)		Unit		(Numerator)			(Denominator)		Unit
Income from continuing operations	$	235,019						$	163,649
Less: Preferred unit distributions		(12,095	)						(11,844	)
Basic income from continuing operations
Income from continuing operations available to common unitholders		222,924			90,540	$	2.46		151,805			88,210	$	1.72
Dilutive units for long-term compensation plans		—			1,391				—			1,490
Diluted income from continuing operations
Income from continuing operations available to common unitholders and assumed conversions		222,924			91,931	$	2.42		151,805			89,700	$	1.70
Basic income from discontinued operations
Discontinued operations net of minority interest		36,940			90,540	$	0.41		16,593			88,210	$	0.19
Dilutive units for long-term compensation plans		—			1,391				—			1,490
Diluted income from discontinued operations
Discontinued operations net of minority interest		36,940			91,931	$	0.40		16,593			89,700	$	0.18
Basic income per common unit
Income available to common unitholders		259,864			90,540	$	2.87		168,398			88,210	$	1.91
Dilutive shares for long-term compensation plans		—			1,391				—			1,490
Diluted income per common unit
Income available to common unitholders and assumed conversions	$	259,864			91,931	$	2.82	$	168,398			89,700	$	1.88

	2003
				Weighted
				Average
	Income			Units		Per
	(Numerator)			(Denominator)		Unit
Income from continuing operations	$	162,497
Less: Preferred unit distributions		(12,416	)
Basic income from continuing operations
Income from continuing operations available to common unitholders		150,081			82,268	$	1.82
Dilutive units for long-term compensation plans		—			1,293
Diluted income from continuing operations
Income from continuing operations available to common unitholders and assumed conversions		150,081			83,561	$	1.80
Basic income from discontinued operations
Discontinued operations net of minority interest		21,173			82,268	$	0.26
Dilutive units for long-term compensation plans		—			1,293
Diluted income from discontinued operations
Discontinued operations net of minority interest		21,173			83,561	$	0.25
Basic income per common unit
Income available to common unitholders		171,254			82,268	$	2.08
Dilutive unit for long-term compensation plans		—			1,293
Diluted income per common unit
Income available to common unitholders and assumed conversions	$	171,254			83,561	$	2.05

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, deferred rent receivable, accounts payable, accrued interest, dividends payable and other liabilities are reasonable estimates of fair values because of the short-term nature of these items. The fair value of the Company’s long-term debt, which is based on estimates by management and on rates quoted on December 31, 2005 for comparable loans, exceeds the aggregate carrying value by approximately $92 million at December 31, 2005.

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Income Taxes

In conformity with the Internal Revenue Code and applicable state and local statutes, taxable income or loss of the Operating Partnership is required to be reported in the tax returns of the partners in accordance with the terms of the Partnership Agreement. However, the Company is taxed in certain States and the United Kingdom. Accordingly, the Company has recognized federal, state and local taxes in accordance with US GAAP, as applicable.

Foreign Currency Translation

The functional currency for the Company’s United Kingdom operations is pounds sterling. The Company translates its financial statements into US dollars. Gains and losses resulting from this translation do not impact the results of operations and are included in accumulated other comprehensive income as a separate component of shareholders’ equity. Other comprehensive income (loss) was ($15.2 million), $10.4 million and $11.9 million for the years ended December 31, 2005, 2004 and 2003, respectively. Upon sale or upon complete or substantially complete liquidation of a foreign investment, the gain or loss on the sale will include a portion of the cumulative translation adjustments that have been previously recorded in other comprehensive income.

Recently Issued Accounting Standards

SFAS No. 123 (revised 2004)

In December 2004, the Financial Accounting Standard Board (FASB) issued FASB Statement No. 123 (revised 2004), Share-Based Payment, which is a revision of FASB Statement No. 123, Accounting for Stock-Based Compensation. Statement 123(R) supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees, and amends FASB Statement No. 95, Statement of Cash Flows (“SFAS No. 123R”). SFAS No. 123R requires the compensation cost relating to share-based payment transactions be recognized in financial statements and be measured based on the fair value of the equity instrument issued. SFAS No. 123R is effective as of the first annual reporting period beginning after June 15, 2005. Awards issued, modified, or settled after the effective date will be measured and recorded in accordance with SFAS No. 123R. Effective January 1, 2003, the Company adopted the fair value recognition provisions of Statement No. 123. The Company does not anticipate that adoption of SFAS No. 123R will have a material impact on its results of operations or its financial position.

SFAS No. 153

In December 2004, the FASB issued SFAS No. 153, “Accounting for Non-monetary Transactions” (“SFAS No. 153”). SFAS 153 requires non-monetary exchanges to be accounted for at fair value, recognizing any gain or loss, if the transactions meet a commercial-substance criterion and fair value is determinable. SFAS NO. 153 is effective for non-monetary transactions occurring in fiscal years beginning after June 15, 2005. The Company does not expect that the implementation of this standard will have a material effect on the Company’s consolidated financial position or results of operations.

Emerging Issues Task Force (“EITF”) Issue No. 04-5

In June 2005, the FASB ratified its consensus in EITF Issue 04-5, “Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights” (Issue 04-5). The effective date for Issue 04-5 is June 29, 2005 for all new or modified partnerships and January 1, 2006 for all other partnerships. The adoption of the provisions of Issue 04-5 is not anticipated to have a material impact on the Company’s financial position or results of operations.

Interpretation of FASB Statement No. 143 (“FIN 47”)

Issued in March 2005, FIN 47 clarifies that the term conditional asset retirement obligation as used in SFAS No. 143, Accounting for Asset Retirement Obligations (“SFAS No. 143”) refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. Thus, the timing and/or method of settlement may be conditional on a future event. An entity is required to recognize a liability for the fair value of a conditional

81

asset retirement obligation if the fair value of the liability can be reasonably estimated. The fair value of a liability for the conditional asset retirement obligation should be recognized when incurred – generally upon acquisition, construction, or development and/or through the normal operation of the asset. Uncertainty about the timing and/or method of settlement of a conditional asset retirement obligation should be factored into the measurement of a liability when sufficient information exists. SFAS No. 143 acknowledges that in some cases, sufficient information may not be available to reasonably estimate the fair value of an asset retirement obligation. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an asset retirement obligation. FIN 47 is effective for the year ended December 31, 2005 and did not have a material effect on the Company’s consolidated financial position or results of operations for 2005.

3. REAL ESTATE

The Company owns and operates industrial and office properties located principally in suburban mixed-use developments or business parks. The carrying value of these properties by type as of December 31, 2005 and 2004 is as follows (in thousands):

	Land		Buildings
	And Land		And				Accumulated
	Improvements		Improvements		Total		Depreciation
2005:
Industrial properties	$	308,404	$	1,669,294	$	1,977,698	$	339,465
Office properties		321,558		2,061,187		2,382,745		409,353
2005 Total	$	629,962	$	3,730,481	$	4,360,443	$	748,818
2004:
Industrial properties	$	293,282	$	1,588,513	$	1,881,795	$	308,963
Office properties		329,705		2,027,691		2,357,396		383,686
2004 Total	$	622,987	$	3,616,204	$	4,239,191	$	692,649

Depreciation expense was $123.3 million in 2005, $114.2 million in 2004 and $105.1 million in 2003.

As of December 31, 2005, the Company has commenced development on 29 properties, which upon completion are expected to comprise 5.6 million square feet of leaseable space. As of December 31, 2005, $324.9 million had been expended for the development of these projects and an additional $490.6 million is estimated to be required for completion.

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     Information on the operating properties the Company has sold for the year ended December 31, 2005 and 2004 are as follows:

2005 Sales

	Number of		Leasable
	Buildings		Square Feet		Proceeds
					(in thousands)
Segment
Delaware Valley
Southeastern Pennsylvania		2		139,760	$	7,864
Other		3		177,733		12,333
Midwest
Lehigh Valley		2		142,204		8,676
Other		18		400,262		23,236
Mid-Atlantic		4		727,732		51,570
Florida		6		726,632		53,834
United Kingdom		16		602,175		263,343
Total		51		2,916,498	$	420,856

2004 Sales

	Number of		Leasable
	Buildings		Square Feet		Proceeds
					(in thousands)
Segment
Delaware Valley
Southeastern Pennsylvania		3		248,073	$	30,814
Other		1		45,390		1,950
Midwest
Lehigh Valley		—		—		—
Other		3		303,723		13,150
Mid-Atlantic		—		—		—
Florida		3		163,330		5,205
United Kingdom		—		—		—
Total		10		760,516	$	51,119

4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

On November 18, 2002, the Company entered into a joint venture agreement (“Liberty Venture I, LP”) with the Public Employees’ Retirement Association of Colorado. The Company sold or contributed 28 properties with a net book value of $127.5 million to the joint venture in exchange for a 25% ownership interest in the joint venture and $108.8 million in cash. The properties are industrial distribution properties in New Jersey (the Delaware Valley Segment). The Company’s share of the joint venture earnings is included in equity in (loss) earnings of unconsolidated joint ventures in the accompanying statement of operations. The Company provides development, leasing and property management services for a fee, and may receive a promoted interest if certain return thresholds are met.

During the year ended December 31, 2004, the joint venture purchased additional industrial distribution properties with net book value of $5.5 million. During the year ended December 31, 2005, the joint venture disposed of three properties for proceeds of $21.1 million.

On December 14, 2005, the Company entered into a joint venture agreement (“Kings Hill Unit Trust”) with Doughty Hanson & Co. Real Estate. The Company sold 15 properties with a net book value of $125.8 million to the joint venture for $219.9 million in cash. In addition, the Company holds a $7.6 million note receivable from the Kings Hill United Trust and retained a 20% ownership interest in the joint venture. The note receivable bears interest at a 9% rate. The Company recognized a $75.1 million gain net of $14.5 million of tax on the sale of its United Kingdom Properties in Operation to the Kings Hill Unit Trust. Due to the Company’s continuing involvement in this joint venture, the operations to the date of sale, as well as the gain on sale and related taxes are included in income from continuing operations in the consolidated statements of operations. The properties which were sold are industrial-flex

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and office properties and are included in the Company’s United Kingdom segment. The Company provides property management services for a fee, and may receive a promoted interest if certain return thresholds are met.

As of December 31, 2005, the Company has a 50% ownership interest in three additional unconsolidated joint ventures. These joint ventures have investments in land or in leaseholds and do not operate or own operating properties.

The Company’s share of each of the joint venture earnings is included in equity in earnings (loss) of unconsolidated joint ventures in the accompanying consolidated statements of operations.

The condensed balance sheets as of December 31, 2005 and 2004 and statements of operations for Liberty Venture I, LLC, Kings Hill Unit Trust and other unconsolidated joint ventures for the years ended December 31, 2005, 2004 and 2003 are as follows (in thousands):

Balance Sheets:

	December 31, 2005
	Liberty Venture			Kings Hill
	Venture I, LLC			Unit Trust			Other		Total
Real estate assets	$	121,092		$	202,200		$	—	$	323,292
Accumulated depreciation		(7,579	)		(284	)		—		(7,863	)
Real estate assets, net		113,513			201,916			—		315,429
Land held for development		2,750			—			37,812		40,562
Other assets		14,922			18,499			9,980		43,401
Total assets	$	131,185		$	220,415		$	47,792	$	399,392
Debt	$	77,826		$	163,448		$	—	$	241,274
Other liabilities		2,284			44,028			678		46,990
Equity		51,075			12,939			47,114		111,128
Total liabilities and equity	$	131,185		$	220,415		$	47,792	$	399,392
Company’s net investment in unconsolidated joint ventures	$	12,310		$	—		$	21,212	$	33,522

	December 31, 2004
	Liberty Venture			Kings Hill
	Venture I, LLC			Unit Trust		Other		Total
Real estate assets	$	128,727		$	—	$	—	$	128,727
Accumulated depreciation		(5,183	)		—		—		(5,183	)
Real estate assets, net		123,544			—		—		123,544
Land held for development		2,686			—		22,543		25,229
Other assets		16,945			—		2,747		19,692
Total assets	$	143,175		$	—	$	25,290	$	168,465
Debt	$	86,585		$	—	$	—	$	86,585
Other liabilities		3,183			—		391		3,574
Equity		53,407		$	—		24,899		78,306
Total liabilities and equity	$	143,175		$	—	$	25,290	$	168,465
Company’s net investment in unconsolidated joint ventures	$	13,035		$	—	$	11,337	$	24,372

Statements of Operations:

	Year Ended December 31, 2005
	Liberty Venture			Kings Hill
	Venture I, LLC			Unit Trust			Other			Total
Total revenue	$	18,592		$	745		$	—		$	19,337
Operating expense		5,859			201			32			6,092
		12,733			544			(32	)		13,245
Interest		4,569			634			—			5,203
Depreciation and amortization		4,933			386			—			5,319
Other (income)/expense		184			33			(3,066	)		(2,849	)
(Gain)/loss on sale		(7,555	)		—			—			(7,555	)
Net income (loss)	$	10,602		$	(509	)	$	3,034		$	13,127
Company’s equity in earnings (loss) of unconsolidated joint ventures	$	2,650		$	(110	)	$	—		$	2,540

84

	Year Ended December 31, 2004
	Liberty Venture			Kings Hill
	Venture I, LLC			Unit Trust		Other		Total
Total revenue	$	18,746		$	—	$	—	$	18,746
Operating expense		6,736			—		—		6,736
		12,010			—		—		12,010
Interest		4,426			—		—		4,426
Depreciation and amortization		10,683			—		—		10,683
Net loss	$	(3,099	)	$	—	$	—	$	(3,099	)
Company’s equity in loss of unconsolidated joint ventures	$	(775	)	$	—	$	—	$	(775	)

	Year Ended December 31, 2003
	Liberty Venture		Kings Hill
	Venture I, LLC		Unit Trust		Other		Total
Total revenue	$	19,400	$	—	$	—	$	19,400
Operating expense		6,276		—		—		6,276
		13,124		—		—		13,124
Interest		3,870		—		—		3,870
Depreciation and amortization		4,401		—		—		4,401
Net income	$	4,853	$	—	$	—	$	4,853
Company’s equity in earnings of unconsolidated joint ventures	$	1,744	$	—	$	—	$	1,744

5. RELATED PARTY TRANSACTIONS

During the year ended December 31, 2003, the Company exercised its option to purchase Rouse Kent Limited (“RKL”) for nominal consideration. As a result of the purchase, the Company’s assets and liabilities increased by approximately $60 million. The operations of RKL are included in the consolidated financial statements beginning July 1, 2003. The transaction was accounted for under the purchase method of accounting.

RKL owned six buildings which contain 210,000 square feet of leaseable space and has planning permission for the development of additional commercial space. These six buildings together with other buildings which the Company owned in the United Kingdom, were sold in December 2005 to the Kings Hill Unit Trust joint venture. (See Investments in Unconsolidated Joint Ventures above.) RKL is party to a contract with the County of Kent which contract entitled RKL to participate in proceeds realized from the sale of residential land parcels to homebuilders.

Pursuant to agreements, the Company provided management services with respect to RKL for the six months ended June 30, 2003 for $300,000. In addition, the Company paid a fee to RKL for management services which it provided for the Company’s properties owned in the United Kingdom. For the six months ended June 30, 2003 the fees for these services were $223,000. The Company recognized interest income on notes receivable from RKL of $1.9 million for the six months ended June 30, 2003.

6. INDEBTEDNESS

Indebtedness consists of mortgage loans, unsecured notes, and borrowings under the credit facility. The weighted average interest rates for the years ended December 31, 2005, 2004 and 2003, were 6.6%, 6.7% and 6.9%, respectively. Interest costs during the years ended December 31, 2005, 2004 and 2003 in the amount of $17.7 million, $13.2 million and $10.9 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2005, 2004 and 2003, was $148.8 million, $130.4 million and $132.5 million, respectively.

During the year ended December 31, 2005, the Company issued $300 million 5.125% senior unsecured notes due March 2, 2015. The Company used the proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

During the year ended December 31, 2004, the Company issued $200 million of 5.65% senior unsecured notes due August 15, 2014. The proceeds from this issuance were used to repay $100 million of 7.1% senior unsecured notes which matured on August 15, 2004, pay down outstanding borrowings under the Company’s unsecured credit facility, acquire properties and for general corporate purposes.

The Company is subject to financial covenants contained in some of the debt agreements, the most restrictive of which are detailed below under the heading “Credit Facility.” As of December 31, 2005 the Company was in compliance with all financial covenants.

85

Mortgage Loans, Unsecured Notes

Mortgage loans with maturities ranging from 2006 to 2016 are collateralized by and in some instances cross-collateralized by properties with a net book value of $406.1 million.

The interest rates on $1,978.5 million of mortgage loans and unsecured notes are fixed and range from 4.6% to 8.8%. Interest rates on $15.2 million of mortgage loans float with the base rate of the respective lending bank or LIBOR. The weighted average remaining term for the mortgage loans and unsecured notes is 6.0 years.

Credit Facility

During the fourth quarter of 2005, the Company obtained a new, four-year, $600 million unsecured revolving credit facility (the “$600 million Credit Facility”) replacing a $450 million unsecured revolving credit facility due January 16, 2006. Based on the Company’s present ratings, borrowings under the credit facility are priced at LIBOR plus 65 basis points. The $600 million Credit Facility contains a competitive bid option, whereby participating lenders bid on the interest rate to be charged. This feature is available for up to 50% of the amount of the facility. The interest rate on the $255.5 million of borrowings outstanding as of December 31, 2005 was 4.39%. The current ratings for the Company’s senior unsecured debt are Baa2, BBB, and BBB from Moody’s, S&P and Fitch, respectively. The credit facility has an accordion feature for an additional $200 million. There is also a 15 basis point facility fee on the current borrowing capacity. The $600 million Credit Facility expires on January 16, 2010 and may be extended for a one year period. The $600 million Credit Facility contains financial covenants, certain of which are set forth below:

• total debt to total assets may not exceed 0.60:1;

• earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;

• unsecured debt to unencumbered asset value must equal or be less than 60%; and

• unencumbered net operating income to unsecured interest expense must equal or exceed 200%.

The scheduled principal amortization and maturities of the Company’s mortgage loans, $600 million Credit Facility and the unsecured notes outstanding and the related weighted average interest rates are as follows (in thousands, except percentages):

	Mortgages										Weighted
											Average
	Principal		Principal		Unsecured		Credit				Interest
	Amortization		Maturities		Notes		Facility		Total		Rate
2006	$	9,323	$	40,895	$	100,000	$	—	$	150,218		7.1	%
2007		8,748		1,553		100,000		—		110,301		7.2	%
2008		8,053		45,259		—		—		53,312		6.6	%
2009		5,652		46,148		270,000		—		321,800		7.8	%
2010		4,827		4,738		200,000		255,450		465,015		6.4	%
2011		4,101		10,730		250,000		—		264,831		7.3	%
2012		3,219		32,910		235,000		—		271,129		6.5	%
2013		2,691		—		—		—		2,691		6.0	%
2014		2,857		—		200,000		—		202,857		5.7	%
2015		3,033		—		300,000		—		303,033		5.1	%
2016 & thereafter		3,991		—		100,000		—		103,991		7.4	%
	$	56,495	$	182,233	$	1,755,000	$	255,450	$	2,249,178		6.6	%

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7. LEASING ACTIVITY

Future minimum rental payments due from tenants under noncancelable operating leases as of December 31, 2005 are as follows (in thousands):

2006	$	448,098
2007		400,091
2008		343,492
2009		271,306
2010		211,230
Thereafter		593,904
TOTAL	$	2,268,121

In addition to minimum rental payments, most leases require the tenants to pay for their pro rata share of specified the consolidated operating expenses. These payments are included as operating expense reimbursement in the accompanying consolidated statements of operations.

8. OWNERS’ EQUITY

Common Units

General and Limited partners’ equity – common units relates to limited partnership interests of the Operating Partnership issued in connection with the formation of the Company and certain subsequent acquisitions. No common units were issued in connection with acquisitions in 2005 or 2004. During 2003, 33,682 common units were issued in connection with an acquisition. The common limited partnership interests outstanding as of December 31, 2005 have the same economic characteristics as common shares. The interests in the Limited Partnership (3,517,837 units) share proportionately in the net income or loss and in any distributions of the Operating Partnership and are exchangeable into the same number of common shares of the Trust.

Preferred Units

The Company has outstanding the following Cumulative Redeemable Preferred Units of the Operating Partnership, (the “Preferred Units”):

Date
of						Liquidation		Dividend			Redeemable
Issue	Issue	Amount		Units		Preference		Rate			As of	Exchangeable after
		(in 000’s)
7/28/99	Series B	$	95,000		3,800	$	25		7.45	%	8/31/09	1/1/14 into Series B Cumulative Redeemable Preferred Shares of the Trust
6/10/02	Series D	$	23,650		473	$	50		7.625	%	6/10/07	6/10/12 into Series D Cumulative Redeemable Preferred Shares of the Trust
6/16/05	Series E	$	20,000		400	$	50		7.00	%	6/16/10	6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust
6/30/05	Series F	$	44,000		880	$	50		6.65	%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust
8/23/05	Series F	$	6,000		120	$	50		6.65	%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust

Effective August 31, 2004, the rate on $95 million Series B preferred units was reduced from 9.25% to 7.45%.

During the year ended December 31, 2005, the Company redeemed for $20 million its outstanding 9.125% Series C Cumulative Redeemable Preferred Units.

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The Company paid the following Preferred Unit distributions for the year ended December 31:

	2005		2004		2003
Distributions (in millions)	$	12.1	$	11.8	$	12.4
Distribution per unit:
Series B	$	1.86	$	2.16	$	2.31
Series C	$	1.05	$	2.28	$	2.28
Series D	$	3.81	$	3.81	$	3.81
Series E	$	1.90		—		—
Series F	$	1.61		—		—

Minority Interest

Minority interest includes third-party ownership interests in consolidated joint venture investments.

9. COMMITMENTS AND CONTINGENCIES

Substantially all of the Properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (collectively, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company. The Environmental Assessments consisted of, among other activities, a visual inspection of each Property and its neighborhood and a check of pertinent public records. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

Although the Company is engaged in litigation incidental to its business, there is no legal proceeding to which it is a party which, in the opinion of management, will materially adversely affect the results of the Company’s operations.

The Company is obligated to make additional capital contributions to unconsolidated joint ventures of $2.5 million.

The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.

10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

A summary of quarterly results of operations for the years ended December 31, 2005 and 2004 follows. Certain 2005 and 2004 amounts have been reclassified to conform to the current presentation of discontinued operations (in thousands, except per share amounts).

	Quarter Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,
	2005		2005		2005		2005		2004		2004		2004		2004
Operating revenue	$	171,888	$	169,552	$	174,026	$	165,264	$	160,863	$	157,168	$	155,729	$	154,567
Income from continuing operations		112,342		38,097		41,693		42,887		42,428		39,921		40,952		40,348
Discontinued operations		2,649		19,209		7,837		7,245		8,149		4,205		1,118		3,121
Income available to common unitholders		111,589		53,953		46,866		47,456		47,901		41,166		38,966		40,365
Income per common unit — basic	$	1.22	$	0.59	$	0.51	$	0.53	$	0.54	$	0.47	$	0.44	$	0.46
Income per common unit — diluted	$	1.20	$	0.58	$	0.51	$	0.52	$	0.53	$	0.46	$	0.44	$	0.45

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11. SEGMENT INFORMATION

The Company operates its portfolio of properties primarily throughout the Mid-Atlantic, Southeastern, and Midwestern United States. Additionally, the Company owns certain assets in the United Kingdom. The Company reviews the performance of the portfolio on a geographical basis, as such, the following regions are considered the Company’s reportable segments:

Reportable Segments	Markets
Delaware Valley	Southeastern Pennsylvania; New Jersey
Midwest	Lehigh Valley, Pennsylvania; Michigan; Minnesota; Milwaukee/Chicago
Mid-Atlantic	Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida	Jacksonville; Orlando; Boca Raton; Tampa; Texas
United Kingdom	County of Kent

The Company’s reportable segments are distinct business units which are each managed separately in order to concentrate market knowledge within a geographic area. Within these reportable segments, the Company derives its revenues from its two product types: industrial properties and office properties.

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The Company evaluates performance of the reportable segments based on property level operating income, which is calculated as rental revenue and operating expense reimbursement less rental expenses and real estate taxes. The accounting policies of the reportable segments are the same as those for the Company on a consolidated basis. The operating information by segment is as follows (in thousands):

FOR THE YEAR ENDED DECEMBER 31, 2005

	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	194,710	$	38,774	$	89,155	$	119,723	$	120,892	$	97,145	$	20,331	$	680,730
Rental property expenses and real estate taxes		56,908		13,864		23,155		44,676		37,460		31,959		3,681		211,703
Property level operating income	$	137,802	$	24,910	$	66,000	$	75,047	$	83,432	$	65,186	$	16,650		469,027
Interest and other income																8,622
Interest expense																(129,617	)
General and administrative																(38,138	)
Depreciation and amortization																(146,526	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																163,368
Gain on property dispositions																84,295
Income taxes																(14,827	)
Minority interest																(357	)
Equity in earnings of unconsolidated joint ventures																2,540
Discontinued operations																36,940
Preferred unit distributions																(12,095	)
Income available to common unitholders															$	259,864

FOR THE YEAR ENDED DECEMBER 31, 2004

	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	184,704	$	33,643	$	75,427	$	113,347	$	114,307	$	87,165	$	19,734	$	628,327
Rental property expenses and real estate taxes		53,335		11,616		20,497		42,113		32,699		27,386		3,168		190,814
Property level operating income	$	131,369	$	22,027	$	54,930	$	71,234	$	81,608	$	59,779	$	16,566		437,513
Interest and other income																7,290
Interest expense																(116,630	)
General and administrative																(33,759	)
Depreciation and amortization																(129,298	)
Income before property dispositions, income taxes, minority interest and equity in loss of unconsolidated joint ventures																165,116
Gain on property dispositions																496
Income taxes																(1,820	)
Minority interest																632
Equity in loss of unconsolidated joint ventures																(775	)
Discontinued operations																16,593
Preferred unit distributions																(11,844	)
Income available to common unitholders															$	168,398

90

FOR THE YEAR ENDED DECEMBER 31, 2003

	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	183,110	$	32,725	$	67,902	$	112,355	$	103,105	$	82,312	$	12,377	$	593,886
Rental property expenses and real estate taxes		51,950		10,878		17,295		40,616		28,648		24,602		2,250		176,239
Property level operating income	$	131,160	$	21,847	$	50,607	$	71,739	$	74,457	$	57,710	$	10,127		417,647
Interest and other income																8,285
Interest expense																(117,754	)
General and administrative																(28,316	)
Depreciation and amortization																(116,557	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																163,305
Loss on property dispositions																447
Income taxes																(2,326	)
Minority interest																(673	)
Equity in earnings of unconsolidated joint ventures																1,744
Discontinued operations																21,173
Preferred share distributions																(12,416	)
Income available to common unitholders															$	171,254

Product Type Information

	Real Estate Related Revenues
	Year Ended December 31,
	2005		2004		2003
Industrial	$	285,894	$	262,529	$	246,247
Office		394,836		365,798		347,639
Total operating revenue	$	680,730	$	628,327	$	593,886

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT

	Delaware Valley						Midwest
	Southeastern						Lehigh						Mid-						United
	Pennsylvania			Other			Valley			Other			Atlantic			Florida			Kingdom			Total
January 1, 2005	$	1,020,714		$	193,784		$	566,194		$	800,611		$	828,809		$	659,775		$	169,304		$	4,239,191
Additions		44,071			15,191			84,698			115,619			115,341			37,796			10,832			423,548
Dispositions		(4,587	)		(21,953	)		(5,987	)		(26,842	)		(30,415	)		(42,214	)		(170,298	)		(302,296	)
December 31, 2005	$	1,060,198		$	187,022		$	644,905		$	889,388		$	913,735		$	655,357		$	9,838			4,360,443
Accumulated depreciation																							(748,818	)
Development in progress																							324,924
Land held for development																							158,653
Assets held for sale, net																							12,654
Other assets																							389,673
Total assets at December 31, 2005																						$	4,497,529

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ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT

	Delaware Valley						Midwest
	Southeastern						Lehigh					Mid-					United
	Pennsylvania			Other			Valley		Other			Atlantic		Florida			Kingdom		Total
January 1, 2004	$	1,014,562		$	164,224		$	446,738	$	778,036		$	739,202	$	608,089		$	159,067	$	3,909,918
Additions		29,824			31,082			119,456		35,484			89,607		55,667			10,237		371,357
Dispositions		(23,672	)		(1,522	)		—		(12,909	)		—		(3,981	)		—		(42,084	)
December 31, 2004	$	1,020,714		$	193,784		$	566,194	$	800,611		$	828,809	$	659,775		$	169,304		4,239,191
Accumulated depreciation																				(692,649	)
Development in progress																				81,099
Land held for development																				171,122
Assets held for sale, net																				12,799
Other assets																				351,265
Total assets at December 31, 2004																			$	4,162,827

12. SFAS NO. 144 “ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS”

Discontinued Operations

In accordance with SFAS No. 144, net income and gain/(loss) on disposition of real estate for properties sold and held for sale are reflected in the accompanying consolidated statements of operations as discontinued operations. The proceeds from dispositions of Operating Properties were $200.9 million and $51.1 million for the years ended December 31, 2005 and 2004, respectively.

The held for sale properties consist of four properties totaling 132,000 square feet in the Company’s Mid-Atlantic segment. The properties held for sale as of December 31, 2005 were sold in January 2006.

Below is a summary of the results of operations of the properties disposed of and held for sale through the respective disposition dates (in thousands):

	December 31,
	2005			2004			2003
Revenues	$	12,352		$	26,513		$	28,888
Operating expenses		(3,822	)		(6,439	)		(6,549	)
Interest expense		(5,811	)		(7,867	)		(6,579	)
Depreciation and amortization		(3,694	)		(7,217	)		(6,545	)
Income before property dispositions	$	(975	)	$	4,990		$	9,215

Sales of Properties in Operation where the Company has continuing involvement, land and development properties are reflected as a component of income from continuing operations.

Interest expense is allocated to discontinued operations as permitted under EITF 87-24, “Allocation of Interest to Discontinued Operations,” and have included such interest expense in computing net income from discontinued operations. The allocation of interest expense to discontinued operations was based on the ratio of assets sold (without continuing involvement) or held for sale to the sum of total net assets plus consolidated debt.

Asset Impairment

In accordance with SFAS No. 144, during the years ended December 31, 2005 and 2004, the Company recognized impairment losses of $5.3 million and $1.4 million, respectively. The 2005 impairment loss of $5.3 million was related to a portfolio of operating properties equaling 615,000 square feet in the Midwest – other segment. The 2004 impairment loss of $1.4 million was on a parcel of land in the Midwest – other segment. Asset impairments are included in the caption gain loss on property dispositions as a component of income from continuing operations. The Company determined this impairment through a comparison of the aggregate future undiscounted cash flows (including quoted offer prices) to be generated by the properties to the carrying value of the properties. The Company has evaluated each of the properties and land held for development and has determined that there are no additional valuation adjustments necessary at December 31, 2005.

92

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized								Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost					to		Land and		Building and		Total	Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
1501 Perryman Road	Aberdeen, MD	$	—		$	5,813,324	$	18,874,059	$	84	$	5,813,080	$	18,874,387	$	24,687,467	$	—		2005	40 yrs.
2196 Avenue C	Allentown, PA		—			101,159		—		1,347,970		107,307		1,341,822		1,449,129		704,986		1980	40 yrs.
2202 Hanger Place	Allentown, PA			*		137,439		—		1,341,155		138,127		1,340,466		1,478,594		785,363		1981	40 yrs.
7437 Industrial Boulevard	Allentown, PA		—			717,488		5,022,413		1,872,180		726,651		6,885,429		7,612,080		2,223,838		1976	40 yrs.
7339 Industrial Boulevard	Allentown, PA			*		1,187,776		—		6,049,516		1,197,447		6,039,845		7,237,293		1,605,166		1996	40 yrs.
400 Nestle Way	Allentown, PA		24,080,572			8,065,500		—		26,870,897		8,184,096		26,752,301		34,936,397		6,429,317		1997	40 yrs.
7248 Industrial Boulevard	Allentown, PA		—			2,670,849		13,307,408		1,097,573		2,670,673		14,405,156		17,075,829		3,351,205		1988	40 yrs.
700 Nestle Way	Allentown, PA		—			3,473,120		—		18,085,441		4,174,970		17,383,591		21,558,561		3,503,834		1998	40 yrs.
7562 Penn Drive	Allentown, PA		—			269,614		844,069		131,443		269,614		975,512		1,245,126		202,120		1989	40 yrs.
7277 Williams Avenue	Allentown, PA		—			462,964		1,449,009		315,821		463,123		1,764,671		2,227,794		442,488		1989	40 yrs.
7355 Williams Avenue	Allentown, PA		—			489,749		1,658,091		304,294		489,749		1,962,385		2,452,134		407,004		1998	40 yrs.
794 Roble Road	Allentown, PA		—			1,147,541		6,088,041		1,125,815		1,147,541		7,213,857		8,361,398		1,564,453		1985	40 yrs.
6923 Schantz Spring Road	Allentown, PA			*		1,127,805		3,309,132		348,419		1,127,805		3,657,551		4,785,355		722,630		1993	40 yrs.
7132 Daniels Drive	Allentown, PA		—			1,623,326		3,464,626		4,070,191		1,695,610		7,462,532		9,158,142		1,375,466		1988	40 yrs.
8014 Industrial Boulevard	Allentown, PA		—			4,019,258		—		9,440,262		3,645,117		9,814,403		13,459,520		1,782,189		1999	40 yrs.
705 Boulder Drive	Allentown, PA		—			4,484,096		—		14,852,439		4,486,836		14,849,699		19,336,535		2,012,358		2001	40 yrs.
651 Boulder Drive	Allentown, PA		—			4,308,646		—		13,280,682		4,308,646		13,280,682		17,589,328		2,219,533		2000	40 yrs.
8150 Industrial Boulevard	Allentown, PA		—			2,564,167		—		8,703,838		2,571,466		8,696,539		11,268,005		1,114,060		2002	40 yrs.
8250 Industrial Boulevard	Allentown, PA		—			1,025,667		—		5,214,510		1,035,854		5,204,323		6,240,177		480,968		2002	40 yrs.
650 Boulder Drive	Allentown, PA		—			5,208,248		—		19,527,776		5,242,478		19,493,547		24,736,024		1,597,932		2002	40 yrs.
650 Boulder Drive Expansion	Allentown, PA		—			2,861,715		—		9,015,365		4,719,311		7,157,769		11,877,080		223,811		2001	40 yrs.
7165 Ambassador Drive	Allentown, PA		—			792,999		—		4,533,868		804,848		4,522,019		5,326,867		442,696		2002	40 yrs.
835 W Hamilton Street	Allentown, PA		—			—		—		59,269,393		1,233,597		58,035,796		59,269,393		4,284,836		2004	40 yrs.
200 Boulder Drive	Allentown, PA		—			4,722,683		18,922,645		178,925		4,722,683		19,101,570		23,824,253		593,798		2004	40 yrs.
250 Boulder Drive	Allentown, PA		—			2,600,622		12,099,145		130,329		2,600,622		12,229,474		14,830,096		381,617		2004	40 yrs.
6560 Stonegate Drive	Allentown, PA			*		458,281		—		2,411,971		458,945		2,411,307		2,870,252		992,783		1989	40 yrs.
6370 Hedgewood Drive	Allentown, PA		942,053			540,795		—		3,233,886		541,459		3,233,222		3,774,681		1,242,135		1990	40 yrs.
6390 Hedgewood Drive	Allentown, PA		—			707,203		—		2,801,290		707,867		2,800,625		3,508,493		1,216,709		1990	40 yrs.
6350 Hedgewood Drive	Allentown, PA		1,158,301			360,027		—		3,458,418		560,691		3,257,754		3,818,445		1,297,997		1989	40 yrs.
6330 Hedgewood Drive	Allentown, PA		—			531,268		—		4,905,648		532,047		4,904,869		5,436,916		2,171,204		1988	40 yrs.
6580 Snowdrift Road	Allentown, PA			*		388,328		—		3,284,907		389,081		3,284,155		3,673,235		1,326,388		1988	40 yrs.
6540 Stonegate Drive	Allentown, PA		1,458,938			422,042		—		3,893,307		422,730		3,892,620		4,315,349		1,687,429		1988	40 yrs.
974 Marcon Boulevard	Allentown, PA		—			143,500		—		2,462,419		144,248		2,461,672		2,605,919		1,083,837		1987	40 yrs.
964 Marcon Boulevard	Allentown, PA		—			138,816		—		1,667,008		139,480		1,666,344		1,805,824		837,998		1985	40 yrs.
764 Roble Road	Allentown, PA		—			141,069		—		864,405		141,746		863,728		1,005,474		415,161		1985	40 yrs.
3174 Airport Road	Allentown, PA		—			98,986		—		1,155,913		98,986		1,155,913		1,254,899		689,117		1979	40 yrs.
2201 Hanger Place	Allentown, PA		—			128,454		—		1,869,709		129,142		1,869,021		1,998,163		984,040		1987	40 yrs.
954 Marcon Boulevard	Allentown, PA		—			103,665		—		1,110,937		104,453		1,110,149		1,214,602		551,293		1981	40 yrs.
754 Roble Road	Allentown, PA		—			162,115		1,731,885		186,641		163,735		1,916,906		2,080,641		608,794		1986	40 yrs.
894 Marcon Boulevard	Allentown, PA		—			117,134		1,048,866		321,307		118,304		1,369,003		1,487,307		340,905		1986	40 yrs.
744 Roble Road	Allentown, PA		—			159,771		1,734,229		270,068		161,371		2,002,697		2,164,068		612,315		1986	40 yrs.
944 Marcon Boulevard	Allentown, PA		—			118,521		1,435,479		433,413		119,711		1,867,702		1,987,413		566,716		1986	40 yrs.
6520 Stonegate Drive	Allentown, PA		—			453,315		—		1,795,242		484,361		1,764,196		2,248,557		511,996		1996	40 yrs.
2041 Avenue C	Allentown, PA			*		213,599		1,095,217		83,135		213,879		1,178,072		1,391,951		324,353		1990	40 yrs.
7144 Daniels Drive	Allentown, PA		—			2,390,217		2,342,761		3,721,684		1,579,169		6,875,493		8,454,662		1,678,004		1975	40 yrs.
7620 Cetronia Road	Allentown, PA		—			1,091,806		3,851,456		353,007		1,093,724		4,202,545		5,296,269		1,258,767		1990	40 yrs.
939 Marcon Boulevard	Allentown, PA			*		2,220,414		4,524,393		858,451		2,220,548		5,382,710		7,603,257		1,434,359		1980	40 yrs.
180,190 Cochrane Drive	Annapolis, MD		—			3,670,256		—		20,870,918		3,752,293		20,788,881		24,541,174		7,864,852		1988	40 yrs.
10430 Lakeridge Parkway	Ashland, VA		—			421,267		3,770,870		282,587		421,267		4,053,457		4,474,724		824,454		1989	40 yrs.
10456 Lakeridge Parkway	Ashland, VA		—			409,261		3,663,754		418,398		409,261		4,082,152		4,491,413		857,776		1991	40 yrs.
2453 Prospect Street	Aurora, IL		—			1,780,395		6,608,091		435,893		1,563,076		7,261,304		8,824,379		1,484		2004	40 yrs.
1000 Bilter Road	Aurora, IL		—			5,136,177		22,491,870		1,902,155		5,120,004		24,410,199		29,530,202		590,155		2005	40 yrs.
101-121 N Raddant Road	Batavia, IL		6,130,347			986,912		9,984,405		46,363		986,912		10,030,769		11,017,681		585,008		2003	40 yrs.
1070 Swanson + 506-530 Kingsland	Batavia, IL		7,884,881			1,100,812		11,135,499		36,314		1,100,812		11,171,813		12,272,625		651,403		2003	40 yrs.
900 Douglas Road	Batavia, IL		—			308,586		3,116,469		9,635		308,586		3,126,104		3,434,690		182,278		2003	40 yrs.
4606 Richlynn Drive	Belcamp, MD		—			299,600		1,818,861		712,787		299,600		2,531,649		2,831,249		404,490		1985	40 yrs.
41199 Van Born Road	Bellville, MI		—			1,829,396		6,765,015		8,133		1,829,396		6,773,148		8,602,543		—		2005	40 yrs.
41133 Van Born Road	Bellville, MI		—			1,829,560		6,454,755		94,444		1,829,560		6,549,199		8,378,759		—		2005	40 yrs.
1655 Valley Center Parkway	Bethlehem, PA		—			214,431		—		1,994,597		215,095		1,993,932		2,209,028		866,099		1993	40 yrs.
100 Brodhead Road	Bethlehem, PA			*		429,416		2,919,588		725,250		429,456		3,644,798		4,074,254		906,161		1990	40 yrs.
1455 Valley Center Parkway	Bethlehem, PA		—			670,290		—		3,732,375		545,172		3,857,492		4,402,665		1,611,685		1997	40 yrs.
1640 Valley Center Parkway	Bethlehem, PA		—			359,000		—		2,412,280		190,728		2,580,553		2,771,280		1,044,485		1996	40 yrs.
1650 Valley Center Parkway	Bethlehem, PA		—			359,000		—		2,212,500		188,896		2,382,604		2,571,500		872,451		1997	40 yrs.

93

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
1660 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,257,716			188,721		2,427,995		2,616,716		672,667		1998	40 yrs.
83 South Commerce Way	Bethlehem, PA		—		143,661		888,128		513,515			212,744		1,332,560		1,545,304		440,910		1989	40 yrs.
85 South Commerce Way	Bethlehem, PA		—		236,708		987,949		157,065			237,078		1,144,644		1,381,722		281,971		1989	40 yrs.
87 South Commerce Way	Bethlehem, PA		—		253,886		1,062,881		217,298			253,886		1,280,179		1,534,065		336,003		1989	40 yrs.
89 South Commerce Way	Bethlehem, PA		—		320,000		—		2,003,316			367,706		1,955,611		2,323,316		620,848		1998	40 yrs.
95 Highland Avenue	Bethlehem, PA		—		430,593		3,182,080		1,387,950			430,593		4,570,029		5,000,623		1,067,777		1985	40 yrs.
1525 Valley Center Parkway	Bethlehem, PA		—		475,686		—		7,753,820			804,104		7,425,402		8,229,506		1,670,311		1999	40 yrs.
74 West Broad Street	Bethlehem, PA		—		1,096,127		—		13,350,023			1,099,079		13,347,071		14,446,150		1,877,308		2002	40 yrs.
1605 Valley Center Parkway	Bethlehem, PA		—		729,751		—		10,808,550			1,766,196		9,772,105		11,538,301		1,104,687		2000	40 yrs.
3400 High Point Boulevard	Bethlehem, PA		—		298,227		—		3,047,434			662,809		2,682,852		3,345,661		284,945		2002	40 yrs.
1495 Valley Center Parkway	Bethlehem, PA		—		434,640		—		3,803,574			435,303		3,802,911		4,238,214		1,391,226		1990	40 yrs.
1550 Valley Center Parkway	Bethlehem, PA		—		196,954		—		3,437,457			197,700		3,436,711		3,634,411		1,328,963		1988	40 yrs.
1560 Valley Center Parkway	Bethlehem, PA		—		240,069		—		4,413,646			240,732		4,412,983		4,653,715		1,872,674		1988	40 yrs.
1510 Valley Center Parkway	Bethlehem, PA		—		312,209		—		3,753,072			312,873		3,752,408		4,065,281		1,566,332		1988	40 yrs.
1530 Valley Center Parkway	Bethlehem, PA		—		211,747		—		2,987,198			212,492		2,986,453		3,198,945		1,135,268		1988	40 yrs.
57 South Commerce Way	Bethlehem, PA		—		390,839		2,701,161		662,728			395,459		3,359,269		3,754,728		1,000,978		1986	40 yrs.
1685 Valley Center Parkway	Bethlehem, PA		—		244,029		—		2,280,697			198,482		2,326,244		2,524,726		739,638		1996	40 yrs.
6601-6625 W. 78th Street	Bloomington, MN		—		2,263,060		—		38,629,236			2,310,246		38,582,050		40,892,296		6,929,276		1998	40 yrs.
4801 West 81st Street	Bloomington, MN		—		1,624,701		2,494,368		648,314			1,624,701		3,142,681		4,767,383		724,405		1984	40 yrs.
8100 Cedar Avenue	Bloomington, MN		—		501,313		3,675,416		971,824			501,313		4,647,240		5,148,553		1,001,604		1983	40 yrs.
6161 Green Valley Drive	Bloomington, MN		—		740,378		3,311,602		732,919			741,194		4,043,704		4,784,898		642,225		1992	40 yrs.
10801 Nesbitt Avenue South	Bloomington, MN		—		784,577		—		4,105,182			786,382		4,103,377		4,889,759		797,154		2001	40 yrs.
5775 West Old Shakopee Road	Bloomington, MN		—		2,052,018		3,849,649		3,288,993			2,060,644		7,130,015		9,190,660		2,054,843		2002	40 yrs.
5715 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,953,949			1,264,758		4,313,199		5,577,958		592,805		2002	40 yrs.
5735 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,089,483			1,264,758		3,448,732		4,713,491		338,168		2002	40 yrs.
1701 Clint Moore Boulevard	Boca Raton, FL		—		1,430,884		3,043,553		643,990			1,430,937		3,687,490		5,118,427		721,615		1985	40 yrs.
951 Broken Sound Parkway	Boca Raton, FL		—		1,426,251		6,098,952		845,468			1,426,251		6,944,420		8,370,670		1,775,105		1986	40 yrs.
777 Yamato Road	Boca Raton, FL		—		4,101,247		16,077,347		4,729,322			4,501,247		20,406,669		24,907,916		4,270,586		1987	40 yrs.
1801 Clint Moore Road	Boca Raton, FL		—		1,065,068		4,481,644		462,220			1,065,068		4,943,864		6,008,933		1,060,278		1986	40 yrs.
400 Boulder Drive	Breinigsville, PA		—		—		—		13,252,051			2,865,575		10,386,476		13,252,051		368,063		2003	40 yrs.
860 Nestle Way	Breinigsville, PA		—		8,118,881		18,885,486		1,390,794			8,118,881		20,276,280		28,395,161		167,113		2004	40 yrs.
602 Heron Drive	Bridgeport, NJ		—		524,728		2,240,478		7,650			524,728		2,248,128		2,772,856		435,284		1996	40 yrs.
245 Executive Drive	Brookfield, WI		—		577,067		5,197,903		2,517,341			577,067		7,715,244		8,292,311		1,171,101		1984	40 yrs.
16620-16650 W Bluemound Road	Brookfield, WI		—		586,665		4,289,907		641,920			586,665		4,931,828		5,518,492		790,717		1999	40 yrs.
15800 West Bluemound Road	Brookfield, WI		—		1,289,204		8,128,035		1,263,239			1,306,811		9,373,667		10,680,478		1,030,788		1994	40 yrs.
20700 Swenson Drive	Brookfield, WI		—		830,008		12,276,445		209,223			830,008		12,485,668		13,315,676		44,449		2005	40 yrs.
20800 Swenson Drive	Brookfield, WI		—		1,023,466		10,729,219		345,767			1,023,466		11,074,986		12,098,451		38,883		2005	40 yrs.
20935 Swenson Drive	Brookfield, WI		—		571,389		10,238,547		174,635			571,389		10,413,181		10,984,570		37,151		2005	40 yrs.
20975 Swenson Drive	Brookfield, WI		—		675,422		8,910,651		412,619			677,372		9,321,320		9,998,692		32,226		2005	40 yrs.
1485 W. Commerce Avenue	Carlisle, PA		—		4,249,868		13,886,039		49,205			4,253,027		13,932,086		18,185,112		348,233		2004	40 yrs.
3773 Corporate Parkway	Center Valley, PA		—		738,108		—		7,597,697			794,874		7,540,931		8,335,805		1,462,903		2001	40 yrs.
1309 Executive Boulevard	Cheaspeake, VA		—		926,125		—		5,086,632			955,374		5,057,383		6,012,757		690,591		2001	40 yrs.
1960 Cuthbert Boulevard	Cherry Hill, NJ		—		321,699		1,291,557		542,915			321,699		1,834,473		2,156,172		456,176		1985	40 yrs.
1970 Cuthbert Boulevard	Cherry Hill, NJ		—		321,699		1,291,558		233,697			321,699		1,525,255		1,846,954		283,559		1985	40 yrs.
7 Carnegie Plaza	Cherry Hill, NJ		—		2,000,000		3,493,983		3,217,287			2,005,475		6,705,794		8,711,270		208,263		2004	40 yrs.
1305 Executive Boulevard	Chesapeake, VA		—		861,020		—		4,874,601			1,129,850		4,605,771		5,735,621		527,850		2002	40 yrs.
1313 Executive Boulevard	Chesapeake, VA		—		1,180,036		—		4,629,615			1,708,050		4,101,602		5,809,652		443,799		2002	40 yrs.
500 Independence Parkway	Chesapeake, VA		3,890,463		864,150		4,427,285		66,501			866,609		4,491,328		5,357,937		228,169		2004	40 yrs.
700 Independence Parkway	Chesapeake, VA		7,204,561		1,950,375		8,273,910		(906,932	)		1,951,135		7,366,217		9,317,352		402,649		2004	40 yrs.
501 Independence Parkway	Chesapeake, VA		—		1,202,556		5,975,538		1,024,000			1,292,273		6,909,821		8,202,094		149,113		2005	40 yrs.
505 Independence Parkway	Chesapeake, VA		—		1,292,062		6,456,515		1,122,658			1,292,254		7,578,979		8,871,234		166,862		2005	40 yrs.
510 Independence Parkway	Chesapeake, VA		—		2,012,149		7,546,882		299,240			2,014,689		7,843,582		9,858,271		192,555		2005	40 yrs.
600 H P Way	Chester, VA		—		146,126		—		5,317,497			501,752		4,961,871		5,463,623		1,058,137		1997	40 yrs.
500 H P Way	Chester, VA		—		142,692		—		5,070,943			491,919		4,721,717		5,213,635		874,593		1997	40 yrs.
9101,9111,9115 Guilford Road	Columbia, MD		—		758,951		—		3,508,048			765,952		3,501,047		4,266,999		1,831,843		1984	40 yrs.
9125,9135,9145 Guilford Road	Columbia, MD		—		900,154		—		5,689,577			920,439		5,669,293		6,589,731		3,246,973		1983	40 yrs.
7178-80 Columbia Gateway	Columbia, MD		—		1,569,237		4,786,887		1,607,974			1,571,105		6,392,992		7,964,098		1,953,105		1987	40 yrs.
9770 Patuxent Woods Drive	Columbia, MD		—		341,663		3,033,309		142,055			341,663		3,175,364		3,517,027		677,183		1986	40 yrs.
9780 Patuxent Woods Drive	Columbia, MD		—		218,542		1,940,636		125,207			218,542		2,065,843		2,284,384		435,146		1986	40 yrs.
9790 Patuxent Woods Drive	Columbia, MD		—		243,791		2,164,094		183,044			243,791		2,347,138		2,590,929		599,732		1986	40 yrs.
9810 Patuxent Woods Drive	Columbia, MD		—		266,684		2,366,901		536,740			266,684		2,903,641		3,170,325		650,361		1986	40 yrs.
9800 Patuxent Woods Drive	Columbia, MD		—		299,099		2,654,069		474,398			299,099		3,128,467		3,427,567		716,219		1988	40 yrs.
9820 Patuxent Woods Drive	Columbia, MD		—		237,779		2,110,835		50,193			237,779		2,161,028		2,398,807		478,162		1988	40 yrs.

94

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
9830 Patuxent Woods Drive	Columbia, MD		—		296,262		2,628,933		143,928		296,262		2,772,861		3,069,124		636,470		1986	40 yrs.
9050 Red Branch Road	Columbia, MD		—		290,950		2,577,153		718,572		290,950		3,295,725		3,586,675		616,194		1972	40 yrs.
8945-8975 Guilford Road	Columbia, MD		—		2,428,795		7,493,740		822,282		2,427,065		8,317,752		10,744,817		1,636,438		1986	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,529,318		1,295,000		3,192,423		4,487,423		485,845		2002	40 yrs.
6200 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,726,880		1,295,000		3,389,986		4,684,986		414,939		2002	40 yrs.
6210 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,722,092		1,307,300		3,372,898		4,680,198		483,713		2002	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,780,749		1,599,259		3,139,595		4,738,854		211,557		2000	40 yrs.
5950 Symphony Woods Road	Columbia, MD		—		1,462,762		11,310,187		980,190		1,467,623		12,285,517		13,753,140		1,418,071		1986	40 yrs.
5150 International Drive	Cudahy, WI		—		739,673		5,108,025		250,327		741,858		5,356,167		6,098,024		252,995		2003	40 yrs.
3255 Neil Armstrong Boulevard	Eagan, MN		—		1,131,017		—		3,393,423		1,131,017		3,393,423		4,524,441		591,576		1998	40 yrs.
6321-6325 Bury Drive	Eden Prairie, MN		—		462,876		4,151,790		301,563		462,876		4,453,353		4,916,229		1,050,521		1988	40 yrs.
7660-7716 Golden Triangle Drive	Eden Prairie, MN		—		568,706		5,115,177		2,627,196		1,289,215		7,021,864		8,311,079		2,173,542		1988	40 yrs.
7400 Flying Cloud Drive	Eden Prairie, MN		—		195,982		1,762,027		136,431		195,982		1,898,459		2,094,440		394,855		1987	40 yrs.
10301-10305 West 70th Street	Eden Prairie, MN		—		120,622		1,085,226		109,698		118,300		1,197,246		1,315,546		267,707		1984	40 yrs.
10321 West 70th Street	Eden Prairie, MN		—		145,198		1,305,700		355,229		142,399		1,663,728		1,806,127		400,559		1984	40 yrs.
10333 West 70th Street	Eden Prairie, MN		—		110,746		995,868		32,756		108,610		1,030,760		1,139,370		225,138		1984	40 yrs.
10349-10357 West 70th Street	Eden Prairie, MN		—		275,903		2,481,666		584,392		270,584		3,071,377		3,341,961		619,935		1985	40 yrs.
10365-10375 West 70th Street	Eden Prairie, MN		—		291,077		2,618,194		506,997		285,464		3,130,804		3,416,267		639,068		1985	40 yrs.
10393-10394 West 70th Street	Eden Prairie, MN		—		269,618		2,423,318		775,855		264,419		3,204,372		3,468,791		640,365		1985	40 yrs.
7078 Shady Oak Road	Eden Prairie, MN		—		343,093		3,085,795		150,672		336,481		3,243,079		3,579,560		692,034		1985	40 yrs.
10400 Viking Drive	Eden Prairie, MN		—		2,912,391		—		22,662,863		2,938,372		22,636,882		25,575,254		4,954,367		1999	40 yrs.
7695-7699 Anagram Drive	Eden Prairie, MN		—		760,525		3,254,758		605,146		760,525		3,859,903		4,620,429		675,192		1997	40 yrs.
7800 Equitable Drive	Eden Prairie, MN		—		2,188,525		3,788,762		95,205		2,188,525		3,883,967		6,072,492		721,965		1993	40 yrs.
7905 Fuller Road	Eden Prairie, MN		—		1,229,862		4,075,167		25,345		1,230,965		4,099,409		5,330,374		730,033		1994	40 yrs.
9023 Columbine Road	Eden Prairie, MN		—		1,956,273		—		4,873,578		1,956,273		4,873,578		6,829,851		899,524		1999	40 yrs.
8967 Columbine Road	Eden Prairie, MN		—		1,450,000		—		3,575,107		1,450,000		3,575,107		5,025,107		616,893		2000	40 yrs.
7777 Golden Triangle Drive	Eden Prairie, MN		—		993,101		2,136,862		903,324		993,101		3,040,185		4,033,286		425,146		2000	40 yrs.
8937 Columbine Road	Eden Prairie, MN		—		1,325,829		—		4,287,274		1,739,966		3,873,137		5,613,103		578,525		2001	40 yrs.
7615 Smetana Lane	Eden Prairie, MN		—		1,011,517		—		8,665,025		3,000,555		6,675,988		9,676,542		1,146,158		2001	40 yrs.
8995 Columbine Road	Eden Prairie, MN		—		1,087,594		—		3,664,053		2,055,296		2,696,352		4,751,648		344,658		2001	40 yrs.
8911 Columbine Road (B2)	Eden Prairie, MN		—		916,687		—		3,608,469		1,718,407		2,806,748		4,525,156		213,862		2000	40 yrs.
8855 Columbine Road	Eden Prairie, MN		—		1,400,925		—		5,226,016		1,599,757		5,027,185		6,626,941		197,523		2000	40 yrs.
27260 Haggerty Road	Farmington Hills, MI		—		456,877		4,091,196		633,559		456,877		4,724,755		5,181,633		1,090,466		1983	40 yrs.
27200 Haggerty Road	Farmington Hills, MI		—		382,754		3,425,227		454,131		382,754		3,879,358		4,262,112		959,305		1983	40 yrs.
27280 Haggerty Road	Farmington Hills, MI		—		452,860		4,055,512		421,431		452,860		4,476,943		4,929,802		1,018,962		1983	40 yrs.
27220 Haggerty Road	Farmington Hills, MI		—		203,064		1,802,592		174,383		203,064		1,976,975		2,180,039		482,880		1985	40 yrs.
27240 Haggerty Road	Farmington Hills, MI		—		171,518		1,518,192		209,332		171,518		1,727,524		1,899,041		389,624		1985	40 yrs.
27300 Haggerty Road	Farmington Hills, MI		—		370,378		3,311,366		663,297		370,378		3,974,663		4,345,042		795,677		1985	40 yrs.
26442-26450 Haggerty Road	Farmington Hills, MI		—		237,687		2,143,478		151,776		237,691		2,295,251		2,532,941		468,876		1988	40 yrs.
26500 Haggerty Road	Farmington Hills, MI		—		311,093		2,791,804		433,197		311,097		3,224,997		3,536,094		636,041		1986	40 yrs.
26650 Haggerty Road	Farmington Hills, MI		—		173,166		1,562,704		142,562		173,170		1,705,262		1,878,432		334,224		1988	40 yrs.
26700 Haggerty Road	Farmington Hills, MI		—		253,338		2,290,696		103,104		253,341		2,393,797		2,647,138		479,514		1986	40 yrs.
26750 Haggerty Road	Farmington Hills, MI		—		292,717		2,638,688		249,370		292,720		2,888,055		3,180,775		678,657		1988	40 yrs.
26800 Haggerty Road	Farmington Hills, MI		—		175,489		1,583,362		243,144		175,492		1,826,503		2,001,995		435,691		1986	40 yrs.
26842-26850 Haggerty Road	Farmington Hills, MI		—		239,606		2,160,470		347,508		239,609		2,507,974		2,747,584		631,875		1988	40 yrs.
26600 Haggerty Road	Farmington Hills, MI		—		455,846		—		2,910,598		537,693		2,828,750		3,366,444		682,893		1999	40 yrs.
26550 Haggerty Road	Farmington Hills, MI		—		368,083		—		2,646,871		535,179		2,479,775		3,014,954		600,743		2000	40 yrs.
32991 Hamilton Court	Farmington Hills, MI		—		1,065,392		3,627,675		1,151,817		1,065,392		4,779,492		5,844,884		535,720		1989	40 yrs.
7028 Snowdrift Road	Fogelville, PA		—		520,473		959,279		260,567		524,390		1,215,930		1,740,319		212,044		1982	40 yrs.
414 Commerce Drive	Fort Washington, PA		—		1,267,194		2,217,460		151,499		1,267,937		2,368,216		3,636,153		—		2004	40 yrs.
275 Commerce Drive	Fort Washington, PA		—		1,775,894		2,160,855		121,017		1,789,023		2,268,742		4,057,766		—		2005	40 yrs.
1250 Virginia Drive	Fort Washington, PA		—		1,639,166		1,928,574		92,973		1,650,456		2,010,257		3,660,713		—		2005	40 yrs.
106 Southchase Boulevard	Fountain Inn, SC		—		201,944		—		5,124,478		703,280		4,623,142		5,326,422		9,821		2005	40 yrs.
9601 Cosner Drive	Fredericksburg, VA		—		475,262		3,917,234		214,221		475,262		4,131,454		4,606,716		1,071,091		1995	40 yrs.
5410 - 5430 Northwest 33rd Avenue	Ft. Lauderdale, FL		—		603,776		4,176,238		1,027,286		625,111		5,182,189		5,807,300		1,113,938		1985	40 yrs.
6500 NW 12th Avenue	Ft. Lauderdale, FL		—		7,099		3,046,309		243,266		—		3,296,674		3,296,674		767,686		1989	40 yrs.
6600 NW 12th Avenue	Ft. Lauderdale, FL		—		7,102		3,047,462		458,816		—		3,513,380		3,513,380		793,835		1989	40 yrs.
4880 Cox Road	Glen Allen, VA		*		743,898		4,499,807		1,168,482		743,898		5,668,289		6,412,187		1,040,769		1995	40 yrs.
5000 Cox Road	Glen Allen, VA		—		770,214		3,685,248		334,094		771,029		4,018,528		4,789,556		974,447		1990	40 yrs.
5500 Cox Road	Glen Allen, VA		—		443,485		—		2,743,086		483,263		2,703,308		3,186,571		662,748		1999	40 yrs.
4801 Cox Road	Glen Allen, VA		—		1,072,896		—		10,165,699		1,075,620		10,162,975		11,238,595		1,941,101		1998	40 yrs.
4198 Cox Road	Glen Allen, VA		—		670,292		3,839,245		939,693		670,292		4,778,938		5,449,229		1,120,326		1984	40 yrs.
4510 Cox Road	Glen Allen, VA		—		1,010,024		7,151,729		1,663,136		1,010,044		8,814,845		9,824,889		2,112,992		1990	40 yrs.

95

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
4121 Cox Road	Glen Allen, VA		—			1,083,006		6,035,653		422,899		1,083,006		6,458,552		7,541,558		222,712		2004	40 yrs.
200 Centreport Drive	Greensboro, NC			*		331,400		3,768,600		617,010		332,017		4,384,994		4,717,010		1,338,420		1986	40 yrs.
101 Centreport Drive	Greensboro, NC		—			826,237		—		7,973,119		826,237		7,973,119		8,799,355		1,690,873		1998	40 yrs.
7736 McCloud Road	Greensboro, NC		—			591,795		5,895,312		619,040		591,795		6,514,352		7,106,147		1,315,174		1986	40 yrs.
4300 Federal Drive Expansion	Greensboro, NC		—			—		—		463,523		—		463,523		463,523		20,770		2003	40 yrs.
202 Centreport Drive	Greensboro, NC			*		549,948		5,360,462		700,556		549,679		6,061,286		6,610,965		1,793,553		1990	40 yrs.
420 Park Avenue	Greenville, SC			*		522,548		2,730,261		960,232		522,548		3,690,493		4,213,041		993,177		1986	40 yrs.
One Independence Pointe	Greenville, SC		—			780,881		6,199,230		6,280,623		784,617		12,476,117		13,260,734		1,818,151		1982	40 yrs.
55 Beattie Place	Greenville, SC		—			2,643,105		23,439,801		9,599,090		2,645,238		33,036,758		35,681,996		5,890,713		1986	40 yrs.
75 Beattie Place	Greenville, SC			*		2,406,646		17,400,939		1,622,607		2,408,577		19,021,615		21,430,192		4,083,670		1987	40 yrs.
15 Brendan Way	Greenville, SC		—			614,192		3,012,019		1,265,102		614,192		4,277,121		4,891,313		1,284,775		1988	40 yrs.
4 Independence Pointe	Greenville, SC		—			—		—		3,509,503		467,438		3,042,065		3,509,503		463,107		2002	40 yrs.
5 Independence Pointe	Greenville, SC		—			—		—		3,286,404		467,438		2,818,966		3,286,404		507,478		2002	40 yrs.
200 Southchase Boulevard	Greenville, SC		—			512,911		—		6,273,615		515,542		6,270,984		6,786,525		322,423		2003	40 yrs.
6 Independence Pointe	Greenville, SC		—			—		—		3,061,966		545,698		2,516,268		3,061,966		115,829		2003	40 yrs.
1 Enterprise Parkway	Hampton, VA		—			974,675		5,579,869		799,060		974,675		6,378,929		7,353,604		1,521,211		1987	40 yrs.
22 Enterprise Parkway	Hampton, VA		—			1,097,368		6,760,778		830,894		1,097,368		7,591,672		8,689,040		1,820,507		1990	40 yrs.
5 Manhattan Square	Hampton, VA		—			207,368		—		1,663,695		212,694		1,658,368		1,871,063		374,309		1999	40 yrs.
21 Enterprise Parkway	Hampton, VA		454,608			263,668		8,167,118		464,956		265,719		8,630,024		8,895,743		1,095,055		1999	40 yrs.
521 Butler Farm Road	Hampton, VA		—			750,769		2,911,149		160,297		710,486		3,111,728		3,822,215		175,244		2003	40 yrs.
7317 Parkway Drive	Hanover, MD		—			1,104,359		1,959,671		79,319		1,104,359		2,038,990		3,143,349		372,288		1983	40 yrs.
500 McCarthy Drive	Harrisburg, PA		—			5,194,872		19,991,436		4,099,799		5,687,013		23,599,094		29,286,107		320,900		2005	40 yrs.
4170 Mendenhall Oaks Parkway	High Point , NC		—			143,699		—		2,205,698		373,502		1,975,894		2,349,397		487,978		1999	40 yrs.
4180 Mendenhall Oaks Parkway	High Point , NC		—			121,329		—		1,834,221		315,614		1,639,936		1,955,550		422,342		1999	40 yrs.
4050 Piedmont Parkway	High Point , NC		—			801,902		—		19,441,413		2,042,159		18,201,156		20,243,315		3,264,385		1998	40 yrs.
4523 Green Point Drive	High Point, NC		—			234,564		—		2,403,961		235,698		2,402,827		2,638,525		977,437		1988	40 yrs.
4501 Green Point Drive	High Point, NC		—			319,289		—		2,553,785		320,450		2,552,624		2,873,074		1,052,143		1989	40 yrs.
4500 Green Point Drive	High Point, NC		—			230,622		—		2,328,582		231,692		2,327,513		2,559,204		1,007,744		1989	40 yrs.
2427 Penny Road	High Point, NC		—			1,165,664		—		3,467,001		655,240		3,977,424		4,632,665		1,488,176		1990	40 yrs.
4524 Green Point Drive	High Point, NC			*		182,810		—		2,344,143		183,888		2,343,064		2,526,953		952,091		1989	40 yrs.
4328, 4336 Federal Drive	High Point, NC		5,014,776			521,122		—		7,237,290		825,092		6,933,319		7,758,412		3,022,263		1995	40 yrs.
4344 Federal Drive	High Point, NC			*		484,001		—		2,728,066		173,623		3,038,445		3,212,068		883,683		1996	40 yrs.
4000 Piedmont Parkway	High Point, NC			*		592,885		4,825,615		726,684		597,368		5,547,816		6,145,185		1,548,882		1989	40 yrs.
4380 Federal Drive	High Point, NC		—			282,996		—		2,210,549		283,368		2,210,177		2,493,545		659,365		1997	40 yrs.
4388 Federal Drive	High Point, NC		—			143,661		—		1,225,791		132,655		1,236,797		1,369,452		395,409		1997	40 yrs.
4160 Mendenhall Oaks Parkway	High Point, NC		—			285,882		—		3,351,143		545,627		3,091,398		3,637,025		587,826		1998	40 yrs.
4194 Mendenhall Oaks Parkway	High Point, NC		—			102,372		—		2,580,368		265,991		2,416,749		2,682,740		556,232		1999	40 yrs.
4196 Mendenhall Oaks Parkway	High Point, NC		—			66,731		—		2,241,658		173,889		2,134,500		2,308,389		637,482		1999	40 yrs.
4300 Federal Drive	High Point, NC		—			264,038		—		1,626,937		276,038		1,614,937		1,890,975		294,402		1998	40 yrs.
4135 Mendenall Oaks Parkway	High Point, NC		—			499,500		—		2,811,431		500,980		2,809,951		3,310,931		474,890		2000	40 yrs.
4183 Eagle Hill Drive	High Point, NC		—			122,203		—		3,748,139		526,266		3,344,076		3,870,342		914,771		2001	40 yrs.
4189 Eagle Hill Drive	High Point, NC		—			100,106		—		3,429,622		431,106		3,098,622		3,529,728		594,341		2001	40 yrs.
4020 Meeting Way	High Point, NC		—			94,232		—		1,682,549		378,101		1,398,680		1,776,781		278,138		2001	40 yrs.
1400 Mendenhall Oaks Parkway	High Point, NC		—			172,320		—		6,897,916		984,672		6,085,564		7,070,236		681,048		2002	40 yrs.
4191 Mendenhall Oaks Parkway	High Point, NC		—			217,943		—		3,119,682		611,166		2,726,459		3,337,625		400,445		2002	40 yrs.
4015 Meeting Way	High Point, NC		—			510,000		—		2,793,668		511,869		2,791,799		3,303,668		63,178		2003	40 yrs.
4195 Eagle Hill Drive	High Point, NC		—			107,586		—		3,348,110		505,700		2,949,996		3,455,696		29,740		2004	40 yrs.
100 Witmer Road	Horsham, PA		—			3,102,784		—		11,907,333		3,764,784		11,245,333		15,010,117		2,569,983		1996	40 yrs.
132 Welsh Road	Horsham, PA		—			1,333,642		—		4,219,965		1,408,041		4,145,566		5,553,607		1,142,261		1998	40 yrs.
111-195 Witmer Road	Horsham, PA		—			407,005		3,129,058		31,932		378,205		3,189,791		3,567,995		819,731		1987	40 yrs.
300 Welsh Road — Building 3	Horsham, PA		—			180,459		1,441,473		358,107		180,459		1,799,579		1,980,038		515,510		1983	40 yrs.
300 Welsh Road — Building 4	Horsham, PA		—			282,493		2,256,508		1,226,326		282,493		3,482,833		3,765,327		995,706		1983	40 yrs.
2 Walnut Grove Drive	Horsham, PA		—			1,281,870		7,767,374		1,283,643		1,265,363		9,067,523		10,332,887		2,544,131		1989	40 yrs.
5 Walnut Grove Drive	Horsham, PA		—			1,065,951		—		9,757,586		1,939,712		8,883,825		10,823,537		1,564,095		2000	40 yrs.
200 Gibraltar Road	Horsham, PA		—			638,513		5,811,323		1,278,883		638,513		7,090,205		7,728,719		1,935,192		1990	40 yrs.
220 Gibraltar Road	Horsham, PA		—			629,944		5,733,228		1,090,771		629,944		6,823,999		7,453,943		1,877,615		1990	40 yrs.
240 Gibraltar Road	Horsham, PA		—			629,944		5,733,234		1,648,022		629,944		7,381,256		8,011,200		1,933,734		1990	40 yrs.
1 Walnut Grove Drive	Horsham, PA		—			1,058,901		5,343,606		1,042,557		1,058,901		6,386,163		7,445,064		1,916,794		1986	40 yrs.
181-187 Gibraltar Road	Horsham, PA		—			360,549		3,259,984		506,596		360,549		3,766,580		4,127,129		969,633		1982	40 yrs.
104 Rock Road	Horsham, PA		—			330,111		2,981,669		233,299		330,111		3,214,968		3,545,079		625,032		1974	40 yrs.
123-135 Rock Road	Horsham, PA		—			292,360		2,411,677		871,675		393,019		3,182,693		3,575,712		899,589		1975	40 yrs.
111-159 Gibraltar Road	Horsham, PA		—			489,032		4,126,151		530,590		489,032		4,656,741		5,145,773		1,130,221		1981	40 yrs.
161-175 Gibraltar Road	Horsham, PA		—			294,673		2,663,722		764,367		294,673		3,428,089		3,722,762		738,619		1976	40 yrs.

96

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
103-109 Gibraltar Road	Horsham, PA		—			270,906		2,448,500		798,112		270,906		3,246,611		3,517,517		930,047		1978	40 yrs.
261-283 Gibraltar Road	Horsham, PA			*		464,871		3,951,972		118,797		464,871		4,070,769		4,535,640		838,375		1978	40 yrs.
210-223 Witmer Road	Horsham, PA		—			270,282		2,441,276		1,667,822		270,282		4,109,098		4,379,380		832,920		1972	40 yrs.
231-237 Gibraltar Road	Horsham, PA			*		436,952		3,948,963		553,574		436,952		4,502,537		4,939,489		1,056,121		1981	40 yrs.
100 Gibraltar Road	Horsham, PA		—			38,729		349,811		9,589		38,729		359,400		398,129		72,416		1975	40 yrs.
101 Gibraltar Road	Horsham, PA		—			651,990		5,888,989		1,348,413		732,552		7,156,840		7,889,392		1,473,017		1977	40 yrs.
506 Prudential Road	Horsham, PA		—			208,140		895,470		652,633		208,140		1,548,102		1,756,243		316,801		1973	40 yrs.
113-123 Rock Road	Horsham, PA		—			351,072		3,171,001		333,995		451,731		3,404,336		3,856,068		727,545		1975	40 yrs.
101-111 Rock Road	Horsham, PA		—			350,561		3,166,389		260,902		452,251		3,325,602		3,777,852		759,807		1975	40 yrs.
120 Gibraltar Road	Horsham, PA		—			533,142		4,830,515		600,104		558,142		5,405,620		5,963,761		1,229,822		1980	40 yrs.
110 Gibraltar Road	Horsham, PA		—			673,041		5,776,369		2,105,987		673,041		7,882,356		8,555,397		1,645,034		1979	40 yrs.
100-107 Lakeside Drive	Horsham, PA		—			239,528		2,163,498		658,861		255,528		2,806,359		3,061,887		775,985		1982	40 yrs.
200-264 Lakeside Drive	Horsham, PA		—			502,705		4,540,597		1,108,942		502,705		5,649,539		6,152,244		1,484,453		1982	40 yrs.
300-309 Lakeside Drive	Horsham, PA		—			369,475		3,338,761		1,718,544		376,475		5,050,304		5,426,780		1,531,806		1982	40 yrs.
400-445 Lakeside Drive	Horsham, PA		—			543,628		4,910,226		2,761,305		583,628		7,631,532		8,215,159		1,845,758		1981	40 yrs.
104 Witmer Road	Horsham, PA			*		1,248,148		—		1,133,690		189,793		2,192,045		2,381,838		637,974		1975	40 yrs.
201 Gibraltar Road	Horsham, PA		—			380,127		3,433,433		1,925,225		380,802		5,357,983		5,738,785		1,027,400		1983	40 yrs.
719 Dresher Road	Horsham, PA			*		493,426		2,812,067		205,125		495,112		3,015,506		3,510,618		598,685		1987	40 yrs.
4 Walnut Grove	Horsham, PA			*		2,515,115		—		7,329,299		2,515,115		7,329,299		9,844,415		1,221,857		1999	40 yrs.
300 Welsh Road	Horsham, PA		—			696,061		3,339,991		522,138		696,061		3,862,128		4,558,189		744,409		1985	40 yrs.
700 Dresher Road	Horsham, PA		—			2,551,777		3,020,638		4,433,228		2,565,140		7,440,503		10,005,643		2,987,753		1987	40 yrs.
680 Blair Mill Road	Horsham, PA		—			3,527,151		—		12,048,609		4,138,577		11,437,183		15,575,760		2,327,967		2001	40 yrs.
102 Rock Road	Horsham, PA		—			1,110,209		2,301,302		1,133,191		1,114,985		3,429,717		4,544,702		380,921		1985	40 yrs.
335 Commerce Drive	Horsham, PA		—			—		—		8,367,455		182,335		8,185,120		8,367,455		159,143		2002	40 yrs.
507 Prudential Road Expansion	Horsham, PA		—			357,565		—		2,089,100		478,406		1,968,259		2,446,666		73,025		2002	40 yrs.
255 Business Center Drive	Horsham, PA		—			1,086,356		2,007,214		416,718		1,078,769		2,431,519		3,510,287		119,701		2003	40 yrs.
355 Business Center Drive	Horsham, PA		—			483,045		898,798		265,466		479,200		1,168,110		1,647,310		73,000		2003	40 yrs.
455 Business Center Drive	Horsham, PA		—			1,351,011		2,503,449		907,019		1,343,370		3,418,109		4,761,479		95,825		2003	40 yrs.
555 Business Center Drive	Horsham, PA		—			727,420		1,353,650		172,448		723,016		1,530,503		2,253,519		129,467		2003	40 yrs.
747 Dresher Road	Horsham, PA		—			1,607,238		—		4,886,080		1,607,977		4,885,340		6,493,318		1,939,962		1988	40 yrs.
507 Prudential Road	Horsham, PA			*		644,900		5,804,100		6,337,783		652,974		12,133,809		12,786,783		3,219,265		1988	40 yrs.
767 Electronic Drive	Horsham, PA			*		1,229,685		—		2,773,209		1,241,970		2,760,924		4,002,893		1,365,414		1996	40 yrs.
16445 Air Center Boulevard	Houston, TX		—			363,339		2,509,186		538,075		363,339		3,047,261		3,410,600		803,325		1997	40 yrs.
16405 Air Center Boulevard	Houston, TX		—			438,853		3,030,396		409,107		438,853		3,439,502		3,878,355		699,139		1997	40 yrs.
16580 Air Center Boulevard	Houston, TX		—			289,000		3,559,857		258,107		289,000		3,817,964		4,106,965		685,016		1997	40 yrs.
1755 Trans Central Drive	Houston, TX		—			293,534		3,036,269		199,433		306,147		3,223,088		3,529,235		490,709		1999	40 yrs.
16605 Air Center Boulevard	Houston, TX		—			298,999		—		3,770,315		496,186		3,573,128		4,069,314		630,823		2002	40 yrs.
10739 West Little York Road	Houston, TX		—			797,931		5,950,894		390,237		799,560		6,339,502		7,139,062		589,823		1999	40 yrs.
10735 West Little York Road	Houston, TX		—			1,110,988		6,351,946		1,657,286		1,135,483		7,984,738		9,120,220		491,593		2000	40 yrs.
8801-19 & 8821-49 Fallbrook Drive	Houston, TX		—			2,290,001		15,297,141		1,524,283		2,290,002		16,821,423		19,111,425		1,135,046		2000	40 yrs.
16685 Air Center Boulevard	Houston, TX		—			—		—		2,935,268		414,691		2,520,577		2,935,268		106,656		2004	40 yrs.
8825-8839 N Sam Houston Pkwy	Houston, TX		—			638,453		3,258,815		244,728		638,477		3,503,518		4,141,995		34,913		2004	40 yrs.
8850-8872 Fallbrook Drive	Houston, TX		—			504,317		2,878,351		1,038,044		504,341		3,916,371		4,420,712		51,930		2004	40 yrs.
8802-8824 Fallbrook Drive	Houston, TX		—			1,114,406		6,364,767		637,096		1,114,433		7,001,836		8,116,269		233,693		2004	40 yrs.
16602 Central Green Boulevard	Houston, TX		—			284,403		—		4,528,739		503,779		4,309,363		4,813,142		45,201		2005	40 yrs.
20 Wright Avenue	Hunt Valley, MD		—			1,205,946		—		9,667,077		1,861,025		9,011,998		10,873,023		995,153		2001	40 yrs.
4 North Park Drive	Hunt Valley, MD		—			3,269,948		13,551,370		820,361		3,269,948		14,371,731		17,641,679		824,227		2003	40 yrs.
6 North Park Drive	Hunt Valley, MD		—			2,077,949		8,770,566		1,000,467		2,077,949		9,771,033		11,848,982		651,192		2003	40 yrs.
10 North Park Drive	Hunt Valley, MD		—			2,211,969		7,816,042		50,967		2,211,969		7,867,009		10,078,978		426,459		2003	40 yrs.
307 International Circle	Hunt Valley, MD		—			3,538,319		14,190,832		6,678,883		3,542,881		20,865,153		24,408,034		11,372		2004	40 yrs.
309 International Circle	Hunt Valley, MD		—			613,667		2,458,204		566,706		615,096		3,023,480		3,638,577		32,100		2004	40 yrs.
311 International Circle	Hunt Valley, MD		—			313,365		1,281,093		133,314		314,572		1,413,200		1,727,773		1,186		2004	40 yrs.
8775 Baypine Road	Jacksonville, FL		—			906,804		—		3,352,440		913,013		3,346,231		4,259,244		1,400,466		1989	40 yrs.
6255 Lake Gray Boulevard	Jacksonville, FL		—			813,067		—		3,917,635		812,634		3,918,068		4,730,702		1,899,761		1987	40 yrs.
8665,8667,8669 Baypine Road	Jacksonville, FL		—			966,552		—		5,750,503		974,959		5,742,096		6,717,055		2,270,711		1987	40 yrs.
7970 Bayberry Road	Jacksonville, FL		—			127,520		—		1,350,044		129,979		1,347,585		1,477,564		967,916		1978	40 yrs.
7898 Baymeadows Way	Jacksonville, FL		—			561,802		—		1,998,616		568,005		1,992,413		2,560,418		1,113,730		1978	40 yrs.
7910 & 7948 Baymeadows Way	Jacksonville, FL		—			210,299		—		2,666,923		211,449		2,665,773		2,877,222		1,481,846		1981	40 yrs.
7954 & 7960 Baymeadows Way	Jacksonville, FL		—			291,312		—		2,946,876		292,667		2,945,521		3,238,188		1,566,033		1982	40 yrs.
7077 Bonneval Road	Jacksonville, FL		—			768,000		5,789,000		1,994,584		774,020		7,777,564		8,551,584		2,956,960		1988	40 yrs.
4190 Belfort Road	Jacksonville, FL		—			821,000		5,866,000		3,499,284		827,420		9,358,864		10,186,284		3,484,746		1986	40 yrs.
7020 AC Skinner Parkway	Jacksonville, FL			*		398,257		—		2,741,010		749,811		2,389,456		3,139,267		899,968		1996	40 yrs.
7022 AC Skinner Parkway	Jacksonville, FL			*		706,934		—		3,593,671		853,981		3,446,624		4,300,605		1,221,731		1996	40 yrs.

97

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized											Date of
									Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
11777 Central Highway	Jacksonville, FL		—			92,207		429,997		1,275,050			140,426		1,656,828		1,797,254		935,684		1985	40 yrs.
4345 Southpoint Parkway	Jacksonville, FL		—			—		—		8,798,125			418,093		8,380,032		8,798,125		2,120,675		1998	40 yrs.
7016 AC Skinner Parkway	Jacksonville, FL		—			597,181		—		2,333,385			602,633		2,327,934		2,930,566		943,824		1996	40 yrs.
7018 AC Skinner Parkway	Jacksonville, FL		—			840,996		—		4,507,239			846,461		4,501,774		5,348,235		1,685,975		1997	40 yrs.
7014 AC Skinner Parkway	Jacksonville, FL		—			574,198		—		3,571,300			780,486		3,365,013		4,145,498		996,728		1999	40 yrs.
6620 Southpoint Drive	Jacksonville, FL		—			614,602		4,267,477		765,593			614,602		5,033,069		5,647,672		1,386,974		1984	40 yrs.
7980 Bayberry Road	Jacksonville, FL		—			330,726		1,338,101		32,776			330,726		1,370,877		1,701,603		294,337		1978	40 yrs.
6600 Southpoint Parkway	Jacksonville, FL		—			998,432		4,055,727		829,894			1,002,704		4,881,349		5,884,053		1,283,949		1986	40 yrs.
6700 Southpoint Parkway	Jacksonville, FL		—			620,719		2,989,746		750,311			624,215		3,736,561		4,360,776		1,209,894		1987	40 yrs.
4801 Executive Park Court — 100	Jacksonville, FL			*		554,993		2,993,277		861,429			554,542		3,855,157		4,409,699		1,067,174		1990	40 yrs.
4801 Executive Park Court — 200	Jacksonville, FL			*		370,017		1,995,518		348,862			370,039		2,344,358		2,714,397		476,094		1990	40 yrs.
4810 Executive Park Court	Jacksonville, FL			*		369,694		3,045,639		806,820			370,039		3,852,113		4,222,153		720,862		1990	40 yrs.
6602 Executive Park Court — 100	Jacksonville, FL			*		388,519		2,095,293		145,006			388,541		2,240,277		2,628,818		561,730		1993	40 yrs.
6602 Executive Park Court — 200	Jacksonville, FL			*		296,014		1,596,347		407,277			296,032		2,003,606		2,299,638		444,228		1993	40 yrs.
6631 Executive Park Court — 100	Jacksonville, FL			*		251,613		1,356,849		485,462			251,627		1,842,297		2,093,924		498,377		1994	40 yrs.
6631 Executive Park Court — 200	Jacksonville, FL			*		406,561		2,195,070		223,189			407,043		2,417,777		2,824,820		585,761		1994	40 yrs.
4815 Executive Park Court — 100	Jacksonville, FL			*		366,317		1,975,393		299,174			366,339		2,274,545		2,640,884		646,432		1995	40 yrs.
4815 Executive Park Court — 200	Jacksonville, FL			*		462,522		2,494,397		438,798			462,549		2,933,168		3,395,717		738,437		1995	40 yrs.
4825 Executive Park Court	Jacksonville, FL			*		601,278		3,242,491		278,174			601,401		3,520,542		4,121,943		772,873		1996	40 yrs.
4820 Executive Park Court	Jacksonville, FL			*		555,173		2,693,130		765,939			555,213		3,459,030		4,014,242		809,113		1997	40 yrs.
6601 Executive Park Circle North	Jacksonville, FL		—			551,250		3,128,361		1,130			551,250		3,129,491		3,680,741		625,531		1992	40 yrs.
4901 Belfort Road	Jacksonville, FL		—			877,964		2,360,742		1,926,500			877,964		4,287,242		5,165,206		1,504,672		1986	40 yrs.
4899 Belfort Road	Jacksonville, FL		—			1,299,201		—		7,870,616			1,207,751		7,962,066		9,169,817		1,533,178		2000	40 yrs.
4905 Belfort Street	Jacksonville, FL		—			638,154		—		3,461,609			641,272		3,458,491		4,099,763		763,747		2000	40 yrs.
7251 Salisbury Road	Jacksonville, FL		—			—		—		3,567,820			662,559		2,905,261		3,567,820		603,510		2000	40 yrs.
10245 Centurion Parkway North	Jacksonville, FL		—			852,644		3,510,889		997,845			853,704		4,507,673		5,361,378		807,437		1996	40 yrs.
4887 Belfort Road	Jacksonville, FL		—			1,299,202		—		7,876,809			1,665,915		7,510,096		9,176,011		1,165,848		2002	40 yrs.
7255 Salisbury Road	Jacksonville, FL		—			392,060		—		2,698,852			680,766		2,410,146		3,090,912		380,810		2002	40 yrs.
3200 Horizon Drive	King of Prussia, PA			*		928,637		—		7,094,141			1,210,137		6,812,640		8,022,777		2,213,089		1996	40 yrs.
440 East Swedesford Road	King of Prussia, PA		—			717,001		4,816,121		2,686,176			717,001		7,502,297		8,219,298		2,483,653		1988	40 yrs.
460 East Swedesford Road	King of Prussia, PA		—			705,317		4,737,487		1,560,144			705,317		6,297,632		7,002,948		1,696,501		1988	40 yrs.
151 South Warner Road	King of Prussia, PA		—			1,218,086		6,937,866		360,761			1,186,972		7,329,741		8,516,713		1,673,333		1980	40 yrs.
3604 Horizon Drive	King of Prussia, PA		—			397,178		—		1,628,512			350,874		1,674,816		2,025,690		653,537		1998	40 yrs.
3606 Horizon Drive	King of Prussia, PA		1,413,163			789,409		—		1,940,816			815,855		1,914,370		2,730,225		689,224		1997	40 yrs.
650 Swedesford Road	King of Prussia, PA		—			952,911		6,722,830		9,089,949			952,911		15,812,779		16,765,690		5,244,628		1971	40 yrs.
680 Swedesford Road	King of Prussia, PA		—			952,361		6,722,830		8,350,943			952,361		15,073,774		16,026,134		5,262,278		1971	40 yrs.
3600 Horizon Drive	King of Prussia, PA		—			236,432		1,856,252		78,474			236,432		1,934,726		2,171,158		379,334		1989	40 yrs.
3602 Horizon Drive	King of Prussia, PA		—			217,734		1,759,489		338,288			217,809		2,097,701		2,315,510		479,231		1989	40 yrs.
2700 Horizon Drive	King of Prussia, PA		—			764,370		—		3,682,257			867,815		3,578,812		4,446,627		988,562		1998	40 yrs.
2900 Horizon Drive	King of Prussia, PA		—			679,440		—		3,503,074			774,096		3,408,418		4,182,514		818,000		1998	40 yrs.
2500 Renaissance Boulevard	King of Prussia, PA		—			509,580		—		2,786,056			592,886		2,702,749		3,295,636		781,214		1999	40 yrs.
2300 Renaissance Boulevard	King of Prussia, PA		—			509,580		—		2,650,651			574,152		2,586,078		3,160,231		651,608		1999	40 yrs.
2100 Renaissance Boulevard	King of Prussia, PA		—			1,110,111		—		9,382,851			1,132,519		9,360,443		10,492,962		2,385,803		1999	40 yrs.
3400 Horizon Drive	King of Prussia, PA		—			776,496		3,139,068		976,258			776,496		4,115,325		4,891,821		1,014,959		1995	40 yrs.
2301 Renaissance Boulevard	King of Prussia, PA		—			1,645,246		—		30,056,189			4,581,649		27,119,785		31,701,434		3,132,370		2002	40 yrs.
2520 Renaissance Boulevard	King of Prussia, PA		—			1,020,000		—		4,970,045			978,402		5,011,643		5,990,045		1,614,544		1999	40 yrs.
2201 Renaissance Boulevard	King of Prussia, PA		—			—		—		15,548,161			2,413,514		13,134,647		15,548,161		2,818,115		2000	40 yrs.
2540 Renaissance Boulevard	King of Prussia, PA		—			—		—		1,625,497			274,341		1,351,156		1,625,497		294,618		2000	40 yrs.
2560 Renaissance Boulevard	King of Prussia, PA		—			—		—		3,729,254			649,792		3,079,462		3,729,254		645,260		2000	40 yrs.
170 South Warner Road	King of Prussia, PA		—			547,800		3,137,400		2,719,699			458,232		5,946,667		6,404,899		2,680,019		1980	40 yrs.
190 South Warner Road	King of Prussia, PA		—			552,200		3,162,600		1,738,565			461,909		4,991,455		5,453,365		2,012,776		1980	40 yrs.
3100 Horizon Drive	King of Prussia, PA			*		601,956		—		2,086,737			611,436		2,077,258		2,688,694		695,232		1995	40 yrs.
3300 Horizon Drive	King of Prussia, PA			*		566,403		—		3,404,307			687,878		3,282,831		3,970,709		832,455		1996	40 yrs.
3500 Horizon Drive	King of Prussia, PA		—			1,204,839		—		2,630,229			1,223,875		2,611,193		3,835,068		631,300		1996	40 yrs.
3000 Horizon Drive	King of Prussia, PA			*		1,191,449		—		2,309,358			946,703		2,554,103		3,500,806		495,987		1997	40 yrs.
800 Town Center Drive	Langhorne, PA		—			1,617,150		—		10,240,772			1,619,288		10,238,634		11,857,922		4,683,208		1987	40 yrs.
8301 Industrial Boulevard	Lehigh, PA		—			11,249,550		—		43,069,316			11,254,716		43,064,150		54,318,866		219,396		2005	40 yrs.
32853 Edward Avenue	Madison Heights, MI		—			138,121		784,426		(9,444	)		138,121		774,982		913,103		172,477		1973	40 yrs.
750 East Mandoline Avenue	Madison Heights, MI		—			151,458		741,185		(64,799	)		151,458		676,386		827,844		150,937		1969	40 yrs.
900 East Mandoline Avenue	Madison Heights, MI		—			157,729		771,872		(36,404	)		157,729		735,468		893,197		205,060		1972	40 yrs.
949 East Mandoline Avenue	Madison Heights, MI		—			137,049		778,338		(91,758	)		137,049		686,580		823,629		149,403		1974	40 yrs.
31700 Research Park Drive	Madison Heights, MI		—			373,202		1,824,721		(133,207	)		373,203		1,691,513		2,064,716		339,163		1988	40 yrs.
800 Tech Row	Madison Heights, MI		—			444,977		2,984,811		(79,329	)		444,977		2,905,482		3,350,459		575,827		1986	40 yrs.

98

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized											Date of
									Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
31771 Sherman Avenue	Madison Heights, MI		—			150,944		645,040		(5,334	)		150,944		639,705		790,650		185,874		1982	40 yrs.
31791 Sherman Avenue	Madison Heights, MI		—			105,606		649,891		(43,885	)		105,606		606,006		711,612		127,804		1983	40 yrs.
31811 Sherman Avenue	Madison Heights, MI		—			207,599		1,179,010		(124,831	)		207,599		1,054,179		1,261,778		225,302		1983	40 yrs.
31831 Sherman Avenue	Madison Heights, MI		—			158,483		900,064		(62,164	)		158,483		837,900		996,383		172,857		1984	40 yrs.
31900 Sherman Avenue	Madison Heights, MI		—			269,293		1,754,498		348,385			269,293		2,102,883		2,372,176		409,916		1984	40 yrs.
950 East Whitcomb Avenue	Madison Heights, MI		—			113,630		2,162,302		45,984			113,630		2,208,286		2,321,916		510,476		1988	40 yrs.
1201 East Whitcomb Avenue	Madison Heights, MI		—			302,567		1,213,232		(146,471	)		302,567		1,066,761		1,369,328		244,630		1980	40 yrs.
1210 East Whitcomb Avenue	Madison Heights, MI		—			121,298		329,051		(25,294	)		121,298		303,758		425,056		87,693		1983	40 yrs.
1901 Summit Tower Boulevard	Maitland, FL		—			6,078,791		12,348,567		420,175			6,083,206		12,764,327		18,847,534		2,402,364		1998	40 yrs.
45-67 Great Valley Parkway	Malvern, PA			*		795,143		—		3,237,185			795,831		3,236,497		4,032,328		2,003,355		1974	40 yrs.
11,15 Great Valley Parkway	Malvern, PA			*		1,837,050		—		15,005,064			1,837,878		15,004,237		16,842,114		9,667,868		1986	40 yrs.
27-43 Great Valley Parkway	Malvern, PA			*		448,775		—		2,546,102			449,447		2,545,430		2,994,877		1,473,355		1977	40 yrs.
1 Country View Road	Malvern, PA		—			400,000		3,600,000		1,004,993			406,421		4,598,572		5,004,993		1,189,429		1982	40 yrs.
200 Chesterfield Parkway	Malvern, PA		—			495,893		2,739,093		395,972			544,649		3,086,309		3,630,958		1,842,759		1989	40 yrs.
50 Morehall Road	Malvern, PA		—			849,576		—		13,043,717			1,337,076		12,556,217		13,893,293		3,878,780		1997	40 yrs.
1 Great Valley Parkway	Malvern, PA		4,661,040			419,460		3,792,570		333,900			419,460		4,126,469		4,545,930		960,954		1982	40 yrs.
5 Great Valley Parkway	Malvern, PA		—			684,200		6,181,661		1,137,394			684,200		7,319,055		8,003,255		1,619,395		1983	40 yrs.
1001 Cedar Hollow Road	Malvern, PA		—			1,436,814		—		16,047,698			1,646,984		15,837,528		17,484,512		4,381,995		1998	40 yrs.
3 Country View Road	Malvern, PA		—			814,278		—		4,946,433			1,128,881		4,631,830		5,760,711		868,510		1998	40 yrs.
425 Technology Drive	Malvern, PA		—			191,114		—		2,014,653			321,473		1,884,294		2,205,767		638,494		1998	40 yrs.
375 Technology Drive	Malvern, PA		—			191,114		—		1,958,524			234,922		1,914,715		2,149,638		627,157		1998	40 yrs.
45 Liberty Boulevard	Malvern, PA		—			4,380,221		—		15,313,598			4,749,748		14,944,071		19,693,819		3,842,589		1999	40 yrs.
100 Chesterfield Parkway	Malvern, PA		—			1,320,625		—		6,973,669			1,349,954		6,944,340		8,294,294		1,994,886		1998	40 yrs.
600 Chesterfield Parkway	Malvern, PA		—			2,013,750		—		8,135,324			2,050,555		8,098,519		10,149,074		2,052,929		1999	40 yrs.
700 Chesterfield Parkway	Malvern, PA		—			2,013,750		—		8,096,150			2,037,813		8,072,087		10,109,900		2,034,360		1999	40 yrs.
18 Great Valley Parkway	Malvern, PA		—			394,036		3,976,221		100,474			398,228		4,072,504		4,470,731		716,566		1980	40 yrs.
11 Great Valley Parkway	Malvern, PA		—			496,297		—		3,226,924			708,331		3,014,890		3,723,221		577,888		2001	40 yrs.
40 Liberty Boulevard	Malvern, PA		—			4,241,137		17,737,090		2,182,842			4,241,167		19,919,901		24,161,068		4,896,375		1989	40 yrs.
2 West Liberty Boulevard	Malvern, PA		—			5,405,041		—		10,622,545			5,405,042		10,622,545		16,027,587		21,632		2003	40 yrs.
10 Great Valley Parkway	Malvern, PA		—			823,540		1,341,376		177,288			832,244		1,509,959		2,342,203		81,811		2003	40 yrs.
10, 20 Liberty Boulevard	Malvern, PA		—			724,058		—		5,758,730			724,846		5,757,942		6,482,788		2,300,840		1985	40 yrs.
420 Lapp Road	Malvern, PA			*		1,054,418		—		6,995,372			1,055,243		6,994,547		8,049,790		2,831,754		1989	40 yrs.
14 Lee Boulevard	Malvern, PA			*		664,282		—		5,804,147			643,892		5,824,537		6,468,429		2,442,002		1988	40 yrs.
500 Chesterfield Parkway	Malvern, PA			*		472,364		—		3,209,021			473,139		3,208,246		3,681,385		1,590,141		1988	40 yrs.
300-400 Chesterfield Parkway	Malvern, PA			*		937,212		—		5,301,111			937,942		5,300,381		6,238,323		2,391,456		1988	40 yrs.
40 Valley Stream Parkway	Malvern, PA			*		322,918		—		3,226,218			325,775		3,223,361		3,549,136		1,142,135		1987	40 yrs.
50 Valley Stream Parkway	Malvern, PA		—			323,971		—		2,324,307			323,792		2,324,486		2,648,278		1,058,801		1987	40 yrs.
20 Valley Stream Parkway	Malvern, PA			*		465,539		—		5,655,563			466,413		5,654,689		6,121,102		2,658,736		1987	40 yrs.
257-275 Great Valley Parkway	Malvern, PA			*		504,611		—		4,989,196			505,458		4,988,349		5,493,807		2,771,418		1983	40 yrs.
300 Technology Drive	Malvern, PA		—			368,626		—		1,344,816			374,497		1,338,945		1,713,442		665,708		1985	40 yrs.
277-293 Great Valley Parkway	Malvern, PA		—			530,729		—		2,321,857			531,534		2,321,052		2,852,586		1,224,085		1984	40 yrs.
311 Technology Drive	Malvern, PA		—			397,131		—		2,672,846			397,948		2,672,029		3,069,977		1,310,656		1984	40 yrs.
7 Great Valley Parkway	Malvern, PA			*		176,435		—		4,890,532			177,317		4,889,650		5,066,967		2,632,459		1985	40 yrs.
55 Valley Stream Parkway	Malvern, PA		—			215,005		—		3,615,244			215,818		3,614,431		3,830,249		1,786,728		1983	40 yrs.
65 Valley Stream Parkway	Malvern, PA			*		381,544		—		7,032,009			382,361		7,031,193		7,413,553		3,463,697		1983	40 yrs.
508 Lapp Road	Malvern, PA			*		331,392		—		2,033,164			332,216		2,032,340		2,364,556		1,165,242		1984	40 yrs.
10 Valley Stream Parkway	Malvern, PA			*		509,075		—		3,089,935			509,899		3,089,111		3,599,010		1,621,446		1984	40 yrs.
333 Phoenixville Pike	Malvern, PA		—			523,530		—		2,917,373			524,230		2,916,673		3,440,903		1,502,374		1985	40 yrs.
30 Great Valley Parkway	Malvern, PA		—			128,126		—		385,634			128,783		384,977		513,760		298,378		1975	40 yrs.
75 Great Valley Parkway	Malvern, PA		436,318			143,074		—		772,076			143,811		771,338		915,150		503,959		1977	40 yrs.
77-123 Great Valley Parkway	Malvern, PA			*		887,664		—		5,435,544			888,359		5,434,849		6,323,208		3,174,678		1978	40 yrs.
256 Great Valley Parkway	Malvern, PA		—			161,098		—		1,785,717			161,949		1,784,866		1,946,815		1,107,351		1980	40 yrs.
205 Great Valley Parkway	Malvern, PA			*		1,368,259		—		10,620,333			1,369,003		10,619,589		11,988,592		6,405,095		1981	40 yrs.
12,14,16 Great Valley Parkway	Malvern, PA		—			130,689		—		1,560,924			128,767		1,562,846		1,691,613		811,850		1982	40 yrs.
155 Great Valley Parkway	Malvern, PA		—			625,147		—		2,627,280			626,068		2,626,359		3,252,427		1,462,181		1981	40 yrs.
333 Technology Drive	Malvern, PA			*		157,249		—		4,584,680			158,077		4,583,852		4,741,929		1,708,999		1987	40 yrs.
510 Lapp Road	Malvern, PA			*		356,950		—		926,587			357,751		925,786		1,283,537		541,042		1983	40 yrs.
60 Morehall Road	Malvern, PA		—			865,424		9,285,000		4,971,296			884,974		14,236,746		15,121,720		5,730,583		1989	40 yrs.
5 Country View Road	Malvern, PA			*		785,168		4,678,632		856,961			786,235		5,534,526		6,320,761		1,741,206		1985	40 yrs.
7550 Meridian Circle	Maple Grove, MN		—			513,250		2,901,906		146,306			513,250		3,048,211		3,561,461		609,420		1989	40 yrs.
8 Stow Road	Marlton, NJ		—			172,600		1,704,436		139,565			172,945		1,843,657		2,016,602		601,855		1988	40 yrs.
10 Stow Road	Marlton, NJ		—			147,000		1,451,536		526,803			147,318		1,978,021		2,125,339		899,963		1988	40 yrs.
12 Stow Road	Marlton, NJ		—			103,300		1,021,036		341,204			103,618		1,361,923		1,465,541		544,471		1988	40 yrs.

99

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
14 Stow Road	Marlton, NJ		—		93,100		920,336		431,684		93,418		1,351,703		1,445,120		524,126		1988	40 yrs.
701A Route 73 South	Marlton, NJ		—		264,387		3,772,000		3,386,416		271,743		7,151,060		7,422,803		3,031,119		1987	40 yrs.
701C Route 73 South	Marlton, NJ		—		84,949		1,328,000		401,665		96,161		1,718,453		1,814,614		626,395		1987	40 yrs.
400 Lippincott Drive	Marlton, NJ		—		69,402		—		3,671,296		317,799		3,422,899		3,740,699		759,649		1999	40 yrs.
406 Lippincott Drive	Marlton, NJ		—		321,455		1,539,871		895,587		327,554		2,429,358		2,756,912		901,488		1990	40 yrs.
301 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		1,264,020		1,069,838		6,044,183		7,114,020		1,842,156		1988	40 yrs.
303 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		1,753,857		1,069,838		6,534,019		7,603,857		2,025,357		1988	40 yrs.
901 Route 73	Marlton, NJ		—		334,411		2,733,314		828,076		334,411		3,561,390		3,895,801		903,061		1985	40 yrs.
404 Lippincott Drive	Marlton, NJ		—		131,896		—		1,650,431		131,896		1,650,431		1,782,327		588,015		1997	40 yrs.
402 Lippincott Drive	Marlton, NJ		—		131,896		—		1,721,965		131,896		1,721,965		1,853,861		580,999		1997	40 yrs.
9 Stow Road	Marlton, NJ		—		652,642		1,765,065		922,076		654,779		2,685,004		3,339,783		659,579		1989	40 yrs.
8301 West Parkland Court	Milwaukee, WI		—		358,442		3,233,707		532,454		358,442		3,766,161		4,124,602		842,371		1982	40 yrs.
7800 N. 113th Street	Milwaukee, WI		—		1,711,964		6,847,857		392,036		1,711,964		7,239,893		8,951,858		1,488,857		1991	40 yrs.
11950 W. Lake Park Drive	Milwaukee, WI		—		391,813		2,340,118		385,633		394,938		2,722,627		3,117,564		592,843		1986	40 yrs.
11400 W. Lake Park Drive	Milwaukee, WI		—		439,595		2,357,904		194,180		443,101		2,548,578		2,991,678		451,053		1986	40 yrs.
11425 W. Lake Park Drive	Milwaukee, WI		—		382,256		2,350,619		957,723		385,305		3,305,293		3,690,598		824,326		1987	40 yrs.
11301 W. Lake Park Drive	Milwaukee, WI		—		614,477		2,626,456		101,328		619,465		2,722,797		3,342,261		474,539		1987	40 yrs.
11900 W. Lake Park Drive	Milwaukee, WI		—		347,853		2,396,887		1,059,217		350,628		3,453,330		3,803,957		855,963		1987	40 yrs.
11414 West Park Place	Milwaukee, WI		—		234,443		—		11,022,640		491,531		10,765,552		11,257,083		1,947,442		2001	40 yrs.
11520 West Calumet Road	Milwaukee, WI		—		341,698		1,527,548		78,494		341,698		1,606,042		1,947,740		235,786		1995	40 yrs.
12100 West Park Place	Milwaukee, WI		—		534,470		3,239,389		483,040		532,370		3,724,529		4,256,899		634,224		1984	40 yrs.
10855 West Park Place	Milwaukee, WI		—		122,894		—		2,984,397		424,710		2,682,580		3,107,290		302,898		2002	40 yrs.
11100 West Liberty Drive	Milwaukee, WI		—		1,800,000		—		7,181,452		1,801,024		7,180,428		8,981,452		485,404		2003	40 yrs.
4700 Nathan Lane North	Minneapolis, MN		—		1,501,308		8,446,083		225,056		1,501,308		8,671,139		10,172,447		1,450,830		1996	40 yrs.
4600 Nathan Lane	Minneapolis, MN		—		1,063,558		—		6,683,083		1,038,197		6,708,444		7,746,641		949,850		2002	40 yrs.
12501 & 12701 Whitewater Drive	Minnegonka, MN		—		2,175,209		3,948,085		5,641,054		2,177,953		9,586,395		11,764,348		454,175		1986	40 yrs.
5600 & 5610 Rowland Road	Minnetonka, MN		—		828,650		7,399,409		1,579,087		829,263		8,977,882		9,807,146		2,488,832		1988	40 yrs.
5400-5500 Feltl Road	Minnetonka, MN		—		883,895		7,983,345		1,827,071		883,895		9,810,416		10,694,311		2,102,836		1985	40 yrs.
10300 Bren Road	Minnetonka, MN		—		344,614		3,110,477		339,685		344,614		3,450,162		3,794,776		745,347		1981	40 yrs.
3400 Lakeside Drive	Miramar, FL		—		2,022,153		11,345,881		1,206,694		2,022,153		12,552,575		14,574,728		2,758,940		1990	40 yrs.
3450 Lakeside Drive	Miramar, FL		—		2,022,152		11,357,143		1,972,320		2,022,152		13,329,463		15,351,615		2,979,767		1990	40 yrs.
3350 SW 148th Avenue	Miramar, FL		—		2,960,511		—		17,921,351		2,980,689		17,901,173		20,881,862		3,623,669		2000	40 yrs.
300 Fellowship Road	Mt. Laurel, NJ		—		—		—		7,267,999		1,098,904		6,169,095		7,267,999		212,031		2004	40 yrs.
3001 Leadenhall Road	Mt. Laurel, NJ		—		1,925,719		191,390		10,965,396		1,936,489		11,146,016		13,082,505		453,201		2003	40 yrs.
4001 Leadenhall Road	Mt. Laurel, NJ		—		3,207,885		391,167		18,844,592		2,784,694		19,658,950		22,443,644		2,044,056		2002	40 yrs.
3000 Atrium Way	Mt. Laurel, NJ		—		500,000		4,500,000		4,124,861		512,018		8,612,844		9,124,861		3,738,227		1987	40 yrs.
11000, 15000 Commerce Parkway	Mt. Laurel, NJ		—		310,585		4,394,900		252,018		311,950		4,645,553		4,957,503		1,703,636		1985	40 yrs.
12000, 14000 Commerce Parkway	Mt. Laurel, NJ		—		361,800		3,285,817		703,601		362,855		3,988,363		4,351,218		1,279,682		1985	40 yrs.
16000, 18000 Commerce Parkway	Mt. Laurel, NJ		—		289,700		2,512,683		578,994		290,545		3,090,832		3,381,377		1,045,910		1985	40 yrs.
1300 Route 73 North	Mt. Laurel, NJ		—		449,400		3,074,850		1,693,803		450,558		4,767,495		5,218,053		1,327,465		1988	40 yrs.
3000 Lincoln Drive	Mt. Laurel, NJ		—		284,052		2,458,155		1,680,241		284,052		4,138,396		4,422,448		1,253,011		1983	40 yrs.
6000 Commerce Parkway	Mt. Laurel, NJ		—		234,151		2,022,683		693,212		234,151		2,715,895		2,950,046		681,110		1985	40 yrs.
7000 Commerce Parkway	Mt. Laurel, NJ		—		260,014		2,236,684		429,449		260,014		2,666,133		2,926,147		664,422		1984	40 yrs.
8000 Commerce Parkway	Mt. Laurel, NJ		—		234,814		1,995,098		317,849		234,814		2,312,947		2,547,761		516,811		1983	40 yrs.
9000 Commerce Parkway	Mt. Laurel, NJ		—		286,587		2,474,820		577,045		286,587		3,051,865		3,338,452		915,454		1983	40 yrs.
1000 Briggs Road	Mt. Laurel, NJ		—		288,577		2,546,537		1,345,162		288,577		3,891,698		4,180,276		1,251,599		1986	40 yrs.
1025 Briggs Road	Mt. Laurel, NJ		1,189,115		430,990		3,714,828		1,295,796		430,990		5,010,624		5,441,614		1,296,661		1987	40 yrs.
1020 Briggs Road	Mt. Laurel, NJ		—		494,334		—		2,986,335		569,184		2,911,486		3,480,669		712,534		1999	40 yrs.
2000 Crawford Place	Mt. Laurel, NJ		—		310,831		2,797,744		2,366,269		310,831		5,164,013		5,474,844		1,845,462		1986	40 yrs.
5000 Dearborn Court	Mt. Laurel, NJ		—		1,057,763		4,191,827		329,209		1,057,763		4,521,037		5,578,799		973,990		1988	40 yrs.
1001 Briggs Road	Mt. Laurel, NJ		—		701,705		3,505,652		2,000,167		701,705		5,505,820		6,207,525		1,480,906		1986	40 yrs.
1015 Briggs Road	Mt. Laurel, NJ		—		356,987		—		3,466,980		470,659		3,353,307		3,823,967		656,280		2000	40 yrs.
17000 Commerce Parkway	Mt. Laurel, NJ		—		144,515		—		2,813,663		144,515		2,813,663		2,958,178		531,822		2001	40 yrs.
9401-9443 Science Center Drive	New Hope, MN		—		431,295		3,888,684		481,742		510,064		4,291,657		4,801,721		988,653		1989	40 yrs.
6 Terry Drive	Newtown, PA		—		622,029		2,228,851		828,769		622,205		3,057,443		3,679,648		658,178		1981	40 yrs.
22515 Heslip Drive	Novi, MI		—		144,477		338,277		16,653		144,477		354,930		499,407		120,200		1975	40 yrs.
550-590 Hale Avenue	Oakdale, MN		—		765,535		3,488,754		317,153		766,390		3,805,052		4,571,442		672,634		1996	40 yrs.
1879 Lamont Avenue	Odenton, MD		—		1,976,000		8,099,579		2,331,500		2,011,030		10,396,049		12,407,079		237,802		2004	40 yrs.
350 Winmeyer Avenue	Odenton, MD		—		1,778,400		7,289,165		791,323		1,809,927		8,048,960		9,858,888		121,962		2004	40 yrs.
9600 Satellite Boulevard	Orlando, FL		—		252,850		1,297,923		62,116		252,850		1,360,039		1,612,889		300,574		1989	40 yrs.
9700 Satellite Boulevard	Orlando, FL		—		405,362		1,146,546		350,093		405,362		1,496,639		1,902,001		339,374		1989	40 yrs.
1902 Cypress Lake Drive	Orlando, FL		—		523,512		3,191,790		880,341		538,512		4,057,131		4,595,643		965,687		1989	40 yrs.
9550 Satellite Boulevard	Orlando, FL		—		574,831		—		2,149,304		587,319		2,136,816		2,724,135		534,050		1999	40 yrs.

100

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized										Date of
									Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
10511 & 10611 Satellite Boulevard	Orlando, FL		—			517,554		2,568,186		385,623		522,991		2,948,372		3,471,363		762,624		1985	40 yrs.
1400-1440 Central Florida Parkway	Orlando, FL		—			518,043		2,561,938		294,022		518,043		2,855,960		3,374,003		615,064		1962	40 yrs.
2216 Directors Row	Orlando, FL		—			453,918		2,572,202		25,865		453,918		2,598,067		3,051,985		491,031		1998	40 yrs.
3701-3727 Vineland Road	Orlando, FL		—			767,929		2,096,504		145,949		767,929		2,242,454		3,010,382		475,560		1985	40 yrs.
2400 South Lake Orange Drive	Orlando, FL		—			385,964		—		2,404,272		642,427		2,147,809		2,790,236		298,291		2001	40 yrs.
6501 Lee Vista Boulevard	Orlando, FL		—			903,701		—		5,541,791		925,671		5,519,821		6,445,492		609,015		2001	40 yrs.
2416 Lake Orange Drive	Orlando, FL		—			535,964		—		3,165,095		704,800		2,996,258		3,701,059		640,443		2002	40 yrs.
10771 Palm Bay Drive	Orlando, FL		—			664,605		—		2,362,814		685,383		2,342,035		3,027,419		341,034		2001	40 yrs.
10003 Satellite Boulevard	Orlando, FL		—			680,312		2,120,754		1,568,071		680,312		3,688,825		4,369,137		227,541		2003	40 yrs.
1090 Gills Drive	Orlando, FL		—			878,320		2,558,833		1,784,767		878,320		4,343,601		5,221,920		197,098		2003	40 yrs.
2202 Taft-Vineland Road	Orlando, FL		—			—		—		6,630,654		1,283,713		5,346,941		6,630,654		255,362		2004	40 yrs.
7315 Kingspointe Parkway	Orlando, FL		—			1,931,697		6,388,203		2,216,978		1,932,004		8,604,875		10,536,878		223,035		2004	40 yrs.
2351 Investors Row	Orlando, FL		—			2,261,924		7,496,249		10,608		2,263,211		7,505,570		9,768,781		187,699		2004	40 yrs.
2256 Taft-Vineland Road	Orlando, FL		—			467,296		—		2,461,652		825,673		2,103,275		2,928,948		39,684		2005	40 yrs.
1950 Summitt Park Drive	Orlando, FL		—			2,573,700		17,478,646		356,895		2,583,667		17,825,574		20,409,241		318,627		2005	40 yrs.
1958 Summit Park Drive	Orlando, FL		—			2,573,961		11,206,937		8,404,103		2,583,216		19,601,785		22,185,001		351,841		2005	40 yrs.
7500 West 110th Street	Overland Park, KS		—			2,380,493		9,575,474		3,105,049		2,380,493		12,680,523		15,061,015		2,551,895		1983	40 yrs.
N26 W23445 Paul Road	Pewaukee, WI		—			561,904		1,928,064		113,241		561,904		2,041,305		2,603,209		297,858		1985	40 yrs.
8801 Tinicum Boulevard	Philadelphia, PA		—			2,474,031		—		43,598,952		125,087		45,947,896		46,072,983		10,826,464		1997	40 yrs.
3 Franklin Plaza	Philadelphia, PA		—			2,483,144		—		32,150,134		2,514,519		32,118,759		34,633,278		5,288,182		1999	40 yrs.
2760 Red Lion Road	Philadelphia, PA		—			—		—		46,541,271		3,985,624		42,555,647		46,541,271		4,754,159		2001	40 yrs.
4751 League Island Boulevard	Philadelphia, PA		—			992,965		331,924		6,730,979		1,022,081		7,033,787		8,055,868		365,684		2003	40 yrs.
9801 80th Avenue	Pleasant Prairie, WI		—			1,692,077		7,934,794		62,495		1,689,726		7,999,640		9,689,366		1,517,661		1994	40 yrs.
2250 Hickory Road	Plymouth Meeting, PA		—			1,015,851		9,175,555		1,488,543		1,032,507		10,647,442		11,679,949		2,414,384		1985	40 yrs.
2905 Northwest Boulevard	Plymouth, MN		—			516,920		4,646,342		1,615,793		516,920		6,262,136		6,779,055		1,576,713		1983	40 yrs.
2800 Campus Drive	Plymouth, MN		—			395,366		3,554,512		866,525		395,366		4,421,037		4,816,403		1,112,379		1985	40 yrs.
2955 Xenium Lane	Plymouth, MN		—			151,238		1,370,140		401,075		151,238		1,771,215		1,922,453		551,389		1985	40 yrs.
2920 Northwest Boulevard	Plymouth, MN		—			392,026		3,433,678		655,417		384,235		4,096,886		4,481,121		1,062,974		1997	40 yrs.
14630-14650 28th Avenue North	Plymouth, MN		—			198,205		1,793,422		644,591		198,205		2,438,013		2,636,218		563,179		1978	40 yrs.
2800 Northwest Boulevard	Plymouth, MN		3,963,999			1,934,438		10,952,503		476,212		1,934,438		11,428,715		13,363,152		2,344,172		1995	40 yrs.
9600 54th Avenue	Plymouth, MN		—			332,317		3,077,820		1,053,822		332,317		4,131,642		4,463,959		658,927		1998	40 yrs.
1500 SW 5th Court	Pompano Beach, FL		—			972,232		3,892,085		186,080		972,232		4,078,165		5,050,397		868,958		1957	40 yrs.
1651 SW 5th Court	Pompano Beach, FL		—			203,247		811,093		126,108		203,247		937,202		1,140,449		218,072		1990	40 yrs.
1601 SW 5th Court	Pompano Beach, FL		—			203,247		811,093		403,403		203,247		1,214,496		1,417,743		238,976		1990	40 yrs.
1501 SW 5th Court	Pompano Beach, FL		—			203,247		811,093		34,338		203,247		845,431		1,048,679		182,175		1990	40 yrs.
1400 SW 6th Court	Pompano Beach, FL		—			1,157,049		4,620,956		263,427		1,157,049		4,884,382		6,041,432		998,636		1986	40 yrs.
1405 SW 6th Court	Pompano Beach, FL		—			392,138		1,565,787		78,994		392,138		1,644,781		2,036,920		347,683		1985	40 yrs.
595 SW 13th Terrace	Pompano Beach, FL		—			359,933		1,437,116		85,041		359,933		1,522,157		1,882,090		307,330		1984	40 yrs.
601 SW 13th Terrace	Pompano Beach, FL		—			164,413		655,933		40,501		164,413		696,434		860,846		134,187		1984	40 yrs.
605 SW 16th Terrace	Pompano Beach, FL		—			310,778		1,238,324		353,372		310,178		1,592,296		1,902,474		255,293		1965	40 yrs.
4300 Carolina Avenue	Richmond, VA		—			2,007,717		14,927,608		440,967		2,009,136		15,367,156		17,376,292		4,108,304		1985	40 yrs.
301 Hill Carter Parkway	Richmond, VA		—			659,456		4,836,010		625		659,456		4,836,635		5,496,091		1,309,815		1989	40 yrs.
4001 Carolina Avenue	Richmond, VA		—			29,443		215,914		305,691		29,443		521,605		551,048		98,697		1935	40 yrs.
5600-5626 Eastport Boulevard	Richmond, VA			*		489,941		3,592,900		199,379		489,941		3,792,279		4,282,220		1,110,878		1989	40 yrs.
5650-5674 Eastport Boulevard	Richmond, VA			*		644,384		4,025,480		210,079		644,384		4,235,559		4,879,943		1,281,114		1990	40 yrs.
5700 Eastport Boulevard	Richmond, VA			*		408,729		2,697,348		827,685		408,729		3,525,033		3,933,762		813,558		1990	40 yrs.
4101-4127 Carolina Avenue	Richmond, VA			*		310,854		2,279,597		567,636		310,854		2,847,233		3,158,087		669,779		1973	40 yrs.
4201-4261 Carolina Avenue	Richmond, VA			*		693,203		5,083,493		852,515		693,203		5,936,008		6,629,211		1,732,857		1975	40 yrs.
4263-4299 Carolina Avenue	Richmond, VA		—			256,203		2,549,649		1,539,234		256,203		4,088,883		4,345,086		1,024,433		1976	40 yrs.
4301-4335 Carolina Avenue	Richmond, VA		—			223,696		1,640,435		623,939		223,696		2,264,374		2,488,070		475,129		1978	40 yrs.
4337-4379 Carolina Avenue	Richmond, VA			*		325,303		2,385,557		858,723		325,303		3,244,280		3,569,583		1,170,470		1979	40 yrs.
4501-4549 Carolina Avenue	Richmond, VA			*		486,166		3,565,211		466,377		486,166		4,031,588		4,517,754		1,047,640		1981	40 yrs.
4551-4593 Carolina Avenue	Richmond, VA			*		474,360		3,478,646		251,242		474,360		3,729,888		4,204,248		990,449		1982	40 yrs.
4601-4643 Carolina Avenue	Richmond, VA			*		652,455		4,784,675		488,112		652,455		5,272,787		5,925,242		1,605,933		1985	40 yrs.
4645-4683 Carolina Avenue	Richmond, VA			*		404,616		2,967,187		1,077,200		404,616		4,044,387		4,449,003		1,672,722		1985	40 yrs.
4447-4491 Carolina Avenue	Richmond, VA		—			454,056		2,729,742		293,897		454,056		3,023,639		3,477,695		860,701		1987	40 yrs.
4401-4445 Carolina Avenue	Richmond, VA			*		615,038		4,510,272		397,983		615,038		4,908,255		5,523,293		1,315,034		1988	40 yrs.
2300 East Parham Road	Richmond, VA		—			221,947		1,011,088		2,443		221,947		1,013,531		1,235,478		291,544		1988	40 yrs.
5601-5659 Eastport Boulevard	Richmond, VA			*		705,660		—		4,687,838		720,100		4,673,398		5,393,498		1,545,623		1996	40 yrs.
5900 Eastport Boulevard	Richmond, VA		—			676,661		—		4,805,572		687,898		4,794,335		5,482,233		1,130,238		1997	40 yrs.
4717-4729 Eubank Road	Richmond, VA			*		449,447		3,294,697		464,789		452,263		3,756,669		4,208,932		977,794		1978	40 yrs.
4263F-N. Carolina Avenue	Richmond, VA		—			91,476		—		1,643,294		91,599		1,643,171		1,734,770		403,420		1975	40 yrs.
510 Eastpark Court	Richmond, VA		—			261,961		2,110,874		295,549		262,210		2,406,174		2,668,384		714,887		1989	40 yrs.

101

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized											Date of
									Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
520 Eastpark Court	Richmond, VA		—			486,118		4,083,582		223,503			486,598		4,306,606		4,793,203		1,047,303		1989	40 yrs.
13001 Kingston Avenue	Richmond, VA		—			376,584		—		2,032,172			376,701		2,032,055		2,408,756		465,543		1998	40 yrs.
5701-5799 Eastport Boulevard	Richmond, VA		—			694,644		—		5,627,694			700,503		5,621,836		6,322,338		1,491,794		1998	40 yrs.
701 Liberty Way	Richmond, VA			*		171,711		—		5,255,576			1,188,857		4,238,430		5,427,287		772,538		1999	40 yrs.
12730 Kingston Avenue	Richmond, VA		—			171,053		—		8,200,764			1,201,072		7,170,745		8,371,817		790,126		2001	40 yrs.
530 Eastpark Court	Richmond, VA		—			266,883		—		2,909,058			334,772		2,841,168		3,175,941		882,208		1999	40 yrs.
3829-3855 Gaskins Road	Richmond, VA		—			364,165		3,264,114		39,764			364,165		3,303,879		3,668,044		644,339		1988	40 yrs.
10800 Nuckols Boulevard	Richmond, VA		—			1,432,462		—		14,420,839			1,794,162		14,059,139		15,853,301		2,077,508		2000	40 yrs.
801 Liberty Way	Richmond, VA			*		780,000		—		6,408,701			785,059		6,403,642		7,188,701		1,309,444		1999	40 yrs.
100 Westgate Parkway	Richmond, VA		—			1,140,648		101,824		8,408,649			1,456,084		8,195,037		9,651,121		1,007,686		2001	40 yrs.
200 Westgate Parkway	Richmond, VA		—			1,623,612		—		5,900,379			1,072,797		6,451,195		7,523,992		643,127		2002	40 yrs.
1001 Boulders Parkway	Richmond, VA		—			2,073,739		5,634,796		251,657			2,079,643		5,880,549		7,960,191		73,860		2005	40 yrs.
7400 Beaufont Springs Drive	Richmond, VA		—			808,581		7,273,850		245,912			810,743		7,517,600		8,328,343		76,665		2005	40 yrs.
1100 Boulders Parkway	Richmond, VA		—			1,276,936		12,052,192		233,584			1,280,662		12,282,050		13,562,712		22		2005	40 yrs.
12 S. Third Street	Richmond, VA		—			40,539		184,682		14,061			40,539		198,743		239,282		52,216		1900	40 yrs.
6532 Judge Adams Road	Rock Creek, NC		—			354,903		—		3,718,126			399,988		3,673,042		4,073,029		854,530		1997	40 yrs.
6530 Judge Adams Road	Rock Creek, NC		—			305,821		—		4,458,196			335,061		4,428,955		4,764,016		793,188		1999	40 yrs.
6509 Franz Warner Parkway	Rock Creek, NC		—			360,494		—		2,829,679			372,494		2,817,679		3,190,173		407,971		2001	40 yrs.
38100 Ecorse Road	Romulus, MI		—			955,063		—		7,899,055			853,063		8,001,055		8,854,118		1,073,201		2000	40 yrs.
38000 Ecourse Road	Romulus, MI		—			807,660		—		12,732,027			1,053,337		12,486,350		13,539,687		2,097,585		2001	40 yrs.
26911-26957 Northwestern Highway	Southfield, MI		—			7,799,515		66,268,817		8,494,884			7,799,515		74,763,701		82,563,216		16,502,680		1985	40 yrs.
13650 NW 8th Street	Sunrise, FL		—			558,223		2,171,930		306,706			558,251		2,478,607		3,036,859		560,899		1991	40 yrs.
13630 NW 8th Street	Sunrise, FL		—			659,797		2,596,275		772,671			659,825		3,368,917		4,028,742		703,238		1991	40 yrs.
5501-5519 Pioneer Park Boulevard	Tampa, FL		—			162,000		1,613,000		258,142			262,416		1,770,726		2,033,142		547,688		1981	40 yrs.
5690-5694 Crenshaw Street	Tampa, FL		—			181,923		1,812,496		218,763			181,923		2,031,260		2,213,183		553,538		1979	40 yrs.
3102,3104,3110 Cherry Palm Drive	Tampa, FL		—			503,767		2,787,585		1,669,638			982,207		3,978,783		4,960,990		1,018,143		1986	40 yrs.
8401-8408 Benjamin Road	Tampa, FL		—			789,651		4,454,648		1,899,353			769,789		6,373,862		7,143,652		1,930,800		1986	40 yrs.
3501 Riga Boulevard	Tampa, FL		—			617,289		3,048,379		454,271			617,289		3,502,650		4,119,939		896,940		1987	40 yrs.
111 Kelsey Lane	Tampa, FL		—			359,540		1,461,850		908,769			359,540		2,370,619		2,730,159		620,004		1990	40 yrs.
7930, 8010-20 Woodland Center Boulevard	Tampa, FL			*		1,408,478		5,247,246		903,228			1,408,478		6,150,475		7,558,952		1,431,770		1990	40 yrs.
7920 Woodland Center Boulevard	Tampa, FL			*		1,382,648		2,445,444		(276,436	)		1,082,648		2,469,008		3,551,656		552,184		1997	40 yrs.
8154-8198 Woodland Center Boulevard	Tampa, FL			*		399,088		2,868,834		420,131			399,088		3,288,965		3,688,053		803,686		1988	40 yrs.
8112-42 Woodland Center Boulevard	Tampa, FL			*		513,263		3,230,239		533,544			513,263		3,763,784		4,277,046		761,297		1995	40 yrs.
8212 Woodland Center Boulevard	Tampa, FL			*		820,882		2,322,720		14,210			820,882		2,336,931		3,157,813		505,452		1996	40 yrs.
131 Kelsey Lane	Tampa, FL		—			511,463		—		4,455,291			559,527		4,407,227		4,966,754		1,495,878		1985	40 yrs.
7724 Woodland Center Boulevard	Tampa, FL		—			235,893		—		2,143,685			235,894		2,143,684		2,379,578		536,691		1998	40 yrs.
7802-50 Woodland Center Boulevard	Tampa, FL		—			357,364		—		2,711,761			506,949		2,562,177		3,069,125		940,408		1999	40 yrs.
7852-98 Woodland Center Boulevard	Tampa, FL		—			357,364		—		2,692,052			506,949		2,542,467		3,049,416		865,665		1999	40 yrs.
8921 Brittany Way	Tampa, FL		—			224,369		1,063,882		1,078,376			254,493		2,112,134		2,366,627		386,134		1998	40 yrs.
5250 Eagle Trail Drive	Tampa, FL		—			952,860		—		3,501,917			952,860		3,501,917		4,454,776		631,873		1998	40 yrs.
7725 Woodland Center Boulevard	Tampa, FL		—			553,335		—		3,345,476			771,501		3,127,310		3,898,811		540,286		1999	40 yrs.
8001 Woodland Center Boulevard	Tampa, FL		—			350,406		—		2,407,337			438,061		2,319,683		2,757,744		413,367		1999	40 yrs.
4630 Woodland Corporate Boulevard	Tampa, FL		—			943,169		—		12,592,708			1,560,099		11,975,778		13,535,877		1,961,943		2000	40 yrs.
701-725 South US Hwy 301	Tampa, FL		—			419,683		—		3,719,472			661,680		3,477,475		4,139,155		905,109		2000	40 yrs.
4502 Woodland Corporate Boulevard	Tampa, FL		—			—		—		4,005,900			1,071,535		2,934,365		4,005,900		454,996		1999	40 yrs.
9001-9015 Brittany Way	Tampa, FL		—			209,841		—		1,555,906			364,514		1,401,234		1,765,748		294,884		2000	40 yrs.
4508 Woodland Corporate Boulevard	Tampa, FL		—			498,598		—		3,057,752			556,887		2,999,463		3,556,350		481,275		2000	40 yrs.
7622 Bald Cypress Place	Tampa, FL		—			—		—		1,305,584			300,000		1,005,584		1,305,584		144,521		2000	40 yrs.
901-933 US Highway 301 South	Tampa, FL		—			500,391		—		4,023,528			840,314		3,683,605		4,523,919		795,906		2001	40 yrs.
4503 Woodland Corporate Boulevard	Tampa, FL		—			—		—		3,454,328			619,913		2,834,415		3,454,328		315,727		2002	40 yrs.
4505 Woodland Corporate Boulevard	Tampa, FL		—			—		—		2,891,079			716,594		2,174,485		2,891,079		365,159		2002	40 yrs.
4511 Woodland Corporate Boulevard	Tampa, FL		—			—		—		2,840,907			686,594		2,154,313		2,840,907		302,759		2002	40 yrs.
7621 Bald Cypress Place	Tampa, FL		—			—		—		1,482,613			447,498		1,035,115		1,482,613		89,641		2001	40 yrs.
4520 Seedling Circle	Tampa, FL		—			854,797		42,131		2,721,233			854,797		2,763,364		3,618,161		116,845		2003	40 yrs.
501 US Highway 301 South	Tampa, FL		—			898,884		—		3,499,853			900,508		3,498,229		4,398,737		92,280		2004	40 yrs.
9002-9036 Brittany Way	Tampa, FL		—			492,320		—		3,964,055			899,284		3,557,092		4,456,375		185,361		2004	40 yrs.
1650 Research Drive	Troy, MI		—			763,067		7,201,677		1,107,575			763,067		8,309,252		9,072,318		1,600,015		1985	40 yrs.
1775 Research Drive	Troy, MI		—			331,422		2,788,073		648,666			331,422		3,436,739		3,768,161		637,270		1985	40 yrs.
1875 Research Drive	Troy, MI		—			329,863		2,774,006		229,619			329,863		3,003,625		3,333,487		657,192		1986	40 yrs.
1850 Research Drive	Troy, MI		—			781,054		7,364,300		2,051,384			781,054		9,415,684		10,196,738		2,007,507		1986	40 yrs.
1965 Research Drive	Troy, MI		—			419,090		3,578,928		347,399			419,090		3,926,327		4,345,418		917,900		1987	40 yrs.
1960 Research Drive	Troy, MI		—			419,146		3,579,166		635,418			419,146		4,214,584		4,633,730		956,481		1987	40 yrs.
1101 Allen Drive	Troy, MI		—			98,144		887,935		326,837			98,148		1,214,768		1,312,916		328,596		1974	40 yrs.

102

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

									Costs
									Capitalized											Date of
									Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
					Initial Cost				to			Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances			Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
OPERATING PROPERTIES
1151 Allen Drive	Troy, MI		—			164,483		1,486,220		209,271			164,486		1,695,487		1,859,974		466,361		1974	40 yrs.
1300 Rankin Street	Troy, MI		—			134,090		1,212,752		371,530			134,094		1,584,278		1,718,372		549,399		1979	40 yrs.
1350 Rankin Street	Troy, MI		—			111,776		1,011,497		181,054			111,779		1,192,547		1,304,327		270,056		1979	40 yrs.
1376-1400 Rankin Street	Troy, MI		—			134,292		1,213,626		274,369			134,296		1,487,992		1,622,287		331,077		1979	40 yrs.
1352-1374 Rankin Street	Troy, MI		—			153,275		1,385,098		285,361			153,279		1,670,455		1,823,734		407,580		1979	40 yrs.
1324-1346 Rankin Street	Troy, MI		—			134,090		1,212,214		124,406			134,094		1,336,616		1,470,710		271,915		1979	40 yrs.
1301-1307 Rankin Street	Troy, MI		—			111,776		1,011,121		138,922			111,779		1,150,040		1,261,819		245,086		1978	40 yrs.
1409 Allen Drive	Troy, MI		—			142,370		1,286,048		408,471			142,374		1,694,516		1,836,889		421,332		1978	40 yrs.
1304 E Maple Road	Troy, MI		—			211,233		1,906,786		349,157			211,236		2,255,940		2,467,176		482,604		1971	40 yrs.
1334 Maplelawn Road	Troy, MI		—			124,296		1,122,802		39,409			124,300		1,162,208		1,286,507		247,380		1983	40 yrs.
1290 Maplelawn Road	Troy, MI		—			85,321		771,621		223,628			85,325		995,245		1,080,570		188,319		1984	40 yrs.
1070 Maplelawn Road	Troy, MI		—			68,560		620,595		106,600			68,563		727,191		795,755		170,394		1982	40 yrs.
950 Maplelawn Road	Troy, MI		—			252,429		2,265,259		176,543			252,433		2,441,798		2,694,231		534,630		1982	40 yrs.
894 Maplelawn Road	Troy, MI		—			181,749		1,632,243		761,128			181,753		2,393,367		2,575,120		524,568		1986	40 yrs.
1940 Norwood Drive	Troy, MI		—			86,836		785,267		87,637			86,839		872,901		959,740		193,218		1983	40 yrs.
1311-1331 Maplelawn Road	Troy, MI		—			125,407		1,132,810		204,037			125,410		1,336,843		1,462,254		365,092		1986	40 yrs.
2354 Bellingham Street	Troy, MI		—			87,340		789,817		19,928			87,344		809,741		897,085		170,975		1990	40 yrs.
2360 Bellingham Street	Troy, MI		—			87,340		789,817		58,250			87,344		848,063		935,407		172,987		1985	40 yrs.
50 West Big Beaver Road	Troy, MI		—			2,159,678		19,481,454		2,053,901			2,159,678		21,535,355		23,695,033		4,578,446		1987	40 yrs.
100 West Big Beaver Road	Troy, MI		—			2,113,006		19,057,355		2,167,108			2,113,006		21,224,463		23,337,469		4,359,088		1987	40 yrs.
1600-1630 East Big Beaver Road	Troy, MI		—			1,454,406		2,952,884		53,694			1,458,737		3,002,247		4,460,984		462,592		1982	40 yrs.
2600 Bellingham Drive	Troy, MI		—			1,796,869		—		4,095,318			1,938,746		3,953,441		5,892,187		902,648		2002	40 yrs.
2710 Bellingham Drive	Troy, MI		—			1,796,869		—		4,721,835			1,938,746		4,579,958		6,518,704		911,389		2002	40 yrs.
3432 Holland Road	Virginia Beach, VA		—			173,527		790,515		2,462			173,527		792,977		966,504		214,298		1989	40 yrs.
2809 South Lynnhaven Road	Virginia Beach, VA		—			953,590		6,142,742		1,039,718			953,590		7,182,460		8,136,050		1,588,070		1987	40 yrs.
200 Golden Oak Court	Virginia Beach, VA			*		1,116,693		6,770,480		931,872			1,116,693		7,702,352		8,819,044		1,737,979		1988	40 yrs.
208 Golden Oak Court	Virginia Beach, VA			*		965,177		6,728,717		1,128,434			965,177		7,857,151		8,822,329		1,779,740		1989	40 yrs.
484 Viking Drive	Virginia Beach, VA		—			891,753		3,607,890		476,860			891,753		4,084,750		4,976,502		878,637		1987	40 yrs.
629 Phoenix Drive	Virginia Beach, VA		—			371,694		2,108,097		192,844			371,694		2,300,941		2,672,635		468,249		1996	40 yrs.
5700 Cleveland Street	Virginia Beach, VA		—			700,112		9,592,721		1,656,986			700,564		11,249,254		11,949,819		2,592,377		1989	40 yrs.
1457 Miller Store Road	Virginia Beach, VA		1,768,123			473,689		2,663,045		327,736			474,746		2,989,725		3,464,470		185,376		2003	40 yrs.
11020 West Plank Court	Wauwatosa, WI		—			464,246		3,230,511		(519,943	)		464,246		2,710,568		3,174,814		453,347		1985	40 yrs.
825 Duportail Road	Wayne, PA		—			5,536,619		16,179,213		575,491			5,539,281		16,752,043		22,291,324		2,424,182		1979	40 yrs.
1500 Liberty Ridge	Wayne, PA		—			8,287,555		—		31,221,790			11,636,499		27,872,847		39,509,346		3,126,431		2002	40 yrs.
1200 Liberty Ridge Drive	Wayne, PA		—			6,215,667		—		8,637,849			5,223,660		9,629,855		14,853,515		2,029,762		2001	40 yrs.
11300-90 West Theodore Trecker Way	West Allis, WI		—			500,565		1,591,678		103,028			504,996		1,690,275		2,195,271		—		2005	40 yrs.
11548 West Theodore Trecker Way	West Allis, WI		—			660,068		4,640,578		24,851			662,751		4,662,746		5,325,497		65,241		2005	40 yrs.
11420 West Theodore Trecker Way	West Allis, WI		—			348,146		2,057,483		12,510			349,728		2,068,411		2,418,139		28,932		2005	40 yrs.
400-500 Brandywine Parkway	West Chester, PA		—			845,846		6,809,025		451,726			845,846		7,260,751		8,106,597		1,545,518		1988	40 yrs.
600 Brandywine Parkway	West Chester, PA		—			664,899		5,352,410		716,066			664,899		6,068,476		6,733,375		1,372,613		1988	40 yrs.
905 Airport Road	West Chester, PA		—			1,715,000		5,185,000		866,637			1,735,012		6,031,625		7,766,637		2,164,900		1988	40 yrs.
Liberty Square	West Malling, UK		—			—		—		—			273,650		9,564,327		9,837,977		—		2005	40 yrs.
3612 La Grange Parkway	Williamsburg, VA		—			—		—		5,687,810			887,234		4,800,577		5,687,810		162,428		2003	40 yrs.
7805 Hudson Road	Woodbury, MN		—			1,279,834		—		10,338,324			1,385,739		10,232,420		11,618,158		1,498,600		2002	40 yrs.
Subtotal Operating Real Estate		$	71,651,258		$	573,622,674	$	1,777,453,153	$	2,009,367,173		$	629,962,000	$	3,730,481,000	$	4,360,443,000	$	748,818,000

103

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction		Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2005		12/31/05		Acquisition		(years)
DEVELOPMENT PROPERTIES
8400 Industrial Boulevard	Allentown, PA		—		7,531,500		—		6,438,875		—		13,970,375		13,970,375		—		2005		N/A
901 Bilter Road	Aurora, IL		—		5,649,052		—		13,484,249		—		19,133,301		19,133,301		—		2004		N/A
1301 Executive Boulevard	Chesapeake, VA		—		—		—		2,814,505		—		2,814,505		2,814,505		—		2005		N/A
6230 Old Dobbin Lane	Columbia, MD		—		3,004,075		—		6,833,827		—		9,837,902		9,837,902		—		2004		N/A
420 Deleware Drive	Fort Washington, PA		—		2,766,931		—		5,870,073		—		8,637,004		8,637,004		—		2004		N/A
200 W Cypress Creek Road	Ft Lauderdale, FL		—		3,414,989		2,399,738		6,852,963		—		12,667,690		12,667,690		—		2003		N/A
2 Independence Point	Greenville, SC		—		371,600		—		2,347,301		—		2,718,901		2,718,901		—		2005		N/A
600 Industrial Drive	Harrisburg, PA		—		7,743,800		—		4,206,745		—		11,950,545		11,950,545		—		2005		N/A
1498 Eagle Hill Drive	High Point, NC		—		94,274		—		1,118,564		—		1,212,838		1,212,838		—		1999		N/A
400 Mendenhall Oaks Parkway	High Point, NC		—		—		—		1,698,078		—		1,698,078		1,698,078		—		2004		N/A
5201 Gate Parkway	Jacksonville, FL		—		3,836,532		—		8,906,863		—		12,743,395		12,743,395		—		2005		N/A
7528 Walker Way	Lehigh Valley, PA		—		893,441		—		4,111,637		—		5,005,078		5,005,078		—		2004		N/A
75 Brookfield Oaks Drive	Mauldin, SC		—		419,731		—		1,751,644		—		2,171,375		2,171,375		—		2003		N/A
65 Brookfield Oaks Drive	Mauldin, SC		—		557,174		—		2,652,752		—		3,209,926		3,209,926		—		2004		N/A
11050 West Liberty Drive	Milvaukee, WI		—		—		—		2,468,136		—		2,468,136		2,468,136		—		2005		N/A
302 Fellowship Road	Mt Laurel, NJ		—		1,512,120		—		2,268,486		—		3,780,605		3,780,605		—		2001		N/A
17th & JFK Tower	Philadelphia, PA		—		22,430,038		—		101,594,438		—		124,024,476		124,024,476		—		2005		N/A
1 Crescent Drive	Philadelphia, PA		—		567,280		—		10,664,954		—		11,232,234		11,232,234		—		2004		N/A
3900 Westerre Parkway	Richmond, VA		—		392,184		—		8,220,581		—		8,612,765		8,612,765		—		2005		N/A
6505 Cogswell Road	Romulus, MI		—		594,523		—		7,087,829		—		7,682,353		7,682,353		—		2000		N/A
38100 Ecorse Road Expansion	Romulus, MI		—		—		—		49,703		—		49,703		49,703		—		2005		N/A
8501 East Raintree Drive	Scottsdale, AZ		—		4,076,412		—		11,281,969		—		15,358,381		15,358,381		—		2005		N/A
6950 Harbor View Blvd	Suffolk, VA		—		929,844		—		6,019,100		—		6,948,944		6,948,944		—		2004		N/A
8900-34 Brittany Way	Tampa, FL		—		537,194		—		2,285,528		—		2,822,723		2,822,723		—		2005		N/A
200-34 Kelsey Lane	Tampa, FL		—		330,097		—		3,539,403		—		3,869,500		3,869,500		—		2005		N/A
1646 Rankin Road	Houston, TX		—		329,961		—		3,108,463		—		3,438,423		3,438,423		—		2005		N/A
3701 Corporate Parkway	Upper Saucon, PA		—		1,078,674		—		3,362,688		—		4,441,362		4,441,362		—		2003		N/A
42 Kings Hill Avenue	West Malling, UK		—		—		—		12,864,051		—		12,864,051		12,864,051		—		2005		N/A
777 Township Line Road	Yardley, PA		—		3,436,013		—		6,123,418		—		9,559,431		9,559,431		—		2005		N/A
Subtotal Development in Progress		$	—	$	72,497,442	$	2,399,738	$	250,026,820	$	—	$	324,924,000	$	324,924,000	$	—

104

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2005

								Costs
								Capitalized											Date of
								Subsequent				Gross Amount Carried at End of Period					Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2005		12/31/05		Acquisition	(years)
LAND HELD FOR DEVELOPMENT
Perryman Road Land	Aberdeen, MD	$	—	$	12,046,811	$	—	$	—		$	12,046,811	$	—	$	12,046,811	$	—	2005	N/A
West Ridge Corporate Center Land	Aurora, IL		—		826,547		—		10,626,723			11,453,270		—		11,453,270		—	2003	N/A
LVCC Phase 2 Land	Bethlehem, PA		—		3,741,506		—		2,418,375			6,159,881		—		6,159,881		—	1998	N/A
Lehigh Valley Corporate Center Land	Bethlehem, PA		—		309,058		—		(42,339	)		266,719		—		266,719		—	1987	N/A
5705 Old Shakopee Road	Bloomington, MN		—		2,113,223		—		50,087			2,163,310		—		2,163,310		—	2001	N/A
Boca Colannade Yamato Road	Boca Raton, FL		—		3,649,792		—		1,103,719			4,753,511		—		4,753,511		—	1998	N/A
Rivers’ Bend Land	Chesterfield, VA		—		1,695,415		—		3,807,147			5,502,561		—		5,502,561		—	1995	N/A
501 Hewlett Packard Way	Chesterfield, VA		—		165,042		—		484,965			650,007		—		650,007		—	1996	N/A
Columbia Crossing Land	Columbis, MD		—		3,865,848		—		417,920			4,283,768		—		4,283,768		—	2000	N/A
Liberty Place Land	Eden Prairie, MN		—		4,500,641		—		(2,308,762	)		2,191,880		—		2,191,880		—	1998	N/A
Independence Pointe Land	Greenville, SC		—		932,484		—		1,512,636			2,445,120		—		2,445,120		—	1997	N/A
Southchase Business Park Land	Greenville, SC		—		1,369,712		—		596,521			1,966,232		—		1,966,232		—	1998	N/A
Volvo Center Land	Hampton, VA		—		1,650,423		—		(515,359	)		1,135,065		—		1,135,065		—	2000	N/A
Lakefront Plaza II Land	Hampton, VA		—		132,785		—		92,583			225,368		—		225,368		—	2001	N/A
Patapsco Valley Business Center	Hanover, MD		—		4,299,366		—		1,694,367			5,993,733		—		5,993,733		—	2004	N/A
Mendenhall Land	High Point, NC		—		1,910,135		—		4,253,485			6,163,620		—		6,163,620		—	1995	N/A
Piedmont Centre Land	High Point, NC		—		1,621,044		—		241,932			1,862,976		—		1,862,976		—	2004	N/A
Horsham Business Center Land	Horsham, PA		—		9,620,495		—		(9,539,695	)		80,800		—		80,800		—	2005	N/A
Commonwealth Corporate Center Land	Horsham, PA		—		3,047,683		—		3,995			3,051,677		—		3,051,677		—	2005	N/A
Central Green Land	Houston, TX		—		481,229		—		13,185			494,414		—		494,414		—	2001	N/A
Noxell Land	Hunt Valley, MD		—		2,166,068		—		838,437			3,004,505		—		3,004,505		—	2001	N/A
Liberty Business Park Land	Jacksonville, FL		—		448,097		—		90,019			538,116		—		538,116		—	1995	N/A
7024 AC Skinner Parkway	Jacksonville, FL		—		468,643		—		356,309			824,952		—		824,952		—	1995	N/A
Belfort Road	Jacksonville, FL		—		468,643		—		109,850			578,493		—		578,493		—	1998	N/A
Butler Plaza Land	Jacksonville, FL		—		1,303,792		—		1,714,406			3,018,198		—		3,018,198		—	1998	N/A
Salisbury Road Land	Jacksonville, FL		—		880,828		—		698,516			1,579,344		—		1,579,344		—	2000	N/A
Skinner Land Parcel B	Jacksonville, FL		—		2,306,191		—		592			2,306,783		—		2,306,783		—	2005	N/A
Boulders Business Center Land	Lehigh, PA		—		25,581,432		—		(6,263,273	)		19,318,159		—		19,318,159		—	2004	N/A
Mill Run Land	Lehigh, PA		—		2,882,221		—		31,423			2,913,643		—		2,913,643		—	2005	N/A
Commodore Business Park	Logan, NJ		—		1,756,748		—		(60,293	)		1,696,455		—		1,696,455		—	1995	N/A
Quarry Ridge Land	Malvern, PA		—		8,398,708		—		2,803,093			11,186,285		15,515		11,201,800		—	2001	N/A
Park Place South Land	Milwaukee, WI		—		2,362,904		—		1,180,869			3,543,774		—		3,543,774		—	1999	N/A
306 & 330 Fellowship Road	Mount Laurel, NJ		—		3,730,570		—		—			3,730,570		—		3,730,570		—	2005	N/A
Orlando Corporate Center Land	Orlando, FL		—		903,701		—		(73,850	)		829,851		—		829,851		—	2000	N/A
Beeland Industrial Park Land	Orlando, FL		—		1,780,809		—		563,071			2,343,880		—		2,343,880		—	2004	N/A
South Center Land — Phase II	Orlando, FL		—		838,853		—		(77,577	)		761,276		—		761,276		—	2004	N/A
Maitland Summit Park Land	Orlando, FL		—		4,388,905		—		23,512			4,412,417		—		4,412,417		—	2005	N/A
JFK & Arch Parking Lots/Land (West)	Philadelphia, PA		—		4,700,222		—		(1,633,306	)		3,066,916		—		3,066,916		—	2000	N/A
Eastport VII	Richmond, VA		—		787,091		—		843,729			1,630,820		—		1,630,820		—	1997	N/A
Eastport VIII	Richmond, VA		—		379,836		—		6,187			386,023		—		386,023		—	1997	N/A
Eastport IX	Richmond, VA		—		209,856		—		5,096			214,952		—		214,952		—	1997	N/A
Westerre Land	Richmond, VA		—		725,109		—		267,056			992,165		—		992,165		—	2003	N/A
IRS Distribution Ctr Land	Richmond, VA		—		100,000		—		(87,019	)		12,981		—		12,981		—	1995	N/A
Romulus Land	Romulus, MI		—		788,338		—		624,330			1,412,668		—		1,412,668		—	1998	N/A
Woodlands Center Land	Sandston, VA		—		928,555		—		285,461			1,214,017		—		1,214,017		—	1996	N/A
Northsight Land	Scottsdale, AZ		—		7,247,107		—		—			7,247,107		—		7,247,107		—	2005	N/A
Woodlands Center Land	Suffolk, VA		—		678,039		—		11,461			689,500		—		689,500		—	2005	N/A
Woodlands Center Land	Suffolk, VA		—		904,052		—		14,245			918,297		—		918,297		—	2005	N/A
Silo Bend Land	Tampa, FL		—		81,802		—		1,660,245			1,742,047		—		1,742,047		—	1996	N/A
Woodland Corporate Center Land	Tampa, FL		—		2,002,231		—		(223,628	)		1,778,604		—		1,778,604		—	1998	N/A
6119 W. Linebaugh Avenue	Tampa, FL		—		175,886		—		22,320			198,205		—		198,205		—	2000	N/A
Big Beaver Airport Land	Troy, MI		—		6,604,631		—		(4,948,875	)		1,655,756		—		1,655,756		—	1999	N/A
Subtotal Land Held for Development		$	—	$	144,959,109	$	—	$	13,693,891		$	158,637,485	$	15,515	$	158,653,000	$	—
Total All Properties		$	71,651,258	$	791,079,225	$	1,779,852,892	$	2,273,087,885		$	788,599,485	$	4,055,420,515	$	4,844,020,000	$	748,818,000

* Denotes property is collateralized under mortgages with Nationwide, Principal Mutual, American General, New York Life, Manufacturer’s Life, USG Annuity and Life and Jackson National Life totalling $264.2 million.

105

SCHEDULE III

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
(In thousands)

A summary of activity for real estate and accumulated depreciation is as follows:

	FOR THE YEARS ENDED
	DECEMBER 31,
	2005			2004			2003
REAL ESTATE:
Balance at beginning of year	$	4,491,412		$	4,129,270		$	3,860,260
Additions		658,041			410,293			309,818
Disposition of property		(305,433	)		(48,151	)		(40,808	)
Balance at end of year	$	4,844,020		$	4,491,412		$	4,129,270
ACCUMULATED DEPRECIATION:
Balance at beginning of year	$	692,649		$	584,841		$	483,807
Depreciation expense		123,278			114,199			105,093
Disposition of property		(67,109	)		(6,391	)		(4,059	)
Balance at end of year	$	748,818		$	692,649		$	584,841

106

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

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that its disclosure controls and procedures, as of the end of the period covered by this report, are functioning effectively to provide reasonable assurance that information required to be disclosed by the Company in its reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar function, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Reports on Internal Control Over Financial Reporting

Management’s Annual Reports on Internal Control Over Financial Reporting, which appear on pages 33 and 71, are incorporated by reference herein.

Attestation Reports of the Registered Public Accounting Firm

The Attestation Reports of the Registered Public Accounting Firm, which appear on pages 34 and 72, are incorporated by reference herein.

Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2005 that have materially affected or are reasonable likely to materially affect the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

107

PART III

ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANTS

The information required by Item 10 shall be included in the Proxy Statement to be filed relating to the Company’s 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 shall be included in the Proxy Statement to be filed relating to the Company’s 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

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

The information required by Item 12 shall be included in the Proxy Statement to be filed relating to the Company’s 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by Item 12 shall be included in the Proxy Statement to be filed relating to the Company’s 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required by Item 13 shall be included in the Proxy Statement to be filed relating to the Company’s 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 shall be included in the Proxy Statement to be filed relating to the Company’s 2006 Annual Meeting of Shareholders and is incorporated herein by reference.

108

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following consolidated Financial Statements of Liberty Property Trust and Liberty Property Limited Partnership are included in Item 8.

1. REPORTS OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND CONSOLIDATED FINANCIAL STATEMENTS

Management’s Annual Report on Internal Control Over Financial Reporting — Liberty Property Trust

Reports of Independent Registered Public Accounting Firm — Liberty Property Trust

Financial Statements — Liberty Property Trust

Balance Sheets:
Liberty Property Trust Consolidated as of December 31, 2005 and 2004

Statements of Operations:
Liberty Property Trust Consolidated for the years ended December 31, 2005, 2004 and 2003

Statements of Shareholders’ Equity:
Liberty Property Trust Consolidated for the years ended December 31, 2005, 2004 and 2003

Statements of Cash Flows:
Liberty Property Trust Consolidated for the years ended December 31, 2005, 2004 and 2003

Notes to Consolidated Financial Statements — Liberty Property Trust

Management’s Annual Report on Internal Control Over Financial Reporting — Liberty Property Limited Partnership

Reports of Independent Registered Public Accounting Firm — Liberty Property Limited Partnership

Financial Statements — Liberty Property Limited Partnership

Balance Sheets:
Liberty Property Limited Partnership Consolidated as of December 31, 2005 and 2004

Statements of Operations:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2005, 2004 and 2003

Statements of Owners’ Equity:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2005, 2004 and 2003

Statements of Cash Flows:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2005, 2004 and 2003

Notes to Consolidated Financial Statements — Liberty Property Limited Partnership

2. FINANCIAL STATEMENT SCHEDULES:

Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2005 for Liberty Property Trust

All other schedules are omitted because they are not required or the required information is shown in the financial statements or notes thereto.

Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2005 for Liberty Property Limited Partnership

All other schedules are omitted because they are not required or the required information is shown in the financial statements or notes thereto.

109

3. EXHIBITS

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed.

EXHIBIT NO.	DESCRIPTION
3.1.1	Amended and Restated Declaration of Trust of the Trust (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Current Report on Form 8-K filed with the Commission on June 25, 1997 (the “June 1997 Form 8-K”)).
3.1.2	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust Establishing and Fixing the Rights and Preferences of a Series of Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 1 filed with the Trust’s Registration Statement on Form 8-A filed with the Commission on August 8, 1997 (the “August 1997 Form 8-A”)).
3.1.3	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust Relating to Designation, Preferences, and Rights of Series A Junior Participating Preferred Shares of the Trust. (Incorporated by reference to Exhibit 3.1.3 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 3l, 1997).
3.1.4	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 9.25% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 3.1.2 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1999 (the “Second Quarter 1999 Form 10-Q”)).
3.1.5	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 9.125% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2000 (the “First Quarter 2000 Form 10-Q”)).
3.1.6	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.625% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002 (the “Second Quarter 2002 Form 10-Q”)).
3.1.7	Articles of Amendment to Amended and Restated Declaration of Trust of the Trust, filed with the State Department of Assessments and Taxation of Maryland on June 21, 2004. (Incorporated by reference to Exhibit 3.1 with Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004 (the “Second Quarter 2004 Form 10-Q”)).
3.1.8	Restatement of Amended Restated Declaration of Trust of the Trust, filed with the State Department of Assessments and Taxation of Maryland on June 21, 2004. (Incorporated by reference to Exhibit 3.2 to the Second Quarter 2004 Form 10-Q).
3.1.9	Articles Supplementary, as filed with the State Department of Assessments and Taxation of Maryland on September 1, 2004 (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on September 2, 2004 (the “September 2, 2004 Form 8-K”))
3.1.10	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.00% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on June 17, 2005 (the “June 17, 2005 Form 8-K”)).
3.1.11	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 6.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on June 30, 2005 (the “June 30, 2005 Form 8-K”)).
3.1.12	Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 6.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated

110

EXHIBIT NO.	DESCRIPTION
	by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on August 24, 2005.)
3.1.13	Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership, dated as of October 22, 1997 (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1997 (the “Third Quarter 1997 Form 10-Q”)).
3.1.14	First Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership. (Incorporated by reference to Exhibit 3.1.1 to the Second Quarter 1999 Form 10-Q).
3.1.15	Second Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership. (Incorporated by reference to Exhibit 3.1.2 to the First Quarter 2000 Form 10-Q).

111

EXHIBIT NO.	DESCRIPTION
3.1.16	Third Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 3.1.2 to the Second Quarter Form 2002 10-Q).
3.1.17	Fourth Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 10 to the September 2, 2004 Form 8-K).
3.1.18	Fifth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the June 17, 2005 8-K).
3.1.19	Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the June 30, 2005 8-K).
3.1.20	Amendment No. 1 to the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on August 24, 2005.)
3.1.21	Amendment No. 2 to the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on December 23, 2005.)
3.1.22*	Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership.
3.1.23	Amended and Restated By-Laws of the Trust. (Incorporated by reference to Exhibit 3.1.3 filed with the Registrants’ Quarterly Report Form 10-Q for the fiscal quarter ended June 30, 2000 (the “Second Quarter 2000 Form 10-Q”)).
4.1	Rights Agreement, dated as of December 17, 1997, by and between the Trust and the Rights Agent (Incorporated by reference to Exhibit 1 filed with the Trust’s Registration Statement on Form 8-A filed with the Commission on December 23, 1997).
4.1.1	First Amended and Restated Rights Agreement, dated as of September 14, 2004, between Liberty Property Trust and Equiserve Trust Company, N.A., as Rights Agent (Incorporated by reference to Exhibit 4 to the Current Report on Form 8-K of the Registrant filed with the Commission on September 14, 2004).
4.2	Indenture (the “First Indenture”), dated as of August 14, 1997, between the Operating Partnership, as Obligor, and The First National Bank of Chicago (“First Chicago”), as Trustee (Incorporated by reference to Exhibit 10.1 filed with the Third Quarter 1997 Form 10-Q).
4.3	First Supplemental Indenture, dated as of August 14, 1997, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the First Indenture and relating to $100,000,000 principal amount of the 7.10% Senior Notes due 2004 and $100,000,000 principal amount of the 7.25% Senior Notes due 2007 of the Operating Partnership (Incorporated by reference to Exhibit 10.2 filed with the Third Quarter 1997 Form 10-Q).
4.4	Senior Indenture (the “Second Indenture”), dated as of October 24, 1997, between the Operating Partnership, as Obligor, and First Chicago, as Trustee (Incorporated by reference to Exhibit 10.3 filed with the Third Quarter 1997 Form 10-Q).
4.5	First Supplemental Indenture, dated as of October 24, 1997, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the Second Indenture and relating to the Fixed Rate and Floating Rate Medium-Term Notes due Nine Months or More from Date of Issue of the

112

EXHIBIT NO.	DESCRIPTION
	Operating Partnership (Incorporated by reference to Exhibit 10.4 filed with the Third Quarter 1997 Form 10-Q).
4.6	Second Supplemental Indenture, dated as of January 12, 1998, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the Second Indenture, and relating to the Fixed Rate and Floating Rate Medium-Term Notes due Nine Months or more from Date of Issue of the Operating Partnership (Incorporated by reference to Exhibit 4.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998 (the “First Quarter 1998 Form 10-Q”)).
4.7	Third Supplemental Indenture, dated as of April 20, 1999, between the Operating Partnership, as Issuer, and the First National Bank of Chicago, as Trustee, supplementing the Second Indenture and relating to the $250,000,000 principal amount of 7.75% Senior Notes, due 2009 of the Operating Partnership (Incorporated by reference to Exhibit 4 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1999 (the “First Quarter 1999 Form 10-Q”)).
4.8	Fourth Supplemental Indenture, dated as of July 26, 2000, between the Operating Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between the Operating Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $200,000,000 principal amount of 8.5% Senior Notes due 2010 of the Operating Partnership. (Incorporated by reference to Exhibit 4 to the Second Quarter 2000 Form 10-Q).
4.9	Fifth Supplemental Indenture, dated as of March 14, 2001, between the Operating Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between the Operating Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $250,000,000 principal amount of 7.25% Senior Notes due 2011 of the Operating Partnership. (Incorporated by reference to Exhibit 4.10 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 2000).
4.10	Sixth Supplemental Indenture, dated as of August 22, 2002, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $150,000,000 principal amount of 6.375% Senior Notes due 2012 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002 (the “Third Quarter 2002 Form 10-Q”)).
4.11	Seventh Supplemental Indenture, dated as of August 10, 2004, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, National Association. (as successor to the First National Bank of Chicago), as Trustee, and relating to $200,000,000 principal amount of 5.65% Senior Notes due 2012 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.1.2 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (the “Third Quarter 2004 Form 10-Q”)).
4.12	Eighth Supplemental Indenture, dated as of March 1, 2005, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, National Association (as successor to the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 5.125% Senior Notes due 2015 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.2 filed with the Registrants’ Current Report on Form 8-K/A filed with the Commission on March 1, 2005 (the “March 2005 Form 8-K”)).
4.13	Note, Relating to the Issuance by the Operating Partnership, on January 22, 1998, of $75 Million Principal Amount of its 6.375% Medium-Term Notes due 2013, Putable/Callable 2003 (Incorporated by reference to Exhibit 4.2 filed with the First Quarter 1998 Form 10-Q).

113

EXHIBIT NO.	DESCRIPTION
4.14	Note, Relating to the Issuance by the Operating Partnership, on January 23, 1998, of $100 Million Principal Amount of its 7.50% Medium-Term Notes due 2018 (Incorporated by reference to Exhibit 4.3 filed with the First Quarter 1998 Form 10-Q).
4.15	Note, Relating to the Issuance by the Operating Partnership, on June 5, 1998, of $100 Million Principal Amount of its 6.60% Medium-Term Notes due 2002. (Incorporated by reference to Exhibit 4 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998 (the “Second Quarter 1998 Form 10-Q”)).
4.16	Note, Relating to the Issuance by the Operating Partnership on November 24, 1998, of $20 Million Principal Amount of its 8.125% Medium-Term Notes due January 15, 2009 (Incorporated by reference to Exhibit 4.11 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
10.1	Liberty Property Trust Amended and Restated Share Incentive Plan dated as of March 15, 2005 (Incorporated by reference to the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2005 (the “First Quarter 2005 Form 10-Q”)).
10.2	Contribution Agreement (Incorporated by reference to Exhibit 10.5 filed with the Form S-11).
10.3	Amended and Restated Limited Partnership Agreements of Pre-existing Pennsylvania Partnerships (Incorporated by reference to Exhibit 10.6 filed with the Form S-11).
10.4	Agreement of Sale for the Acquisition Properties (Incorporated by reference to Exhibit 10.7 filed with the Form S-11).
10.5	Option Agreement and Right of First Offer (Incorporated by reference to Exhibit 10.8 filed with the Form S-11).
10.6	Form of Indemnity Agreement (Incorporated by reference to Exhibit 10.9 filed with the Form S-11).
10.7	Contribution Agreement among the Trust, the Operating Partnership and the Contributing Owners described therein, related to the Lingerfelt Properties (Incorporated by reference to Exhibit 10.1 filed with the Registrants’ Current Report on Form 8-K filed with the Commission on March 3, 1995).
10.8*	Amended and Restated Credit Agreement, dated as of December 22, 2005, by and among the Operating Partnership, the Trust, certain affiliated co-borrowers, with Bank of America, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, Wachovia Bank, National Association, SunTrust Bank and Citizens Bank of Pennsylvania, as Documentation Agents, PNC Bank, National Association and Wells Fargo Bank, National Association, as Managing Agents, Banc of America Securities LLC and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint Bookrunners, and the lenders a party thereto.
10.9	Liberty Property Trust — Amended Management Severance Plan. (Incorporated by reference to Exhibit 10.9 filed with Registrants’ Annual Report on Form 10-K for the year ended December 31, 2001).
10.10	Liberty Property Trust — Employee Stock Purchase Plan. (Incorporated by reference to Exhibit 10.14 filed with the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000).
10.11	Description of Compensation of Non-Employee Trustees. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrants filed with the Commission on February 23, 2005.)

114

EXHIBIT NO.	DESCRIPTION
10.12	Form of Restricted Share Grant under the Liberty Property Trust Amended and Restated Share Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrants filed with the Commission on February 24, 2005 (the “February 24, 2005 8-K”)).
10.13	Form of Option Grant under the Liberty Property Trust Amended and Restated Share Incentive Plan. (Incorporated by reference to Exhibit 10.2 to the February 24, 2005 8-K).
10.14	Certain Elements of the Liberty Property Trust Executive Compensation Program. (Incorporated by reference to Exhibit 10.3 to the February 24, 2005 8-K).
12*	Statement re: Computation of Ratios.
21*	Subsidiaries.
23.1*	Consent of Ernst & Young LLP relating to financial statements of the Trust.
23.2*	Consent of Ernst & Young LLP relating to financial statements of the Operating Partnership.
31.1*	Certifications of the Chief Executive Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2*	Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.3*	Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.4*	Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1*	Certifications of the Chief Executive Officer of Liberty Property Trust required under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.2*	Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.3*	Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

115

EXHIBIT NO.

DESCRIPTION

32.4*

Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

* Filed herewith

116

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.

	LIBERTY PROPERTY TRUST
Date: March 14, 2006	By: /s/ WILLIAM P. HANKOWSKY
	WILLIAM P. HANKOWSKY
	CHAIRMAN, PRESIDENT AND
	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 and on the dates indicated.

/s/ WILLIAM P. HANKOWSKY	Chairman of the Board of Trustees,	March 14, 2006
William P. Hankowsky	President and Chief Executive Officer (Principal Executive Officer)
/s/ GEORGE J. ALBURGER, JR.	Executive Vice President and	March 14, 2006
George J. Alburger, Jr.	Chief Financial Officer (Principal Financial and Accounting Officer)
/s/ M. LEANNE LACHMAN	Trustee	March 14, 2006
M. Leanne Lachman
/s/ FREDERICK F. BUCHHOLZ	Trustee	March 14, 2006
Frederick F. Buchholz
/s/ J. ANTHONY HAYDEN	Trustee	March 14, 2006
J. Anthony Hayden
/s/ DAVID L. LINGERFELT	Trustee	March 14, 2006
David L. Lingerfelt
/s/ JOHN A. MILLER, CLU	Trustee	March 14, 2006
John A. Miller, CLU
/s/ STEPHEN B. SIEGEL	Trustee	March 14, 2006
Stephen B. Siegel
/s/ THOMAS C. DELOACH, JR.	Trustee	March 14, 2006
Thomas C. DeLoach, Jr.
/s/ DANIEL P. GARTON	Trustee	March 14, 2006
Daniel P. Garton
/s/ JOSE A. MEJIA	Trustee	March 14, 2006
Jose A. Mejia

117

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.

	LIBERTY PROPERTY LIMITED PARTNERSHIP
	BY: Liberty Property Trust
	General Partner
Date: March 14, 2006	By: /s/ WILLIAM P. HANKOWSKY
	WILLIAM P. HANKOWSKY
	CHAIRMAN, PRESIDENT AND
	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 and on the dates indicated.

/s/ WILLIAM P. HANKOWSKY	Chairman of the Board of Trustees, President
William P. Hankowsky	and Chief Executive Officer Trustee of the General Partner	March 14, 2006
/s/ M. LEANNE LACHMAN	Trustee of the General Partner	March 14, 2006
M. Leanne Lachman
/s/ FREDERICK F. BUCHHOLZ	Trustee of the General Partner	March 14, 2006
Frederick F. Buchholz
/s/ J. ANTHONY HAYDEN	Trustee of the General Partner	March 14, 2006
J. Anthony Hayden
/s/ DAVID L. LINGERFELT	Trustee of the General Partner	March 14, 2006
David L. Lingerfelt
/s/ JOHN A. MILLER, CLU	Trustee of the General Partner	March 14, 2006
John A. Miller, CLU
/s/ STEPHEN B. SIEGEL	Trustee of the General Partner	March 14, 2006
Stephen B. Siegel
/s/ THOMAS C. DELOACH, JR.	Trustee of the General Partner	March 14, 2006
Thomas C. DeLoach, Jr.
/s/ DANIEL P. GARTON	Trustee of the General Partner	March 14, 2006
Daniel P. Garton
/s/ JOSE A. MEJIA	Trustee of the General Partner	March 14, 2006
Jose A. Mejia

118

EXHIBIT INDEX

EXHIBIT NO.	DESCRIPTION
3.1.22	Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership.
10.8	Amended and Restated Credit Agreement, (dated as of December 22, 2005) with Bank of America, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, Wachovia Bank, National Association, Sun Trust Bank and Citizens Bank of Pennsylvania, as Documentation Agents, PNC Bank, National Association and Wells Fargo Bank, National Association, as Managing Agents, Banc of America Securities LLC and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint Bookrunners, and the lenders a party thereto.
12	Statement re: Computation of Ratios.
21	Subsidiaries.
23.1	Consent of Ernst & Young LLP relating to financial statements of the Trust.
23.2	Consent of Ernst & Young LLP relating to financial statements of the Operating Partnership.
31.1	Certifications of the Chief Executive Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2	Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.3	Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.4	Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1	Certifications of the Chief Executive Officer of Liberty Property Trust required under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.2	Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.3	Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
32.4	Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that

119

section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

120

EX-3.1.22

                          Schedule A December 31,2005

                                                                  EXHIBIT 3.1.22

                      LIBERTY PROPERTY LIMITED PARTNERSHIP
                              PARTNERSHIP INTERESTS
                             AS OF DECEMBER 31, 2005



                                       Number of
                                      Partnership
           Limited Partners            Interests       %
- ------------------------------------  -----------  ----------
                                             
 1 Balitsaris, Peter                       58,542      0.0637%
 2 Carr, Clai                             115,000      0.1252%
 3 Castorina, John                         14,491      0.0158%
 4 Denny, Joseph                          260,250      0.2832%
 5 Felix, Jill                            195,043      0.2123%
 6 Fenza, Robert                          195,043      0.2123%
 7 Fitzgerald, Ward                        14,491      0.0158%
 8 Gildea, Larry                           93,319      0.1016%
 9 Goldschmidt, Robert                     22,895      0.0249%
10 Hagan, Michael                          14,491      0.0158%
11 Hammers, David                         244,426      0.2660%
12 Kiel, Bob                               14,491      0.0158%
13 Kline, Earl                             19,128      0.0208%
14 Lutz, Jim                               37,312      0.0406%
15 Mazzerralli, James                      14,491      0.0158%
16 Messaros, Sharron                        7,245      0.0079%
17 Morrissey, Mary Beth                    14,491      0.0158%
18 Price, Leslie                           99,970      0.1088%
19 Reichert, Joseph                        27,242      0.0296%
20 Estate of Willard Rouse                460,418      0.5011%
21 Trust for Congdon Children              95,347      0.1038%
22 Trust for Hammers Children              95,348      0.1038%
23 Trust for Mary Rouse                    13,621      0.0148%
24 Trust for Anne Rouse                    13,621      0.0148%
25 Trust for Rouse Younger Children        81,726      0.0889%
26 Trust for Laurie Hammers                 5,506      0.0060%
27 Weitzmann, Mike                         42,312      0.0460%
28 Liberty Special Purpose Trust           10,574      0.0115%
29 Thomas, Rebecca                          8,076      0.0088%
30 Trust for J. Ryan Lingerfelt            15,625      0.0170%
31 Trust for Justin M. Lingerfelt          15,625      0.0170%
32 Trust for Daniel K. Lingerfelt          15,625      0.0170%
33 Trust for Catherine E. Lingerfelt       15,625      0.0170%
34 Lingerfelt, Alan T.                    317,500      0.3455%
35 Lingerfelt, L. Harold                  164,375      0.1789%
36 Lingerfelt, David L.                    30,674      0.0334%
37 Ferguson, Morris U.                      6,000      0.0065%


                                     Page 1


                           Schedule A December 31,2005

                                                                  EXHIBIT 3.1.22

                      LIBERTY PROPERTY LIMITED PARTNERSHIP
                        PARTNERSHIP INTERESTS - CONTINUED
                             AS OF DECEMBER 31, 2005



                                             Number of
                                            Partnership
           Limited Partners                  Interests       %
- ------------------------------------------  -----------  --------
                                                   
38 Lingerfelt, Carl C.                         10,900      0.0119%
39 Wright, Murray H.                            7,500      0.0082%
40 Latimer, Erle Marie                         12,500      0.0136%
41 Samet, Norman G.                            14,013      0.0153%
42 Mann, Bernard                               14,012      0.0152%
43 Stender, Stewart R.                         57,613      0.0627%
44 Rouse & Associates Maryland Partnership     20,000      0.0218%
45 Helwig, A. Carl                            224,737      0.2446%
46 Sunday, James J.                            79,348      0.0864%
47 Walters, Charles J.                        155,723      0.1695%
48 Doyle, Margaret A.                          19,380      0.0211%
49 Stanford Baratz Revocable Trust              9,044      0.0098%
50 F. Greek Logan Properties, LLC              33,682      0.0367%

           Preferred Limited Partners

51 Belair Real Estate Corporation
52 Belrose Realty Corporation
53 Bel Alliance Properties, LLC
54 Belwater Realty Corp.
55 Montebello Realty Corp.
56 JPM Mosaic VI REIT, Inc.

                   General Partner

57 Liberty Property Trust                          GP     96.1600%
                                                         --------

   Total Ownership                                       100.0000%


   General Partner - The partnership units for Liberty Property Trust have
   not been reflected because there is no conversion of units to shares by
   the general partner.

                                     Page 2

EX-10.8

                                                                    EXHIBIT 10.8

                                               PUBLISHED CUSIP NUMBER: 53117RAA7

                              AMENDED AND RESTATED

                                CREDIT AGREEMENT

                                      AMONG

                      LIBERTY PROPERTY LIMITED PARTNERSHIP

                                       AND

                             LIBERTY PROPERTY TRUST

                                       AND

                 BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT

                                       AND

                 JPMORGAN CHASE BANK, N.A., AS SYNDICATION AGENT

                                       AND

                      WACHOVIA BANK, NATIONAL ASSOCIATION,
                SUNTRUST BANK, AND CITIZENS BANK OF PENNSYLVANIA,
                             AS DOCUMENTATION AGENTS

                                       AND

                       PNC BANK, NATIONAL ASSOCIATION AND
                     WELLS FARGO BANK, NATIONAL ASSOCIATION,
                               AS MANAGING AGENTS

                                       AND

                            THE LENDERS PARTY HERETO

                                       AND

                       BANC OF AMERICA SECURITIES LLC AND
                          J.P. MORGAN SECURITIES INC.,
                  AS JOINT LEAD ARRANGERS AND JOINT BOOKRUNNERS



                                TABLE OF CONTENTS



                                                                                                                      Page
                                                                                                                      ----
                                                                                                                   
Section 1. DEFINITIONS OF RULES OF INTERPRETATION..............................................................         1

         Section 1.1.        Definitions.......................................................................         1

         Section 1.2.        Rules of Interpretation...........................................................        25

         Section 1.3.        Exchange Rates; Currency Equivalents..............................................        26

         Section 1.4.        Additional Alternative Currencies.................................................        26

         Section 1.5.        Change of Currency................................................................        27

         Section 1.6.        Times of Day......................................................................        28

         Section 1.7.        Letter of Credit Amounts..........................................................        28

Section 2. REVOLVING CREDIT FACILITY...........................................................................        28

         Section 2.1.        Loans.............................................................................        28

         Section 2.2.        Changes in Total Commitment.......................................................        29

         Section 2.3.        The Notes.........................................................................        31

         Section 2.4.        Interest on Loans.................................................................        32

         Section 2.5.        Requests for Loans................................................................        32

         Section 2.6.        Conversion and Continuation Options...............................................        33

         Section 2.7.        Funds for Loans...................................................................        34

         Section 2.8.        Swingline Loans...................................................................        35

         Section 2.9.        Letters of Credit.................................................................        37

         Section 2.10.       Competitive Bid Loans.............................................................        41

         Section 2.11.       Sharing Event.....................................................................        45

Section 3. REPAYMENT OF THE LOANS..............................................................................        48

         Section 3.1.        Maturity..........................................................................        48

         Section 3.2.        Mandatory Repayments of Loan......................................................        48

         Section 3.3.        Optional Repayments of Loans......................................................        48

         Section 3.4.        Currency Matters..................................................................        50

Section 4. CERTAIN GENERAL PROVISIONS..........................................................................        50

         Section 4.1.        Closing Fees......................................................................        50




                                TABLE OF CONTENTS

                                  (continued)



                                                                                                                      Page
                                                                                                                      ----
                                                                                                                   
         Section 4.2.        Other Fees........................................................................        51

         Section 4.3.        Funds for Payments................................................................        51

         Section 4.4.        Computations......................................................................        52

         Section 4.5.        Additional Costs, Etc.............................................................        52

         Section 4.6.        Capital Adequacy..................................................................        53

         Section 4.7.        Certificate.......................................................................        53

         Section 4.8.        Indemnity.........................................................................        53

         Section 4.9.        Default Interest and Late Charges.................................................        54

         Section 4.10.       Inability to Determine Eurocurrency Rate..........................................        54

         Section 4.11.       Illegality........................................................................        54

         Section 4.12.       Replacement of Lenders............................................................        55

         Section 4.13.       Sharing of Payments by Lenders....................................................        55

         Section 4.14.       Alternative Currencies............................................................        56

Section 5. UNENCUMBERED PROPERTIES; NO LIMITATION ON RECOURSE..................................................        57

         Section 5.1.        Unencumbered Properties and Unencumbered Development Properties...................        57

         Section 5.2.        Waivers by Requisite Lenders......................................................        57

         Section 5.3.        Rejection of Unencumbered Properties and Unencumbered Development Properties......        57

         Section 5.4.        Change in Circumstances...........................................................        58

         Section 5.5.        No Limitation on Recourse.........................................................        58

         Section 5.6.        Additional Guarantors.............................................................        58

Section 6. REPRESENTATIONS AND WARRANTIES......................................................................        58

         Section 6.1.        Authority; Etc....................................................................        58

         Section 6.2.        Governmental Approvals and Consents...............................................        60

         Section 6.3.        Title to Properties...............................................................        60

         Section 6.4.        Financial Statements..............................................................        60

         Section 6.5.        No Material Changes, Etc..........................................................        61


                                       ii


                                TABLE OF CONTENTS

                                  (continued)


                                                                                                                      Page
                                                                                                                      ----
                                                                                                                   
         Section 6.6.        Franchises, Patents, Copyrights, Etc..............................................        61

         Section 6.7.        Litigation........................................................................        61

         Section 6.8.        No Materially Adverse Contracts, Etc..............................................        61

         Section 6.9.        Compliance With Other Instruments, Laws, Etc......................................        62

         Section 6.10.       Tax Status........................................................................        62

         Section 6.11.       Event of Default..................................................................        62

         Section 6.12.       Investment Company Act............................................................        62

         Section 6.13.       Absence of Financing Statements, Etc..............................................        62

         Section 6.14.       Status of the Company.............................................................        62

         Section 6.15.       Certain Transactions..............................................................        62

         Section 6.16.       Benefit Plans; Multiemployer Plans; Guaranteed Pension Plans......................        63

         Section 6.17.       Regulations U and X...............................................................        63

         Section 6.18.       Environmental Compliance..........................................................        63

         Section 6.19.       Subsidiaries and Affiliates.......................................................        65

         Section 6.20.       Loan Documents....................................................................        65

         Section 6.21.       Buildings on the Unencumbered Properties..........................................        65

         Section 6.22.       Insurance.........................................................................        65

         Section 6.23.       Disclosure........................................................................        65

         Section 6.24.       Solvency..........................................................................        66

Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER...............................................................        66

         Section 7.1.        Punctual Payment..................................................................        66

         Section 7.2.        Maintenance of Office.............................................................        66

         Section 7.3.        Records and Accounts..............................................................        66

         Section 7.4.        Financial Statements, Certificates and Information................................        66

         Section 7.5.        Notices...........................................................................        68

         Section 7.6.        Existence; Maintenance of REIT Status; Maintenance of Properties..................        70

         Section 7.7.        Insurance.........................................................................        71


                                       iii


                                TABLE OF CONTENTS

                                  (continued)


                                                                                                                      Page
                                                                                                                      ----
                                                                                                                   
         Section 7.8.        Taxes.............................................................................        71

         Section 7.9.        Inspection of Properties and Books................................................        71

         Section 7.10.       Compliance with Laws, Contracts, Licenses, and Permits............................        71

         Section 7.11.       Use of Proceeds...................................................................        72

         Section 7.12.       INTENTIONALLY OMITTED.............................................................        72

         Section 7.13.       Notices of Significant Transactions...............................................        72

         Section 7.14.       Further Assurances................................................................        72

         Section 7.15.       Environmental Indemnification.....................................................        72

         Section 7.16.       Response Actions..................................................................        73

         Section 7.17.       Employee Benefit Plans............................................................        73

Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER..........................................................        74

         Section 8.1.        Restrictions on Recourse IndebtedneSection .......................................        74

         Section 8.2.        Restrictions on Investments.......................................................        74

         Section 8.3.        Merger, Consolidation and Other Fundamental Changes...............................        75

         Section 8.4.        Sale and Leaseback................................................................        76

         Section 8.5.        Compliance with Environmental Laws................................................        76

         Section 8.6.        Distributions.....................................................................        76

         Section 8.7.        Equity Repurchase Payments........................................................        77

         Section 8.8.        Preferred Distributions...........................................................        77

         Section 8.9.        Liens.............................................................................        77

         Section 8.10.       Negative Pledge...................................................................        77

         Section 8.11.       Transactions with Affiliates......................................................        77

         Section 8.12.       Change in Nature of BusineSection ................................................        78

         Section 8.13.       Dispositions......................................................................        78

Section 9. FINANCIAL COVENANTS OF THE BORROWER.................................................................        78

         Section 9.1.        Unsecured Debt to Value of All Unencumbered Properties............................        78

         Section 9.2.        Total Debt to Total Asset Value...................................................        78


                                       iv

                                TABLE OF CONTENTS

                                   (continued)


                                                                                                                      Page
                                                                                                                      ----
                                                                                                                   
         Section 9.3.        Maximum Secured Debt..............................................................        78

         Section 9.4.        Minimum Tangible Net Worth........................................................        78

         Section 9.5.        Unencumbered Interest Coverage Ratio..............................................        78

         Section 9.6.        Adjusted EBITDA to Fixed Charges..................................................        79

         Section 9.7.        Pro Forma Calculations............................................................        79

         Section 9.8.        Covenant Calculations.............................................................        79

Section 10. CONDITIONS TO EFFECTIVENESS........................................................................        79

         Section 10.1.       Loan Documents....................................................................        79

         Section 10.2.       Certified Copies of Organization Documents; Good Standing Certificates............        80

         Section 10.3.       By-laws; Resolutions..............................................................        80

         Section 10.4.       Incumbency Certificate; Authorized Signers........................................        80

         Section 10.5.       Opinions of Counsel Concerning Organization and Loan Documents....................        80

         Section 10.6.       Payment of Fees...................................................................        80

         Section 10.7.       Closing Certificate...............................................................        80

         Section 10.8.       Compliance Certificate............................................................        81

Section 11. CONDITIONS TO ALL CREDIT ADVANCES..................................................................        81

         Section 11.1.       Representations True; No Event of Default; Compliance Certificate.................        81

         Section 11.2.       No Legal Impediment...............................................................        81

         Section 11.3.       Governmental Regulation...........................................................        81

         Section 11.4.       Proceedings and Documents.........................................................        81

Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC...............................................................        82

         Section 12.1.       Events of Default and Acceleration................................................        82

         Section 12.2.       Termination of Commitments........................................................        85

         Section 12.3.       Remedies..........................................................................        85

         Section 12.4.       Distribution of Enforcement Proceeds..............................................        85

Section 13. SETOFF.............................................................................................        86


                                        v


                                TABLE OF CONTENTS

                                   (continued)


                                                                                                                      Page
                                                                                                                      ----
                                                                                                                   
Section 14. THE AGENT..........................................................................................        87

         Section 14.1.       Authorization.....................................................................        87

         Section 14.2.       Employees and Agents..............................................................        87

         Section 14.3.       No Liability......................................................................        87

         Section 14.4.       No Representations................................................................        87

         Section 14.5.       Payment...........................................................................        88

         Section 14.6.       Holders of Notes..................................................................        89

         Section 14.7.       Indemnity.........................................................................        89

         Section 14.8.       Agent as Lender...................................................................        89

         Section 14.9.       Resignation and Removal...........................................................        89

         Section 14.10.      Notification of Defaults and Events of Default and other Notices..................        90

         Section 14.11.      Duties in the Case of Enforcement.................................................        90

Section 15. EXPENSES...........................................................................................        90

Section 16. INDEMNIFICATION....................................................................................        91

Section 17. SURVIVAL OF COVENANTS, ETC.........................................................................        92

Section 18. ASSIGNMENT; PARTICIPATIONS; ETC....................................................................        92

         Section 18.1.       Conditions to Assignment by Lenders...............................................        92

         Section 18.2.       Certain Representations and Warranties; Limitations; Covenants....................        93

         Section 18.3.       Register..........................................................................        93

         Section 18.4.       New Notes.........................................................................        94

         Section 18.5.       Participations....................................................................        94

         Section 18.6.       Pledge by Lender..................................................................        95

         Section 18.7.       No Assignment by Borrower.........................................................        95

         Section 18.8.       Disclosure........................................................................        95

         Section 18.9.       Designated Banks..................................................................        95

Section 19.     NOTICES, ETC...................................................................................        96

Section 20.     GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.............................................        98


                                       vi


                                TABLE OF CONTENTS

                                  (continued)


                                                                                                                      Page
                                                                                                                      ----
                                                                                                                   
Section 21.     HEADINGS.......................................................................................        98

Section 22.     COUNTERPARTS...................................................................................        98

Section 23.     ENTIRE AGREEMENT...............................................................................        98

Section 24.     WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.................................................        98

Section 25.     CONSENTS, AMENDMENTS, WAIVERS, ETC.............................................................        99

Section 26.     SEVERABILITY...................................................................................       100

Section 27.     ACKNOWLEDGMENTS................................................................................       100

Section 28.     NO WAIVER; CUMULATIVE REMEDIES.................................................................       100

Section 29.     INTEREST RATE LIMITATION.......................................................................       100

Section 30.     USA PATRIOT ACT NOTICE.........................................................................       101

Section 31.     JUDGMENT CURRENCY..............................................................................       101

Section 32.     TRANSITIONAL ARRANGEMENTS......................................................................       101


                                       vii


Exhibit A        Form of Note
Exhibit B        Form of Loan Request
Exhibit C        Form of Compliance Certificate
Exhibit D        Form of Swingline Loan Request
Exhibit E        Form of Assignment and Acceptance
Exhibit F        Form of Letter of Credit Request
Exhibit G        Form of Letter of Credit Application
Exhibit H        Form of Competitive Bid Quote Request
Exhibit I        Form of Invitation for Competitive Bid Quotes
Exhibit J        Form of Competitive Bid Quote
Exhibit K        Form of Acceptance of Competitive Bid Quote
Exhibit L        Form of Joinder Agreement
Exhibit M        Form of Guaranty Agreement
Exhibit N        Form of Designated Bank Note
Exhibit O        Form of Designation Agreement

Schedule 1       Lenders; Domestic and Eurocurrency Lending Offices
Schedule 1.1(a)  Unencumbered Properties and Unencumbered Development Properties
Schedule 1.1(b)  Eligible Ground Leases
Schedule 1.1(c)  Mandatory Cost Schedule
Schedule 1.2     Commitments and Commitment Percentages
Schedule 1.3     Related Companies, Guarantors and Unconsolidated Entities
Schedule 1.4     Existing Letter of Credit
Schedule 6.3     Title to Properties
Schedule 6.7     Litigation
Schedule 6.15    Insider Transactions
Schedule 6.16    Employee Benefit Plans
Schedule 6.18    Environmental Matters
Schedule 6.19    Company Assets
Schedule 6.21    Building Structural Defects, etc.
Schedule 6.22    Insurance
Schedule 8.2(d)  Investments

                                      viii


                      AMENDED AND RESTATED CREDIT AGREEMENT

      This AMENDED AND RESTATED CREDIT AGREEMENT is made as of the 22nd day of
December, 2005, by and among LIBERTY PROPERTY LIMITED PARTNERSHIP, a
Pennsylvania limited partnership (the "BORROWER"), LIBERTY PROPERTY TRUST, a
Maryland trust (the "COMPANY"), BANK OF AMERICA, N.A., a national banking
association ("BANK OF AMERICA"), the other lending institutions which are listed
from time to time on Schedule 1 (collectively, with Bank of America, the
"LENDERS"), JPMORGAN CHASE BANK, N.A., a national banking association ("JPMCB"),
as syndication agent, and BANK OF AMERICA, N.A., as administrative agent for
itself and such other lending institutions (the "AGENT").

      WHEREAS, the Borrower, Bank of America (successor by merger to Fleet
National Bank, a national banking association), as administrative agent, and
certain other lenders are party to that certain Credit Agreement, dated as of
January 16, 2003, as amended by the First Amendment to Credit Agreement, dated
as of December 20, 2004 (as so amended, the "ORIGINAL CREDIT AGREEMENT"),
pursuant to which such lenders extended credit to the Borrower on the terms set
forth therein;

      WHEREAS, the Borrower, Bank of America (successor by merger to Fleet
National Bank, a national banking association), as administrative agent, and
certain other lenders are party to that certain Multi-Currency Credit Agreement,
dated as of January 16, 2003, as amended by the First Amendment to
Multi-Currency Credit Agreement, dated as of December 20, 2004 (as so amended,
the "MULTI-CURRENCY CREDIT AGREEMENT", together with the Original Credit
Agreement, the "EXISTING CREDIT AGREEMENTS"), pursuant to which such lenders
extended credit to the Borrower on the terms set forth therein; and

      WHEREAS, the Borrower, Bank of America, as administrative agent, and the
Lenders party hereto have agreed to enter into this Agreement to amend and
restate in their entireties the Existing Credit Agreements as set forth herein.

      NOW, THEREFORE, to accomplish these purposes, the Agent, the Borrower, the
Company and the Lenders hereby agree as follows:

      Section 1. DEFINITIONS OF RULES OF INTERPRETATION.

      Section 1.1. Definitions. The following terms shall have the meanings set
forth in this Section l or elsewhere in the provisions of this Agreement
referred to below:

      ACT. See Section 30.



      ADDITIONAL TRANCHE A COMMITMENT. The portion (if any) of any Lender's
Tranche A Commitment which will become effective on the Commitment Increase Date
if the Total Commitment is increased pursuant to Section 2.2.

      ADDITIONAL COMMITMENT LENDERS. Those Lenders which provide an Additional
Tranche A Commitment.

      ADJUSTED EBITDA. EBITDA minus the Reserve Amount for all of the applicable
Real Estate Assets and adjusted to remove the effect of recognizing rental
income on a straight-line basis over the applicable lease terms.

      ADJUSTED NET OPERATING INCOME. Net Operating Income minus the Reserve
Amount for all of the applicable Real Estate Assets and adjusted to remove the
effect of recognizing rental income on a straight-line basis over the applicable
lease terms.

      AFFILIATED LENDERS. Any commercial bank or financial institution which is
(i) the parent corporation of any of the Lenders, (ii) a wholly-owned subsidiary
of any of the Lenders or (iii) a wholly-owned subsidiary of the parent
corporation of any of the Lenders.

      AFFILIATE. With respect to any Person, another Person that directly or
indirectly through one or more intermediaries, controls or is controlled by or
is under common control with the Person specified.

      AGENT. Bank of America, N.A. acting in its capacity as administrative
agent for the Lenders or any successor agent.

      AGENT'S HEAD OFFICE. The Agent's head office located at 901 Main Street,
Dallas, Texas 75202-3714, or at such other location as the Agent may designate
from time to time.

      AGREEMENT. This Credit Agreement, including the Schedules and Exhibits
hereto as it may be amended, modified or supplemented from time to time.

      AGREEMENT CURRENCY. See Section 31.

      ALTERNATIVE CURRENCY. Each of Euro, Sterling or such other currency (other
than Dollars) as may be approved in accordance with Section 1.4, in each case,
so long as (a) such currency is readily available to all Lenders holding a
Tranche B Commitment and is freely transferable and freely convertible to
Dollars and (b) Reuters (or any successor thereto) reports BBA LIBOR for such
currency for the relevant Interest Period.

      ALTERNATIVE CURRENCY EQUIVALENT. At any time, with respect to any amount
denominated in Dollars, the equivalent amount thereof in the applicable
Alternative Currency as determined by the Agent or the L/C Issuer, as the case
may be, at such time on the basis of the Spot Rate (determined in respect of the
most recent Revaluation Date) for the purchase of such Alternative Currency with
Dollars.

                                        2


      ALTERNATIVE CURRENCY LOAN. Any Loan denominated in an Alternative Currency
bearing interest calculated by reference to the Eurocurrency Rate.

      APPLICABLE FACILITY FEE RATE. As of any date of determination, an annual
rate determined based on the ratings assigned to the Borrower's senior long-term
unsecured debt by the Ratings Agencies pursuant to the following table:



                                                                     Facility Fee
       S&P Rating           Moody's Rating           Fitch Rating        Rate
- ---------------------  ---------------------  ---------------------  ------------
                                                            
Below BBB- or unrated  Below Baa3 or unrated  Below BBB- or unrated         0.25%
        BBB-                   Baa3                    BBB-                 0.20%
        BBB                    Baa2                    BBB                  0.15%
        BBB+                   Baa1                    BBB+                 0.15%
    A- or higher           A3 or higher            A- or higher             0.15%


If the Borrower maintains three ratings and those three ratings are not
equivalent, the Applicable Facility Fee Rate will be based on the lower of the
two highest ratings. If the Borrower maintains two ratings and those two ratings
are not equivalent, the Applicable Facility Fee Rate shall be based on the lower
of the two ratings. If the Borrower fails to maintain at least two ratings, the
Applicable Facility Fee Rate shall be based on an S&P Rating of below BBB-. Any
change in the Applicable Facility Fee Rate caused by a change in the Moody's
Rating, the S&P Rating or the Fitch Rating shall become effective on the first
day following the effective date of such change.

      APPLICABLE MARGIN. As of any date of determination, the annual rate
determined based on the ratings assigned to the Borrower's senior long-term
unsecured debt by the Ratings Agencies pursuant to the following table for
Eurocurrency Rate Loans and Prime Rate Loans, respectively:



                                                                      Eurocurrency Rate  Prime Rate
       S&P Rating         Moody's Rating         Fitch Rating              Margin           Margin
- ----------------------  ---------------------  ---------------------  -----------------  ----------
                                                                             
 Below BBB- or unrated  Below Baa3 or unrated  Below BBB- or unrated        1.00%              0.25%
         BBB-                 Baa3                   BBB-                   0.80%             0.000%
         BBB                  Baa2                   BBB                    0.65%             0.000%
         BBB+                 Baa1                   BBB+                  0.525%             0.000%
     A- or higher         A3 or higher           A- or higher              0.475%             0.000%


If the Borrower maintains three ratings and those three ratings are not
equivalent, the Applicable Margin will be based on the lower of the two highest
ratings. If the Borrower maintains two ratings and those two ratings are not
equivalent, the Applicable Margin will be based on the lower of the two ratings.
If the Borrower fails to maintain at least two ratings, the Applicable Margin
shall be based on an S&P Rating of below BBB-. Any change in the Applicable
Margin caused by a change in the Moody's Rating, the S&P Rating or the Fitch
Rating shall become effective on the first day following the effective date of
such change.

                                        3


      APPLICABLE TIME. With respect to any borrowings and payments in any
Alternative Currency, the local time in the place of settlement for such
Alternative Currency as may be determined by the Agent, to be necessary for
timely settlement on the relevant date in accordance with normal banking
procedures in the place of payment.

      ARRANGER. Collectively, Banc of America Securities LLC and J.P. Morgan
Securities Inc., in their capacities as joint lead arrangers and joint
bookrunners, or any successors thereto.

      ASSIGNMENT AND ACCEPTANCE. See Section 18.

      BALANCE SHEET DATE. September 30, 2005.

      BANK OF AMERICA. As defined in the preamble hereto.

      BBA LIBOR. See definition of Eurocurrency Rate.

      BORROWER. As defined in the preamble hereto.

      BORROWER MATERIALS. See Section 7.5.

      BORROWING DATE. The date on which any Loan is made or is to be made
(including, without limitation, the date on which any Mandatory Prime Rate Loan
is made), and the date on which any Loan is converted or continued in accordance
with Section 2.6.

      BUILDINGS. The buildings, structures and other improvements now or
hereafter located on the Unencumbered Properties.

      BUSINESS DAY. Any day other than a Saturday, Sunday or other day on which
commercial banks are authorized to close under the laws of, or are in fact
closed in, the state where the Agent's Head Office with respect to Obligations
denominated in Dollars is located and:

            (a) if such day relates to any interest rate settings as to a
      Eurocurrency Rate Loan denominated in Dollars, any fundings,
      disbursements, settlements and payments in Dollars in respect of any such
      Eurocurrency Rate Loan, or any other dealings in Dollars to be carried out
      pursuant to this Agreement in respect of any such Eurocurrency Rate Loan,
      means any such day on which dealings in deposits in Dollars are conducted
      by and between banks in the London interbank eurodollar market;

            (b) if such day relates to any interest rate settings as to a
      Eurocurrency Rate Loan denominated in Euro, any fundings, disbursements,
      settlements and payments in Euro in respect of any such Eurocurrency Rate
      Loan, or any other dealings in Euro to be carried out pursuant to this
      Agreement in respect of any such Eurocurrency Rate Loan, means a TARGET
      Day;

            (c) if such day relates to any interest rate settings as to a
      Eurocurrency Rate Loan denominated in a currency other than Dollars or
      Euro, means any such day on which dealings in deposits in the relevant
      currency are conducted by and between banks in the London or other
      applicable offshore interbank market for such currency; and

                                        4


            (d) if such day relates to any fundings, disbursements, settlements
      and payments in a currency other than Dollars or Euro in respect of a
      Eurocurrency Rate Loan denominated in a currency other than Dollars or
      Euro, or any other dealings in any currency other than Dollars or Euro to
      be carried out pursuant to this Agreement in respect of any such
      Eurocurrency Rate Loan (other than any interest rate settings), means any
      such day on which banks are open for foreign exchange business in the
      principal financial center of the country of such currency.

      CAPITALIZED LEASES. Leases under which the Borrower is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the Borrower in accordance
with Generally Accepted Accounting Principles.

      CERCLA. See Section 6.18.

      CHANGE OF CONTROL. (a) Any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding
any employee benefit plan of such person or its subsidiaries, and any person or
entity acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan) becomes the "beneficial owner" (as defined in
Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a
person or group shall be deemed to have "beneficial ownership" of all securities
that such person or group has the right to acquire (such right, an "OPTION
RIGHT"), whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of 25% or more of the Voting Interests of the
Borrower on a fully-diluted basis (and taking into account all such securities
that such person or group has the right to acquire pursuant to any option
right); or

      (b) during any period of twelve (12) consecutive months, a majority of the
members of the board of directors or other equivalent governing body of the
Borrower cease to be composed of individuals (i) who were members of that board
or equivalent governing body on the first day of such period, (ii) whose
election or nomination to that board or equivalent governing body was approved
by individuals referred to in clause (i) above constituting at the time of such
election or nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other equivalent
governing body was approved by individuals referred to in clauses (i) and (ii)
above constituting at the time of such election or nomination at least a
majority of that board or equivalent governing body (excluding, in the case of
both clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing body
occurs as a result of solicitation of proxies or consents for the election or
removal of one or more directors by any person or group other than a
solicitation for the election of one or more directors by or on behalf of the
board of directors).

      CODE. The Internal Revenue Code of 1986, as amended and in effect from
time to time.

      COMMITMENT. With respect to each Lender, sum of such Lender's Tranche A
Commitment and Tranche B Commitment. The Commitment of the Lender which is also
the Swingline Lender shall not be reduced by the amount of its Swingline
Commitment.

                                        5


      COMMITMENT INCREASE. An increase in the Tranche A Commitments such that
the Total Commitment is not more than $800,000,000 pursuant to Section 2.2(a).

      COMMITMENT PERCENTAGE. With respect to each Lender, the percentage set
forth from time to time on Schedule 1.2 hereto as such Lender's percentage of
the Tranche A Commitments, the Tranche B Commitments or the Total Commitment, as
applicable. If the Borrower exercises its option to increase the Tranche A
Commitments and the Total Commitment pursuant to Section 2.2(a), the Commitment
Percentages of the Lenders will change effective upon the Commitment Increase
Date.

      COMMITMENT INCREASE DATE. See Section 2.2(a).

      COMPANY. See preamble.

      COMPETITIVE BID LOANS. Loans made by one or more Lenders pursuant to
Section 2.10.

      COMPETITIVE BID LOAN ACCOUNT. See Section 2.10(a).

      COMPETITIVE BID QUOTE REQUEST. See Section 2.10(c).

      COMPETITIVE BID QUOTE. An offer to make a Competitive Bid Loan made by a
Lender in response to a Competitive Bid Quote Request.

      COMPLIANCE CERTIFICATE. See Section 2.5(a).

      CONTROL. The possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of a Person, whether through
the ability to exercise voting power, by contract or otherwise. "CONTROLLING"
and "CONTROLLED" have meanings correlative thereto.

      CONVERSION REQUEST. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with Section 2.6.

      CREDIT EXPOSURE. With respect to each Lender as of any date of
determination, the sum, without duplication, of the following: (i) the
outstanding principal amount of all Loans advanced by such Lender under Section
2.1, (ii) the outstanding principal amount of all Mandatory Prime Rate Loans
advanced by such Lender pursuant to Section 2.8(b) or Section 2.9(d), (iii)
the outstanding principal amount of all participations purchased by such Lender
pursuant to Section 2.8(c), Section 2.9(d) or Section 2.11(b), (iv) the
outstanding principal amount of all Competitive Bid Loans advanced by such
Lender pursuant to Section 2.10(k), (v) such Lender's Commitment Percentage of
all outstanding Swingline Loans, except any Swingline Loan in which a
participation has been purchased therein by such Lender pursuant to Section
2.8(c) and (vi) such Lender's Commitment Percentage of the stated amount of each
Letter of Credit issued under Section 2.9 which has not expired or terminated
prior to the date of determination.

      DEFAULT. See Section 12.1.

      DELINQUENT LENDER. See Section 14.5(c).

                                        6


      DESIGNATED BANK. A special purpose corporation that (i) shall have become
a party to this Agreement pursuant to Section 18.9, and (ii) is not otherwise a
Lender.

      DESIGNATED BANK NOTES. Promissory notes of the Borrower, substantially in
the form of Exhibit N hereto, evidencing the obligation of the Borrower to repay
Competitive Bid Loans made by Designated Banks, as the same may be amended,
supplemented, modified or restated from time to time, and "Designated Bank Note"
means any one of such promissory notes issued under Section 18.9.

      DESIGNATING LENDER. See Section 18.9.

      DESIGNATION AGREEMENT. A designation agreement, substantially in the form
of Exhibit O, entered into by a Lender and a Designated Bank and accepted by the
Agent.

      DEVELOPMENT PROPERTY. A Real Estate Asset that is in the process of being
improved with one or more industrial or office buildings or other similar
commercial property, including "flex" and warehouse buildings, of a type
consistent with the Borrower's business strategy and is classified as
"development in progress" on the Borrower's consolidated balance sheet prepared
in accordance with Generally Accepted Accounting Principles. Any such Real
Estate Asset shall continue to be treated as a Development Property until the
earlier of (a) such Real Estate Asset achieving an occupancy rate of 90% (based
on net leasable area) or (b) the end of the twelfth (12th) month after
completion of construction (as evidenced by a certificate of occupancy).

      DISTRIBUTION. The declaration or payment of any dividend or distribution
of cash or cash equivalents to the holders of common shares of beneficial
interest in the Company or the holders of common units of limited partnership
interest in the Borrower.

      DOLLARS OR $. Dollars in lawful currency of the United States of America.

      DOLLAR EQUIVALENT. At any time, (a) with respect to any amount denominated
in Dollars, such amount, and (b) with respect to any amount denominated in any
Alternative Currency, the equivalent amount thereof in Dollars as determined by
the Agent or the L/C Issuer, as the case may be, at such time on the basis of
the Spot Rate (determined in respect of the most recent Revaluation Date) for
the purchase of Dollars with such Alternative Currency.

      DOMESTIC LENDING OFFICE. Initially, the office of each Lender designated
as such in Schedule 1 hereto; thereafter, such other office of such Lender, if
any, located within the United States that will be making or maintaining Prime
Rate Loans.

      DRAWING DATE. The date on which a draft under a Letter of Credit is paid
by the Agent.

      EBITDA. For any period, the net income or loss of the Borrower and the
Related Companies, excluding gains or losses from sales of property,
write-ups/write-downs, forgiveness of indebtedness, other extraordinary items
and minority interests, plus (to the extent deducted in determining net income
or loss) interest expense, the amount recorded as income taxes on the books and
records of the Borrower or the Related Companies, depreciation and amortization,
all as defined and computed in accordance with Generally Accepted Accounting
Principles.

                                        7


      EFFECTIVE DATE. The date upon which this Agreement shall become effective
pursuant to Section 10. Unless the Agent notifies the Borrower and the Lenders
that some other date is the Effective Date, the Effective Date shall be the date
set forth on the first page of this Agreement.

      ELIGIBLE ASSIGNEE. Any of (a) a commercial bank organized under the laws
of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with Generally Accepted Accounting
Principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), and having total assets in excess of $1,000,000,000, provided that
such bank is acting through a branch or agency located in the country in which
it is organized or another country which is also a member of the OECD; (d) the
central bank of any country which is a member of the OECD; (e) any other
assignee having a net worth of at least $100,000,000 that, in the reasonable
judgment of the Agent, is a reputable institutional investor with substantial
experience in lending and originating loans similar to the Facility, or in
purchasing, investing in or otherwise holding such loans; and (f) any Lender
Affiliate or a Related Fund of a Lender. For purposes hereof, "Lender Affiliate"
shall mean, (A) with respect to any Person that would otherwise be an Eligible
Assignee under clauses (a) - (e) above (a "QUALIFIED ASSIGNEE"), (i) an
affiliate of such Qualified Assignee or (ii) any Person that is engaged in
making, purchasing, holding or otherwise investing in bank loans or similar
extensions of credit in the ordinary course of its business and is administered
(including as placement agent therefore) or managed by a Qualified Assignee or
an affiliate of a Qualified Assignee and (B) with respect to a Lender that is a
fund which invests in bank loans or similar extensions of credit, any Related
Fund of such Lender. Further, for purposes hereof a "Related Fund" shall mean,
with respect to a Lender which is a fund which invests in bank loans or similar
extensions of credit, any other such fund managed by the same investment advisor
as such Lender or by an affiliate of such Lender or such advisor.

      Notwithstanding anything to the contrary, the term Eligible Assignee shall
exclude any Person controlling, controlled by or under common control with, the
Borrower or the Company.

      ELIGIBLE GROUND LEASE. A ground lease that (a) has a minimum remaining
term of twenty-five (25) years, including tenant controlled renewal options or
acceptable purchase options containing nominal or market based purchase prices,
as of any date of determination, and (b) has customary notice rights, default
cure rights, bankruptcy new lease rights and other customary provisions for the
benefit of a leasehold mortgagee or has equivalent protection for a leasehold
permanent mortgagee by a subordination to such leasehold permanent mortgagee of
the landlord's fee interest, and (c) is otherwise eligible for non-recourse
leasehold mortgage financing under customary prudent lending requirements. The
Eligible Ground Leases as of the date of this Agreement are listed on Schedule
1.1(b).

      EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
Section 3 (3) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.

                                        8


      EMU. The economic and monetary union in accordance with the Treaty of Rome
1957, as amended by the Single European Act 1986, the Maastricht Treaty of 1992
and the Amsterdam Treaty of 1998.

      EMU LEGISLATION. The legislative measures of the European Council for the
introduction of, changeover to or operation of a single or unified European
currency.

      ENVIRONMENTAL LAWS. See Section 6.18(a).

      EQUITY REPURCHASE PAYMENTS. All payments of cash or cash equivalents by
Borrower or the Company as consideration for the repurchase, redemption or
retirement of any common shares of beneficial interest in the Company, or any
common units of limited partnership interest in Borrower.

      ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.

      ERISA AFFILIATE. Any Person which is treated as a single employer with the
Borrower under Section 414 of the Code.

      ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.

      EURO OR EUR. Euro is the lawful currency of the Participating Member
States.

      EUROCURRENCY LENDING OFFICE. Initially, the office of each Lender
designated as such in Schedule 1 hereto; thereafter, such other office of such
Lender, if any, that shall be making or maintaining Eurocurrency Rate Loans.

      EUROCURRENCY PREPAYMENT FEE. See Section 3.3.

      EUROCURRENCY RATE. For any Interest Period with respect to a Eurocurrency
Rate Loan, the rate per annum equal to the British Bankers Association LIBOR
Rate ("BBA LIBOR"), as published by Reuters (or other commercially available
source providing quotations of BBA LIBOR as designated by the Agent from time to
time) at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period, for deposits in the relevant currency (for
delivery on the first day of such Interest Period) with a term equivalent to
such Interest Period. If such rate is not available at such time for any reason,
then the "Eurocurrency Rate" for such Interest Period shall be the rate per
annum determined by the Agent to be the rate at which deposits in the relevant
currency for delivery on the first day of such Interest Period in Same Day Funds
in the approximate amount of the Eurocurrency Rate Loan being made, continued or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America's London Branch (or other Bank of America
branch or Affiliate) to major banks in the London or other offshore interbank
market for such currency at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such Interest Period.

                                       9


      EUROCURRENCY RATE LOAN. Any LIBOR Rate Loan or Alternative Currency Loan.

      EVENT OF DEFAULT. See Section 12.1.

      EXISTING CREDIT AGREEMENTS. As defined in the recitals hereto.

      EXISTING LETTERS OF CREDIT. See Section 2.9(a).

      FACILITY. The unsecured revolving line of credit facility provided to
the Borrower pursuant to this Agreement initially in a maximum amount of
$600,000,000.

      FEDERAL FUNDS RATE. For any day, the rate per annum equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate (rounded upward,
if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Agent.

      FEE LETTER. The letter agreement, dated November 15, 2005, among the
Borrower, the Company, the Agent, JPMCB and the Arranger.

      FITCH RATING. The rating for Borrower's senior long-term unsecured debt
assigned by Fitch Ratings or its successors.

      FIXED CHARGES. With respect to any fiscal period of the Borrower, an
amount equal to the sum of (i) Interest Expense, (ii) regularly scheduled
installments of principal payable with respect to Total Debt, (iii) current
maturities on Recourse Indebtedness not refinanced with Loans hereunder or other
replacement Indebtedness or otherwise repaid plus (iv) all dividend payments due
to the holders of any preferred shares of beneficial interest of the Company and
all distributions due to the holders of any limited partnership interests in the
Borrower other than limited partner distributions based on the per share
dividend paid on the common shares of beneficial interest of the Company.

      FUNDS FROM OPERATIONS. With respect to any fiscal period of the Borrower,
means "funds from operations" as defined in accordance with resolutions adopted
by the board of Governors of the National Association of Real Estate Investment
Trusts as in effect from time to time.

      GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (b) consistently applied with past financial statements of the Borrower
adopting the same principles; provided that a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in Generally

                                       10


Accepted Accounting Principles) as to financial statements in which such
principles have been properly applied.

      GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.

      GUARANTORS. The Company and the partnerships and corporations designated
as Guarantors on Schedule 1.3 hereto and any other Related Company which is at
least 85% owned by Borrower and which becomes a Guarantor pursuant to Section
5.6.

      GUARANTY. The Guaranty of even date herewith in the form of Exhibit M
hereto from the Company and the other Guarantors to the Agent and the Lenders
pursuant to which the Company and the other Guarantors have guaranteed the
Obligations hereunder.

      HAZARDOUS SUBSTANCES. See Section 6.18(b).

      INDEBTEDNESection All obligations, contingent and otherwise (without
double-counting), of the following types: (a) the Obligations, (b) all debt and
similar monetary obligations for borrowed money, whether direct or indirect; (c)
all liabilities secured by any mortgage, pledge, negative pledge, security
interest, lien, negative lien, charge, or other encumbrance existing on property
owned or acquired subject thereto, whether or not the liability secured thereby
shall have been assumed; (d) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness or obligations
of others (including, without limitation, the indebtedness or obligations of
Unconsolidated Entities), including any obligation to supply funds to or in any
manner to invest in, directly or indirectly, the debtor, to purchase
indebtedness, or to assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or otherwise,
and the obligations to reimburse the issuer in respect of any letters of credit
and bankers' acceptances; (e) all obligations under Capitalized Leases; (f) all
obligations under so-called forward equity purchase contracts to the extent such
obligations are not payable solely in equity interests; (g) all uncollateralized
obligations in respect of Interest Rate Contracts, financial derivatives
contracts, and foreign exchange contracts; (h) all obligations in respect of any
so-called synthetic leases (i.e. a lease of property which is treated as an
operating lease under GAAP and as a loan for U.S. income tax purposes and (i)
such obligor's liabilities, contingent or otherwise of the type set forth in (a)
through (h) above, under any joint venture, limited liability company or
partnership agreement.

      INTEREST EXPENSE. With respect to any fiscal period of the Borrower, an
amount equal to the sum of the following with respect to Total Debt: (i) total
interest expense, accrued in accordance with Generally Accepted Accounting
Principles plus (ii) all capitalized interest determined in accordance with
Generally Accepted Accounting Principles, plus (iii) the amortization of
deferred financing costs.

      INTEREST PAYMENT DATE. As to any Loan (including any Swingline Loan or any
Competitive Bid Loan), the first Business Day of each calendar month and the
Maturity Date.

                                       11


      INTEREST PERIOD. With respect to each Loan, (a) initially, the period
commencing on the Borrowing Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in a Loan Request
(except that no Loan Request is required for Mandatory Prime Rate Loans and
except that Borrower shall have no options with respect to selecting Interest
Periods for Swingline Loans) (i) for any Prime Rate Loan, the day on which such
Prime Rate Loan is paid in full or converted to a LIBOR Rate Loan; and (ii) for
any Eurocurrency Rate Loan, 1, 2 or 3 months; and (b) thereafter, each period
commencing on the last day of the next preceding Interest Period applicable to
such Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:

            (A) if any Interest Period would otherwise end on a day that is not
      a Business Day, that Interest Period shall be extended to the next
      succeeding Business Day;

            (B) if the Borrower shall fail to give notice as provided in
      Section 2.6, the Borrower shall be deemed to have requested a conversion
      of the affected LIBOR Rate Loan to a Prime Rate Loan on the last day of
      the then current Interest Period with respect thereto;

            (C) any Interest Period that begins on the last Business Day of a
      calendar month (or on a day for which there is no numerically
      corresponding day in the calendar month at the end of such Interest
      Period) shall end on the last Business Day of the calendar month at the
      end of such Interest Period; and

            (E) the Borrower may not select any Interest Period relating to any
      Eurocurrency Rate Loan that would extend beyond the Maturity Date.

      INTEREST RATE CONTRACTS. Interest rate swap, cap or similar agreements
providing for interest rate protection.

      INTERNAL REVENUE CODE. The Internal Revenue Code of 1986, as amended to
the date hereof and from time to time hereafter, any successor statute and any
regulations or guidelines promulgated thereunder.

      INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock, partnership or
membership interests or Indebtedness of, or for loans, advances, capital
contributions or transfers of property to, or in respect of any guaranties (or
other commitments as described under Indebtedness), or obligations of, any
Person. In determining the aggregate amount of Investments outstanding at any
particular time: (a) the amount of any Investment represented by a guaranty or
secured by a letter of credit shall be taken at not less than the principal
amount of the obligations guaranteed or secured by such letter of credit and
still outstanding; (b) there shall be included as an Investment all interest
accrued with respect to Indebtedness constituting an Investment unless and until
such interest is paid; (c) there shall be deducted in respect of each such
Investment any amount received as a return of capital; (d) there shall not be
deducted in respect of any Investment any amounts received as earnings on such
Investment, whether as dividends, interest or otherwise, except that accrued
interest included as provided in the foregoing clause (b) may be deducted when
paid;

                                       12


and (e) there shall not be deducted from the aggregate amount of Investments any
decrease in the value thereof.

      JPMCB. As defined in the preamble hereto.

      JUDGMENT CURRENCY. See Section 31.

      LEASES. Leases, licenses and agreements whether written or oral, relating
to the use or occupation of space in the Buildings on the Unencumbered
Properties and the Unencumbered Development Properties by persons other than the
owner thereof or any of its affiliates.

      LENDERS. Bank of America, JPMCB and the other lending institutions listed
from time to time on Schedule 1 hereto and any other Person who becomes an
assignee of any rights of a Lender pursuant to Section 18 or a Person who
acquires all or substantially all of the stock or assets of a Lender. The L/C
Issuer and the Swingline Lender shall each be deemed a Lender, as applicable.

      L/C ISSUER. Bank of America, in its capacity as issuer of Letters of
Credit hereunder, or any successor issuer of Letters of Credit hereunder.

      LETTER OF CREDIT. A letter of credit issued or deemed issued by the L/C
Issuer for the account of the Borrower pursuant to Section 2.9.

      LETTER OF CREDIT REQUEST. See Section 2.9.

      LIBOR RATE LOANS. Loans denominated in Dollars bearing interest calculated
by reference to the Eurocurrency Rate.

      LIEN. Any lien, encumbrance, mortgage, deed of trust, pledge, restriction
or other security interest. If title to any Real Estate Asset is held by a
Subsidiary of Borrower or an Unconsolidated Entity then any pledge or assignment
of Borrower's stock, partnership interest, limited liability company interest or
other ownership interest in such Subsidiary or Unconsolidated Entity shall be
deemed to be a Lien on the Real Estate Assets owned by such Subsidiary or
Unconsolidated Entity.

      LOAN DOCUMENTS. This Agreement, the Notes, the Guaranty and any and all
other agreements, documents and instruments now or hereafter evidencing,
securing or otherwise relating to the Loans.

      LOAN REQUEST. See Section 2.5.

      LOANS. All Loans (whether Tranche A Loans or Tranche B Loans) made or to
be made by one or more of the Lenders to the Borrower hereunder, including Loans
pursuant to Section 2.1 and Section 2.5, Swingline Loans made by Swingline
Lender pursuant to Section 2.8 and Mandatory Prime Rate Loans made pursuant to
Section 2.8 or Section 2.9, and Competitive Bid Loans made pursuant to
Section 2.10.

      MANDATORY COST. With respect to any period, the percentage rate per annum
determined in accordance with Schedule 1.1(c).

                                       13


      MANDATORY PRIME RATE LOANS. Loans made by the Lenders (without a Loan
Request) under the circumstances described in Section 2.8(b) or Section
2.9(d).

      MATERIAL ADVERSE EFFECT. A material adverse effect on (i) the business,
Unencumbered Properties, Unencumbered Development Properties, results of
operations or financial condition of the Borrower and the Related Companies
taken as a whole or (ii) the ability of the Borrower, any Guarantor or the
Company to perform its obligations under the Loan Documents, or (iii) the
validity or enforceability of any of the Loan Documents or the remedies or
material rights of the Agent, the L/C Issuer or the Lenders thereunder.

      MATURITY DATE. January 16, 2010 (or, if Borrower shall exercise its option
to extend such Maturity Date in accordance with Section 3.1, January 16, 2011),
or such earlier date on which the Loans shall become due and payable pursuant to
the terms hereof.

      MAXIMUM CREDIT AMOUNT. The least of the following: (i) the maximum amount
of Outstanding Obligations without causing a violation of Section 9.1; (ii) the
maximum amount of Outstanding Obligations without causing a violation of Section
9.2; and (iii) the Total Commitment.

      MAXIMUM RATE. See Section 29.

      MOODY'S RATING. The rating for Borrower's senior long-term unsecured debt
assigned by Moody's Investors Services, Inc. or its successors.

      MORTGAGES AND NOTES RECEIVABLE. Notes and notes receivable that are
secured by mortgages or other interests in real property and related assets.

      MULTI-CURRENCY CREDIT AGREEMENT. As defined in the recitals hereto.

      MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.

      NET OFFERING PROCEEDS. All cash proceeds received after the Effective Date
by the Borrower or the Company as a result of the sale of common, preferred or
other classes of stock of the Company or the issuance of limited partnership
interests in the Borrower less customary costs and discounts of issuance paid by
Company or Borrower in connection therewith.

      NET OPERATING INCOME. With respect to any fiscal period of the Borrower
and with respect to any one or more of the Real Estate Assets, the total rental
and other operating income from the operation of such Real Estate Assets after
deducting all expenses and other proper charges incurred by the Borrower in
connection with the operation of such Real Estate Assets during such fiscal
period, including, without limitation, property operating expenses, real estate
taxes and bad debt expenses, but before payment or provision for Fixed Charges,
income taxes, and depreciation, amortization, and other non-cash expenses, all
as determined in accordance with Generally Accepted Accounting Principles. With
respect to Real Estate Assets located outside of the United States, Net
Operating Income shall be converted from the currency in

                                       14


which the applicable income and expenses are paid to Dollars using the currency
exchange rates in effect as of the end of the applicable fiscal period.

      NOTES. See Section 2.3.

      OBLIGATIONS. All indebtedness, obligations and liabilities of the
Borrower, any Guarantor or the Company to any of the Lenders and the Agent,
individually or collectively, under this Agreement or any of the other Loan
Documents or in respect of any of the Loans, the Letters of Credit or the Notes
or other instruments at any time evidencing any thereof, whether existing on the
date of this Agreement or arising or incurred hereafter, direct or indirect,
joint or several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise.

      ORIGINAL CREDIT AGREEMENT. As defined in the recitals hereto.

      OUTSTANDING OBLIGATIONS. As of any date of determination, the sum of the
outstanding principal amount of the Tranche A Obligations, the Tranche A Letter
of Credit Obligations, the Tranche B Loans, and the Tranche B Obligations.

      PARTICIPATING MEMBER STATE. Each state so described in any EMU
Legislation.

      PBGC. The Pension Benefit Guaranty Corporation created by Section 4002 of
ERISA and any successor entity or entities having similar responsibilities.

      PERMITTED ACQUISITION. The acquisition by Borrower or any Related Company
of Real Estate Assets which, in the aggregate, are primarily leased or intended
to be leased primarily for industrial or office purposes (including "flex" and
warehouse uses) or other similar commercial purposes of a type consistent with
the Borrower's business strategy, whether such acquisition is accomplished by a
direct purchase of such Real Estate Assets or by a merger or acquisition of
stock or other ownership interests or debt securities such that the owner of
such Real Estate becomes a Related Company.

      PERMITTED DEVELOPMENTS. The construction of any new buildings or the
construction of additions expanding existing buildings or the rehabilitation of
the existing buildings (other than normal refurbishing and tenant fit up work in
previously completed buildings) relating to any Real Estate Assets of the
Borrower or any of the Related Companies. Each Permitted Development shall be
counted for purposes of Section 8.2 in the amount of the total projected cost
of such project from the time of commencement of the applicable construction
work until the earlier of (i) the date that 90% of such project is leased (but
not prior to the date that a final certificate of occupancy has been issued with
respect to such project) or (ii) the first anniversary of the issuance of such
certificate of occupancy.

      PERMITTED LIENS. The following Liens, security interests and other
encumbrances:

                  (i) Liens to secure taxes, assessments and other governmental
            charges;

                                       15


                  (ii) deposits or pledges made in connection with, or to secure
            payment of, workmen's compensation, unemployment insurance, old age
            pensions or other social security obligations, and deposits with
            utility companies and other similar deposits made in the ordinary
            course of business;

                  (iii) Liens in respect of judgments or awards;

                  (iv) Liens of carriers, warehousemen, mechanics and
            materialmen, and other Liens securing claims for labor, materials
            and/or supplies;

                  (v) encumbrances consisting of easements, rights of way,
            Leases, covenants, restrictions on the use of real property and
            defects and irregularities in the title thereto; landlord's or
            lessor's Liens and similar or minor Liens or encumbrances none of
            which in the opinion of the Borrower interferes materially and
            adversely with the ordinary conduct of the business of the Borrower,
            and which matters neither (x) individually or in the aggregate have
            a Material Adverse Effect nor (xx) individually or in the aggregate
            have a materially adverse effect on the value of an Unencumbered
            Property;

                  (vi) mortgages held by Borrower or a Guarantor securing
            Indebtedness described in Section 8.1(d);

                  (vii) Liens on capital assets (not Real Estate) securing
            Indebtedness for the purchase price of such capital assets otherwise
            permitted by this Agreement; and;

                  (viii) Liens affecting an Unencumbered Property consisting of
            mortgages, deeds of trust or other security interests granted by a
            Guarantor to the Borrower or another Guarantor to secure
            intercompany Indebtedness owing from such Guarantor to the Borrower
            or such other Guarantor; provided that at all times such
            Indebtedness and Liens shall be held by the Borrower or a Guarantor
            and the Borrower's or such Guarantor's rights or interests therein
            shall not be subject to any Liens except Permitted Liens.

      PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.

      PLATFORM. See Section 7.5.

      PREFERRED DISTRIBUTION. The declaration or payment of any dividend or
distribution of cash or cash equivalents to the holders of preferred shares of
beneficial interest in the Company or the holders of preferred units of limited
partnership interest of the Borrower.

      PREPAYMENT DATE. See Section 3.3.

                                       16


      PRIME RATE. The variable per annum rate of interest designated from time
to time by the Agent as its Prime Rate. The Prime Rate is a reference rate and
does not necessarily represent the lowest or best rate being charged to any
customer. In the event that the Agent does not announce a Prime Rate, the Prime
Rate shall be a per annum rate of interest equal to the Federal Funds Rate plus
one-half of one percent (0.50%).

      PRIME RATE LOANS. Those Loans bearing interest calculated by reference to
the Prime Rate. All Prime Rate Loans shall be denominated in Dollars.

      PROPERTIES. All Real Estate Assets, Real Estate, and all other assets,
including, without limitation, intangibles and personalty owned by the Borrower
or any of the Related Companies.

      PUBLIC LENDERS. See Section 7.5.

      RATING AGENCIES. Moody's Investors Services, Inc., Standard & Poor's, a
division of The McGraw Hill Companies, Inc. and Fitch Ratings, or their
respective successors.

      REAL ESTATE. All real property at any time owned, leased (as lessee or
sublessee) or operated by the Borrower, any Guarantor, or any of the Related
Companies.

      REAL ESTATE ASSETS. Those fixed and tangible properties consisting of
land, buildings and/or other improvements owned by the Borrower, by any
Guarantor or by any of the Related Companies at the relevant time of reference
thereto, including without limitation, the Unencumbered Properties and the
Unencumbered Development Properties, but excluding all leaseholds other than
leaseholds under ground leases which either have an unexpired term of at least
25 years or contain a purchase option for nominal consideration.

      RECORD. The grid attached to any Note, or the continuation of such grid,
or any other similar record, including computer records, maintained by any
Lender with respect to any Loan.

      RECOURSE INDEBTEDNESS. That portion of Total Debt which is Indebtedness
other than Indebtedness with respect to which recourse for payment is
contractually limited (except for customary exclusions) to specific assets
encumbered by a lien securing such Indebtedness.

      REGISTER. See Section 18.3.

      REIT. A domestic trust or corporation that qualifies as a real estate
investment trust under the provisions of Section 856, et seq. of the Internal
Revenue Code or any successor provisions.

      RELATED BUSINESS. A business which is either (i) customarily
ancillary to the real estate business such as real estate consulting, brokerage
or management or (ii) provides telecommunication or other goods and services to
the tenants of the Properties.

      RELATED COMPANIES. The entities listed and described on Schedule 1.3
hereto, or thereafter, any entity whose financial statements are consolidated or
combined with the Company's pursuant to Generally Accepted Accounting
principles, or any ERISA Affiliate.

                                       17


      RELATED PARTIES. With respect to any Person, such Person's Affiliates and
the partners, directors, officers, employees, agents and advisors of such Person
and of such Person's Affiliates.

      RELEASE. See Section 6.18(c)(iii).

      REQUISITE LENDERS. As of any date, the Lenders whose aggregate Commitments
constitute at least fifty-one percent (51%) of the Total Commitment, provided
that on and after the date that Commitments which constitute at least fifty-one
percent (51%) of the Total Commitment have terminated pursuant to Section 12.2,
Requisite Lenders shall mean the Lenders whose aggregate Credit Exposures
constitute at least fifty-one percent (51%) of the aggregate Credit Exposures of
all Lenders, and provided that the Commitments (or the Credit Exposures) of any
Delinquent Lenders shall be disregarded when determining the Requisite Lenders.

      RESERVE AMOUNT. With respect to any Real Estate Assets or group of Real
Estate Assets, a normalized annual reserve for capital expenditures, replacement
reserves and leasing costs at the rate of $0.25 per year per square foot of
gross leasable area contained in all buildings on such Real Estate Assets. When
the Reserve Amount is used in computing an amount with respect to a fiscal
period which is shorter than a year, said amount shall be appropriately
prorated.

      RESPONSIBLE OFFICER. With respect to the Company, any one of its Chairman,
President, Chief Executive Officer, Chief Operating Officer, Chief Financial
Officer, Treasurer, Executive Vice Presidents, Senior Vice Presidents or other
executive officers.

      REVALUATION DATE. (a) With respect to any Loan, each of the following: (i)
each Borrowing Date of a Eurocurrency Rate Loan denominated in an Alternative
Currency, (ii) the last Business Day of each calendar month, and (iii) such
additional dates as the Agent shall determine; and (b) with respect to any
Letter of Credit, each of the following: (i) each date of issuance of a Letter
of Credit denominated in an Alternative Currency, (ii) each date of an amendment
of any such Letter of Credit having the effect of increasing the amount thereof
(solely with respect to the increased amount), (iii) each date of any payment by
the Agent under any Letter of Credit denominated in an Alternative Currency, and
(iv) such additional dates as the Agent shall determine.

      S&P RATING. The rating for Borrower's senior long-term unsecured debt
assigned by Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies, Inc., or its successors.

      SAME DAY FUNDS. (a) With respect to disbursements and payments in Dollars,
immediately available funds, and (b) with respect to disbursements and payments
in an Alternative Currency, same day or other funds as may be determined by the
Agent or the L/C Issuer, as the case may be, to be customary in the place of
disbursement or payment for the settlement of international banking transactions
in the relevant Alternative Currency.

      SECURED INDEBTEDNESS. That portion of Total Debt which is secured by a
Lien on any Properties.

                                       18


      SHARING EVENT. The occurrence of (i) an Event of Default with respect to
the Borrower or the Company pursuant to Sections 12.1(g) or 12.1(h),
(ii) a termination of the Commitments pursuant to Section 12.2 or (iii) the
acceleration of the Loans pursuant to Section 12.1.

      SOLVENT. When used with respect to any Person, means that at the time of
determination:

      (i) the fair saleable value of its assets is in excess of the total amount
of its liabilities (including, without limitation, contingent liabilities); and

      (ii) the present fair saleable value of its assets is greater than its
probable liability on its existing debts as such debts become absolute and
matured; and

      (iii) it is then able and expects to be able to pay its debts (including,
without limitation, contingent debts and other commitments) as they mature; and

      (iv) it has capital sufficient to carry on its business as conducted and
as proposed to be conducted.

      SPOT RATE. For a currency, the rate determined by the Agent or the L/C
Issuer, as applicable, to be the rate quoted by the Person acting in such
capacity as the spot rate for the purchase by such Person of such currency with
another currency through its principal foreign exchange trading office at
approximately 11:00 a.m. on the date two Business Days prior to the date as of
which the foreign exchange computation is made; provided that the Agent or the
L/C Issuer may obtain such spot rate from another financial institution
designated by the Agent or the L/C Issuer if the Person acting in such capacity
does not have as of the date of determination a spot buying rate for any such
currency; and provided further that the L/C Issuer may use such spot rate quoted
on the date as of which the foreign exchange computation is made in the case of
any Letter of Credit denominated in an Alternative Currency.

      STERLING and (POUND). The lawful currency of the United Kingdom.

      SUBSIDIARY. Any corporation, association, trust, or other business entity
of which the designated parent or other controlling Person shall at any time own
directly or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes) of the outstanding Voting Interests.

      SWINGLINE COMMITMENT. The Commitment of the Swingline Lender to make
Swingline Loans up to a maximum principal amount of $50,000,000 at any time
outstanding. The Swingline Commitment is a portion of, and not in addition to,
the Total Commitment.

      SWINGLINE LENDER. Bank of America or any other Lender as a successor of
Swingline Lender.

      SWINGLINE LOAN. Any Loan made by the Swingline Lender to the Borrower
pursuant to the Swingline Lender's Swingline Commitment.

                                       19


      SWINGLINE LOAN REQUEST. A Loan Request in the form of Exhibit D hereto
given by Borrower with respect to a Swingline Loan.

      SWINGLINE NOTE. The Note from Borrower payable to the Swingline Lender In
the principal amount of $50,000,000 as evidence of the Swingline Loans.

      TANGIBLE NET WORTH. Total Asset Value minus Total Liabilities determined
in accordance with Generally Accepted Accounting Principles.

      TARGET DAY. Any day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer (TARGET) payment system (or, if such payment system
ceases to be operative, such other payment system (if any) determined by the
Agent to be a suitable replacement) is open for the settlement of payments in
Euro.

      TOTAL ASSET VALUE. The sum, without duplication, of (i) the assets
classified as cash and cash equivalents on the consolidated balance sheet of the
Borrower, plus (ii) the amount determined by taking (a) Adjusted EBITDA for all
Real Estate Assets owned at least one complete fiscal quarter (other than
Development Properties); (b) then multiplying by four (4); and (c) then dividing
such product by 0.085; plus (iii) the value (at cost) of all Real Estate Assets
acquired within the immediately preceding fiscal quarter, plus (iv) the lower of
(x) cost or (y) book value of all Development Properties, plus (v) the book
value of all notes receivable held by the Borrower and its Subsidiaries, all as
shown on the consolidated balance sheet of the Borrower prepared in accordance
with Generally Accepted Accounting Principles as of the end of the most recent
fiscal quarter for which financial statements have been provided pursuant to
Section 7.4, plus (vi) the book value of Undeveloped Land, as shown on such
consolidated balance sheet. Adjusted EBITDA used to compute Total Asset Value
will be computed on a pro forma basis as though any Real Estate Assets acquired
or disposed of since the first day of the applicable fiscal quarter had been
acquired or disposed of prior to the first day of such fiscal quarter.

      TOTAL COMMITMENT. The aggregate principal amount of the Commitments of all
of the Lenders, as in effect from time to time, the maximum amount of which
shall be $600,000,000, as increased from time to time pursuant to Section
2.2(a) or as decreased from time to time pursuant to Section 2.2(c).

      TOTAL DEBT. The sum of the following (without duplication): (i) all
Indebtedness of the Borrower and the Related Companies included in the
liabilities portion of the Borrower's balance sheet prepared in accordance with
Generally Accepted Accounting Principles as of the end of the most recent fiscal
quarter for which financial statements have been provided pursuant to Section
7.4, including, without limitation, the Indebtedness presently shown on the
balance sheet line items designated as "mortgage loans", "unsecured notes" and
"credit facility" adjusted to reflect any such Indebtedness incurred or repaid
between the end of such fiscal quarter and the date of determination, (ii) plus
all Indebtedness of the Borrower and the Related Companies of a type which is
not included on the balance sheet described in clause (i) of this definition,
and (iii) to the extent not already included in this definition, the amount of
Indebtedness to be included in Total Debt pursuant to Section 9.8.

                                       20


      TOTAL GAAP ASSETS. The aggregate book value of all assets of the Borrower
and the Related Companies consolidated and determined in accordance with
Generally Accepted Accounting Principles.

      TOTAL LIABILITIES. The sum of the following (without duplication): (i) all
liabilities of the Borrower and the Related Companies consolidated and
determined in accordance with Generally Accepted Accounting Principles, (ii) all
Indebtedness of the Borrower and the Related Companies whether or not so
classified, including, without limitation, all outstanding Loans under this
Agreement, and (iii) the balance available for drawing under letters of credit
issued for the account of the Borrower or any of the Related Companies.

      TRANCHE A AVAILABILITY. At any time, the amount by which the Tranche A
Commitments at such time exceeds the sum of the Tranche A Obligations and the
Tranche A Letter of Credit Obligations at such time.

      TRANCHE A COMMITMENT. With respect to each Lender, the amount set forth
from time to time on Schedule 1.2 hereto as the amount of such Lender's
commitment to make Tranche A Loans hereunder to the Borrower and to participate
in Swingline Loans and Tranche A Letters of Credit hereunder, as adjusted from
time to time as a result of any Commitment Increase pursuant to Section 2.2(a),
any reduction in Commitments pursuant to Section 2.2(c), or any assignment
pursuant to Section 18, and Tranche A Commitments shall be the aggregate
principal amount of the Tranche A Commitment of all of the Lenders, the maximum
amount of which shall be $550,000,000, as increased from time to time pursuant
to Section 2.2(a) or as decreased from time to time pursuant to Section
2.2(c).

      TRANCHE A CREDIT EXPOSURE. With respect to each Lender as of any date of
determination, the sum, without duplication, of the following: (i) the
outstanding principal amount of all Tranche A Loans advanced by such Lender
under Section 2.1, Section 2.8(b), and Section 2.9(d), (ii) the outstanding
principal amount of all participations purchased by such Lender pursuant to
Section 2.8(c), Section 2.9(d) or Section 2.11(b), (iii) such Lender's
Commitment Percentage of all outstanding Swingline Loans which are deemed to use
the Tranche A Commitments, except any Swingline Loan in which a participation
has been purchased therein by such Lender pursuant to Section 2.8(c) and (vi)
such Lender's Commitment Percentage of the stated amount of each Tranche A
Letter of Credit issued under Section 2.9 which has not expired or terminated
prior to the date of determination.

      TRANCHE A LETTER OF CREDIT. Any standby Letter of Credit issued at the
request of the Borrower and for the account of the Borrower against the Tranche
A Commitments in accordance with Section 2.8.

      TRANCHE A LETTER OF CREDIT OBLIGATIONS. As of any date of determination,
the maximum amount which the L/C Issuer may be required to pay on such date or
any future time under Tranche A Letters of Credit outstanding as of such date.

      TRANCHE A LOANS. Loans made by the Lenders pursuant to Section Section
2.1, 2.8, and 2.9 to the extent that such Loans are deemed, pursuant to Section
Section 2.1, 2.8, and 2.9, as applicable, to be a use of the Tranche A
Commitments.

                                       21


      TRANCHE A OBLIGATIONS. At any time, the outstanding principal amount of
the Tranche A Loans at such time, plus the portion (if any) of the outstanding
principal amount of the Competitive Bid Loans that are deemed, pursuant to
Section 2.10, to be a use of the Tranche A Commitments.

      TRANCHE B AVAILABILITY. At any time, the amount by which the Tranche B
Commitments at such time exceeds the sum of the Tranche B Obligations and the
Tranche B Letter of Credit Obligations at such time.

      TRANCHE B COMMITMENT. With respect to each Lender, the amount set forth
from time to time on Schedule 1.2 hereto as the amount of such Lender's
commitment to make Tranche B Loans hereunder to the Borrower and to participate
in Swingline Loans and Tranche B Letters of Credit hereunder, as adjusted from
time to time as a result of any reduction in Commitments pursuant to Section
2.2(c) or any assignment pursuant to Section 18, and Tranche B Commitments
shall be the aggregate principal amount of the Tranche B Commitment of all of
the Lenders, the maximum amount of which shall be $50,000,000, as decreased from
time to time pursuant to Section 2.2(c).

      TRANCHE B CREDIT EXPOSURE. With respect to each Lender as of any date of
determination, the sum, without duplication, of the following: (i) the
outstanding principal amount of all Tranche B Loans advanced by such Lender
under Section 2.1, Section 2.8(b), and Section 2.9(d), (ii) the outstanding
principal amount of all participations purchased by such Lender pursuant to
Section 2.8(c), Section 2.9(d) or Section 2.11(b), (iii) such Lender's
Commitment Percentage of all outstanding Swingline Loans which are deemed to use
the Tranche B Commitments, except any Swingline Loan in which a participation
has been purchased therein by such Lender pursuant to Section 2.8(c) and (vi)
such Lender's Commitment Percentage of the stated amount of each Tranche B
Letter of Credit issued under Section 2.9 which has not expired or terminated
prior to the date of determination.

      TRANCHE B LETTER OF CREDIT. Any standby Letter of Credit issued at the
request of the Borrower and for the account of the Borrower against the Tranche
B Commitments in accordance with Section 2.8.

      TRANCHE B LETTER OF CREDIT OBLIGATIONS. As of any date of determination,
the maximum amount which the L/C Issuer may be required to pay on such date or
any future time under Tranche B Letters of Credit outstanding as of such date.

      TRANCHE B LOANS. Loans made by the Lenders pursuant to Section Section
2.1, 2.8, and 2.9 to the extent that such Loans are deemed, pursuant to Section
Section 2.1, 2.8, and 2.9, as applicable, to be a use of the Tranche B
Commitments.

      TRANCHE B OBLIGATIONS. At any time, the outstanding principal amount of
the Tranche B Loans at such time plus the portion (if any) of the outstanding
principal amount of the Competitive Bid Loans that are deemed, pursuant to
Section 2.10, to be a use of the Tranche B Commitments.

      TYPE. As to any Loan its nature as a Prime Rate Loan or a Eurocurrency
Rate Loan.

                                       22


      UNCONSOLIDATED ENTITY. As of any date, any Person in whom the Borrower,
the Company or any Related Company holds an Investment, and whose financial
results would not be consolidated under Generally Accepted Accounting Principles
with the financial statements of the Borrower, if such statements were prepared
as of such date. Unconsolidated Entities existing on the date hereof are set
forth in Schedule 1.3.

      UNDEVELOPED LAND. Any Real Estate consisting of raw land which is
unimproved by buildings and does not generate any income.

      UNENCUMBERED DEVELOPMENT PROPERTY. A Real Estate Asset which at the date
of determination (i)(a) is 100% owned in fee or ground leased under an Eligible
Ground Lease by Borrower or one of the Guarantors or (b) the Borrower, directly
or indirectly, owns at least 51% of the Voting Interests of such Real Estate
Asset and has the sole authority to make decisions regarding any sales or
financings related to such Real Estate Asset, (ii) is a Development Property;
(iii) is not directly or indirectly subject to any Lien (other than Permitted
Liens) or to any negative pledge agreement or other agreement that prohibits the
creation of any Lien thereon; (iv) is a Real Estate Asset with respect to which
each of the representations contained in Section 6.18 and Section 6.21 hereof
is true and accurate as of such date of determination; (v) may be legally
conveyed separately from any other Real Estate without the need to obtain any
subdivision approval, zoning variance or other consent or approval from any
unrelated Person, and (vi) is located in the United States, Canada or Europe.
Each Real Estate Asset which satisfies the conditions set forth in this
definition or with respect to which the Requisite Lenders have granted the
necessary waivers pursuant to Section 5.2 shall be deemed to be an Unencumbered
Development Property only during such periods of time as Borrower has included
the same on the list of Unencumbered Development Properties attached to the most
recent Compliance Certificate delivered hereunder, and shall cease to be
considered an Unencumbered Development Property on the earlier of (i) the date
that 90% of such project is leased (but not prior to the date that a final
certificate of occupancy has been issued with respect to such project) or (ii)
the first anniversary of the issuance of such certificate of occupancy.
Thereafter, such Real Estate Asset may be an Unencumbered Property, assuming
that it meets the requirements set forth in the definition of an Unencumbered
Property. At no time shall the same Real Estate Asset be counted as both an
Unencumbered Property and an Unencumbered Development Property.

      UNENCUMBERED DEVELOPMENT PROPERTY VALUE. With respect to any Unencumbered
Development Property at any time, the lower of (a) cost or (b) book value of
such Unencumbered Development Property in accordance with Generally Accepted
Accounting Principles.

      UNENCUMBERED PROPERTY. A Real Estate Asset which at the date of
determination, (i)(a) is 100% owned in fee or ground leased under an Eligible
Ground Lease by Borrower or one of the Guarantors or (b) the Borrower, directly
or indirectly, owns at least 51% of the Voting Interests of such Real Estate
Asset and has the sole authority to make decisions regarding any sales or
financings related to such Real Estate Asset, (ii) is improved with one or more
completed industrial or office buildings (including "flex" and warehouse
buildings) or other similar commercial property of a type consistent with the
Borrower's business strategy; (iii) is not directly or indirectly subject to any
Lien (other than Permitted Liens) or to any negative

                                       23


pledge agreement or other agreement that prohibits the creation of any Lien
thereon; (iv) is a Real Estate Asset with respect to which each of the
representations contained in Section 6.18 and Section 6.21 hereof is true and
accurate as of such date of determination; (v) may be legally conveyed
separately from any other Real Estate without the need to obtain any subdivision
approval, zoning variance or other consent or approval from an unrelated Person;
(vi) is located in the United States, Canada or Europe, and (vii) to the extent
requested by the Agent, the Borrower has delivered to the Agent historical
operating and leasing information relating to such Unencumbered Property, in
form and substance reasonably satisfactory to the Agent. Each Real Estate Asset
which satisfies the conditions set forth in this definition or with respect to
which the Requisite Lenders have granted the necessary waivers pursuant to
Section 5.2 shall be deemed to be an Unencumbered Property only during such
periods of time as Borrower has included the same on the list of Unencumbered
Properties attached to the most recent Compliance Certificate delivered
hereunder.

      UNENCUMBERED PROPERTY VALUE. With respect to any Unencumbered Property at
any time (other than an Unencumbered Development Property or an Unencumbered
Property acquired within the immediately preceding fiscal quarter), an amount
computed as follows: (a) the Adjusted Net Operating Income of such Unencumbered
Property for the most recent fiscal quarter of the Borrower for which financial
statements have been delivered to the Agent pursuant to Section 7.4; (b) then
multiplying by four (4); and (c) dividing such difference by 0.085.

      UNSECURED INDEBTEDNESS. That portion of Total Debt which is not secured by
a Lien (other than Permitted Liens) on any Properties including, without
limitation, the Outstanding Obligations, the Unsecured Term Notes and any
Indebtedness evidenced by any bonds, debentures, notes or other debt securities
presently outstanding or which may be hereafter issued by Borrower or by the
Company. Unsecured Indebtedness shall not include accrued ordinary operating
expenses payable on a current basis.

      UNSECURED TERM NOTES. All notes from time to time outstanding under the
Indenture dated August 14, 1997 among Borrower, the Company and J.P. Morgan
Trust Company, N.A. (as successor trustee), as Trustee, as amended and
supplemented through the date hereof and as the same may be further amended or
supplemented from time to time.

      VALUE OF ALL UNENCUMBERED PROPERTIES. When determined as of the end of a
fiscal quarter, the sum, without duplication of the following items: (a) the
aggregate Unencumbered Property Value of all Unencumbered Properties; plus (b)
the aggregate Unencumbered Development Property Value of all of the Unencumbered
Development Properties; plus (c) one hundred percent (100%) of the purchase
price for any Unencumbered Property acquired within the immediately preceding
fiscal quarter. When determined as of a date which is during a fiscal quarter
based on an updated list of Unencumbered Properties and Unencumbered Development
Properties attached to the applicable Compliance Certificate as provided in the
last sentence of Section 5.1 or in Section 7.13, the Value of All Unencumbered
Properties most recently computed as provided in the preceding sentence of this
definition will be adjusted by subtracting the contribution to Value of All
Unencumbered Properties made by Unencumbered Properties and Unencumbered
Development Properties which have been deleted from such list and by adding the
contribution to Value of All Unencumbered Properties made by the Unencumbered
Properties and

                                       24


Unencumbered Development Properties which have been added to such list. To the
extent (i) the aggregate contribution to Value of All Unencumbered Properties
made by the Unencumbered Properties and Unencumbered Development Properties
located in Europe exceeds five percent (5%) of the Value of All Unencumbered
Properties, the amount in excess of said 5% level will be excluded when
computing the Value of All Unencumbered Properties, (ii) the aggregate
Unencumbered Development Property Value of all of the Unencumbered Development
Properties exceeds fifteen percent (15%) of the Value of All Unencumbered
Properties, the amount in excess of said level will be excluded when computing
the Value of All Unencumbered Properties, (iii) contribution to Value of All
Unencumbered Properties made by any single Unencumbered Property or Unencumbered
Development Property exceeds fifteen percent (15%) of the Value of All
Unencumbered Properties, the amount in excess of said level will be excluded
when computing the Value of All Unencumbered Properties and (iv) the aggregate
contribution to Value of all Unencumbered Properties made by Unencumbered
Properties and Unencumbered Development Properties that are not wholly-owned by
the Borrower or one of its wholly-owned Subsidiaries exceeds 10% of the Value of
All Unencumbered Properties, the amount in excess of said level will be excluded
when computing the Value of All Unencumbered Properties.

      VOTING INTERESTS. Stock or similar ownership interests, of any class or
classes (however designated), the holders of which are at the time entitled, as
such holders, (a) to vote for the election of a majority of the directors (or
persons performing similar functions) of the corporation, association,
partnership, trust or other business entity involved, or (b) to control, manage
or conduct the business of the corporation, partnership, association, trust or
other business entity involved.

      Section 1.2. Rules of Interpretation.

            (a) A reference to any document or agreement shall include such
      document or agreement as amended, modified or supplemented from time to
      time in accordance with its terms and the terms of this Agreement.

            (b) The singular includes the plural and the plural includes the
      singular.

            (c) A reference to any law includes any amendment or modification to
      such law.

            (d) A reference to any Person includes its permitted successors and
      permitted assigns.

            (e) Accounting terms not otherwise defined herein have the meanings
      assigned to them by Generally Accepted Accounting Principles applied on a
      consistent basis by the accounting entity to which they refer and, except
      as otherwise expressly stated, all use of accounting terms with respect to
      the Borrower shall reflect the consolidation of the financial statements
      of Borrower and the Related Companies.

            (f) If at any time any change in Generally Accepted Accounting
      Principles would affect the computation of any financial ratio or
      requirement set forth in any Loan

                                       25


      Document, and either the Borrower or the Requisite Lenders shall so
      request, the Agent, the Lenders and the Borrower shall negotiate in good
      faith to amend such ratio or requirement to preserve the original intent
      thereof in light of such change in Generally Accepted Accounting
      Principles (subject to the approval of the Requisite Lenders); provided
      that, until so amended, (i) such ratio or requirement shall continue to be
      computed in accordance with Generally Accepted Accounting Principles prior
      to such change therein and (ii) the Borrower shall provide to the Agent
      and the Lenders financial statements and other documents required under
      this Agreement or as reasonably requested hereunder setting forth a
      reconciliation between calculations of such ratio or requirement made
      before and after giving effect to such change in Generally Accepted
      Accounting Principles.

            (g) The words "include", "includes" and "including" are not
      limiting.

            (h) All terms not specifically defined herein or by Generally
      Accepted Accounting Principles, which terms are defined in the Uniform
      Commercial Code as in effect in Massachusetts, have the meanings assigned
      to them therein.

            (i) Reference to a particular "Section " refers to that section of
      this Agreement unless otherwise indicated.

            (j) The words "herein", "hereof", "hereunder" and words of like
      import shall refer to this Agreement as a whole and not to any particular
      section or subdivision of this Agreement.

            (k) The words "so long as any Loan or Note is outstanding" shall
      mean so long as such Loan or Note is not indefeasibly paid in full in
      cash.

      Section 1.3. Exchange Rates; Currency Equivalents. (a) The Agent or the
L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation
Date to be used for calculating Dollar Equivalent amounts of any Loans or
Letters of Credit and Outstanding Obligations denominated in Alternative
Currencies. Such Spot Rates shall become effective as of such Revaluation Date
and shall be the Spot Rates employed in converting any amounts between the
applicable currencies until the next Revaluation Date to occur. Except for
purposes of financial statements delivered by the Borrower, the Company or the
Guarantors hereunder or calculating financial covenants hereunder or except as
otherwise provided herein, the applicable amount of any currency (other than
Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent
amount as so determined by the Agent or the L/C Issuer, as applicable.

            (b) Wherever in this Agreement in connection with the making,
      conversion, continuation or prepayment of a Eurocurrency Rate Loan or the
      issuance, amendment or extension of a Letter of Credit, an amount, such as
      a required minimum or multiple amount, is expressed in Dollars, but such
      Eurocurrency Rate Loan or Letter of Credit is denominated in an
      Alternative Currency, such amount shall be the relevant Alternative
      Currency Equivalent of such Dollar amount (rounded to the nearest unit of
      such Alternative Currency, with 0.5 of a unit being rounded upward), as
      determined by the Agent or the L/C Issuer, as the case may be.

                                       26


      Section 1.4. Additional Alternative Currencies. (a) The Borrower may from
time to time request that Eurocurrency Rate Loans be made and/or Letters of
Credit be issued in a currency other than those specifically listed in the
definition of "Alternative Currency;" provided that such requested currency is a
lawful currency (other than Dollars) and meets the requirements set forth in the
definition of "Alternative Currency". In the case of any such request with
respect to the making of Eurocurrency Rate Loans, such request shall be subject
to the approval of the Agent and the Lenders; and in the case of any such
request with respect to the issuance of Letters of Credit, such request shall be
subject to the approval of the Agent and the L/C Issuer.

            (b) Any such request shall be made to the Agent not later than 11:00
      a.m., 20 Business Days prior to the date of the desired Loan or Letters of
      Credit (or such other time or date as may be agreed by the Agent and, in
      the case of any such request pertaining to Letters of Credit, the L/C
      Issuer, in its or their sole discretion). In the case of any such request
      pertaining to Eurocurrency Rate Loans, the Agent shall promptly notify
      each Lender thereof; and in the case of any such request pertaining to
      Letters of Credit, the Agent shall promptly notify the L/C Issuer thereof.
      Each Lender (in the case of any such request pertaining to Eurocurrency
      Rate Loans) or the L/C Issuer (in the case of a request pertaining to
      Letters of Credit) shall notify the Agent, not later than 11:00 a.m., ten
      Business Days after receipt of such request whether it consents, in its
      sole discretion, to the making of Eurocurrency Rate Loans or the issuance
      of Letters of Credit, as the case may be, in such requested currency.

            (c) Any failure by a Lender or the L/C Issuer, as the case may be,
      to respond to such request within the time period specified in the
      preceding sentence shall be deemed to be a refusal by such Lender or the
      L/C Issuer, as the case may be, to permit Eurocurrency Rate Loans to be
      made or Letters of Credit to be issued in such requested currency. If the
      Agent and all the Lenders consent to making Eurocurrency Rate Loans in
      such requested currency, the Agent shall so notify the Borrower and such
      currency shall thereupon be deemed for all purposes to be an Alternative
      Currency hereunder for purposes of any borrowings of Eurocurrency Rate
      Loans; and if the Agent and the L/C Issuer consent to the issuance of
      Letters of Credit in such requested currency, the Agent shall so notify
      the Borrower and such currency shall thereupon be deemed for all purposes
      to be an Alternative Currency hereunder for purposes of any Letter of
      Credit issuances. If the Agent shall fail to obtain consent to any request
      for an additional currency under this Section 1.4, the Agent shall
      promptly so notify the Borrower.

      Section 1.5. Change of Currency. (a) Each obligation of the Borrower to
make a payment denominated in the national currency unit of any member state of
the European Union that adopts the Euro as its lawful currency after the date
hereof shall be redenominated into Euro at the time of such adoption (in
accordance with the EMU Legislation). If, in relation to the currency of any
such member state, the basis of accrual of interest expressed in this Agreement
in respect of that currency shall be inconsistent with any convention or
practice in the London interbank market for the basis of accrual of interest in
respect of the Euro, such expressed basis shall be replaced by such convention
or practice with effect from the date on which such member state adopts the Euro
as its lawful currency; provided that if any Loan in the currency of such

                                       27


member state is outstanding immediately prior to such date, such replacement
shall take effect, with respect to such Loan, at the end of the then current
Interest Period.

            (b) Each provision of this Agreement shall be subject to such
      reasonable changes of construction as the Agent may from time to time
      specify to be appropriate to reflect the adoption of the Euro by any
      member state of the European Union and any relevant market conventions or
      practices relating to the Euro.

            (c) Each provision of this Agreement also shall be subject to such
      reasonable changes of construction as the Agent may from time to time
      specify to be appropriate to reflect a change in currency of any other
      country and any relevant market conventions or practices relating to the
      change in currency.

      Section 1.6. Times of Day. Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

      Section 1.7. Letter of Credit Amounts. Unless otherwise specified herein,
the amount of a Letter of Credit at any time shall be deemed to be the Dollar
Equivalent of the stated amount of such Letter of Credit in effect at such time;
provided, however, that with respect to any Letter of Credit that, by its terms
or the terms of any other document related thereto, provides for one or more
automatic increases in the stated amount thereof, the amount of such Letter of
Credit shall be deemed to be the Dollar Equivalent of the maximum stated amount
of such Letter of Credit after giving effect to all such increases, whether or
not such maximum stated amount is in effect at such time.

      Section 2. REVOLVING CREDIT FACILITY.

      Section 2.1. Loans.

            (a) Commitment to Lend Tranche A Loans; Limitation on Commitments.
      Subject to the provisions of Section 2.5 and the other terms and
      conditions set forth in this Agreement, each of the Lenders with a Tranche
      A Commitment severally (and not jointly) agrees to lend to the Borrower
      and the Borrower may borrow, repay, and reborrow in Dollars from time to
      time between the Effective Date and the Maturity Date upon notice by the
      Borrower to the Agent given and approved by the Agent in accordance with
      Section 2.5, such sums as are requested by the Borrower up to a maximum
      aggregate principal amount (after giving effect to all amounts requested)
      such that such Lender's Tranche A Credit Exposure (excluding the
      Competitive Bid Loans owed to such Lender) does not exceed such Lender's
      Tranche A Commitment, provided that (1) the Outstanding Obligations (after
      giving effect to all amounts requested) shall not at any time exceed the
      Maximum Credit Amount and (2) the sum of the Tranche A Obligations (after
      giving effect to all amounts requested) and the Tranche A Letter of Credit
      Obligations shall not exceed the Tranche A Commitments. The Tranche A
      Loans under this Section 2.1 shall be made pro rata in accordance with
      each Lender's Commitment Percentage for Tranche A Loans and the Lenders
      shall at all times immediately adjust inter se any inconsistency between
      each Lender's outstanding principal amount thereof and each Lender's
      Tranche A Commitment. Each request for a Tranche A Loan

                                       28


      hereunder shall constitute a representation and warranty by the Borrower
      that the conditions set forth in Section 10 or Section 11 (whichever is
      applicable) have been satisfied on the date of such request and will be
      satisfied on the proposed Borrowing Date of the requested Tranche A Loan,
      provided that the making of such representation and warranty by Borrower
      shall not limit the right of any Lender not to lend upon a determination
      by the Requisite Lenders that such conditions have not been satisfied.

            (b) Commitment to Lend Tranche B Loans; Limitation on Commitments.
      Subject to the provisions of Section 2.5 and the other terms and
      conditions set forth in this Agreement, each of the Lenders with a Tranche
      B Commitment severally (and not jointly) agrees to lend to the Borrower
      and the Borrower may borrow, repay, and reborrow in Dollars or any
      Alternative Currency from time to time between the Effective Date and the
      Maturity Date upon notice by the Borrower to the Agent given and approved
      by the Agent in accordance with Section 2.5, such sums as are requested
      by the Borrower up to a maximum aggregate principal amount (after giving
      effect to all amounts requested) such that the Dollar Equivalent of such
      Lender's Tranche B Credit Exposure (excluding the Competitive Bid Loans
      owed to such Lender) does not exceed such Lender's Tranche B Commitment,
      provided that the Dollar Equivalent of (1) the Outstanding Obligations
      (after giving effect to all amounts requested) shall not at any time
      exceed the Maximum Credit Amount and (2) the sum of the Tranche B
      Obligations and the Tranche B Letter of Credit Obligations shall not
      exceed the Tranche B Commitments. The Tranche B Loans under this Section
      2.1 shall be made pro rata in accordance with each Lender's Commitment
      Percentage for Tranche B Loans and the Lenders shall at all times
      immediately adjust inter se any inconsistency between each Lender's
      outstanding principal amount thereof and each Lender's Tranche B
      Commitment. Each request for a Tranche B Loan hereunder shall constitute a
      representation and warranty by the Borrower that the conditions set forth
      in Section 10 or Section 11 (whichever is applicable) have been
      satisfied on the date of such request and will be satisfied on the
      proposed Borrowing Date of the requested Tranche B Loan, provided that the
      making of such representation and warranty by Borrower shall not limit the
      right of any Lender not to lend upon a determination by the Requisite
      Lenders that such conditions have not been satisfied.

            (c) Use of Tranche A Commitments and Tranche B Commitments.
      Notwithstanding any other provision of this Agreement to the contrary, (a)
      each Loan denominated in Dollars (whether bearing interest at the
      Eurocurrency Rate or the Prime Rate) shall be a Tranche A Loan and shall
      be deemed to use the Tranche A Commitments, unless the Tranche A
      Commitments have been fully used and are not available at such time for
      such Loan, in which case such Loan denominated in Dollars shall be a
      Tranche B Loan, if such Tranche B Commitments are available, and shall be
      deemed to use the Tranche B Commitments and (b) each Loan denominated in
      an Alternative Currency shall be a Tranche B Loan, if such Tranche B
      Commitments are available, and shall be deemed to use the Tranche B
      Commitments.

      Section 2.2. Changes in Total Commitment.

                                       29


            (a) Provided that no Default or Event of Default has occurred and is
      continuing, the Borrower shall have the option on up to four (4) occasions
      during the term of this Agreement to request an increase in the Tranche A
      Commitments and the Total Commitment by an amount not less than
      $25,000,000 per request and $200,000,000 in the aggregate (to not more
      than $750,000,000 and $800,000,000, respectively), by written notice to
      the Agent. Upon receipt of such notice, the Agent shall consult with
      Arranger and shall notify the Borrower of the amount of the arrangement
      fees to be paid to Arranger and the upfront fees to be paid to any Lenders
      who provide an Additional Tranche A Commitment in connection with such
      increase in the Tranche A Commitment and the Total Commitment. If the
      Borrower agrees to pay the arrangement and upfront fees so determined,
      then the Agent shall send a notice to all Lenders with a Commitment (the
      "ADDITIONAL COMMITMENT REQUEST NOTICE") informing them of the Borrower's
      request to increase the Tranche A Commitment and the Total Commitment and
      of the upfront fees to be paid with respect thereto. Each Lender who
      desires to provide an Additional Tranche A Commitment upon such terms
      shall provide the Agent with a written commitment letter specifying the
      amount of the Additional Tranche A Commitment by which it is willing to
      provide prior to such deadline as may be specified in the Additional
      Commitment Request Notice. If the requested increase is oversubscribed
      then the Agent and the Arranger shall allocate the Commitment Increase
      among the Lenders who provide such commitment letters on such basis as the
      Agent and the Arranger shall determine in their sole discretion. If the
      Additional Tranche A Commitments so provided are not sufficient to provide
      the full amount of the Commitment Increase requested by the Borrower, then
      the Agent may, but shall not be obligated to, invite one or more Eligible
      Assignees to become a Lender and provide an Additional Tranche A
      Commitment. The Agent shall provide all Lenders with a notice setting
      forth the amount, if any, of the Additional Tranche A Commitment to be
      provided by each Lender and the revised Commitment Percentages which shall
      be applicable after the effective date of the Commitment Increase
      specified therein (the "COMMITMENT INCREASE Date"). Nothing in this
      Section 2.2 shall constitute or be deemed to constitute an agreement by
      any Lender to increase its Commitment hereunder.

            (b) On the Commitment Increase Date the outstanding principal
      balance of the Loans shall be reallocated among the Lenders such that
      after the Commitment Increase Date the outstanding principal amount of
      Tranche A Loans owed to each Lender shall be equal to such Lender's
      Commitment Percentage with respect to such Lender's Tranche A Commitment
      (as in effect after the Commitment Increase Date) of the outstanding
      principal amount of all Tranche A Loans. On the Commitment Increase Date
      those Lenders whose Commitment Percentage is increasing shall advance the
      funds to the Agent and the funds so advanced shall be distributed among
      the Lenders whose Commitment Percentage is decreasing as necessary to
      accomplish the required reallocation of the outstanding Loans. The funds
      so advanced shall be Prime Rate Loans until converted to Eurocurrency Rate
      Loans which are allocated among all Lenders based on their Commitment
      Percentages. To the extent such reallocation results in certain Lenders
      receiving funds which are applied to Eurocurrency Rate Loans prior to the
      last day of the applicable Interest Period, then the Borrower shall pay to
      the Agent for the account of the affected Lenders the Eurocurrency
      Prepayment Fee which shall be

                                       30


      determined separately for each such Lender in the manner set forth in
      Section 3.3. On the Commitment Increase Date, the Lenders' respective
      interests in outstanding Letters of Credit shall also be adjusted to
      reflect the revised Commitment Percentages. Upon request from any Lender
      whose interest in an outstanding Letter of Credit is so increasing, the
      Borrower will pay additional Letter of Credit fees for the amount of such
      increase at the rate provided in Section 2.9(c) prorated for the period
      from the Commitment Increase Date until the expiration of the applicable
      Letter of Credit.

            (c) The Borrower shall have the right at any time upon at least ten
      (10) Business Days' prior written notice to the Agent, to reduce by
      $10,000,000 or an integral multiple of $10,000,000 in excess thereof the
      unborrowed portion of the then Total Commitment, provided that (i) the
      Total Commitment shall not be reduced to less than $100,000,000 unless the
      Total Commitment is reduced to zero, (ii) the Tranche A Commitments as
      reduced shall not be in an amount less than the sum of the aggregate
      Tranche A Obligations and the aggregate Tranche A Letter of Credit
      Obligations, and (iii) the Tranche B Commitments as reduced shall not be
      in an amount less than the sum of aggregate the Tranche B Obligations and
      the aggregate Tranche B Letter of Credit Obligations. The Tranche A
      Commitments and the Tranche B Commitments of the Lenders shall be reduced
      pro rata in accordance with their respective Commitment Percentages by the
      amount specified in any such notice. Upon the effective date of any such
      reduction, the Borrower shall pay to the Agent for the respective accounts
      of the Lenders the full amount of any Facility Fee then accrued on the
      amount of the reduction. No reduction of the Commitments may be
      reinstated.

            (d) Upon the effective date of each increase or reduction in the
      Total Commitment pursuant to this Section 2.2, the Agent may make such
      other changes by way of supplement, amendment or restatement of any Loan
      Documents as may be necessary or desirable to reflect the Commitment
      Increase, notwithstanding anything to the contrary in Section 25, without
      the consent of any Lenders other than the Lenders with an Additional
      Tranche A Commitment. The Borrower shall also execute and deliver to the
      Agent new Notes for each Lender whose Commitment has changed so that the
      principal amount of such Lender's Note (not including the Note relating to
      the Swingline Commitment) shall equal its Commitment. The Agent shall
      deliver such replacement Notes to the respective Lenders in exchange for
      the Notes replaced thereby which shall be surrendered by such Lenders.
      Such new Notes shall provide that they are replacements for the
      surrendered Notes and that they do not constitute a novation, shall be
      dated as of the Commitment Increase Date or the effective date of such
      reduction in the Total Commitment, as applicable, and shall otherwise be
      in substantially the form of the replaced Notes. Within five (5) days of
      issuance of any new Notes pursuant to this Section 2.2(d), the Borrower
      shall deliver an opinion of counsel, addressed to the Lenders and the
      Agent, relating to the due authorization, execution and delivery of such
      new Notes and the enforceability thereof, in form and substance reasonably
      satisfactory to the Lenders. The surrendered Notes shall be canceled and
      returned to the Borrower.

      Section 2.3. The Notes. The Loans under the Facility shall be evidenced
by separate promissory notes of the Borrower in substantially the form of
Exhibit A hereto (or if such note is

                                       31


a Designated Bank Note, in substantially the form of Exhibit N hereto) (each a
"NOTE"), and completed with appropriate insertions and there shall also be a
Swingline Note payable to the order of the Swingline Lender in the principal
amount of the Swingline Commitment. One or more Notes shall be payable to the
order of each Lender in an aggregate principal amount equal to such Lender's
Commitment. The Borrower irrevocably authorizes each Lender to make or cause to
be made, at or about the time of the Borrowing Date of any Loan or at the time
of receipt of any payment of principal on such Lender's Note, an appropriate
notation on such Lender's Record reflecting the making of such Loan or (as the
case may be) the receipt of such payment. The outstanding amount of the Loans
set forth on such Lender's Record shall (absent manifest error) be prima facie
evidence of the principal amount thereof owing and unpaid to such Lender, but
the failure to record, or any error in so recording, any such amount on the
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Note to make payments of principal of or interest on any
Note when due. Upon receipt of an affidavit of an officer of any Lender as to
the loss, theft, destruction or mutilation of its Note or any other security
document which is not of public record, and, in the case of any such loss,
theft, destruction or mutilation, upon cancellation of such Note or other
security document, Borrower will issue, in lieu thereof, a replacement Note or
other security document in the same principal amount thereof and otherwise of
like tenor.

      Section 2.4. Interest on Loans.

            (a) Subject to Section 4.9, each Prime Rate Loan shall bear
      interest for the period commencing with the Borrowing Date thereof and
      ending on the last day of the Interest Period with respect thereto at the
      rate equal to the Prime Rate plus the Applicable Margin.

            (b) Subject to Section 4.9, each Eurocurrency Rate Loan shall bear
      interest for the period commencing with the Borrowing Date thereof and
      ending on the last day of the Interest Period with respect thereto at the
      rate per annum equal to the applicable Eurocurrency Rate determined for
      such Interest Period plus the Applicable Margin (or, with respect to
      Competitive Bid Loans, the applicable Competitive Bid Margin) plus (in the
      case of a Eurocurrency Rate Loan of any Lender which is lent from a
      Eurocurrency Lending Office in the United Kingdom or a Participating
      Member State) the Mandatory Cost.

            (c) The Borrower unconditionally promises to pay interest on each
      Loan in arrears on each Interest Payment Date with respect thereto.

      Section 2.5. Requests for Loans.

            (a) The Borrower shall give to the Agent written notice in the form
      of Exhibit B hereto of each Loan requested hereunder (a "LOAN REQUEST") no
      later than 11:00 a.m. on (a) the Business Day prior to the proposed
      Borrowing Date of any Prime Rate Loan other than a Swingline Loan, (b) two
      (2) Business Days prior to the proposed Borrowing Date of any LIBOR Rate
      Loan, or (c) four (4) Business Days prior to the proposed Borrowing Date
      of any Alternative Currency Loan. Each such notice shall specify (i) the
      principal amount in the requested currency of the proposed Loan, (ii) the
      proposed

                                       32


      Borrowing Date of such Loan, (iii) the Interest Period for such Loan, (iv)
      the Type of such Loan and the requested currency of such Loan if a
      Eurocurrency Loan, and (v) the Tranche A Availability or Tranche B
      Availability, as applicable, as of the date of the Loan Request, and shall
      be accompanied by a statement in the form of Exhibit C hereto signed by a
      Responsible Officer setting forth in reasonable detail computations
      evidencing compliance with the covenants contained in Section 9.1 through
      Section 9.6 hereof after giving effect to such requested Loan (a
      "COMPLIANCE Certificate"). Upon receipt of a Loan Request, the Agent
      shall, within one (1) Business Day thereafter, provide to each of the
      Lenders with a Commitment for such Loan by facsimile a copy of such Loan
      Request and accompanying Compliance Certificate and each Lender shall,
      within 24 hours thereafter, notify the Agent if it believes that any of
      the conditions contained in Section 11 of this Agreement has not been met
      or waived. If such A notice is given the Requisite Lenders shall promptly
      determine whether all of the conditions contained in Section 11 of this
      Agreement have been met oR waived. If no such notice is given by any
      Lender or if following such notice the Requisite Lenders determine that
      the conditions contained in Section 11 have been met or waived, each of
      the Lenders shall be obligated to fund its Commitment Percentage of the
      requested Loans. Each such Loan Request shall be irrevocable and binding
      on the Borrower and the Borrower shall be obligated to accept the Loan
      requested from the Lenders on the proposed Borrowing Date. Each Loan
      Request shall be in a minimum aggregate amount of $3,000,000 or an
      integral multiple of $1,000,000 in excess thereof.

            (b) Notwithstanding anything contained in Section 2.5(a) to the
      contrary, in the event that the making of a requested Loan would cause
      non-compliance with anY of the covenants contained in Section 9.1 through
      Section 9.6 hereof, the Agent may, in its sole discretion, reduce the
      amount of the Loan Request to an amoUNT which would enable the Borrower to
      maintain compliance with such otherwise defaulted covenant or covenants
      and Borrower shall accept the Loan made pursuant to such reduced Loan
      Request.

      Section 2.6. Conversion and Continuation Options.

            (a) The Borrower may elect from time to time to convert any
      outstanding Loan denominated in Dollars to a Loan of another Type
      denominated in Dollars, provided that (i) with respect to any such
      conversion of a LIBOR Rate Loan to a Prime Rate Loan, the Borrower shall
      give the Agent written notice of such election no later than 11:00 a.m.
      two (2) Business Days prior to the conversion; (ii) with respect to any
      such conversion of a LIBOR Rate Loan into a Prime Rate Loan, such
      conversion shall only be made on the last day of the Interest Period with
      respect thereto; (iii) subject to the further proviso at the end of this
      section and subject to Section 2.6(b) and Section 2.6(d) hereof, with
      respect to any such conversion of a Prime Rate Loan to a LIBOR Rate Loan,
      the Borrower shall give the Agent written notice of such election no later
      than 11:00 a.m. at least two (2) Business Days prior to the conversion and
      (iv) no Loan may be converted into a LIBOR Rate Loan when any Default or
      Event of Default has occurred and is continuing. The Agent shall promptly
      provide notice of any such request to the Lenders. On the date on which
      such conversion is being made, each Lender shall take such action as is
      necessary to transfer its Commitment Percentage of such Loans to its
      Domestic Lending Office or

                                       33


      its Eurocurrency Lending Office, as the case may be. All or any part of
      outstanding Loans of any Type may be converted as provided herein,
      provided further that each Conversion Request relating to the conversion
      of a Prime Rate Loan to a LIBOR Rate Loan shall be for an amount equal to
      $3,000,000 or an integral multiple of $1,000,000 in excess thereof and
      shall be irrevocable by the Borrower. The Borrower may not convert
      Alternative Currency Loans to Loans of another Type, but may continue such
      Loans in accordance with Section 2.6(b).

            (b) Any Loans of any Type may be continued as such upon the
      expiration of an Interest Period with respect thereto by compliance by the
      Borrower with the notice provisions contained in Section 2.6(a); provided
      that no Eurocurrency Rate Loan may be continued as such when any Default
      or Event of Default haS occurred and is continuing but, (i) in the case of
      a Eurocurrency Rate Loan denominated in Dollars, shall be automatically
      converted to a Prime Rate Loan and (ii) in the case of a Eurocurrency Rate
      Loan denominated in any Alternative Currency, such Eurocurrency Rate Loan
      shall be repaid, in each case, on the last day of the first Interest
      Period relating thereto ending during the continuance of any Default or
      Event of Default.

            (c) In the event that the Borrower does not notify the Agent of its
      election hereunder with respect to (i) any Loan denominated in Dollars,
      such Loan shall be automatically converted to a Prime Rate Loan at the end
      of the applicable Interest Period and (ii) any Alternative Currency Loan,
      such Loan shall be due and payable on the last day of the Interest Period
      for such Loan.

            (d) The Borrower may not request a Eurocurrency Rate Loan pursuant
      to Section 2.5, elect to convert a Prime Rate Loan to a LIBOR Rate Loan
      pursuant to Section 2.6(A) or elect to continue a Eurocurrency Rate Loan
      pursuant to Section 2.6(b) if, after giving effect thereto, there would
      be greater than ten (10) EurocurrencY Rate Loans outstanding (whether
      denominated in Dollars or Alternative Currency) or greater than four (4)
      Eurocurrency Rate Loans outstanding that are denominated in any
      Alternative Currencies. Any Loan Request for a Eurocurrency Rate Loan that
      would create greater than ten (10) Eurocurrency Rate Loans outstanding
      shall be deemed to be a Loan Request for a Prime Rate Loan.

            (e) From and after the occurrence of an Event of Default, the Agent
      may, or upon request of the Requisite Lenders holding Tranche B
      Commitments shall, require that each Alternative Currency Loan then
      outstanding be repaid by means of one or more Prime Rate Loans in the
      amount of the Dollar Equivalent of such Alternative Currency Loan.

      Section 2.7. Funds for Loans.

            (a) Subject to Section 2.5 and other provisions of this Agreement,
      not later than 1:00 p.m. on the proposed Borrowing Date of any Loans, each
      of the LenderS with a Commitment for such Loan will make available to the
      Agent, at the Agent's Head Office, in immediately available funds, the
      amount of such Lender's Commitment Percentage of the amount of the
      requested Loans. Upon receipt from each Lender of such amount, and

                                       34


      upon receipt of the documents required by Section Section 10 or 11
      (whichever is applicable) and the satisfaction of the other conditions set
      forth therein, to the extent applicable, the AgENT will make available to
      the Borrower the aggregate amount of such Loans made available to the
      Agent by the Lenders. The failure or refusal of any Lender to make
      available to the Agent at the aforesaid time and place on any Borrowing
      Date the amount of its Commitment Percentage of the requested Loans shall
      not relieve any other Lender from its several obligation hereunder to make
      available to the Agent the amount of such other Lender's Commitment
      Percentage of any requested Loans but shall not obligate any other Lender
      or Agent to fund more than its Commitment Percentage of the requested
      Loans or to increase its Commitment Percentage.

            (b) The Agent may, unless notified to the contrary by any Lender
      prior to a Borrowing Date, assume that such Lender has made available to
      the Agent on such Borrowing Date the amount of such Lender's Commitment
      Percentage of the Loans to be made on such Borrowing Date, and the Agent
      may (but it shall not be required to), in reliance upon such assumption,
      make available to the Borrower a corresponding amount. If any Lender makes
      available to the Agent such amount on a date after such Borrowing Date,
      such Lender shall pay to the Agent on demand an amount equal to the
      product of (i) the average computed for the period referred to in clause
      (iii) below, of the weighted average interest rate paid by the Agent for
      federal funds acquired by the Agent during each day included in such
      period, times (ii) the amount of such Lender's Commitment Percentage of
      such Loans, times (iii) a fraction, the numerator of which is the number
      of days or portion thereof that elapsed from and including such Borrowing
      Date to the date on which the amount of such Lender's Commitment
      Percentage of such Loans shall become immediately available to the Agent,
      and the denominator of which is 365. A statement of the Agent submitted to
      such Lender with respect to any amounts owing under this paragraph shall
      be prima facie evidence of the amount due and owing to the Agent by such
      Lender.

      Section 2.8. Swingline Loans.

            (a) Subject to the provisions of this Section 2.8 and the other
      terms and conditions set forth in this Agreement, the Swingline Lender
      agrees to lend to thE Borrower and the Borrower may borrow, repay and
      reborrow from time to time between the Effective Date and the date which
      is five (5) days prior to the Maturity Date, such sums as are requested by
      Borrower up to a maximum aggregate principal amount of Swingline Loans
      outstanding (after giving effect to all amounts requested) at any one time
      equal to the Swingline Commitment, provided that the (i) Outstanding
      Obligations, including the outstanding amount of Swingline Loans (after
      giving effect to all amounts requested) shall not at any time exceed the
      Maximum Credit Amount, (ii) the sum of the Tranche A Obligations
      (including any Swingline Loans deemed to use the Tranche A Commitments as
      provided below) and the Tranche A Letter of Credit Obligations shall not
      at any time exceed the Tranche A Commitments and (iii) the sum of the
      Tranche B Obligations (including any Swingline Loans deemed to use the
      Tranche B Commitments as provided below) and the Tranche B Letter of
      Credit Obligations shall not at any time exceed the Tranche B Commitments.
      All Swingline Loans will be Prime Rate Loans.

                                       35


      Notwithstanding any other provision of this Agreement to the contrary,
      each Swingline Loan shall be a Tranche A Loan and shall be deemed to use
      the Tranche A Commitments, unless the Tranche A Commitments have been
      fully used and are not available at such time for Loan, in which case such
      Swingline Loan shall be a Tranche B Loan, if such Tranche B Commitments
      are available, and shall be deemed to use the Tranche B Commitments.

            (b) The Borrower shall give to the Agent a Swingline Loan Request no
      later than 1:00 p.m. on the proposed Borrowing Date for any Swingline
      Loan. Each such Swingline Loan Request shall be irrevocable and binding on
      the Borrower and the Borrower shall be obligated to accept the Swingline
      Loan requested from the Swingline Lender on the proposed Borrowing Date.
      Each Swingline Loan Request shall be in a minimum aggregate amount of
      $100,000 or in integral multiple of $100,000 in excess thereof. Unless the
      Swingline Lender determines that certain of the conditions contained in
      Section 11 oF this Agreement have not been met or waived as of the
      proposed Borrowing Date, then the Swingline Lender will make available to
      the Agent, and the Agent will make available to the Borrower, the
      aggregate amount of the Swingline Loans so requested before the close of
      business on the Borrowing Date. The Borrower agrees to repay each
      Swingline Loan within seven (7) Business Days after the Borrowing Date
      thereof. In addition, the Borrower agrees that Swingline Loans shall not
      be outstanding for more than a total of fourteen (14) days during any
      month and the Borrower shall repay Swingline Loans to the extent necessary
      to comply the foregoing restriction. The funds used to repay such
      Swingline Loan may be from Loans made pursuant to Section 2.1, or with
      other funds of the Borrower, but the Borrower may not use the proceeds of
      one Swingline Loan to repay a previous SwinglinE Loan. The Borrower and
      the Lenders agree that upon written demand by the Swingline Lender (which
      may be given at any time and shall be deemed given if any Swingline Loan
      is not repaid on the date required by this Agreement), the Agent shall
      give each Lender a notice requiring the funding of a Mandatory Prime Rate
      Loan for the purpose of repaying a Swingline Loan. Within one (1) business
      day after receipt of such notice from the Agent, each Lender shall be
      obligated to fund its Commitment Percentage of the Mandatory Prime Rate
      Loan. Upon the funding of such Mandatory Prime Rate Loan, the Agent shall
      forward the proceeds thereof to the Swingline Lender to repay the
      applicable Swingline Loan. Each Lender shall be obligated to fund its
      Commitment Percentage of Mandatory Prime Rate Loans hereunder regardless
      of whether or not all of the conditions contained in Section 11 of thiS
      Agreement have been met or waived and even if the funding is to take place
      after the Maturity Date.

            (c) In the event that a Mandatory Prime Rate Loan cannot be made on
      the date required in the paragraph (b) above, upon written demand by the
      Swingline Lender, each other Lender shall purchase from the Swingline
      Lender a participating interest in the outstanding Swingline Loan in an
      amount equal to such other Lender's Commitment Percentage of such
      outstanding Swingline Loan as of the date of such purchase. Each Lender
      agrees to purchase its Commitment Percentage of each Swingline Loan within
      one (1) business day after such demand therefor is made by the Swingline
      Lender and on such date of purchase, an amount equal to such Lender's
      Commitment Percentage of the

                                       36


      outstanding principal amount of the Swingline Loan to be purchased by such
      Lender shall be advanced to the Agent and upon receipt of such funds the
      Agent shall transfer such funds to the Swingline Lender. Upon any sale by
      the Swingline Lender to any other Lender of a participating interest in
      any Swingline Loan pursuant to this paragraph, the Swingline Lender
      represents and warrants to such other Lender that the Swingline Lender is
      the legal and beneficial owner of the interest being sold by it, free and
      clear of any liens, but makes no other representation or warranty. Except
      for such representation and warranty, the Swingline Lender shall have no
      responsibility or liability to any other Lender with respect to the
      Swingline Loans or the participation therein so sold, and no Lender shall
      have any recourse against the Swingline Lender with respect to such
      Swingline Loans or participation therein, except that the Swingline Lender
      shall pay to each Lender that purchases a participation interest in
      Swingline Loans pursuant to this paragraph such Lender's ratable share of
      the payments, if any, actually received by the Swingline Lender on account
      of such Swingline Loans. If and to the extent that any Lender does not so
      advance the purchase price for such participation interest as required by
      this paragraph, such Lender agrees to pay to the Agent, for the account of
      Swingline Lender, on demand an amount computed in the same manner as the
      amount due to the Agent from a Lender which has made available funds for
      loans after the Borrowing Date thereof pursuant to Section 2.7(b).

      Section 2.9. Letters of Credit.

            (a) Up to $50,000,000 of the Commitments may be used by Borrower for
      the issuance of Letters of Credit by the L/C Issuer for the account of the
      Borrower subject to the terms and conditions set forth herein. Each Letter
      of Credit shall be denominated in Dollars or Alternative Currency and
      shall be a standby letter of credit issued to support the obligations of
      Borrower in connection with any purposes for which the proceeds of the
      Loans may be used pursuant to Section 7.11; provided that after giving
      effect to all Letters of Credit requested, in no event shall (i) the sum
      of the Tranche A LetteR of Credit Obligations and the Dollar Equivalent of
      the Tranche B Letter of Credit Obligations exceed fifty million dollars
      ($50,000,000), (ii) the aggregate Credit Exposure of all Lenders exceed
      the Maximum Credit Amount, (iii) the sum of the Tranche A Obligations and
      the Tranche A Letter of Credit Obligations exceed the Tranche A
      Commitments and (iv) the sum of the Dollar Equivalent of the Tranche B
      Obligations and the Dollar Equivalent of the Tranche B Letter of Credit
      Obligations exceed the Tranche B Commitments. Each Letter of Credit shall
      have an initial term of not more than one (1) year, and shall expire no
      later than fifteen (15) days (thirty (30) days in the case of a Letter of
      Credit denominated in Alternative Currency) prior to the Maturity Date;
      provided, that (i) any Letter of Credit with a one-year term may provide
      for the automatic renewal thereof for additional one-year periods so long
      as such renewal does not extend the expiration date of such Letter of
      Credit beyond the dates set forth above and (ii) Letters of Credit
      denominated in Dollars may have a later expiration date so long as (A)
      such expiration date is not later than 364 days after the Maturity Date
      and (B) the Borrower provides cash collateral for each such Letter of
      Credit at least ten (10) days prior to the Maturity Date. On or before the
      date that is ten (10) days prior to the Maturity Date, the Borrower shall
      deposit in an interest-bearing cash collateral account

                                       37


      opened by the Agent an amount equal to the aggregate then undrawn and
      unexpired amount of all Letters of Credit that have an expiration date
      which extends beyond the Maturity Date. Amounts held in such cash
      collateral account shall be applied by the Agent towards the reimbursement
      of any drawings under such Letters of Credit. After the payment in full of
      all Obligations hereunder, any unused portion of such cash collateral
      (including any interest) shall be returned to the Borrower. Any letter of
      Credit expiring after the Maturity Date shall be governed by the terms of
      this Agreement, which shall survive the Maturity Date for such purpose.
      Although the L/C Issuer shall be the issuing bank of the Letter of Credit,
      each Lender hereby accepts for its own account and risk an undivided
      interest equal to its Commitment Percentage in the L/C Issuer's
      obligations and rights under each Letter of Credit issued hereunder. Each
      Lender unconditionally and irrevocably agrees with the L/C Issuer that, if
      a draft is paid under any Letter of Credit, such Lender shall promptly pay
      to the L/C Issuer an amount equal to such Lender's Commitment Percentage
      of the amount of such draft or any part thereof. Upon the issuance of each
      Letter of Credit hereunder, there shall be reserved from each Lender's
      Commitment an amount equal to such Lender's Commitment Percentage of the
      stated amount of the Letter of Credit. Such reserved amounts shall remain
      in place and shall be unavailable for borrowing under Section 2.1 until
      the date that the Letter of Credit expires, is fully drawn or is
      terminated. Notwithstanding anY other provision of this Agreement to the
      contrary, (a) each Letter of Credit denominated in Dollars shall be a
      Tranche A Letter of Credit and shall be deemed to use the Tranche A
      Commitments, unless the Tranche A Commitments have been fully used and are
      not available at such time for such Letter of Credit, in which case such
      Letter of Credit denominated in Dollars shall be a Tranche B Letter of
      Credit, if such Tranche B Commitments are available, and shall be deemed
      to use the Tranche B Commitments, and (b) each Letter of Credit
      denominated in an Alternative Currency shall be a Tranche B Letter of
      Credit, if such Tranche B Commitments are available, and shall be deemed
      to use the Tranche B Commitments. The letters of credit issued prior to
      the Effective Date by Bank of America described on Schedule 1.4 (the
      "EXISTING LETTERS OF CREDIT") shall be deemed to be Letters of Credit for
      all purposes hereunder and shall be deemed to be Tranche A Letters of
      Credit and use the Tranche A Commitments.

            (b) The Borrower shall give to the L/C Issuer and the Agent a
      written notice in the form of Exhibit F hereto of each Letter of Credit
      requested hereunder (a "LETTER OF CREDIT REQUEST") no less than five (5)
      Business Days (or in the case of a Letter of Credit denominated in
      Alternative Currency, at least ten (10) Business Days) prior to the
      proposed issuance date of the requested Letter of Credit. Each Letter of
      Credit Request shall specify (i) the name and address of the beneficiary
      of the requested Letter of Credit and the requested currency of such
      Letter of Credit, (ii) the stated amount of the requested Letter of Credit
      in the requested currency, (iii) the proposed issuance date and expiration
      date of the requested Letter of Credit, (iv) the proposed form of the
      requested Letter of Credit, and (v) the permitted purpose for which the
      Letter of Credit will be used. The L/C Issuer may also require that the
      Borrower complete its standard letter of credit application in the form of
      Exhibit G attached hereto, as such standard form may be revised from time
      to time, and submit the same together with the Letter of Credit Request.
      Within two (2) Business Days after receipt of a Letter of Credit Request,
      the

                                       38


      L/C Issuer shall provide the Agent and the Agent shall provide to each of
      the Lenders by facsimile the Letter of Credit Request and such other
      documents and information pertaining to such requested Letter of Credit
      issuance. Unless the L/C Issuer has received written notice from any
      Lender or Agent at least one (1) Business Day prior to the requested date
      of issuance of the applicable Letter of Credit that any conditions
      contained in Section 11 of the Agreement shall not then be satisfied, and
      so long as the L/C Issuer haS determined in its discretion that it is
      willing to issue the requested Letter of Credit and that it is satisfied
      with the proposed form thereof, then, the L/C Issuer shall, on the
      requested date, issue the Letter of Credit and each of the Lenders shall
      then be obligated to the L/C Issuer with respect to its Commitment
      Percentage of the Letter of Credit as provided above in Section 2.9(a).

            (c) The Borrower shall pay to the L/C Issuer for its own account a
      fronting fee for each Letter of Credit equal to the greater of (i)
      one-tenth percent per annum (0.10%) of the Dollar Equivalent of the stated
      amount of the Letter of Credit or (ii) $1,500, payable in arrears on the
      last Business Day of each calendar quarter. The Borrower shall pay to the
      Agent for the account of the Lenders a Letter of Credit fee equal to the
      then prevailing Applicable Margin for Eurocurrency Rate Loans less
      one-tenth of one percent (0.10%) per annum of the Dollar Equivalent of the
      stated amount of the Letter of Credit, which Letter of Credit fee shall be
      due and payable on the last Business Day of each calendar quarter. Such
      fronting fee and Letter of Credit fee shall be prorated for any partial
      quarter based on a 360-day year and paid for the actual number of days
      between the last Business Day of the previous calendar quarter and the
      expiration date or termination of such Letter of Credit. Promptly after
      its receipt thereof the Agent shall distribute such Letter of Credit fee
      to the Lenders pro-rata in accordance with their respective Commitment
      Percentages. Such fees shall be nonrefundable. The Borrower also agrees to
      pay the L/C Issuer's standard fees with respect to the issuance,
      amendment, renewal or extension of any Letter of Credit or processing of
      drawings thereunder and to reimburse the L/C Issuer for all reasonable
      fees, costs, expenses and disbursements of the L/C Issuer in issuing,
      effecting payment under, amending or otherwise administering any Letter of
      Credit.

            (d) On or promptly after each Drawing Date the L/C Issuer shall
      notify the Agent and the Agent shall notify the Lenders and the Borrower
      of the amount of the draft paid by the L/C Issuer on such Drawing Date.
      The payment of a draft under a Letter of Credit shall constitute an
      advance of a Mandatory Prime Rate Loan in an amount equal to the Dollar
      Equivalent of the aggregate amount of the drawing, which amount shall bear
      interest as a Prime Rate Loan from the Drawing Date. On the Drawing Date
      each Lender shall make available to the L/C Issuer in immediately
      available funds its Commitment Percentage of the amount of the Mandatory
      Prime Rate Loan so advanced upon such payment of a draft under the Letter
      of Credit. If the L/C Issuer receives such funds from any Lender on a date
      after the Drawing Date, such Lender will be entitled to distribution
      pursuant to Section 14.5 of its pro ratA share of interest paid by
      Borrower on such Mandatory Prime Rate Loan accrued from the Drawing Date,
      but such Lender shall pay to the L/C Issuer on demand an amount computed
      in the same manner as the amount due to the L/C Issuer from a Lender which
      has made available funds for loans after the Borrowing Date

                                       39


      thereof pursuant to Section 2.7(b). Each Lender's obligation to fund its
      Commitment Percentage of Mandatory Prime Rate Loans arising froM the
      payment of a draft under a Letter of Credit shall not be subject to the
      satisfaction of the conditions set forth in Section 11. Within three (3)
      Business Days after each Drawing Date, the Borrower shall deliver to the
      Agent a written explanation of the facts and circumstances relating to
      such drawing and a Compliance Certificate and any other information
      requested by the L/C Issuer or the Agent for the purpose of allowing the
      Lenders to determine whether the drawing or related events have resulted
      in a Default or Event of Default. The Agent shall promptly provide copies
      of such explanation and information to the Lenders. In the event that a
      Mandatory Prime Rate Loan cannot be made on the date required in this
      paragraph, upon written demand by the L/C Issuer, each other Lender shall
      purchase from the L/C Issuer a participating interest in the unreimbursed
      draft paid pursuant to such Letter of Credit in an amount equal to such
      other Lender's Commitment Percentage of such unreimbursed draft. Each
      Lender agrees to purchase its Commitment Percentage of such unreimbursed
      draft within one (1) Business Day after such demand therefor is made by
      the L/C Issuer and on such date of purchase, an amount equal to such
      Lender's Commitment Percentage of such unreimbursed draft to be purchased
      by such Lender shall be advanced to the L/C Issuer.

            (e) The Borrower's obligations under this Section 2.9 shall be
      absolute and unconditional under any and all circumstances and
      irrespective of any set-off, counterclaim or defense to payment which the
      Borrower may have or have had against the Agent, the L/C Issuer, any
      Lender or any beneficiary of a Letter of Credit. The Borrower also agrees
      that the L/C Issuer shall not be responsible for, and the Borrower's
      reimbursement obligations hereunder shall not be affected by, among other
      things, (i) the validity or genuineness of documents or of any
      endorsements thereon, even though such documents shall in fact prove to be
      invalid, fraudulent or forged, or (ii) any dispute between or among the
      Borrower and any beneficiary of any Letter of Credit or any other party to
      which such Letter of Credit may be transferred or (iii) any claims
      whatsoever of the Borrower against any beneficiary of such Letter of
      Credit or any such transferee. The L/C Issuer shall not be liable for any
      error, omission, interruption or delay in transmission, dispatch or
      delivery of any message or advice, however transmitted, in connection with
      any Letter of Credit, except for errors, omissions, interruptions or
      delays caused by the L/C Issuer's gross negligence or willful misconduct.
      The Borrower agrees that any action taken or omitted by the L/C Issuer
      under or in connection with any Letter of Credit or the related drafts or
      documents, if done in the absence of gross negligence or willful
      misconduct and in accordance with the standards of care specified in the
      Uniform Customs and Practices for Documentary Credits as the same may be
      amended from time to time, shall be binding on the Borrower and shall not
      result in any liability of the L/C Issuer to the Borrower.

            (f) In the event that any Letters of Credit are in effect at the
      time of an acceleration of the maturity of the Loans pursuant to Section
      12.1, the amountS which shall thereupon become immediately due and payable
      by the Borrower shall include a sum equal to the Dollar Equivalent of the
      aggregate stated amount of such then effective Letters of Credit. Such sum
      shall be deposited in a cash collateral account to be opened

                                       40


      by the L/C Issuer which shall be under the sole dominion and control of
      the L/C Issuer. The Borrower hereby grants to the L/C Issuer, for the
      benefit of the Lenders, as security for the Obligations a first priority
      security interest in such cash collateral account and all deposits at any
      time therein and the proceeds thereof and the Borrower shall execute and
      deliver such documents and take all actions as may be required to create
      and maintain a valid and perfected first priority Lien on such cash
      collateral account in favor of the L/C Issuer. Borrower acknowledges that
      the L/C Issuer shall be deemed to be in control of such cash collateral
      account as required for perfection of said security interest under Article
      9 of the Uniform Commercial Code. Amounts held in such cash collateral
      account shall be applied by the L/C Issuer on each Drawing Date thereafter
      to pay any drafts presented pursuant to the Letters of Credit. After all
      Letters of Credit have been fully drawn upon, expired or otherwise
      terminated, any balance remaining in such cash collateral account shall be
      applied in the same manner as enforcement proceeds under Section 12.4.

            (g) For the purposes of this Agreement, the issuance of any
      supplement, modification, amendment, renewal, extension to or of any
      Letter of Credit shall be treated the same as the issuance of a new Letter
      of Credit.

      Section 2.10. Competitive Bid Loans. In addition to the Tranche A Loans,
Tranche B Loans and Swingline Loans made pursuant to Section 2 hereof so long
as the BorroWER maintains ratings from two of the three Ratings Agencies of BBB-
or Baa3 or higher, as applicable, subject to the terms and conditions set forth
herein, the Borrower may from time to time request Competitive Bid Loans
pursuant to the terms of this Section 2.10, provided that (x) at no time shall
the Dollar Equivalent oF the aggregate principal amount of Competitive Bid Loans
outstanding at any time exceed fifty percent (50%) of the Total Commitments, (y)
to the extent that the requested Competitive Bid Loan is to be denominated in an
Alternative Currency, the Dollar Equivalent of the aggregate principal amount of
the requested Competitive Bid Loan shall not exceed the Tranche B Availability
and (z) the Dollar Equivalent of the aggregate principal amount of the requested
Competitive Bid Loan shall not exceed the amount by which the Commitments at
such time exceed the Outstanding Obligations. The Lenders may, but shall have no
obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept such offers in the manner set forth in this Section 2.10.
Notwithstanding anY other provision of this Agreement to the contrary, (A) each
Competitive Bid Loan denominated in Dollars shall constitute Tranche A
Obligations and shall be deemed to use the Tranche A Commitments, except to the
extent that the Tranche A Commitments have been fully used and are not available
at such time for such Borrowing, in which case the portion of such Competitive
Bid Loan that can not be accommodated by the Tranche A Commitments shall
constitute Tranche B Obligations, if such Tranche B Commitments are available,
and shall be deemed to use the Tranche B Commitments, and (B) each Competitive
Bid Loan denominated in an Alternative Currency shall constitute Tranche B
Obligations, if such Tranche B Commitments are available and shall be deemed to
use the Tranche B Commitments.

            (a) The obligation of the Borrower to repay the outstanding
      principal amount of any and all Competitive Bid Loans, plus interest at
      the sum of the Competitive Bid Margin plus the applicable Eurocurrency
      Rate accrued thereon, shall be evidenced by this

                                       41


      Credit Agreement and by individual loan accounts (the "COMPETITIVE BID
      LOAN ACCOUNTS" and individually, a "COMPETITIVE BID LOAN ACCOUNT")
      maintained by the Agent on its books for each of the Lenders, it being the
      intention of the parties hereto that the Borrower's obligations with
      respect to Competitive Bid Loans are to be evidenced only as stated herein
      and not by separate promissory notes and shall hereby constitute an
      absolute promise to pay when due, without notice, demand, presentment or
      setoff.

            (b) The Borrower irrevocably authorizes the Agent to make or cause
      to be made, in connection with a Borrowing Date of any Competitive Bid
      Loan or at the time of receipt of any payment of principal on the
      applicable Lender's Competitive Bid Loan Account an appropriate notation,
      reflecting the making of the Competitive Bid Loan or the receipt of such
      payment. The outstanding amount of the Competitive Bid Loans set forth on
      the Agent's records, as applicable, shall be prima facie evidence of the
      principal amount thereof owing and unpaid to such Lender, but the failure
      to record, or any error in so recording, any such amount shall not limit
      or otherwise affect the obligations of the Borrower hereunder to make
      payments of principal of or interest on any Competitive Bid Loan when due.

            (c) When the Borrower wishes to request offers to make Competitive
      Bid Loans under this Section 2.10, it shall transmit to the Agent by
      facsimile a CompetitivE Bid Quote Request substantially in the form of
      Exhibit H hereto (a "COMPETITIVE BID QUOTE REQUEST") so as to be received
      no later than 11:00 a.m. four (4) Business Days (eight (8) Business Days
      in the case of a request for a Competitive Bid Quote denominated in
      Alternative Currency) prior to the requested Borrowing Date, specifying:

                  (A) the requested Borrowing Date (which must be a Business
            Day);

                  (B) the requested currency and the aggregate amount in the
            requested currency of such Competitive Bid Loans, which shall be the
            Dollar Equivalent of $5,000,000 or a larger multiple of $1,000,000;
            and

                  (C) the Type and duration of the Interest Period applicable
            thereto, subject to the provisions of the definition of Interest
            Period.

The Borrower may request offers to make Competitive Bid Loans for more than one
Interest Period and/or more than one Borrowing Date in a single Competitive Bid
Quote Request. No new Competitive Bid Quote Request shall be given until the
Borrower has notified the Agent of its acceptance or non-acceptance of the
Competitive Bid Quotes relating to any outstanding Competitive Bid Quote
Request.

            (d) Promptly upon receipt of a Competitive Bid Quote Request, the
      Agent shall send to the Lenders by telecopy or facsimile transmission an
      Invitation for Competitive Bid Quotes substantially in the form of Exhibit
      I hereto, which shall constitute an invitation by the Borrower to each
      Lender to submit Competitive Bid Quotes in accordance with this Section
      2.10.

                                       42


            (e) Each Lender may, but shall be under no obligation to, submit a
      Competitive Bid Quote containing an offer or offers to make Competitive
      Bid Loans in response to any Competitive Bid Quote Request. Each
      Competitive Bid Quote must comply with the requirements of this Section
      2.10(e) and must be submitteD to the Agent by facsimile transmission not
      later than 10:00 a.m. on the third Business Day (or fifth Business Day in
      the case of a request for a Competitive Bid Quote denominated in
      Alternative Currency) prior to the proposed Borrowing Date, provided that
      Competitive Bid Quotes may be submitted by the Agent in its capacity as a
      Lender only if it submits its Competitive Bid Quote to the Borrower not
      later than one hour prior to the deadline for the other Lenders.
      Competitive Bid Loans to be funded pursuant to a Competitive Bid Quote
      may, as provided in Section 18.9, be funded by A Lender's Designated
      Bank. A Lender making a Competitive Bid Quote may, but shall not be
      required to, specify in its Competitive Bid Quote whether the related
      Competitive Bid Loans are intended to be funded by such Lender's
      Designated Bank, as provided in Section 18.9. Subject to the provisions
      oF Section Section 10 and 11 hereof, any Competitive Bid Quote so made
      shall be irrevocable except with the written consent of the Agent given on
      the instructions OF the Borrower.

            (f) Each Competitive Bid Quote shall be in substantially the form of
      Exhibit J hereto and shall in any case specify:

                  (i) the proposed Borrowing Date(s);

                  (ii) the principal amount of the Competitive Bid Loan for
            which each proposal is being made, the Dollar Equivalent of which
            principal amount (w) may be greater than or less than the Commitment
            of the quoting Lender, (x) must be $1,000,000 or a larger multiple
            of $500,000, (y) may not exceed the aggregate principal amount of
            Competitive Bid Loans for which offers were requested and (z) may be
            subject to an aggregate limitation as to the principal amount of
            Competitive Bid Loans for which offers being made by such quoting
            Lender may be accepted;

                  (iii) the Interest Periods for which Competitive Bid Quotes
            are being submitted;

                  (iv) the margin above or below the applicable Eurocurrency
            Rate (the "COMPETITIVE BID MARGIN") offered for each such
            Competitive Bid Loan, expressed as a percentage (specified to the
            nearest 1/10,000th of 1%) to be added to or subtracted from such
            Eurocurrency Rate; and

                  (v) the identity of the quoting Lender.

A Competitive Bid Quote may include up to five (5) separate offers by the
quoting Lender with respect to each Interest Period specified in the related
Invitation for Competitive Bid Quotes.

            (g) Any Competitive Bid Quote shall be disregarded if it:

                                       43


                  (i) is not substantially in the form of Exhibit J hereto;

                  (ii) contains qualifying, conditional or similar language;

                  (iii) proposes terms other than or in addition to those set
            forth in the applicable Invitation for Competitive Bid Quotes; or

                  (iv) arrives after the time set forth in Section 2.10 (e)
            hereof.

            (h) The Agent shall promptly notify the Borrower of the terms (a) of
      any Competitive Bid Quote submitted by a Lender that is in accordance with
      Section 2.10(e) and (b) of any Competitive Bid Quote that amends,
      modifies or is otherwise inconsistent with a previous Competitive Bid
      Quote submitted by such Lender with respect to the same Competitive Bid
      Quote Request. Any such subsequent Competitive Bid Quote shall be
      disregarded by the Agent unless such subsequent Competitive Bid Quote is
      submitted solely to correct a manifest error in such former Competitive
      Bid Quote and was received by the Agent within the time period required in
      Section 2.10(e) for receipt of Competitive Bid Quotes. The Agent's notice
      to the Borrower shall specify (i) thE aggregate principal amount of
      Competitive Bid Loans for which offers have been received for each
      Interest Period specified in the related Competitive Bid Quote Request and
      the Dollar Equivalents thereof, (ii) the respective principal amounts and
      Competitive Bid Margins so offered, and the Identity of the respective
      Lenders submitting such offers, and (iii) if applicable, limitations on
      the aggregate principal amount of Competitive Bid Loans for which offers
      in any single Competitive Bid Quote may be accepted.

            (i) Not later than 4:00 p.m. on the third Business Day (or fifth
      Business Day in the case of a requested Competitive Bid Quote denominated
      in Alternative Currency) prior to the proposed Borrowing Date, the
      Borrower shall notify the Agent of its acceptance or non-acceptance of
      each Competitive Bid Quote in substantially the form of Exhibit K hereto.
      The Borrower may accept any Competitive Bid Quote in whole or in part;
      provided that:

                  (i) the aggregate principal amount of each Competitive Bid
            Loan may not exceed the applicable amount set forth in the related
            Competitive Bid Quote Request;

                  (ii) acceptance of offers may only be generally made on the
            basis of ascending Competitive Bid Margins with the same terms, and

                  (iii) the Borrower may not accept any offer that is described
            in Section 2.10(g) or that otherwise fails to comply with the
            requirements of this Agreement.

The Agent shall promptly notify each Lender which submitted a Competitive Bid
Quote of the Borrower's acceptance or non-acceptance thereof. A Lender who is
notified that it has been selected to make a Competitive Bid Loan may designate
its Designated Bank (if any) to fund such Competitive Bid Loan on its behalf, as
described in Section 18.9. Any Designated Bank which funds a Competitive Bid
Loan shall on and after the time of such funding become the obligee in

                                       44


respect oF such Competitive Bid Loan and be entitled to receive payment thereof
when due. At the request of any Lender which submitted a Competitive Bid Quote,
the Agent will promptly notify all Lenders which submitted Competitive Bid
Quotes of the aggregate principal amount of, and the range of Competitive Bid
Margins of, the accepted Competitive Bid Loans for each requested Interest
Period.

            (j) If offers are made by two (2) or more Lenders with the same
      Competitive Bid Margin for a greater aggregate principal amount than the
      amount in respect of which offers are accepted for the related Interest
      Period, the principal amount of Competitive Bid Loans in respect of which
      such offers at such Competitive Bid Margin are accepted shall be allocated
      by the Borrower among such Lenders as nearly as possible (in such
      multiples, not less than the Dollar Equivalent of $1,000,000, as the
      Borrower may deem appropriate) in proportion to the aggregate principal
      amounts of such offers. Determination by the Agent of the amounts of
      Competitive Bid Loans shall be conclusive in the absence of manifest
      error.

            (k) If, on or prior to the Borrowing Date of any Competitive Bid
      Loan, the Total Commitment has not terminated in full and if, on such
      Borrowing Date, the applicable conditions of Section Section 10 and 11
      hereof are satisfied, and the Agent shall have received a Compliance
      Certificate, the Lender or LendERS whose offers the Borrower has accepted
      will fund each Competitive Bid Loan so accepted. Not later than 1:00 p.m.
      on such Borrowing Date, each such Lender or Lenders or Designated Bank
      will make available to the Agent, at the Agent's Head Office, in
      immediately available funds, the amount of such Lender's Competitive Bid
      Loans. Upon receipt from each such Lender of such amount, the Agent will
      make available to the Borrower the aggregate amount of such Loans made
      available to the Agent by the Lenders.

            (l) The principal of each Competitive Bid Loan shall become
      absolutely due and payable by the Borrower on the last day of the Interest
      Period relating thereto, and the Borrower hereby absolutely and
      unconditionally promises to pay to the Agent for the account of the
      relevant Lenders at or before 1:00 p.m. on the last day of the Interest
      Periods relating thereto the principal amount of all such Competitive Bid
      Loans, plus interest thereon at the sum of the applicable Competitive Bid
      Margin specified in the applicable Competitive Bid Quotes plus the
      applicable Eurocurrency Rate. Interest on the Competitive Bid Loans shall
      be payable in arrears on each Interest Payment Date. Subject to the terms
      of this Credit Agreement, the Borrower may make Competitive Bid Quote
      Requests with respect to new borrowings of any amounts so repaid prior to
      the Maturity Date. The provisions of Section 2.6 shall not apply to
      Competitive Bid Loans.

      Section 2.11. Sharing Event.

            (a) Upon the occurrence of a Sharing Event, automatically (and
      without the taking of any action) (x) all then outstanding Eurocurrency
      Rate Loans denominated in an Alternative Currency (other than Competitive
      Bid Loans) shall be automatically converted into Loans denominated in
      Dollars (in an amount equal to the Dollar Equivalent, as determined by the
      Agent on the date of such conversion, of the aggregate principal amount of
      the such Eurocurrency Rate Loans on the date such Sharing Event

                                       45


      first occurred, which Loans denominated in Dollars (i) shall thereafter be
      deemed to be Prime Rate Loans and (ii) unless the Sharing Event resulted
      solely from a termination of the Total Commitment, shall be immediately
      due and payable on the date such Sharing Event has occurred) and (y)
      unless the Sharing Event resulted solely from a termination of the Total
      Commitment, all accrued and unpaid interest and other amounts owing with
      respect to such Eurocurrency Rate Loans shall be immediately due and
      payable in Dollars, in an amount equal to the Dollar Equivalent of such
      accrued and unpaid interest and other amounts.

            (b) Upon the occurrence of a Sharing Event, and after giving effect
      to any automatic conversion pursuant to Section 2.11(a), each Lender
      shall (and herebY unconditionally and irrevocably agrees to) purchase and
      sell (in each case in Dollars) undivided participating interests in all
      Loans (other than Competitive Bid Loans) outstanding to, and any unpaid
      amounts the L/C Issuer has disbursed under a Letter of Credit owing by,
      the Borrower in amounts such that each Lender shall have a share of the
      outstanding Loans (other than Competitive Bid Loans) and any unpaid
      amounts the L/C Issuer has disbursed under a Letter of Credit then owing
      by the Borrower equal to its Commitment Percentage of the Total Commitment
      (although if because of fluctuations in currency exchange rates any Lender
      would be required to purchase such participations after giving effect to
      which such Lender's Loans and Letter of Credit participations under
      Section 2.9(d) (including participations therein purchased pursuant to
      this Section 2.11) would exceed sUCH Lender's Commitment, then such
      participations shall be in an amount after giving effect to which such
      Lender's Loans and Letter of Credit participations under Section 2.9(d)
      (including participations therein purchased pursuant to this Section
      2.11) would equal such Lender's Commitment). Upon ANY such occurrence, the
      Agent shall notify each Lender and shall specify the amount of Dollars
      required from such Lender in order to effect the purchases and sales by
      the various Lenders of participating interests in the amounts required
      above (together with accrued interest with respect to the period for the
      last interest payment date through the date of the Sharing Event plus any
      additional amounts payable by the Borrowers pursuant to Section 4.5 in
      respect of such accrued but unpaid interest); provided, in the event that
      a Sharing Event shall have occurred, each Lender shall be deemeD to have
      purchased, automatically and without request, such participating
      interests. Promptly upon receipt of such request, each Lender shall
      deliver to the Agent (in immediately available funds in Dollars) the net
      amounts as specified by the Agent. The Agent shall promptly deliver the
      amounts so received to the various Lenders in such amounts as are needed
      to effect the purchases and sales of participations as provided above.
      Promptly following receipt thereof, each Lender which has sold
      participations in any of its Loans and Letter of Credit participations
      under Section 2.9(d) (through the Agent) will deliver to each Lender
      (through the Agent) which has so purchased a participating interest a
      participation certificate dated the date of receipt of such funds and in
      such amount. It is understood that the amount of funds delivered by each
      Lender shall be calculated on a net basis, giving effect to both the sales
      and purchases of participations by the various Lenders as required above.

            (c) Upon the occurrence of a Sharing Event (i) no further Loans
      shall be made, (ii) all amounts from time to time accruing with respect
      to, and all amounts from

                                       46


      time to time payable on account of, any outstanding Eurocurrency Rate
      Loans denominated in Alternative Currency (including, without limitation,
      any interest and other amounts which were accrued but unpaid on the date
      of such purchase) shall be converted to Loans denominated in Dollars in
      accordance with Section 2.11(a) and be payable immediately in Dollars as
      if such Eurocurrency Rate Loans had originally been made in Dollars anD
      shall be distributed by the relevant Lenders (or their affiliates) to the
      Agent for the account of the Lenders which made such Loans or are
      participating therein and (iii) the Commitments of the Lenders shall be
      automatically terminated. Notwithstanding anything to the contrary
      contained above, the failure of any Lender to purchase its participating
      interest in any Loans upon the occurrence of a Sharing Event shall not
      relieve any other Lender of its obligation hereunder to purchase its
      participating interests in a timely manner, but no Lender shall be
      responsible for the failure of any other Lender to purchase the
      participating interest to be purchased by such other Lender on any date.

            (d) If any amount required to be paid by any Lender pursuant to
      Section 2.11(b) is not paid to the Agent within one (1) Business Day
      following the date upoN which such Lender receives notice from the Agent
      of the amount of its participations required to be purchased pursuant to
      said Section 2.11(b), such LendeR shall also pay to the Agent on demand
      an amount equal to the product of (i) the amount so required to be paid by
      such Lender for the purchase of its participations times (ii) the daily
      average Federal Funds Rate during the period from and including the date
      of request for payment to the date on which such payment is immediately
      available to the Agent times (iii) a fraction the numerator of which is
      the number of days that elapsed during such period and the denominator of
      which is 360. If any such amount required to be paid by any Lender
      pursuant to Section 2.11(b) is not in fact madE available to the Agent
      within three (3) Business Days following the date upon which such Lender
      receives notice from the Agent as to the amount of participations required
      to be purchased by it, the Agent shall be entitled to recover from such
      Lender on demand, such amount with interest thereon calculated from such
      request date at the rate per annum applicable to Prime Rate Loans
      hereunder. A certificate of the Agent submitted to any Lender with respect
      to any amounts payable by any Lender pursuant to this Section 2.11 shall
      be deemed conclusive absent manifest error. Amounts payablE under this
      Section 2.11 shall be paid to the Agent for the account of the relevant
      Lenders; provided that, if the Agent (in its sole discretion) haS elected
      to fund on behalf of such Lender the amounts owing to such Lenders, then
      the amounts shall be paid to the Agent for its own account.

            (e) Whenever, at any time after the relevant Lenders have received
      from any Lenders purchases of participations in any Loans pursuant to this
      Section 2.11, thE Lenders receive any payment on account thereof, such
      Lenders will distribute to the Agent, for the account of the various
      Lenders participating therein, such Lenders' participating interests in
      such amounts (appropriately adjusted, in the case of interest payments, to
      reflect the period of time during which such participations were
      outstanding) in like funds as received; provided, however, that in the
      event that such payment received by any Lenders are required to be
      returned, the Lenders who received previous distributions in respect of
      their participating interests therein will return to the respective
      Lenders any portion

                                       47


      thereof previously so distributed to them in like funds as such payment is
      required to be returned by the respective Lenders.

            (f) Each Lender's obligation to purchase participating interests
      pursuant to this Section 2.11 shall be absolute and unconditional and
      shall not be affected bY any circumstance including, without limitation,
      (i) any setoff, counterclaim, recoupment, defense or other right which
      such Lender may have against any other Lender, the Borrower or any other
      Person for any reason whatsoever, (ii) the occurrence or continuance of a
      Default or an Event of Default, (iii) any adverse change in the condition
      (financial or otherwise) of the Borrower or any other Person, (iv) any
      breach of this Agreement by the Borrower, the Company, any of the other
      Guarantors or any Lender or any other Person, or (v) any other
      circumstance, happening or event whatsoever, whether or not similar to any
      of the foregoing.

            (g) Notwithstanding anything to the contrary contained elsewhere in
      this Agreement, upon any purchase of participations as required above,
      each Lender which has purchased such participations shall be entitled to
      receive from the Borrower any increased costs and indemnities directly
      from the Borrower to the same extent as if it were the direct Lender as
      opposed to a participant therein. The Borrower acknowledges and agrees
      that, upon the occurrence of a Sharing Event and after giving effect to
      the requirements of this Section 2.11, increased taxes may be owing by
      the Borrower pursuanT to Section Section 4.5 and 4.8, which taxes shall
      be paid (to the extent provided in such sections) by the Borrower, without
      any claim that the increased taXES are not payable because same resulted
      from the participations effected as otherwise required by this Section
      2.11.

      Section 3. REPAYMENT OF THE LOANS.

      Section 3.1. Maturity. The Borrower unconditionally promises to pay on
the Maturity Date, and there shall become absolutely due and payable on the
MaturitY Date, all of the Loans outstanding on such date, together with any and
all accrued and unpaid interest and charges thereon. Provided that no Default or
Event of Default has occurred and is continuing (either at the time of exercise
of the option or at the original Maturity Date), the Borrower shall have one (1)
option to extend the Maturity Date for one (1) year by written notice to the
Agent not earlier than ninety (90) days prior to the original Maturity Date and
not later than sixty (60) days prior to the original Maturity Date. Such written
notice must be accompanied by payment to the Agent of an extension fee at the
rate of 0.15% of the Total Commitment, which fee shall be distributed by the
Agent to each Lender in accordance with such Lender's respective Commitment.

      Section 3.2. Mandatory Repayments of Loan. If at any time the sum of the
Outstanding Obligations exceeds the Maximum Credit Amount, then the Borrower
shalL immediately pay the amount of such excess to the Agent for the respective
accounts of the Lenders for application to the Loans. If no Event of Default is
then existing, the Borrower may designate which Loans are to be repaid
therewith. The Borrower shall repay Swingline Loans on or before the date
required under Section 2.8. The Borrower shall repay Competitive Bid Loans on
or before the date required under Section 2.10 (l).

                                       48


      Section 3.3. Optional Repayments of Loans. The Borrower shall have the
right, at its election, to repay the outstanding amount of the Loans, as a whole
or iN part, on any Business Day, without penalty or premium; provided that the
Borrower shall not have the right to prepay any Competitive Bid Loan with out
the prior written consent of the Lender thereof and the full or partial
prepayment of the outstanding amount of any Eurocurrency Rate Loans made
pursuant to this Section 3.3 may be made only on the last day of the Interest
Period relating thereto, except as set forth below in this Section 3.3. The
Borrower shall give the AgENT prior written notice of any prepayment pursuant to
this Section 3.3 no later than 10:00 a.m., on (i) the same Business Day as
prepayment of any Prime Rate Loans, (ii) the day that is two (2) Business Days
prior to any proposed repayment of any LIBOR Rate Loans, or (iii) the day that
is four (4) Business Days prior to any proposed repayment of any Alternative
Currency Loans, specifying the proposed date of payment of Loans and the
principal amount to be paid. The Agent shall promptly notify each Lender of the
principal amount of such payment to be received by such Lender. Each such
partial prepayment of the Loans shall be in an integral multiple of $1,000,000
and, to the extent requested by the Agent, shall be accompanied by the payment
of all charges outstanding on all Loans and of accrued interest on the principal
repaid to the date of payment. The principal payments so received shall be
applied first to the principal of Swingline Loans, next to the principal of
Prime Rate Loans other than Swingline Loans and then to the principal of
Eurocurrency Rate Loans. Notwithstanding anything contained herein to the
contrary, the Borrower may make a full or partial prepayment of a Eurocurrency
Rate Loan on a date other than the last day of the Interest Period relating
thereto, if all optional prepayments (in whole or in part) on such Loans shall
be accompanied by, and the Borrower hereby promises to pay, a prepayment fee in
an amount determined by the Agent in the following manner:

            (a) Eurocurrency Prepayment Fee. Borrower acknowledges that
      prepayment or acceleration of a Eurocurrency Rate Loan during an Interest
      Period shall result in the Lenders incurring additional costs, expenses
      and/or liabilities and that it is extremely difficult and impractical to
      ascertain the extent of such costs, expenses and/or liabilities. (For all
      purposes of this Section, any Loan not being made as a Eurocurrency Rate
      Loan in accordance with the Loan Request therefor, as a result of
      Borrower's cancellation thereof, shall be treated as if such Eurocurrency
      Rate Loan had been prepaid.) Therefore, on the date a Eurocurrency Rate
      Loan is prepaid or the date all sums payable hereunder become due and
      payable on a date other than the last day of an Interest Period, by
      acceleration or otherwise ("PREPAYMENT DATE"), Borrower will pay to Agent,
      for the account of each Lender, (in addition to all other sums then
      owing), an amount ("EUROCURRENCY PREPAYMENT FEE") determined by the Agent
      as follows: The current rate for United States Treasury securities (bills
      on a discounted basis shall be converted to a bond equivalent) with a
      maturity date closest to the end of the Interest Period as to which
      prepayment is made, shall be subtracted from the interest rate applicable
      to the Eurocurrency Rate Loan being prepaid. If the result is zero or a
      negative number, there shall be no Eurocurrency Prepayment Fee. If the
      result is a positive number, then the resulting percentage shall be
      multiplied by the amount of the Eurocurrency Rate Loan being prepaid. The
      resulting amount shall be divided by 360 and multiplied by the number of
      days remaining in the Interest Period as to which the prepayment is being
      made. The resulting amount shall be the Eurocurrency Prepayment Fee.

                                       49


            (b) Upon the written notice to Borrower from Agent, Borrower shall
      immediately pay to Agent, for the account of the Lenders, the Eurocurrency
      Prepayment Fee. Such written notice (which shall include calculations in
      reasonable detail) shall, in the absence of manifest error, be conclusive
      and binding on the parties hereto.

            (c) Borrower understands, agrees and acknowledges the following: (i)
      no Lender has any obligation to purchase, sell and/or match funds in
      connection with the use of the Eurocurrency Rate as a basis for
      calculating the rate of interest on a Eurocurrency Rate Loan; (ii) the
      Eurocurrency Rate is used merely as a reference in determining such rate;
      and (iii) Borrower has accepted the Eurocurrency Rate as a reasonable and
      fair basis for calculating such rate and a Eurocurrency Prepayment Fee.
      Borrower further agrees to pay the Eurocurrency Prepayment Fee, if any,
      whether or not a Lender elects to purchase, sell and/or match funds.

      Section 3.4. Currency Matters. Dollars are the currency of account and
payment for each and every sum at any time due from the Borrower hereunder;
provided that: (a) except as expressly provided in this Agreement, each
repayment of a Tranche B Loan, Tranche B Letter of Credit Obligation or a part
thereof shall be made in the currency in which such Tranche B Loan or Tranche B
Letter of Credit Obligation, as the case may be, is denominated at the time of
that repayment; (b) each payment of interest shall be made in the currency in
which the principal or other sum in respect of which such interest is payable is
denominated; (c) each payment of any fees shall be in Dollars; (d) each payment
in respect of costs, expenses and indemnities shall be made in the currency in
which the same were incurred; and (e) any amount expressed to be payable in an
Alternative Currency shall be paid in such Alternative Currency. No payment to
the Agent or any Lender (whether under any judgment or court order or otherwise)
shall discharge the obligation or liability in respect of which it was made
unless and until the Agent or such Lender shall have received payment in full in
the currency in which such obligation or liability was incurred, and to the
extent that the amount of any such payment shall, on actual conversion into such
currency, fall short of such obligation or liability, actual or contingent,
expressed in that currency, the Borrower agrees to indemnify and hold harmless
the Agent or such Lender, as the case may be, with respect to the amount of the
shortfall, with such indemnity surviving the termination of this Agreement and
any legal proceeding, judgment or court order pursuant to which the original
payment was made which resulted in the shortfall. To the extent the Agent or any
Lender receives payment of any Obligation in a currency other than the currency
required to be paid hereunder, each of the Agent and such Lender shall take all
reasonable actions to convert such currency into the currency in which the
underlying liability was incurred, at the Agent's or such Lender's spot rate of
exchange, within one (1) Business Day after receipt of payment by the Borrower,
provided, if reasonable methods and/or markets do not exist for making such
exchange, then the Agent or such Lender, as the case may be, will make such
exchange within one (1) Business Day of the date on which making such exchange
is, in the Agent's or such Lender's reasonable determination, commercially
possible, and, provided further, nothing contained herein shall in any manner
limit the Borrower's obligations to pay all Obligations in the currency required
under this Agreement, nor shall it be construed as the Agent's or any Lender's
consent to the Borrower paying any Obligation in any currency other than as set
forth in clauses (a) - (e) of this Section 3.4.

                                       50


      Section 4. CERTAIN GENERAL PROVISIONS.

      Section 4.1. Closing Fees. On the Effective Date, the Borrower shall pay
to Bank of America and Arranger the fees in the amounts specified in the Fee
Letter required to be paid by the Borrower on or before the Effective Date.

      Section 4.2. Other Fees.

            (a) Facility Fee. The Borrower shall pay to the Agent for the
      accounts of the Lenders a Facility Fee equal to the sum of each Lender's
      Commitment multiplied by the Applicable Facility Fee Rate. The Facility
      Fee shall be payable on the basis of the applicable annual rate quarterly
      in arrears on or before the first Business Day of each calendar quarter
      for the immediately preceding calendar quarter commencing on the first
      such date following the date hereof, with a final payment on the Maturity
      Date or any earlier date on which the Commitments shall terminate.

            (b) Administrative Fee. The Borrower shall pay to the Agent, for the
      Agent's own account, an annual administrative fee as provided in the Fee
      Letter. The Agent's fee shall be payable annually in advance on the
      Effective Date and on each anniversary thereof for the following annual
      period.

            (c) Competitive Bid Rate Loan Fee. The Borrower shall pay to the
      Agent, for its own account, a non-refundable competitive bid fee equal to
      (i) $1,500 multiplied by (ii) the number of Competitive Bid Quote Requests
      provided to the Agent in any calendar month (regardless of whether such
      Competitive Bid Loans are borrowed). Such fee shall be payable on the
      first day of each calendar month with respect to any Competitive Bid Quote
      Requests requested in the prior month.

      Section 4.3. Funds for Payments.

            (a) Except as expressly provided herein and except with respect to
      principal of and interest on Alternative Currency Loans, all payments of
      principal, interest, closing fees, Facility Fees and any other amounts due
      hereunder (other than as provided in Section 2.2(b), Section 4.1,
      Section 4.5 and Section 4.6) or under aNy of the other Loan Documents,
      and all prepayments, shall be made to the Agent, for the respective
      accounts of the Lenders, at the Agent's Head Office, in each case in
      Dollars in Same Day Funds not later than 2:00 p.m. on the dates specified
      herein. All payments of principal of and interest on Alternative Currency
      Loans shall be made to the Agent, for the respective accounts of the
      Lenders, at the place designated by the Agent in such Alternative Currency
      in Same Day Funds not later than the Applicable Time specified by the
      Agent on the dates specified herein.

            (b) All payments by the Borrower hereunder and under any of the
      other Loan Documents shall be made without setoff or counterclaim and free
      and clear of and without deduction for any taxes, levies, imposts, duties,
      charges, fees, deductions, withholdings, compulsory liens, restrictions or
      conditions of any nature now or hereafter imposed or levied by any
      jurisdiction or any political subdivision thereof or taxing or

                                       51


      other authority therein unless the Borrower is compelled by law to make
      such deduction or withholding. If any such obligation is imposed upon the
      Borrower with respect to any amount payable by it hereunder or under any
      of the other Loan Documents, the Borrower shall pay to the Agent, for the
      account of the Lenders or (as the case may be) the Agent, on the date on
      which such amount is due and payable hereunder or under such other Loan
      Document, such additional amount in Dollars as shall be necessary to
      enable the Lenders or the Agent to receive the same net amount which the
      Lenders or the Agent would have received on such due date had no such
      obligation been imposed upon the Borrower. The Borrower will deliver
      promptly to the Agent certificates or other valid vouchers for all taxes
      or other charges deducted from or paid with respect to payments made by
      the Borrower hereunder or under such other Loan Document.

      Section 4.4. Computations. All computations of interest on the Loans
(other than Prime Rate Loans) and of other fees to the extent applicable shall
be based on a 360-day year (365 or 366 day year for Prime Rate Loans, or in the
case of interest in respect of Alternative Currency Loans as to which market
practice differs from the foregoing, in accordance with such market practice)
and paid for the actual number of days elapsed. Except as otherwise provided in
the definition of the term "INTEREST PERIOD" with respect to Eurocurrency Rate
Loans, whenever a payment hereunder or under any of the other Loan Documents
becomes due on a day that is not a Business Day, the due date for such payment
shall be extended to the next succeeding Business Day, and such extension of
time shall be included in computing interest and fees in connection with such
payment. The outstanding amount of the Loans as reflected on the Records from
time to time shall (absent manifest error) be considered correct and binding on
the Borrower unless within thirty (30) Business Days after receipt by the Agent
or any of the Lenders from Borrower of any notice by the Borrower of such
outstanding amount, the Agent or such Lender shall notify the Borrower to the
contrary.

      Section 4.5. Additional Costs, Etc. If, as a result of any change or
adoption after the date hereof, any present or future applicable law which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Lender
or the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:

            (a) subject any Lender or the Agent to any tax, levy, impost, duty,
      charge, fee, deduction or withholding of any nature with respect to this
      Agreement, the other Loan Documents, such Lender's Commitment or the Loans
      (other than taxes based upon or measured by the income or profits of such
      Lender or the Agent), or

            (b) materially change the basis of taxation (except for changes in
      taxes on income or profits) of payments to any Lender of the principal of
      or the interest on any Loans or any other amounts payable to any Lender
      under this Agreement or the other Loan Documents, or

            (c) impose or increase or render applicable (other than to the
      extent specifically provided for elsewhere in this Agreement) any special
      deposit, reserve,

                                       52


      assessment, liquidity, capital adequacy or other similar requirements
      (whether or not having the force of law) against assets held by, or
      deposits in or for the account of, or Loans by, or commitments of an
      office of any Lender, or

            (d) impose on any Lender any other conditions or requirements with
      respect to this Agreement, the other Loan Documents, the Loans, the Total
      Commitment, or any class of Loans or commitments of which any of the Loans
      or the Total Commitment forms a part;

and the result of any of the foregoing is

                  (i) to increase the cost to such Lender of making, funding,
            issuing, renewing, extending or maintaining any of the Loans or such
            Lender's Commitment, or

                  (ii) to reduce the amount of principal, interest or other
            amount payable to such Lender or the Agent hereunder on account of
            the Commitments or any of the Loans, or

                  (iii) to require such Lender or the Agent to make any payment
            or to forego any interest or other sum payable hereunder, the amount
            of which payment or foregone interest or other sum is calculated by
            reference to the gross amount of any sum receivable or deemed
            received by such Lender or the Agent from the Borrower hereunder,
            then, and in each such case, the Borrower will, upon demand made by
            such Lender or (as the case may be) the Agent at any time and from
            time to time and as often as the occasion therefor may arise, pay to
            such Lender or the Agent, to the extent permitted by law, such
            additional amounts as will be sufficient to compensate such Lender
            or the Agent for such additional cost, reduction, payment or
            foregone interest or other sum.

      Section 4.6. Capital Adequacy. If, as a result of any change or adoption
after the date hereof, any present or future law, governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law) or the
interpretation thereof by a court or governmental authority with appropriate
jurisdiction affects the amount of capital required or expected to be maintained
by banks or bank holding companies and any Lender or the Agent determines that
the amount of capital required to be maintained by it is increased by or based
upon the existence of the Loans made or deemed to be made pursuant hereto, then
such Lender or the Agent may notify the Borrower of such fact, and the Borrower
shall pay to such Lender or the Agent from time to time on demand, as an
additional fee payable hereunder, such amount as such Lender or the Agent shall
determine in good faith and certify in a notice to the Borrower to be an amount
that will adequately compensate such Lender or the Agent in light of these
circumstances for its increased costs of maintaining such capital. Each Lender
and the Agent shall allocate such cost increases among its customers in good
faith and on an equitable basis.

      Section 4.7. Certificate. A certificate setting forth any additional
amounts payable pursuant to Section Section 4.5 or 4.6 and a brief explanation
(but reasonably detailEd) of such amounts which are due,

                                       53


submitted by any Lender or the Agent to the Borrower, shall be prima facie
evidence that such amounts are due and owing.

      Section 4.8. Indemnity. In addition to the other provisions of this
Agreement regarding any such matters, the Borrower agrees to indemnify each
Lender and to hold each Lender harmless from and against any loss, cost or
reasonable expense (including loss of anticipated profits, but excluding other
incidental or consequential damages) that such Lender may sustain or incur as a
consequence of (a) a default by the Borrower in payment of the principal amount
of or any interest on any Eurocurrency Rate Loans as and when due and payable,
including any such loss or expense caused by Borrower's breach or other default
and arising from interest or fees payable by such Lender to lenders of funds
obtained by it in order to maintain its Eurocurrency Rate Loans, (b) a default
by the Borrower in making a borrowing or conversion after the Borrower has given
(or is deemed to have given) a Loan Request or a Conversion Request, (c) the
making of any payment of a Eurocurrency Rate Loan or the making of any
conversion of a LIBOR Rate Loan to a Prime Rate Loan on a day that is not the
last day of the applicable Interest Period with respect thereto, including
interest or fees payable by such Lender to lenders of funds obtained by it in
order to maintain any such Eurocurrency Rate Loan and (d) any failure by the
Borrower to prepay a Eurocurrency Loan on the date specified in a prepayment
notice given by the Borrower.

      Section 4.9. Default Interest and Late Charges. During any period when an
Event of Default has occurred and is continuing, or after the Maturity Date or
after judgment has been rendered on any Note, Borrower's right to select
Eurocurrency Loans shall cease and the unpaid principal of all Loans shall, at
the option of each Lender bear interest at a rate which is four (4) percentage
points per annum greater than that which would otherwise be applicable to Prime
Rate Loans; provided that with respect to any Eurocurrency Rate Loan of any
Lender which is lent from a Eurocurrency Lending Office in the United Kingdom or
a Participating Member State, the rate applicable to such Loan shall be the rate
(including the Applicable Margin and any Mandatory Cost) otherwise applicable to
such Loan plus four percent (4%) per annum.

      Section 4.10. Inability to Determine Eurocurrency Rate. In the event,
prior to the commencement of any Interest Period relating to any Eurocurrency
Rate Loan, the Agent shall determine that adequate and reasonable methods do not
exist for ascertaining the Eurocurrency Rate that would otherwise determine the
rate of interest to be applicable to any Eurocurrency Rate Loan during any
Interest Period, the Agent shall forthwith give notice of such determination
(which shall be conclusive and binding on the Borrower) to the Borrower. In such
event (a) any Loan Request with respect to Eurocurrency Rate Loans shall be
automatically withdrawn and shall be deemed a request for Prime Rate Loans, (b)
each LIBOR Rate Loan will automatically, on the last day of the then current
Interest Period thereof, become a Prime Rate Loan and each Alternative Currency
Loan shall be repaid on the last day of the then current Interest Period, and
(c) the obligations of the Lenders to make Eurocurrency Rate Loans shall be
suspended until the Agent determines that the circumstances giving rise to such
suspension no longer exist, whereupon the Agent shall so notify the Borrower.

      Section 4.11. Illegality. Notwithstanding any other provisions herein, if
any present or future law, regulation, treaty or directive or in the
interpretation or application thereof shall make it

                                       54


unlawful for any Lender to make or maintain Eurocurrency Rate Loans, such Lender
shall forthwith give notice of such circumstances to the Borrower and thereupon
(a) the Commitment of such Lender to make Eurocurrency Rate Loans or convert
Loans of another Type to LIBOR Rate Loans shall forthwith be suspended and (b)
the LIBOR Rate Loans then outstanding shall be converted automatically to Prime
Rate Loans, and the Alternative Currency Loans shall be repaid, in each case, on
the last day of each Interest Period applicable to such Eurocurrency Rate Loans
or within such earlier period as may be required by law. The Borrower hereby
agrees promptly to pay to the Agent for the account of such Lender, upon demand,
any additional amounts necessary to compensate such Lender for any costs
incurred by such Lender in making any conversion in accordance with this
Section 4.11, including any interest or fees payable by such Lender to lenders
of funds obtained by it in order to make or maintain its Eurocurrency Rate Loans
hereunder. If, at any time, the rate of interest, together with all amounts
which constitute interest and which are reserved, charged or taken by the
Lenders as compensation for fees, services or expenses incidental to the making,
negotiating or collection of the Loans or the other Obligations, shall be deemed
by any competent court of law, governmental agency or tribunal to exceed the
maximum rate of interest permitted to be charged by any Lender to Borrower under
applicable law, then, during such time as such rate of interest would be deemed
excessive, that portion of each sum paid attributable to that portion of such
interest rate that exceeds the maximum rate of interest so permitted shall be
deemed a voluntary prepayment of principal without penalty (including, without
limitation, prepayment fees required pursuant to Section 4.3(a) hereof). As
used herein, the term "applicable law" shall mean the law in effect as of the
date hereof, provided, however, that in the event there is a change in the law
which results in a higher permissible rate of interest, then this Agreement and
the Notes shall be governed by such new law as of its effective date.

      Section 4.12. Replacement of Lenders. If any of the Lenders shall make a
notice or demand upon the Borrower pursuant to Section 4.5, Section 4.6, or
Section 4.11 basEd on circumstances or laws which are not generally applicable
to the Lenders organized under the laws of the United States or any State
thereof, the Borrower shall have the right to replace such Lender with an
Eligible Assignee selected by the Borrower and approved by the Agent. In such
event the assignment shall take place on a date set by the Agent at which time
the assigning Lender and the Eligible Assignee shall enter into an Assignment
and Acceptance as contemplated by Section 18.1 (and clause (d) thereof shall
not be applicable) and the assigning Lender shall receive from the Eligible
Assignee or the Borrower a sum equal to the outstanding principal amount of the
Loans owed to the assigning Lender together with accrued interest thereon plus
the accrued Facility Fee under Section 4.2(a) allocated to the assigning
Lender, plus all other amounts then due to the assigning Lender hereunder
(including any Eurocurrency Prepayment Fees, any amounts under Section 4.5,
Section 4.6 or Section 4.11 and indemnity amounts).

      Section 4.13. Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of setoff or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of the Loans made by it (other
than a Competitive Bid Loan), or the participations in L/C Obligations or in
Swing Line Loans held by it resulting in such Lender's receiving payment of a
proportion of the aggregate amount of such Loans or participations and accrued
interest thereon greater than its pro rata share thereof as provided herein,
then the Lender receiving such greater proportion shall (a) notify the Agent of
such fact, and (b) purchase (for cash at face value)

                                       55


participations in the Loans and sub-participations in Tranche A Letter of Credit
Obligations, Tranche B Letter of Credit Obligations and Swing Line Loans of the
other Lenders, or make such other adjustments as shall be equitable, so that the
benefit of all such payments shall be shared by the Lenders ratably in
accordance with the aggregate amount of principal of and accrued interest on
their respective Loans and other amounts owing them, provided that:

            (a) if any such participations or sub-participations are purchased
      and all or any portion of the payment giving rise thereto is recovered,
      such participations or sub-participations shall be rescinded and the
      purchase price restored to the extent of such recovery, without interest;
      and

            (b) the provisions of this section shall not be construed to apply
      to (x) any payment made by a Borrower pursuant to and in accordance with
      the express terms of this Agreement or (y) any payment obtained by a
      Lender as consideration for the assignment of or sale of a participation
      in any of its Loans or sub-participations in Tranche A Letter of Credit
      Obligations, Tranche B Letter of Credit Obligations or Swing Line Loans to
      any assignee or participant, other than to the Borrower or any Subsidiary
      thereof (as to which the provisions of this section shall apply).

  The Borrower consents to the foregoing and agrees, to the extent it may
  effectively do so under applicable law, that any Lender acquiring a
  participation pursuant to the foregoing arrangements may exercise against
  the Borrower rights of setoff and counterclaim with respect to such
  participation as fully as if such Lender were a direct creditor of the
  Borrower in the amount of such participation.

      Section 4.14. Alternative Currencies.

            (a) Request for Alternative Currencies. In the event that the
      Borrower requests any Tranche B Loans be made as Eurocurrency Rate Loans
      in an Alternative Currency pursuant to Section 2.5, the Tranche B Loan
      proposed to be made under Section 2.5 shall be in an amount not less than
      the applicablE Alternative Currency Equivalent of the minimum borrowing
      amounts set forth in Section 2.5; provided, that after giving effect to
      the making of such Loan, the sum of (a) the aggregate Tranche B
      Obligations and (b) the aggregate Tranche B Letter of Credit Obligations
      shall not exceed the Tranche B Commitments at the time of such Loan.
      Subject to the foregoing and to the satisfaction of the terms and
      conditions of Section 11, each Tranche B Loan requested to be made in an
      Alternative Currency will be made on the date specified therefor in the
      Loan Request and, upon being so made, will have the Interest Period
      requested in the Loan Request.(b) Denominations. In the event that any
      portion of the funds available under the terms of this Agreement is
      denominated in an Alternative Currency, the Dollar Equivalent of such
      portion of the funds shall be calculated pursuant to the definition of
      "Dollar Equivalent." The amount so determined shall then be added to the
      amount already outstanding in Dollars for the purpose of determining the
      remaining availability of funds under Section 2.1 and Section 14.4(a)
      and any required repayments under Section 14.4(c).

            (c) Repayment. The Agent shall, on each Revaluation Date, calculate
      the Dollar Equivalent of all Alternative Currency Loans. If at any such
      time the Dollar

                                       56


      Equivalent of the aggregate principal amount outstanding of the sum of (i)
      all Tranche B Obligations and (ii) all Tranche B Letter of Credit
      Obligations shall exceed the lesser of $50,000,000 or the Tranche B
      Commitments due to currency fluctuations, the Borrower shall, upon demand
      by the Agent, pay or cause to be paid within three (3) Business Days of
      any such demand made by the Agent, such amounts as are sufficient to
      eliminate such excess and to reduce the Dollar Equivalent of the aggregate
      principal amount outstanding of the sum of (x) the Tranche B Obligations
      and (y) the Tranche B Letters of Credit Obligations to an amount equal to
      the lesser of $50,000,000 or the amount of the Tranche B Commitments.

            (d) Funding. Each Lender may make any Eurocurrency Rate Loan
      denominated in an Alternative Currency by causing any of its domestic or
      foreign branches or foreign affiliates to make such Eurocurrency Rate Loan
      (whether or not such branch or affiliate is named as a lending office on
      the signature pages hereof); provided that in such event the obligation of
      the Borrower to repay such Eurocurrency Rate Loan shall nevertheless be to
      such Lender and shall, for all purposes of this Agreement (including
      without limitation for purposes of the definition of "REQUISITE LENDERS")
      be deemed made by such Lender, to the extent of such Eurocurrency Rate
      Loan, for the account of such branch or affiliate.

      Section 5. UNENCUMBERED PROPERTIES; NO LIMITATION ON RECOURSE.

      Section 5.1. Unencumbered Properties and Unencumbered Development
Properties. The Borrower represents and warrants that each of the Real Estate
Assets listed on Schedule 1.1(a) will on the Effective Date either (i) satisfy
all of the conditions set forth in the definition of Unencumbered Property or
(ii) satisfy all of the conditions set forth in the definition of Unencumbered
Development Property. From time to time during the term of this Agreement
additional Real Estate Assets may become Unencumbered Properties or Unencumbered
Development Properties and certain Real Estate Assets which previously satisfied
the conditions set forth in the definition of Unencumbered Property or in the
definition of Unencumbered Development Property may cease to be Unencumbered
Properties or Unencumbered Development Properties by virtue of property
dispositions, creation of Liens or other reasons. There shall be attached to
each Compliance Certificate delivered pursuant to Section 7.4(d) or Section
7.13 an updated listing of the Unencumbered Properties and Unencumbered
Development PropertieS relied upon by the Borrower in computing the Value of All
Unencumbered Properties and the Adjusted Net Operating Income of the
Unencumbered Properties (before reserves are deducted) stated in such Compliance
Certificate. Compliance Certificates delivered pursuant to Section 2.5(a),
Section 2.9(b), Section 2.10(k) or Section 11.1 may, at Borrower's option,
include an updated listing of the Unencumbered Properties and Unencumbered
Development Properties and shall include such updated listing whenever a
redetermination of the Value of All Unencumbered Properties based on such an
updated listing would result in a decrease by more than $50,000,000 (from that
shown on the most recently delivered Compliance Certificate) in the Value of All
Unencumbered Properties by virtue of property dispositions, creation of Liens or
other reasons.

      Section 5.2. Waivers by Requisite Lenders. If any Real Estate Asset fails
to satisfy any of the requirements contained in the definition of Unencumbered
Property or the definition of

                                       57


Unencumbered Development Property then the applicable Real Estate Asset may
nevertheless be deemed to be Unencumbered Property or an Unencumbered
Development Property hereunder if the Requisite Lenders grant the necessary
waivers and vote to accept such Real Estate Asset as an Unencumbered Property or
an Unencumbered Development Property.

      Section 5.3. Rejection of Unencumbered Properties and Unencumbered
Development Properties. If at any time the Agent properly determines that any
Real Estate Asset listed as an Unencumbered Property or an Unencumbered
Development Property by the Borrower does not satisfy all of the requirements of
the definition of Unencumbered Property or of Unencumbered Development Property,
as applicable (to the extent not waived by the Requisite Lenders pursuant to
Section 5.2) it may reject an Unencumbered Property or an Unencumbered
Development Property by notice to the Borrower and if the Agent so requests the
Borrower shall revise the applicable Compliance Certificate to reflect the
resulting change in the Value of All Unencumbered Properties and the Adjusted
Net Operating Income of the Unencumbered Properties.

      Section 5.4. Change in Circumstances. If at any time during the term of
this Agreement Borrower becomes aware that any of the representations contained
in Section 6 are no longer accurate in any material respect with respect to any
Unencumbered Property or any Unencumbered Development Property, it will promptly
so notify the Agent and either request a waiver pursuant to Section 5.2 or
confirm that such Real Estate Asset is no longer an Unencumbered Property or an
Unencumbered Development Property. If any waiver so requested is not granted by
the Requisite Lenders within ten (10) Business Days the Agent shall reject the
applicable Unencumbered Property or Unencumbered Development Property pursuant
to Section 5.3.

      Section 5.5. No Limitation on Recourse. The Obligations are full recourse
obligations of the Borrower and, to the extent provided in the Guaranty, of the
Company and the other Guarantors, and all of their respective Real Estate Assets
and other properties shall be available for the indefeasible payment in full in
cash and performance of the Obligations. Notwithstanding anything to the
contrary contained herein, the trustees of Liberty Property Trust shall have no
personal liability of any nature under this document. The Agent and the Lenders
shall look solely to the assets of Liberty Property Trust to satisfy any
liability or recourse against Liberty Property Trust hereunder.

      Section 5.6. Additional Guarantors. If Borrower desires that a Real
Estate Asset owned by a Related Company which is not previously a Guarantor
become an Unencumbered Property or an Unencumbered Development Property, then
provided that the applicable Related Company is formed under the laws of one of
the United States and is at least 85% owned by Borrower, such Related Company
may become a Guarantor upon delivery to the Agent of the following, all in form
and substance reasonably satisfactory to the Agent: (a) a Joinder Agreement in
substantially the form of Exhibit L hereto, (b) good standing certificates,
general partner certificates, secretary certificates, opinions of counsel and
such other documents as may be reasonably requested by the Agent. The Agent
shall provide copies of said documents to the Lenders.

      Section 6. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Agent and each of the Lenders as follows:

      Section 6.1. Authority; Etc.

                                       58


            (a) Organization; Good Standing. The Company (i) is a Maryland real
      estate investment trust duly organized, validly existing and in good
      standing under the laws of the State of Maryland, (ii) has all requisite
      power to own its properties and conduct its business as now conducted and
      as presently contemplated, and (iii) to the extent required by law is in
      good standing as a foreign entity and is duly authorized to do business in
      the States in which the Unencumbered Properties and the Unencumbered
      Development Properties are located and in each other jurisdiction where
      such qualification is necessary except where a failure to be so qualified
      in such other jurisdiction would not have a Materially Adverse Effect. The
      Borrower is a Pennsylvania limited partnership, and each Guarantor is a
      limited partnership or a Pennsylvania corporation, and each such entity is
      duly organized, validly existing and in good standing under the laws of
      the State of its formation as shown on Schedule 3.1(a), has all requisite
      power to own its properties and conduct its business as presently
      contemplated and is duly authorized to do business in the States in which
      the Unencumbered Properties and the Unencumbered Development Properties
      owned by it are located and in each other jurisdiction where such
      qualification is necessary except where a failure to be so qualified in
      such other jurisdiction would not have a Material Adverse Effect.

            (b) Authorization. The execution, delivery and performance of this
      Agreement and the other Loan Documents to which the Borrower or any
      Guarantor is to become a party and the transactions contemplated hereby
      and thereby (i) are within the authority of the Borrower and each such
      Guarantor, (ii) have been duly authorized by all necessary proceedings on
      the part of the Borrower, such Guarantor and the Company as general
      partner of Borrower, (iii) do not conflict with or result in any breach or
      contravention of any provision of law, statute, rule or regulation to
      which the Borrower, any Guarantor or the Company is subject or any
      judgment, order, writ, injunction, license or permit applicable to the
      Borrower, any Guarantor or the Company and (iv) do not conflict with any
      provision of the Borrower's partnership agreement, the Company's
      declaration of trust, charter documents or bylaws, the partnership
      agreement, charter documents or bylaws of any of the Guarantors, or any
      agreement (except agreements as to which such a conflict would not result
      in a Material Adverse Effect) or other instrument binding upon, the
      Borrower or the Company or to which any of their properties are subject.
      The execution, delivery and performance of the Guaranty and the other Loan
      Documents to which the Company is to become a party and the transactions
      contemplated hereby and thereby (i) are within the authority of the
      Company, (ii) have been duly authorized by all necessary proceedings on
      the part of the Company, (iii) do not conflict with or result in any
      breach or contravention of any provision of law, statute, rule or
      regulation to which the Company is subject or any judgment, order, writ,
      injunction, license or permit applicable to the Company and (iv) do not
      conflict with any provision of the Company's charter documents or bylaws,
      partnership agreement, declaration of trust, or any agreement or
      instrument (except agreements or instruments as to which such a conflict
      would not result in a Material Adverse Effect) binding upon the Company or
      to which any of the Company's properties are subject.

            (c) Enforceability. The execution and delivery of this Agreement and
      the other Loan Documents to which the Borrower is or is to become a party
      will result in

                                       59


      valid and legally binding obligations of the Borrower enforceable against
      it in accordance with the respective terms and provisions hereof and
      thereof, except as enforceability is limited by bankruptcy, insolvency,
      reorganization, moratorium or other laws relating to or affecting
      generally the enforcement of creditors' rights and general equitable
      principles. The execution and delivery of the Guaranty and the other Loan
      Documents to which the Company is or is to become a party will result in
      valid and legally binding obligations of the Company enforceable against
      the Company in accordance with the respective terms and provisions hereof
      and thereof, except as enforceability is limited by bankruptcy,
      insolvency, reorganization, moratorium or other laws relating to or
      affecting generally the enforcement of creditors rights and general
      equitable principles.

      Section 6.2. Governmental Approvals and Consents. The execution, delivery
and performance by the Borrower, the Company and each other Guarantor of this
Agreement and the other Loan Documents to which the Borrower, the Company or
such other Guarantor is or is to become a party and the transactions
contemplated hereby and thereby do not require the Borrower, the Company or any
Guarantor to obtain the approval or consent of, or require the filing by the
Borrower, the Company or any Guarantor with, any governmental agency or
authority, or any third party, other than those already obtained or made.

      Section 6.3. Title to Properties.

            (a) Either the Borrower or a Guarantor holds good and clear record
      and marketable fee simple title to the Unencumbered Properties and the
      Unencumbered Development Properties, subject to no Liens except for the
      Permitted Liens.

            (b) Except as indicated on Schedule 6.3 hereto, the Borrower owns
      all of the properties reflected in the balance sheet of the Borrower as at
      the Balance Sheet Date or acquired since that date (except properties sold
      or otherwise disposed of in the ordinary course of business since that
      date), subject to no rights of others, including any mortgages, leases,
      conditional sales agreements, title retention agreements, liens or other
      encumbrances except Permitted Liens.

      Section 6.4. Financial Statements. The following financial statements
have been furnished to each of the Lenders.

            (a) A balance sheet of the Company as of December 31, 2004, and a
      statement of operations and statement of cash flows of the Company for the
      fiscal year then ended, a balance sheet of the Borrower as of the Balance
      Sheet Date, and a statement of operations and statement of cash flows of
      the Borrower for the fiscal year then ended, all accompanied by an
      auditor's report prepared without qualification by Ernst & Young LLP. Such
      balance sheets and statements of operations and of cash flows have been
      prepared in accordance with Generally Accepted Accounting Principles and
      fairly present the financial condition of the Borrower and the Company,
      respectively as at the close of business on the date thereof and the
      results of operations and cash flows for the fiscal year then ended. There
      are no contingent liabilities of the Borrower or the Company,
      respectively, as of such date involving material amounts, known to the
      officers of the Company not disclosed in said balance sheet and the
      related notes thereto which are

                                       60


      required to be so disclosed therein in accordance with generally accepted
      accounting principles.

            (b) A balance sheet and a statement of operations and statement of
      cash flows of the Company and a balance sheet and a statement of
      operations and statement of cash flows of the Borrower for each of the
      fiscal quarters of the Company ended since December 31, 2004 for which the
      Company has filed form l0-Q with the SEC, which the Company's Responsible
      Officer certifies has been prepared in accordance with Generally Accepted
      Accounting Principles (except to the extent otherwise described in such
      Form 10-Q) consistent with those used in the preparation of the annual
      audited statements delivered pursuant to paragraph (a) above and fairly
      represents the financial condition of the Company and the Borrower,
      respectively, as at the close of business on the dates thereof and the
      results of operations and of cash flows for the fiscal quarters then ended
      (subject to year-end adjustments). There are no contingent liabilities of
      the Borrower or the Company as of such dates involving material amounts,
      known to the officers of the Company, not disclosed in such balance sheets
      and the related notes thereto which are required to be so disclosed
      therein in accordance with generally accepted accounting principles.

            (c) A statement prepared by the Borrower which sets forth the total
      Net Operating Income of the Unencumbered Properties for the fiscal quarter
      of the Borrower ended on the Balance Sheet Date.

      Section 6.5. No Material Changes, Etc. Since the Balance Sheet Date,
there has occurred no material adverse change in the financial condition or
assets or business of the Borrower as shown on or reflected in the balance sheet
of the Borrower as of the Balance Sheet Date, or the statement of income for the
fiscal year then ended, other than changes in the ordinary course of business
that have not had any Material Adverse Effect either individually or in the
aggregate.

      Section 6.6. Franchises, Patents, Copyrights, Etc. The Borrower possesses
all franchises, patents, copyrights, trademarks, trade names, licenses and
permits, and rights in respect of the foregoing, adequate for the conduct of its
business substantially as now conducted without known conflict with any rights
of others, except to the extent the Borrower's failure to possess the same does
not have a Material Adverse Effect.

      Section 6.7. Litigation. Except as listed and described on Schedule 6.7
hereto, there are no actions, suits, proceedings or investigations of any kind
pending or, to Borrower's knowledge, threatened against the Borrower, the
Company, any other Guarantor or any of the Related Companies before any court,
tribunal or administrative agency or board that, if adversely determined, might,
either in any case or in the aggregate, have a Material Adverse Effect or
materially impair the right of the Borrower, the Company, any other Guarantor or
any of the Related Companies to carry on business substantially as now conducted
by it, or which question the validity of this Agreement or any of the other Loan
Documents, any action taken or to be taken pursuant hereto or thereto, or which
would result in a Lien on any Unencumbered Property or any Unencumbered
Development Property, or which will materially adversely affect the ability of
the Borrower, any Guarantor or the Company to pay and perform the Obligations in
the manner contemplated by this Agreement and the other Loan Documents.

                                       61


      Section 6.8. No Materially Adverse Contracts, Etc. Neither the Borrower
nor the Company is subject to any charter, trust or other legal restriction, or
any judgment, decree, order, rule or regulation that has or is expected in the
future to have a Material Adverse Effect. Neither the Borrower nor the Company
is a party to any contract or agreement that has or is expected, in the judgment
of the Company's officers, to have any Material Adverse Effect.

      Section 6.9. Compliance With Other Instruments, Laws, Etc. Neither the
Borrower nor the Company is in violation of any provision of the Borrower's
partnership agreement or of the Company's charter documents, by-laws, or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license, rule
or regulation, in any of the foregoing cases in a manner that is reasonably
likely to result in the imposition of substantial penalties or have a Material
Adverse Effect.

      Section 6.10. Tax Status. Each of the Borrower and the Company (a) has
made or filed all federal and state income and all other tax returns, reports
and declarations required by any jurisdiction to which it is subject, and (b)
has paid all taxes and other governmental assessments and charges shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith and by appropriate proceedings. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Company know of no basis for any such
claim.

      Section 6.11. Event of Default. No Default or Event of Default has
occurred and is continuing.

      Section 6.12. Investment Company Act. Neither the Borrower nor the
Company is an "investment company", or an "affiliated company" or a "principal
underwriter" of an "investment company", as such terms are defined in the
Investment Company Act of 1940.

      Section 6.13. Absence of Financing Statements, Etc. There is no financing
statement, security agreement, chattel mortgage, real estate mortgage, equipment
lease, financing lease, option, encumbrance or other document existing, filed or
recorded with any filing records, registry, or other public office, that
purports to cover, affect or give notice of any present or possible future lien
or encumbrance on, or security interest in, any Unencumbered Property or any
Unencumbered Development Property, except Permitted Liens.

      Section 6.14. Status of the Company. The Company (i) is a REIT, (ii) has
not revoked its election to be a REIT, (iii) has not engaged in any "prohibited
transactions" as defined in Section 856(b)(6)(iii) of the Code (or any successor
provision thereto), and (iv) for its current "tax year" (as defined in the Code)
is, and for all prior tax years subsequent to its election to be a real estate
investment trust has been, entitled to a dividends paid deduction which meets
the requirements of Section 857 of the Internal Revenue Code. The common stock
of the Company is listed for trading on the New York Stock Exchange.

      Section 6.15. Certain Transactions. Except as set forth on Schedule 6.15
hereto, as of the date hereof, none of the officers or employees of the
Borrower, any Guarantor or the Company are presently a party to any transaction
with the Borrower, any Guarantor or the Company (other than for services as
employees, officers and trustees) , including any contract, agreement or other
arrangement providing for the furnishing of services to or by, providing for
rental of real or

                                       62


personal property to or from, or otherwise requiring payments to or from any
officer, trustee or such employee or, to the knowledge of the Borrower and the
Company, any corporation, partnership, trust or other entity in which any
officer, trustee or any such employee or natural Person related to such officer,
trustee or employee or other Person in which such officer, trustee or employee
has a direct or indirect beneficial interest has a substantial interest or is an
officer or trustee.

      Section 6.16. Benefit Plans; Multiemployer Plans; Guaranteed Pension
Plans. As of the date hereof as to any Employee Benefit Plan, Multiemployer Plan
or Guaranteed Pension Plan, neither the Borrower nor any ERISA Affiliate
maintains or contributes to any Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan, except as may be set forth on Schedule 6.16. Any
Employee Benefit Plan or Guaranteed Pension Plan that the Borrower or any ERISA
Affiliate maintains or contributes to as of the date of this Agreement or
hereafter is or shall be, as applicable, maintained and operated in compliance
with Section 7.17 hereof.

      Section 6.17. Regulations U and X. No portion of any Loan is to be used
for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.

      Section 6.18. Environmental Compliance. The Borrower has caused Phase I
environmental assessments to be conducted with respect to the Real Estate
Assets. Based on the information contained in the reports received by Borrower
with respect to said environmental assessments, Borrower makes the following
representations and warranties:

            (a) Except as may be set forth on Schedule 6.18, to the best of
      Borrower's knowledge none of the Borrower, the Company, any other
      Guarantor, any of the Related Companies or any operator of the Real Estate
      or any portion thereof, or any operations thereon is in violation, or
      alleged material violation, of any judgment, decree, order, law, license,
      rule or regulation pertaining to environmental matters (hereinafter
      collectively referred to as the "ENVIRONMENTAL LAWS"), including without
      limitation, those arising under the Resource Conservation and Recovery Act
      ("RCRA"), the Comprehensive Environmental Response, Compensation and
      Liability Act of 1980 as amended ("CERCLA"), the Superfund Amendments and
      Reauthorization Act of 1986 ("SARA"), the Federal Clean Water Act, the
      Federal Clean Air Act, the Toxic Substances Control Act, or any state or
      local statute, regulation, ordinance, order or decree relating to health,
      safety or the environment, including, without limitation, the
      environmental statutes, regulations, orders and decrees of the States in
      which any of the Unencumbered Properties or any of the Unencumbered
      Development Properties may be located, which violation would have a
      Material Adverse Effect or would materially decrease the value of an
      Unencumbered Property or an Unencumbered Development Property. The
      foregoing, representations and warranties that relate to Unencumbered
      Properties or Unencumbered Development Properties shall be subject to the
      last sentence of Section 12.1(e).

            (b) Except as set forth on Schedule 6.18 attached hereto, none of
      Borrower, any Guarantor, the Company or the Related Companies has received
      written notice from any third party including, without limitation any
      federal, state or local governmental

                                       63


      authority with respect to any of the Unencumbered Properties or any of the
      Unencumbered Development Properties or otherwise if the same would have a
      Material Adverse Effect, (i) that it has been identified by the United
      States Environmental Protection Agency ("EPA") as a potentially
      responsible party under CERCLA with respect to a site listed on the
      National Priorities List, 40 C.F.R. Part 300 Appendix B (1986) ; (ii) that
      any hazardous waste, as defined by 42 U.S.C. Section 9601(5), any
      hazardous substances as defined by 42 U.S.C. Section 9601(14), any
      pollutant or contaminant as defined by 42 U.S.C. Section 9601(33) or any
      toxic substances, oiL or hazardous materials or other chemicals or
      substances regulated by any Environmental Laws ("Hazardous Materials")
      which it has generated, transported or disposed of have been found at any
      site at which a federal, state or local agency or other third party has
      conducted or has ordered that the Borrower, any Guarantor, the Company or
      any of the Related Companies conduct a remedial investigation, removal or
      other response action pursuant to any Environmental Law; or (iii) that it
      is or shall be a named party to any claim, action, cause of action,
      complaint, or legal or administrative proceeding (in each case, contingent
      or otherwise) arising out of any third party's incurrence of costs,
      expenses, losses or damages of any kind whatsoever in connection with the
      release of Hazardous Materials. The foregoing, representations and
      warranties that relate to Unencumbered Properties or Unencumbered
      Development Properties shall be subject to the last sentence of Section
      12.1(e).

            (c) Except as set forth on Schedule 6.18 attached hereto and except
      to the extent the same would neither have a Material Adverse Effect nor
      materially decrease the value of an Unencumbered Property or an
      Unencumbered Development Property, (i) to the best of Borrower's knowledge
      no portion of the Real Estate has been used for the handling, processing,
      storage or disposal of Hazardous Materials except in material compliance
      with applicable Environmental Laws; and except as set forth on Schedule
      6.18, no underground tank or other underground storage receptacle for
      Hazardous Materials is located on any portion of the Real Estate; (ii) in
      the course of any activities conducted by the Borrower, any Guarantor, the
      Company, any of the Related Companies or the operators of any Real Estate,
      or to the best of Borrower's knowledge, any ground or space tenants on any
      Real Estate, no Hazardous Materials have been generated or are being used
      on the Real Estate except in material compliance with applicable
      Environmental Laws; (iii) there has been no present, or to the best of
      Borrower's knowledge past, releasing, spilling, leaking, pumping, pouring,
      emitting, emptying, discharging, injecting, escaping, disposing or dumping
      (a "RELEASE") or threatened Release of Hazardous Materials on, upon, into
      or from any Real Estate; (iv) to the best of Borrower's knowledge, there
      have been no Releases on, upon, from or into any real property in the
      vicinity of any of the Real Estate which, through soil or groundwater
      contamination, may have come to be located on; and (v) to the best of
      Borrower's knowledge, any Hazardous Materials that have been generated on
      any of the Real Estate have been transported off-site only by carriers
      having an identification number issued by the EPA, treated or disposed of
      only by treatment or disposal facilities maintaining valid permits as
      required under applicable Environmental Laws, which transporters and
      facilities have been and are, to the best of the Borrower's knowledge,
      operating in material compliance with such permits and applicable
      Environmental Laws. Notwithstanding that any representation contained
      herein may be limited to the

                                       64


      knowledge of the Borrower, any such limitation shall not affect the
      covenants specified in Section 7.10 or elsewhere in this Agreement. The
      foregoing, representations and warranties that relate to Unencumbered
      Properties or Unencumbered Development Properties shall be subject to the
      last sentence of Section 12.1(e).

            (d) None of the Real Estate is or shall be subject to any applicable
      environmental clean-up responsibility law or environmental restrictive
      transfer law or regulation, solely by virtue of the transactions set forth
      herein and contemplated hereby.

      Section 6.19. Subsidiaries and Affiliates. As of the date hereof, the
Borrower has no Subsidiaries except for the Related Companies listed on Schedule
1.3 and does not have an ownership interest in any entity whose financial
statements are not consolidated with the Borrower's except for the
Unconsolidated Entities listed on Schedule 1.3. Except as set forth on Schedule
6.19, as of the date hereof: (a) the Company is not a partner in any partnership
other than Borrower and is not a member of any limited liability company and (b)
the Company owns no material assets other than its partnership interest in
Borrower. Schedule 6.19 shall be updated annually at the time of delivery of the
financial statements pursuant to Section 7.4(a) to reflect any changes,
including any subsequent Guarantors and their Subsidiaries, if any.

      Section 6.20. Loan Documents. All of the representations and warranties
of the Borrower, any Guarantor or the Company made in the other Loan Documents
or any document or instrument delivered or to be delivered to the Agent or the
Lenders pursuant to or in connection with any of such Loan Documents are true
and correct in all material respects.

      Section 6.21. Buildings on the Unencumbered Properties. Except as set
forth on Schedule 6.21, to the best of Borrower's knowledge there are no
material defects in the roof, foundation, structural elements and masonry walls
of the Buildings on the Unencumbered Properties or Unencumbered Development
Properties or their heating, ventilating and air conditioning, electrical,
sprinkler, plumbing or other mechanical systems which would materially decrease
the value of such Unencumbered Property or Unencumbered Development Property.
The foregoing, representations and warranties that relate to Unencumbered
Properties or Unencumbered Development Properties shall be subject to the last
sentence of Section 12.1(e).

      Section 6.22. Insurance. The insurance policies and programs in effect as
of the Effective Date and thereafter with respect to the Real Estate Assets,
assets and business of the Company, the Borrower and the Related Companies are
in compliance with Section 7.7. Schedule 6.22 accurately sets forth as of the
date hereof all insurance policies currently maintained by the Company, the
Borrower and the Related Companies.

      Section 6.23. Disclosure. No report, financial statement, certificate or
other information furnished (whether in writing or orally) by or on behalf of
the Borrower or the Company to the Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; provided that, with respect to projected financial
information, the Borrower represents only that such

                                       65


information was prepared in good faith based upon assumptions believed to be
reasonable at the time.

      Section 6.24. Solvency. After giving effect to the Loans to be made or
Letters of Credit to be issued, and the disbursement of the proceeds of such
Loans pursuant to the Borrower's instructions, each of the Borrower and the
Company is Solvent.

      Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER. Borrower covenants and
agrees as follows, so long as any Loan or Note or Letter of Credit (or interest
or fees thereon) is outstanding or the Lenders have any obligations to make
Loans or issue or renew any Letters of Credit:

      Section 7.1. Punctual Payment. The Borrower unconditionally agree to duly
and punctually pay the principal and interest on the Loans and all other amounts
provided for in the Notes, this Agreement, and the other Loan Documents all in
accordance with the terms of the Notes, this Agreement and the other Loan
Documents.

      Section 7.2. Maintenance of Office. The Borrower will maintain its chief
executive office in Malvern, Pennsylvania or at such other place in the United
States Of America as the Borrower shall designate upon written notice to the
Agent to be delivered within fifteen (15) days of such change, where notices,
presentations and demands to or upon the Borrower in respect of the Loan
Documents may be given or made.

      Section 7.3. Records and Accounts. The Borrower will keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with Generally Accepted Accounting Principles.

      Section 7.4. Financial Statements, Certificates and Information. The
Borrower will deliver to each of the Lenders:

            (a) as soon as practicable, but in any event not later than ninety
      (90) days after the end of each fiscal year of the Borrower, the audited
      balance sheets of the Borrower and of the Company at the end of such year,
      and the related audited statements of operations and statements of cash
      flows and Funds From Operations and taxable income for such year, each
      setting forth in comparative form the figures for the previous fiscal year
      and all such statements to be in reasonable detail, prepared in accordance
      with Generally Accepted Accounting Principles on a consolidated basis
      including the Borrower and the Related Companies, and accompanied by an
      auditor's report prepared without qualification by Ernst & Young LLP or by
      another independent certified public accountant reasonably acceptable to
      the Agent; provided, however, that for so long as the Borrower and the
      Company are filing Form 10-K with the SEC, the delivery of a copy thereof
      pursuant to paragraph (e) of this Section 7.4 shall be deemed to satisfy
      this paragraph (a);

            (b) as soon as practicable, but in any event not later than
      forty-five (45) days after the end of each of the first three (3) fiscal
      quarters of the Borrower, copies of the unaudited balance sheets of the
      Borrower and of the Company as at the end of such

                                       66


      quarter, and the related unaudited statements of operations and statements
      of Funds From Operations and estimated taxable income for the portion of
      the Borrower's fiscal year then elapsed, all in reasonable detail and
      prepared in accordance with Generally Accepted Accounting Principles on a
      consolidated basis including the Borrower and the Related Companies,
      together with a certification by the principal financial or accounting
      officer of the Company that the information contained in such financial
      statements fairly presents the financial position of the Borrower and of
      the Company on the date thereof (subject to year-end adjustments);
      provided, however, that for so long as the Borrower and the Company are
      filing Form 10-Q with the SEC, the delivery of a copy thereof pursuant to
      paragraph (e) of this Section 7.4 shall be deemed to satisfy this
      paragraph (b);

            (c) as soon as practicable, but in any event not later than
      forty-five (45) days after the end of each of the first three (3) fiscal
      quarters and not later than ninety (90) days after the end of the last
      fiscal quarter of each fiscal year of the Borrower, (i) copies of a
      statement of the aggregate Net Operating Income for such fiscal quarter
      for the Unencumbered Properties and a listing of such properties, prepared
      on a basis consistent with the statements furnished pursuant to Section
      6.4 (c) , and certified by the Company pursuant to a certificate signed on
      the Company's behalf by a Responsible Officer of the Company and, (ii) at
      the time of the annual financial statements referred to in subsection (a)
      above, and, if requested by the Agent, at the time of quarterly financial
      statements referred to in subsection (b) above, a statement setting forth
      the Net Operating Income for such fiscal quarter for each Unencumbered
      Property listed by address;

            (d) simultaneously with the delivery of the financial statements
      referred to in subsections (a) and (b) above, a statement in the form of
      Exhibit C hereto signed on the Company's behalf by a Responsible Officer
      of the Company and setting forth in reasonable detail computations
      evidencing compliance with the covenants contained herein and (if
      applicable) reconciliations to reflect changes in Generally Accepted
      Accounting Principles since the Balance Sheet Date, and including an
      updated Schedule 6.19, if required under Section 6.19;

            (e) as soon as practicable, but in any event not later than ninety
      (90) days after the end of each fiscal year of the Company, copies of the
      Form l0-K statement filed with the Securities and Exchange Commission
      ("SEC") for such fiscal year, and as soon as practicable, but in any event
      not later than forty-five (45) days after the end of each fiscal quarter,
      copies of the Form l0-Q statement filed with the SEC for such fiscal
      quarter, provided that in either case if the SEC has granted an extension
      for the filing of such statements, Borrower shall deliver such statements
      to the Agent simultaneously with the filing thereof with the SEC;

            (f) promptly after the same are available, copies of each annual
      report, proxy or financial statement or other report or communication sent
      to the stockholders of the Borrower, and copies of all annual, regular,
      periodic and special reports and registration statements which the
      Borrower may file or be required to file with the SEC under Section 13 or
      15(d) of the Securities Exchange Act of 1934, and not otherwise required
      to be delivered to the Agent pursuant hereto;

                                       67


            (g) promptly, and in any event within five Business Days after
      receipt thereof by any Related Company or any Subsidiary thereof, copies
      of each notice or other correspondence received from the SEC (or
      comparable agency in any applicable non-U.S. jurisdiction) concerning any
      investigation or possible investigation or other inquiry by such agency
      regarding financial or other operational results of any Related Company or
      any Subsidiary thereof; and

            (h) from time to time such other financial data and information as
      the Agent may reasonably request including, without limitation, financial
      statements of any Unconsolidated Entities.

      Section 7.5. Notices.

            (a) Defaults. The Borrower will promptly notify the Agent in writing
      of the occurrence of any Default or Event of Default of which a
      Responsible Officer is aware. If any Person shall give any notice or take
      any other action in respect of a claimed default (whether or not
      constituting a Default or an Event of Default under this Agreement) under
      any note, evidence of Indebtedness, indenture or other obligation to which
      or with respect to which the Borrower, any Guarantor, the Company or any
      of the Related Companies is a party or obligor, whether as principal or
      surety, and if the principal amount thereof exceeds $5,000,000, and such
      default would permit the holder of such note or obligation or other
      evidence of Indebtedness to accelerate the maturity thereof, the Borrower
      shall forthwith give written notice thereof to the Agent and each of the
      Lenders, describing the notice or action and the nature of the claimed
      default.

            (b) Environmental Events. The Borrower will promptly notify the
      Agent in writing of any of the following events: (i) upon Borrower's
      obtaining knowledge of any violation of any Environmental Law regarding an
      Unencumbered Property or an Unencumbered Development Property or any Real
      Estate or Borrower's operations which violation is reasonably likely to
      have a Material Adverse Effect; (ii) upon Borrower's obtaining knowledge
      of any potential or known Release, or threat of Release, of any Hazardous
      Substance at, from, or into an Unencumbered Property or an Unencumbered
      Development Property or any Real Estate which it reports in writing or is
      reportable by it in writing to any governmental authority and which is
      material in amount or nature or which could materially affect the value of
      such Unencumbered Property or Unencumbered Development Property or which
      could have a Material Adverse Effect; (iii) upon Borrower's receipt of any
      notice of violation of any Environmental Laws or of any Release or
      threatened Release of Hazardous Substances, including a notice or claim of
      liability or potential responsibility from any third party (including
      without limitation any federal, state or local governmental officials) and
      including notice of any formal inquiry, proceeding, demand, investigation
      or other action with regard to (A) Borrower's or any Person's operation of
      an Unencumbered Property or an Unencumbered Development Property or any
      Real Estate if the same would have a Material Adverse Effect, (B)
      contamination on, from or into an Unencumbered Property or an Unencumbered
      Development Property or any Real Estate if the same would have a Material
      Adverse Effect, or (C) investigation or remediation of off-site locations
      at which

                                       68


      Borrower or any of its predecessors are alleged to have directly or
      indirectly disposed of Hazardous Substances; or (iv) upon Borrower's
      obtaining knowledge that any expense or loss has been incurred by such
      governmental authority in connection with the assessment, containment,
      removal or remediation of any Hazardous Substances with respect to which
      Borrower, any Guarantor, the Company or any of the Related Companies may
      be liable or for which a lien may be imposed on an Unencumbered Property
      or an Unencumbered Development Property.

            (c) Notification of Liens Against Unencumbered Properties and
      Unencumbered Development Properties or Other Material Claims. The Borrower
      will, promptly after becoming aware thereof, notify the Agent in writing
      of any Liens (except Permitted Liens) placed upon or attaching to any
      Unencumbered Properties or any Unencumbered Development Properties or of
      any other setoff, claims (including environmental claims), withholdings or
      other defenses which could have a Material Adverse Effect.

            (d) Notice of Litigation and Judgments. The Borrower will give
      notice to the Agent in writing within fifteen (15) days of becoming aware
      of any litigation, proceedings or material governmental investigations
      threatened in writing or any pending litigation, proceedings and material
      governmental investigations affecting any of the Unencumbered Properties
      or any of the Unencumbered Development Properties or affecting Borrower,
      any Guarantor, the Company or any of the Related Companies or to which the
      Borrower, any Guarantor, the Company or any of the Related Companies is or
      is to become a party involving an uninsured claim (or as to which the
      insurer reserves rights) against the Borrower, any Guarantor, the Company
      or any of the Related Companies that at the time of giving of notice could
      reasonably be expected to have a Materially Adverse Effect, and stating
      the nature and status of such litigation, proceedings or governmental
      investigation. The Borrower will give notice to the Agent, in writing, in
      form and detail reasonably satisfactory to the Agent, within ten (10) days
      of any judgment not covered by insurance, final or otherwise, against the
      Borrower in an amount in excess of $1,000,000.

            (e) Notice of Rating Changes. The Borrower will promptly notify the
      Agent in writing of the occurrence of any change in the Moody's Rating, in
      the S&P Rating or in the Fitch Rating.

            (f) Notice of ERISA Reportable Events. The Borrower will promptly
      notify the Agent in writing of the occurrence of any ERISA Reportable
      Event.

            (g) Notice of Changes in Accounting or Financial Reporting
      Practices. The Borrower will promptly notify the Agent in writing of the
      occurrence of any material change in accounting policies or financial
      reporting practices by the Borrower or any Related Company.

      Documents required to be delivered pursuant to Section Section 7.4(a),
(b), (e) or (f) (to the extent any such documents are included in materials
otherwise fileD with the SEC) may be delivered electronically and if so
delivered, shall be deemed to have been delivered on the date (i) on

                                       69


which the Borrower posts such documents, or provides a link thereto on the
Borrower's website on the Internet at the website address listed in Section 19;
or (ii) on which such documents are posted on the Borrower's behalf on an
Internet or intranet website, if any, to which each Lender and the Agent have
access (whether a commercial, third-party website or whether sponsored by the
Agent); provided that: (i) the Borrower shall deliver paper copies of such
documents to the Agent or any Lender that requests the Borrower to deliver such
paper copies until a written request to cease delivering paper copies is given
by the Agent or such Lender and (ii) the Borrower shall notify the Agent and
each Lender (by telecopier or electronic mail) of the posting of any such
documents and provide to the Agent by electronic mail electronic versions (i.e.,
soft copies) of such documents. Notwithstanding anything contained herein, in
every instance the Borrower shall be required to provide paper copies of the
compliance certificates required by Section 11.1 to the Agent. Except for such
compliance certificates, the Agent shall have no obligation to request the
delivery or to maintain copies of the documents referred to above, and in any
event shall have no responsibility to monitor compliance by the Borrower with
any such request for delivery, and each Lender shall be solely responsible for
requesting delivery to it or maintaining its copies of such documents.

      The Borrower hereby acknowledges that (a) the Agent and/or the Arranger
will make available to the Lenders materials and/or information provided by or
on behalf of the Borrower hereunder (collectively, "BORROWER MATERIALS") by
posting the Borrower Materials on IntraLinks or another similar electronic
system (the "PLATFORM") and (b) certain of the Lenders may be "public-side"
Lenders (i.e., Lenders that do not wish to receive material non-public
information with respect to the Borrower or its securities) (each, a "PUBLIC
LENDER"). The Borrower hereby agrees that (w) all Borrower Materials that are to
be made available to Public Lenders shall be clearly and conspicuously marked
"PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
"PUBLIC," the Borrower shall be deemed to have authorized the Agent, the
Arranger, and the Lenders to treat such Borrower Materials as not containing any
material non-public information with respect to the Borrower or its securities
for purposes of United States Federal and state securities laws; (y) all
Borrower Materials marked "PUBLIC" are permitted to be made available through a
portion of the Platform designated "Public Investor;" and (z) the Agent and the
Arranger shall be entitled to treat any Borrower Materials that are not marked
"PUBLIC" as being suitable only for posting on a portion of the Platform not
designated "Public Investor."

      Section 7.6. Existence; Maintenance of REIT Status; Maintenance of
Properties. The Company will do or cause to be done all things necessary to
preserve and keep in full force and effect its existence as a Maryland trust and
its status as a self administered REIT and the existence of Borrower as a
Pennsylvania limited partnership. The common shares of beneficial interest of
the Company will at all times be listed for trading on either the New York Stock
Exchange or one of the other major stock exchanges. The Borrower will do or
cause to be done all things necessary to preserve and keep in full force all of
its rights and franchises which in the judgment of the Borrower may be necessary
to properly and advantageously conduct the businesses being conducted by it, the
Company or any of the Related Companies. The Borrower (a) will cause all of the
properties used or useful in the conduct of the business of Borrower, the
Company or any of the Related Companies to be maintained and kept in good
condition, repair and working order and supplied with all necessary equipment,
(b) will cause to be made all

                                       70


necessary repairs, renewals, replacements, betterments and improvements thereof,
all as in the judgment of the Borrower may be necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times, and (c) will continue to engage primarily in the businesses now
conducted by it and in related businesses.

      Section 7.7. Insurance. With respect to the Real Estate Assets and other
properties and businesses of Borrower, the Guarantors and the Related Companies,
the Borrower will maintain or cause to be maintained insurance with financially
sound and reputable insurers against such casualties and contingencies as shall
be in accordance with the general practices of businesses engaged in similar
activities in similar geographic areas and in amounts, containing such terms, in
such forms and for such periods as may be reasonable and prudent. With respect
to the Unencumbered Properties, such insurance will include all risk casualty
insurance for the replacement cost of all Buildings including loss of rents for
12 months and, to the extent available, flood insurance. With respect to the
Unencumbered Development Properties, such insurance will include all risk
builders risk insurance.

      Section 7.8. Taxes. The Borrower will pay real estate taxes, other taxes,
assessments and other governmental charges against the Real Estate Assets before
the same become delinquent, and will duly pay and discharge, or cause to be paid
and discharged, before the same shall become overdue, all taxes, assessments and
other governmental charges imposed upon it and its other properties, sales and
activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its properties; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Borrower shall have set aside on its books adequate reserves with
respect thereto; and provided further that the Borrower will pay all such taxes,
assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor.

      Section 7.9. Inspection of Properties and Books. The Borrower shall
permit the Lenders, through the Agent or any of the Lenders' other designated
representatives, to visit and inspect any of the Unencumbered Properties and any
of the Unencumbered Development Properties, to examine the books of account of
the Borrower, the Company and the Related Companies (and to make copies thereof
and extracts therefrom) and to discuss the affairs, finances and accounts of the
Borrower with, and to be advised as to the same by, its officers, all at such
reasonable times and intervals as the Agent or any Lender may reasonably request
upon reasonable prior notice.

      Section 7.10. Compliance with Laws, Contracts, Licenses, and Permits. The
Borrower will comply, and will cause each Guarantor and all Related Companies to
comply, with (a) all applicable laws and regulations now or hereafter in effect
wherever its business is conducted, including all Environmental Laws, (b) the
provisions of all applicable partnership agreements, charter documents and
by-laws, (c) all agreements and instruments to which it is a party or by which
it or any of its Real Estate Assets may be bound including the Leases, and (d)
all applicable decrees, orders, and judgments except (with respect to (a)
through (d) above) to the extent such non-compliance would not have a Material
Adverse Effect. If at any time any permit or authorization from any governmental
Person shall become necessary or required in order that

                                       71


the Borrower, any Guarantor or the Company may fulfill or be in compliance with
any of its obligations hereunder or under any of the Loan Documents, the
Borrower will promptly take or cause to be taken all reasonable steps within the
power of the Borrower to obtain such authorization, consent, approval, permit or
license and furnish the Agent and the Lenders with evidence thereof.

      Section 7.11. Use of Proceeds. Subject to the provisions of Section 2.5
hereof, the proceeds of the Loans shall be used by the Borrower for permitted
capitaL expenditures, and for working capital and other general corporate
purposes consistent with the covenants contained herein.

      Section 7.12. INTENTIONALLY OMITTED.

      Section 7.13. Notices of Significant Transactions. The Borrower will
notify the Agent in writing prior to the closing of any of the following
transactions pursuant to a single transaction or a series of related
transactions:

            (a) The sale or transfer of one or more Real Estate Assets for an
      aggregate sales price or other consideration of $75,000,000 or more.

            (b) The creation of a Lien on, or the sale or transfer of, any
      Unencumbered Property or Unencumbered Development Property or the sale of
      any Subsidiary which owns an Unencumbered Property or Unencumbered
      Development Property, if such Property's contribution to the Value of All
      Unencumbered Properties (based on the most recently ended fiscal quarter
      for which financial statements have been provided pursuant to Section
      7.4) is $50,000,000 or more.

            (c) The creation of Indebtedness of the Borrower or a Related
      Company exceeding $100,000,000.

            (d) The sale or transfer of the ownership interest of Borrower or
      any of the Related Companies in any of the Related Companies or the
      Unconsolidated Entities if the aggregate consideration to be received by
      the Borrower or the Related Companies in connection with such transaction
      exceeds $100,000,000.

Each notice given pursuant to this Section 7.13 shall be accompanied by a
Compliance Certificate including an updated list of Unencumbered Properties and
Unencumbered Development Properties and demonstrating in reasonable detail
compliance, after giving effect to the proposed transaction, with the covenants
contained in Section 9.1 through Section 9.8.

      Section 7.14. Further Assurances. The Borrower will cooperate with the
Agent and the Lenders and execute such further instruments and documents and
perform such further acts as the Agent and the Lenders shall reasonably request
to carry out to their satisfaction the transactions contemplated by this
Agreement and the other Loan Documents.

      Section 7.15. Environmental Indemnification. The Borrower covenants and
agrees that it will indemnify and hold the Agent and each Lender harmless from
and against any and all claims, expense, damage, loss or liability incurred by
the Agent or any Lender (including all reasonable

                                       72


costs of legal representation incurred by the Agent or any Lender, but
excluding, as applicable, for the Agent or a Lender any claim, expense, damage,
loss or liability as a result of the gross negligence or willful misconduct of
the Agent or such Lender) relating to (a) any Release or threatened Release of
Hazardous Substances on any Unencumbered Property or any Unencumbered
Development Property or any Real Estate; (b) any violation of any Environmental
Laws with respect to conditions at any Unencumbered Property or any Unencumbered
Development Property or any Real Estate or the operations conducted thereon; or
(c) the investigation or remediation of off-site locations at which the Borrower
or its predecessors are alleged to have directly or indirectly disposed of
Hazardous Substances. It is expressly acknowledged by the Borrower that this
covenant of indemnification shall survive the payment of the Loans and shall
inure to the benefit of the Agent and the Lenders, and their successors and
assigns.

      Section 7.16. Response Actions. The Borrower (and, to the extent relating
to Real Property owned by it, each Guarantor) covenants and agrees that if any
Release or, disposal of Hazardous Substances shall occur or shall have occurred
on any Unencumbered Property or any Unencumbered Development Property or any
other Real Estate if the same would have a Material Adverse Effect, the Borrower
(or the Guarantor that owns the applicable Real Estate) will cause the prompt
containment and removal of such Hazardous Substances and remediation of such
Unencumbered Property, Unencumbered Development Property or Real Estate as
necessary to comply with all Environmental Laws or to preserve the value of such
Unencumbered Property, Unencumbered Development Property or Real Estate to the
extent necessary to avoid a Material Adverse Effect.

      Section 7.17. Employee Benefit Plans.

            (a) Representation. The Borrower and its ERISA Affiliates do not
      currently maintain or contribute to any Employee Benefit Plan, Guaranteed
      Pension Plan or Multiemployer Plan, except as set forth on Schedule 6.16.

            (b) Notice. The Borrower will obtain the consent of the Agent prior
      to the establishment by the Borrower or any ERISA Affiliate of any
      Guaranteed Pension Plan, or any other Employee Benefit Plan if the
      establishment of such Plan could reasonably be expected to create material
      liability for the Borrower.

            (c) In General. Each Employee Benefit Plan maintained by the
      Borrower or any ERISA Affiliate will be operated in compliance in all
      material respects with the provisions of ERISA and, to the extent
      applicable, the Code, including but not limited to the provisions
      thereunder respecting prohibited transactions.

            (d) Terminability of Welfare Plans. With respect to each Employee
      Benefit Plan maintained by the Borrower or an ERISA Affiliate which is an
      employee welfare benefit plan within the meaning of Section 3(1) or
      Section 3(2)(B) of ERISA, the Borrower, or the ERISA Affiliate, as the
      case may be, has the right tO terminate each such plan at any time (or at
      any time subsequent to the expiration of any applicable bargaining
      agreement) without liability other than liability to pay claims incurred
      prior to the date of termination.

                                       73


            (e) Multiemployer Plans. Without the consent of the Agent, the
      Borrower will not enter into, maintain or contribute to, any multiemployer
      Plan.

            (f) Unfunded or Underfunded Liabilities. The Borrower will not, at
      any time, have accruing unfunded or underfunded liabilities with respect
      to any Employee Benefit Plan (other than an Employee Benefit Plan which is
      a "top-hat plan" that is eligible for the alternate method of compliance
      with ERISA reporting and disclosure requirements provided in Department of
      Labor regulation section 2520.104-23 and which could not reasonably be
      expected to create material liability for the Borrower), Guaranteed
      Pension Plan or Multiemployer Plan, or permit any condition to exist under
      any Multiemployer Plan that would create a withdrawal liability.

      Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower (and,
to the extent provided herein, each Guarantor) covenants and agrees as follows,
so long as any Loan or Note or Letter of Credit (or interests or fees thereon)
is outstanding or the Lenders have any obligation to make any Loans or issue or
renew any Letters of Credit:

      Section 8.1. Restrictions on Recourse IndebtedneSection Except with the
prior written consent of the Requisite Lenders, the Borrower will not, and the
Borrower will not permit any Guarantor or any of the Related Companies to
create, incur, assume, guarantee or become or remain liable, contingently or
otherwise, with respect to any Recourse Indebtedness described in any one or
more of the following paragraphs:

            (a) Indebtedness that creates a violation of Section 9.4, Section
      9.5, Section 9.6 or Section 9.7;

            (b) Indebtedness that constitutes an Investment pursuant to the
      definition of Investment, and that creates a violation of Section 8.2;

            (c) Indebtedness that is prohibited by the terms of the Unsecured
      Term Notes, for so long as the Unsecured Terms Notes remain outstanding;
      or

            (d) Indebtedness of the Borrower or a Related Company to the
      Borrower or a Related Company (other than Indebtedness to a Guarantor)
      that is not fully subordinated to the Obligations. For the purposes hereof
      "fully subordinated" means (i) that no principal or interest on such
      Indebtedness shall be paid if any Obligation that is due and payable
      hereunder has not been paid and (ii) full subordination in the event of a
      bankruptcy proceeding.

      Section 8.2. Restrictions on Investments. The Borrower will not, and will
not permit any Guarantor or any of the Related Companies to make or permit to
exist or to remain outstanding any Investment except Investments in:

            (a) marketable direct or guaranteed obligations of the United States
      of America, Federal Home Loan Mortgage Corporation, Federal National
      Mortgage Association or any agency or instrumentality of the United States
      of America provided such obligations are backed by the full faith and
      credit of the United States of America, that mature within one (1) year
      from the date of purchase by the Borrower;

                                       74


            (b) demand deposits, certificates of deposit, money market accounts,
      bankers acceptances, LIBOR time deposits and time deposits of United
      States banks having total assets in excess of $1,000,000,000 or repurchase
      obligations with a term of not more than 7 days with such banks for
      underlying securities of the type described in clause (a) of this Section
      8.2;

            (c) securities commonly known as "commercial paper" issued by a
      corporation organized and existing under the laws of the United States of
      America or any state thereof that at the time of purchase have been rated
      and the ratings for which are not less than " P I " if rated by Moody's
      Investors Services, Inc., and not less than "A I " if rated by Standard
      and Poor's and participations in short term commercial loans made to such
      corporations by a commercial bank which provides cash management services
      to the Borrower;

            (d) Investments existing or contemplated on the date hereof and
      listed on Schedule 8.2(d) hereto;

            (e) Investments made in the ordinary course of the Borrower's
      business in Interest Rate Contracts;

            (f) Investments in Permitted Acquisitions;

            (g) Investments in the following categories so long as the aggregate
      amount, without duplication, of all Investments described in this
      paragraph (g) does not exceed, at any time, thirty percent (30%) of Total
      Asset Value and the aggregate amount of each of the following categories
      of Investments does not exceed the specified percentage of Total Asset
      Value set forth in the following table:



Category of Investment          Maximum Percentage of Total Asset Value
- ------------------------------  ---------------------------------------
                             
Permitted Developments                            30%
Unconsolidated Entities                           20%
Undeveloped Land                                  10%
Mortgages and Notes Receivable                    10%


            (h) Investments by the Borrower in one or more Guarantors or by a
      Guarantor in the Borrower or one or more other Guarantors.

      Section 8.3. Merger, Consolidation and Other Fundamental Changes. The
Borrower will not, and will not permit the Company or any of the Related
Companies to (i) become a party to any merger or consolidation, or (ii) agree to
or effect any property acquisition or stock acquisition (other than Permitted
Acquisitions in compliance with the other terms of this Agreement) , or (iii)
enter into any joint venture or invest in any Unconsolidated Entity unless prior
to such transaction the Borrower has provided the Agent with a notice describing
such transaction and, if

                                       75


the reasonably expected financial impact on the Borrower as reflected on its
balance sheet arising from all transactions described in this Section 8.3 shall
exceed 20% of Total Asset Value, the Borrower shall have obtained the prior
consent of the Requisite Lenders provided, however, that this Section 8.3 shall
not be applicable to (A) any merger, consolidation or transfer among the
Borrower's wholly-owned subsidiaries other than Guarantors, (B) any merger or
consolidation of any one or more Guarantors into the Borrower or another
Guarantor or any transfer from a Guarantor to the Borrower or another Guarantor,
or (C) any merger or consolidation with respect to which all of the following
are satisfied: (1) the surviving entity is Borrower, the Company or any other
Guarantor and there is no substantial change in senior management of the
Company, (2) the other entity or entities involved in such merger or
consolidation are engaged in the same line of business as Borrower, and (3)
following such transaction, the Borrower and the Company will not be in breach
of any of the covenants, representations or warranties of this Agreement. Except
as set forth on Schedule 6.19, the Company will not own or acquire any material
assets other than its partnership interest in the Borrower. If the Company is
the surviving entity in a merger, the assets acquired pursuant thereto will be
immediately transferred to the Borrower.

      Section 8.4. Sale and Leaseback. The Borrower will not enter into any
arrangement, directly or indirectly, whereby the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower intends to use for substantially the same
purpose as the property being sold or transferred. The Borrower will not permit
the Company or any of the Related Companies to enter into any such arrangement.

      Section 8.5. Compliance with Environmental Laws. The Borrower will not
do, and will not permit the Company or any of the Related Companies to do, any
of the following: (a) use any of the Real Estate or any portion thereof as a
facility for the handling, processing, storage or disposal of Hazardous
Materials except for immaterial amounts of Hazardous Materials used in the
routine maintenance and operation of the Real Estate and in compliance with
applicable law, (b) cause or permit to be located on any of the Real Estate any
underground tank or other underground storage receptacle for Hazardous Materials
which is reasonably likely to result in material liability under Environmental
Laws, (c) generate any Hazardous Materials on any of the Real Estate except in
material compliance with Environmental Laws, or (d) conduct any activity at any
Real Estate or use any Real Estate in any manner so as to cause a Release which
is reasonably likely to result in material liability under Environmental Laws.

      Section 8.6. Distributions. Borrower shall not permit the total
Distributions by it and the Company during any fiscal year to exceed 90% of
Funds from Operations for such year and shall not permit there to be more than
two consecutive fiscal quarters during which the total Distributions by Borrower
and the Company during each fiscal quarter exceed 100% of Funds from Operations
for such fiscal quarter except that such limitations on Distributions may be
exceeded to the extent necessary for the Company to maintain its REIT status
provided that the Company provides the Agent with a letter from its accountants
or attorneys setting forth the basis for computation of the amount of such
necessary excess Distributions. During any period when any Default or Event of
Default has occurred and is continuing the total Distributions by the Borrower
and the Company will not exceed the minimum amount necessary for the Company to
maintain its REIT status. The Guarantors (other than the Company) will not make
any Distributions except Distributions to the Borrower.

                                       76


      Section 8.7. Equity Repurchase Payments. The Borrower and the Company
shall not make any Equity Repurchase Payments during any period when any Default
or Event of Default has occurred and is continuing or would occur after giving
effect thereto.

      Section 8.8. Preferred Distributions. During any period when any Event of
Default has occurred and is continuing the Borrower and the Company shall not
make any Preferred Distributions.

      Section 8.9. Liens. The Borrower and the Company will not, and will not
permit any Related Company to, create, incur, assume or permit to exist any Lien
on any property or asset now owned or hereafter acquired by it, except:

            (a) Permitted Liens;

            (b) Liens securing Secured Indebtedness, the incurrence of which is
      not prohibited by Article IX; and

            (c) other Liens on a Property which is not an Unencumbered Property,
      so long as such Liens would not have a Material Adverse Effect or
      constitute or result in a Default or an Event of Default under this
      Agreement.

Notwithstanding the foregoing provisions of this Section 8.9, the failure of
any Unencumbered Property to comply with the covenants set forth in this
Section 8.9 shalL result in such Unencumbered Property's no longer qualifying
as Unencumbered Property under this Agreement, but such disqualification shall
not by itself constitute a Default or Event of Default, unless such
non-qualification otherwise constitutes or results in a Default or Event of
Default.

      Section 8.10. Negative Pledge. From and after the date hereof, none of
the Borrower, the Company, nor any other Guarantor shall enter into or permit to
exist, and none of the Borrower, the Company, nor any other Guarantor will
permit any Related Company to enter into or permit to exist, any agreement or
arrangement (i) containing any provision prohibiting or restricting the creation
or assumption of any Lien upon its properties (other than mechanics liens or
judgment liens more than 30 days past due and other than with respect to
prohibitions on liens set forth in a mortgage or any related loan agreement or
joint venture agreement on a particular property which is not an Unencumbered
Property), revenues or assets, whether now owned or hereafter acquired, or (ii)
prohibiting or restricting the ability of a such party to amend or modify this
Agreement or any other Loan Document, or (iii) prohibiting or restricting the
ability of any Related Company to make or pay dividends or distributions to the
Company, the Borrower or any other Guarantor.

      Section 8.11. Transactions with Affiliates. The Borrower, the Company and
the other Guarantors will not, and will not permit any Related Company to, sell,
lease or otherwise transfer any property or assets to, or purchase, lease or
otherwise acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of
business at prices and on terms and conditions not less favorable to such party
or such Related Company than could be obtained on an arm's-length basis from
unrelated third parties, (b) transactions between or among the Related
Companies, (c) payment of compensation,

                                       77


perquisites and fringe benefits arising out of any employment or consulting
relationship, and (d) any such Transactions between or among the Borrower and/or
any Guarantor.

      Section 8.12. Change in Nature of BusineSection The Borrower, the
Company and the other Guarantors will not engage in any material line of
business substantially different from the line of business conducted by the
Related Companies on the date hereof or any Related Business.

      Section 8.13. Dispositions. The Borrower, the Company and the other
Guarantors will not, and will not permit and Related Company to, sell transfer
and otherwise dispose of any asset unless the Borrower complies with Section
7.13 to the extent applicable, and after giving effect thereto no Default or
Event of Default exists.

      Section 9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower covenants
and agrees as follows, so long as any Loan or Note is outstanding or any Lender
has any obligation to make any Loan or any Letter of Credit is outstanding:

      Section 9.1. Unsecured Debt to Value of All Unencumbered Properties. The
Borrower will not at any time permit the ratio of Unsecured Indebtedness to the
Value of All Unencumbered Properties to exceed 60%; provided that such ratio may
exceed 60% on up to two (2) occasions during the term of this Agreement in order
to permit the Borrower to consummate a permitted acquisition of a portfolio of
properties so long as (a) such ratio does not exceed 65%, (b) such ratio ceases
to exceed 60% within 180 days following each date such ratio first exceeded 60%
and (c) the Borrower provides a certificate to the Agent when such ratio first
exceeds 60% and when such ratio ceases to exceed 60%.

      Section 9.2. Total Debt to Total Asset Value. The Borrower will not at
any time permit the ratio of Total Debt to Total Asset Value to exceed 60%;
provided that such ratio may exceed 60% on up to two (2) occasions during the
term of this Agreement in order to permit the Borrower to consummate a permitted
acquisition of a portfolio of properties so long as (a) such ratio does not
exceed 65%, (b) such ratio ceases to exceed 60% within 180 days following each
date such ratio first exceeded 60% and (c) the Borrower provides a certificate
to the Agent when such ratio first exceeds 60% and when such ratio ceases to
exceed 60%.

      Section 9.3. Maximum Secured Debt. The Borrower will not at anytime
permit the ratio of Secured Indebtedness to Total Asset Value to exceed forty
percent (40%).

      Section 9.4. Minimum Tangible Net Worth. The Borrower will not as of any
Borrowing Date or as of the end of any fiscal quarter of the Borrower (each such
date is referred to herein as a "SPECIFIED DATE") permit the Tangible Net Worth
of the Borrower to be less than $1,650,000,000 plus 75% of Net Offering
Proceeds.

      Section 9.5. Unencumbered Interest Coverage Ratio. The Borrower will not
as of any Specified Date permit the ratio of its Adjusted Net Operating Income
from all Unencumbered Properties to Interest Expense on Unsecured Indebtedness
to be less than 2.00 to 1.0 for any fiscal quarter.

                                       78


      Section 9.6. Adjusted EBITDA to Fixed Charges. The Borrower will not as
of any Specified Date permit the ratio of its Adjusted EBITDA to Fixed Charges
to be less than 1.50 to 1.0 for any fiscal quarter.

      Section 9.7. Pro Forma Calculations. The Borrower shall comply with the
financial ratios set forth in Section 9.1 through Section 9.6 as of each
Borrowing Date. The BorroWer shall recalculate such financial ratios referred to
in Section 9.1 through Section 9.3 by adding the amount equal to the
Indebtedness associated with the Loans to be madE on such Borrowing Date to the
Indebtedness reflected on the most recently available financial statements, and
adding thereto any Indebtedness incurred since the date of such financial
statement (less any Indebtedness repaid, retired, or forgiven during such
period) and adding thereto the value of such assets (determined at cost)
acquired with such Indebtedness to Total Asset Value and Value of All
Unencumbered Properties, if applicable (less the value of any assets sold during
such period). The Borrower shall deliver its certificate, signed on its behalf
by a Responsible Officer of the Borrower, certifying that the pro forma
calculations as of such Borrowing Date demonstrate the Borrower's compliance
with the covenants and financial ratios set forth in Section 9.1 through
Section 9.6.

      Section 9.8. Covenant Calculations.

            (a) For purposes of the calculations to be made pursuant to Section
      8.2(g) and Section 9.1 to Section 9.6 (and the definitions used
      therein), the relevant financIal statements and terms will (1) be adjusted
      to include minority interests relating to the Borrower's operating
      partnership units and (2) exclude the minority interests effect relating
      to consolidation of investments in non-wholly owned subsidiaries under
      Interpretation No. 46 of the Financial Accounting Standards Board.

            (b) For purposes of calculating the financial covenants in Section
      8.2(g), Section 8.6 and Section 9.1 through Section 9.6 (including the
      definitions used therein), (a) AdjUsted EBITDA, Adjusted Net Operating
      Income, EBITDA, Fixed Charges, Interest Expenses, Net Operating Income,
      Total Asset Value, Unencumbered Development Property Value, Unencumbered
      Net Income, Unencumbered Property Value and Value of All Unencumbered
      Properties shall be calculated, and without duplication, to include the
      pro-rata share (as determined by their respective percentage interests in
      the profits and losses of such Unconsolidated Entity) of results or value
      attributable to the Borrower and its Subsidiaries from Unconsolidated
      Entities and (b) Total Debt shall be calculated as follows: (i) if the
      Indebtedness of a Unconsolidated Entity is recourse to the Borrower or one
      of its Subsidiaries, then Total Debt shall include the amount of such
      Indebtedness that is recourse to such Person, without duplication, and
      (ii) if the Indebtedness of such Unconsolidated Entity is not recourse to
      the Borrower or one of its Subsidiaries, then Total Debt shall include
      such Person's pro-rata share of such Indebtedness as determined by its
      percentage interest in the profits and losses of such Unconsolidated
      Entity.

      Section 10. CONDITIONS TO EFFECTIVENESection This Agreement shall become
effective when each of the following conditions precedent have been satisfied:

      Section 10.1. Loan Documents. Each of the Loan Documents shall have been
duly executed and delivered by the respective parties thereto, shall be in

                                       79


full force and effect and shall be in form and substance satisfactory to each of
the Lenders. Each Lender shall have received a fully executed copy of each such
document prior to or on the Effective Date.

      Section 10.2. Certified Copies of Organization Documents; Good Standing
Certificates. The Agent shall have received (i) a Certificate of the Company to
which there shall be attached complete copies of the Borrower's Limited
Partnership Agreement and its Certificate of Limited Partnership, certified as
of a recent date by the Secretary of State of Pennsylvania, (ii) Certificates of
Good Standing for the Borrower from the State of Pennsylvania and each State in
which an Unencumbered Property or an Unencumbered Development Property is
located, (iii) a copy of the Company's Declaration of Trust certified by the
Maryland Secretary of State, (iv) Certificates of Good Standing for the Company
from the State of Maryland and the Commonwealth of Pennsylvania, and (v)
certificates of good standing and certificates from the Borrower with respect to
the provisions of applicable organizational documents of the Guarantors.

      Section 10.3. By-laws; Resolutions. All action on the part of the
Borrower and each Guarantor necessary for the valid execution, delivery and
performance by the Borrower and each Guarantor of this Agreement and the other
Loan Documents to which it is or is to become a party shall have been duly and
effectively taken, and evidence thereof satisfactory to the Agent shall have
been provided to the Agent. The Agent shall have received from the Company true
copies of its by-laws and the resolutions adopted by its Board of Directors
authorizing the transactions described herein, each certified by its secretary
to be true and complete and in effect on the Effective Date.

      Section 10.4. Incumbency Certificate; Authorized Signers. The Agent shall
have received from the Company an incumbency certificate, dated as of the
Effective Date, signed by a duly authorized officer of the Company and giving
the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign, in the name and on behalf of the Company (in its own
capacity and as general partner on behalf of Borrower and on behalf of each
Guarantor which is a partnership), each of the Loan Documents to which the
Borrower, any Guarantor or the Company is or is to become a party; (b) to make
Loan Requests and Conversion Requests; and (c) to give notices and to take other
action on behalf of the Borrower under the Loan Documents.

      Section 10.5. Opinions of Counsel Concerning Organization and Loan
Documents. Each of the Lenders and the Agent shall have received favorable
opinions from Borrower's and Guarantors' counsel addressed to the Lenders and
the Agent and dated as of the Effective Date, in form and substance satisfactory
to the Agent.

      Section 10.6. Payment of Fees. The Borrower shall have paid to the Agent
the fees pursuant to Section 4.1 and shall have paid all other expenses as
provided in Section 15 hereof then outstanding.

      Section 10.7. Closing Certificate. The Borrower shall have delivered to
the Agent a certificate of the Borrower, signed on its behalf by a Responsible
Officer, certifying that the conditions specified in Section Section
10.1-10.6, Section 10.8 and Section 11.1 have been satisfied and that there
has been no event or circumstance iN the business, operations, financial or
other condition or prospects of the Borrower, the Company or any Related Company
since the Balance Sheet Date, that has had or

                                       80


could be reasonably expected to have, either individually or in the aggregate, a
Material Adverse Effect.

      Section 10.8. Compliance Certificate. The Borrower shall have provided to
the Agent and each of the Lenders a certificate of the Company, signed on its
behalf by a Responsible Officer, certifying as to pro forma compliance with the
financial covenants in Section 8.2(g) and Section 9 as of the Effective Date,
taking into account anY Loans to be made or Letters of Credit to be issued on
such date.

      Section 11. CONDITIONS TO ALL CREDIT ADVANCES. The obligations of the
Lenders to make any Loan or to issue, amend, renew or extend any Letter of
Credit, whether on or after the Effective Date, shall also be subject to the
satisfaction of the following conditions precedent:

      Section 11.1. Representations True; No Event of Default; Compliance
Certificate. Each of the representations and warranties of the Borrower and the
Company contained in this Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Agreement shall
be true as of the date as of which they were made and shall also be true in all
material respects at and as of the time of the making of such Loan or the
issuance of such Letter of Credit, with the same effect as if made at and as of
that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Agreement and the other Loan Documents and
changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, and except to the extent that such
representations and warranties relate expressly to an earlier date); the
Borrower shall have performed and complied with all terms and conditions herein
required to be performed by it or prior to the Borrowing Date of such Loan or
the issuance date of such Letter of Credit; and no Default or Event of Default
shall have occurred and be continuing on the date of any Loan Request or on the
Borrowing Date of such Loan or on the date of any Letter of Credit Request or on
the issuance date of such Letter of Credit or would occur as a result of the
making of such Loan or the issuance of such Letter of Credit. Each of the
Lenders shall have received a Compliance Certificate of the Borrower, signed on
its behalf by a Responsible Officer, to such effect, which certificate will
include, without limitation, computations evidencing compliance with the
covenants contained in Section 9.1 through Section 9.6 hereof after giving
effect to such requested Loan or Letter of Credit.

      Section 11.2. No Legal Impediment. No change shall have occurred after the
date of this Agreement in any law or regulations thereunder or interpretations
thereof that in the reasonable opinion of any Lender would make it illegal for
such Lender to make such Loan or to hold an interest in such Letter of Credit.

      Section 11.3. Governmental Regulation. Each Lender shall have received
such statements in substance and form reasonably satisfactory to such Lender as
such Lender shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.

      Section 11.4. Proceedings and Documents. All proceedings in connection
with the transactions contemplated by this Agreement, the other Loan Documents
and all other documents incident thereto shall be reasonably satisfactory in
substance and in form to the Agent, and the Lenders

                                       81


shall have received all information and such counterpart originals or certified
or other copies of such documents as the Agent may reasonably request.

Each Loan Request or Letter of Credit Request (other than a Loan Request
requesting only a conversion of any Loan (other than a Competitive Bid Loan) to
the other Type or a continuation of Eurocurrency Rate Loan (other than a
Competitive Bid Loan)) submitted by the Borrower, and each amendment, renewal,
or extension of any Letter of Credit shall be deemed to be a representation and
warranty that the conditions specified in Section 11.1 have been satisfied on
and as of the applicable Borrowing Date or date on which a Letter of Credit is
issued.

      Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.

      Section 12.1. Events of Default and Acceleration. If any of the following
events ("EVENTS OF DEFAULT" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "DEFAULTS") shall
occur:

            (a) the Borrower shall fail to pay any principal of the Loans when
      the same shall become due and payable, and such failure shall continue
      unremedied for five (5) days;

            (b) the Borrower shall fail to pay any interest on the Loans or any
      other sums due hereunder or under any of the other Loan Documents when the
      same shall become due and payable, and such failure shall continue
      unremedied for five (5) days;

            (c) the Borrower or the Company shall fail to comply with any of its
      covenants contained in Section 7.5, the first sentence of Section 7.6,
      Section 7.11, Section 7.13, Section 8 or Section 9 hereof;

            (d) the Borrower, any Guarantor or the Company shall fail to perform
      any other term, covenant or agreement contained herein or in any of the
      other Loan Documents (other than those specified elsewhere in this Section
      12) for thirty (30) days after written notice of such failure from Agent
      to the Borrower;

            (e) any representation or warranty of the Borrower in this Agreement
      or any of the other Loan Documents or in any other document or instrument
      delivered pursuant to or in connection with this Agreement, shall prove to
      have been false in any material respect upon the date when made or deemed
      to have been made or repeated; provided, however, that with respect to the
      representations and warranties of the Borrower contained in Section 6.2,
      Section 6.3, Section 6.13, Section 6.18 and Section 6.21, if the condition
      or event making the representation and warranty false is capable of being
      cured by the Borrower, no enforcemenT action has been commenced against
      the Borrower or the applicable Unencumbered Property or Unencumbered
      Development Property on account of such condition or event, the applicable
      Unencumbered Property or Unencumbered Development Property is not subject
      to risk of forfeiture due to such condition or event, and the Borrower
      promptly commences the cure thereof after the Borrower's first obtaining
      knowledge of such condition or event, the Borrower shall have a period of
      thirty (30) days after the date that the Borrower first obtained knowledge
      of such condition or event during which the Borrower may cure such
      condition or event (or, if

                                       82


      such condition or event is not reasonably capable of being cured within
      such thirty (30) day period, such additional period of time as may be
      reasonably required in order to cure such condition or event but in any
      event such period shall not exceed six (6) months from the date that the
      Borrower first obtained knowledge of such condition or event), and no
      Event of Default shall exist hereunder during such thirty (30) day or
      additional period so long as the Borrower continuously and diligently
      pursues the cure of such condition or event and the other conditions to
      such cure period have not changed. Notwithstanding the foregoing, the
      failure of any Unencumbered Property to comply with such representations
      shall result in such Unencumbered Property's no longer qualifying as
      Unencumbered Property under this Agreement while such non-compliance is in
      effect, but such disqualification shall not by itself constitute a Default
      or Event of Default;

            (f) the Borrower, the Company or any of the Related Companies shall
      fail to pay at maturity, or within any applicable period of grace, any
      Recourse Indebtedness, or shall fail to observe or perform any material
      term, covenant or agreement contained in any agreement by which it is
      bound, evidencing or securing Indebtedness for such period of time as
      would permit (assuming the giving of appropriate notice if required and
      the passage of any applicable grace or cure periods) the holder or holders
      thereof or of any obligations issued thereunder to accelerate the maturity
      thereof, unless in any event the aggregate amount of all such defaulted
      Recourse Indebtedness plus the amount of any unsatisfied judgments
      described in paragraph (i) of this Section 12.1 is less than
      $30,000,000.00;

            (g) any of the Borrower, the Company or any other Guarantor shall
      make an assignment for the benefit of creditors, or admit in writing its
      inability to pay or generally fail to pay its debts as they mature or
      become due, or shall petition or apply for the appointment of a trustee or
      other custodian, liquidator or receiver of any substantial part of its
      properties or shall commence any case or other proceeding under any
      bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
      dissolution or liquidation or similar law of any jurisdiction, now or
      hereafter in effect, or shall take any action to authorize or in
      furtherance of any of the foregoing, or if any such petition or
      application shall be filed or any such case or other proceeding shall be
      commenced against any such Person and such Person shall indicate its
      approval thereof, consent thereto or acquiescence therein or any of the
      events described in this paragraph shall occur with respect to any other
      Related Company or any Unconsolidated Entity and such event shall have a
      Material Adverse Effect;

            (h) an involuntary proceeding shall be commenced or an involuntary
      petition shall be filed seeking (i) liquidation, reorganization or other
      relief in respect of the Borrower, the Company, or any other Guarantor, or
      its debts, or of a substantial part of its assets, under any Federal,
      state or foreign bankruptcy, insolvency, receivership or similar law now
      or hereafter in effect or (ii) the appointment of a receiver, trustee,
      custodian, sequestrator, conservator or similar official for the Borrower,
      the Company, or any other Guarantor or for a substantial part of its
      assets, and, in any such case, such proceeding or petition shall continue
      undismissed for 60 days or an order or decree approving or ordering any of
      the foregoing shall be entered, or any of the events described in this

                                       83


      paragraph shall occur with respect to any other Related Company or any
      Unconsolidated Entity and such event shall have a Material Adverse Effect;

            (i) there shall remain in force, undischarged, unsatisfied and
      unstayed, for more than thirty days, whether or not consecutive, any
      uninsured final judgment against the Borrower that, with other outstanding
      uninsured final judgments, undischarged, against the Borrower, the Company
      or any of the Related Companies plus the amount of any defaulted Recourse
      Indebtedness under paragraph (f) of this Section 12. 1, exceeds in the
      aggregate $30,000,000;

            (j) if any of the Loan Documents or any material provision of any
      Loan Documents shall be unenforceable, cancelled, terminated, revoked or
      rescinded otherwise than in accordance with the terms thereof or with the
      express prior written agreement, consent or approval of the Agent, or any
      action at law, suit or in equity or other legal proceeding to make
      unenforceable, cancel, revoke or rescind any of the Loan Documents shall
      be commenced by or on behalf of the Borrower, any Guarantor or the
      Company, or any court or any other governmental or regulatory authority or
      agency of competent jurisdiction shall make a determination that, or issue
      a judgment, order, decree or ruling to the effect that, any one or more of
      the Loan Documents is illegal, invalid or unenforceable in accordance with
      the terms thereof;

            (k) the Borrower, any Guarantor or the Company shall be indicted for
      a federal crime, a punishment for which could include the forfeiture of
      any assets of the Borrower;

            (l) the Borrower shall fail to pay, observe or perform any term,
      covenant, condition or agreement contained in any agreement, document or
      instrument evidencing, securing or otherwise relating to any Indebtedness
      of the Borrower to any Lender (other than the Obligations) and/or relating
      to any Permitted Lien (other than the Obligations) within any applicable
      period of grace provided for in such agreement, document or instrument;

            (m) an ERISA Reportable Event shall have occurred that, in the
      opinion of the Requisite Lenders, when taken together with all other ERISA
      Reportable Events that have occurred, could reasonably be expected to
      result in liability of the Related Companies in an aggregate amount
      exceeding $5,000,000;

            (n) the Company shall at any time fail to retain direct or indirect
      management and Control of the Borrower;

            (o) a Change of Control shall occur;

            (p) any "Event of Default", as defined in any of the other Loan
      Documents shall occur;

then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Requisite Lenders shall, by notice in writing
to the Borrower declare all amounts

                                       84


owing with respect to this Agreement, the Notes and the other Loan Documents to
be, and they shall thereupon forthwith become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower and the Guarantors; provided that in
the event of any Event of Default specified in Section Section 12.1(g) or
12.1(h), all such amounts shall become immediatelY due and payable automatically
and without any requirement of notice from the Agent or action by the Requisite
Lenders.

      Section 12.2. Termination of Commitments. If any one or more Events of
Default specified in Section 12.1(g) or Section 12.1(h) shall occur, any unused
portion of The Commitments, and of the Swingline Commitment, shall forthwith
automatically terminate and the Lenders shall be relieved of all obligations to
make Loans to the Borrower or to issue Letters of Credit for the benefit of the
Borrower. If any other Event of Default shall have occurred and be continuing,
the Agent may with the consent of the Requisite Lenders and shall at the request
of the Requisite Lenders by notice to the Borrower terminate the unused portion
of its Commitment hereunder, and of the Swingline Commitment, and upon such
notice being given such unused portion of its Commitment or of the Swingline
Commitment, shall terminate immediately and the Lenders shall be relieved of all
further obligations to make Loans other than Mandatory Prime Rate Loans. No
termination of the Commitments hereunder shall relieve the Borrower of any of
the Obligations or any of its existing obligations to the Lenders arising under
other agreements or instruments.

      Section 12.3. Remedies. In case any one or more of the Events of Default
shall have occurred, and whether or not the Requisite Lenders shall have
accelerated the maturity of the Loans pursuant to Section 12.1, the Agent may
with the consent of the Requisite Lenders and shall at the request of the
Requisite Lenders proceed to protect and enforce the rights and remedies of the
Agent and the Lenders under this Agreement, the Notes or any of the other Loan
Documents by suit in equity, action at law or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement and the other Loan Documents or any instrument pursuant to which
the Obligations are evidenced and, if any amount shall have become due, by
declaration or otherwise, to proceed to enforce the payment thereof or any other
legal or equitable right of the Agent and the Lenders. No remedy herein
conferred upon any Lender or the Agent or the holder of any Note is intended to
be exclusive of any other remedy and each and every remedy shall be cumulative
and shall be in addition to every other remedy given hereunder or now or
hereafter existing at law or in equity or by statute or any other provision of
law.

      Section 12.4. Distribution of Enforcement Proceeds. In the event that,
following the occurrence or during the continuance of any Default or Event of
Default, the Agent or any Lender as the case may be, receives any monies in
connection with the enforcement of any of the Loan Documents, such monies shall
be distributed for application as follows:

            (a) First, to the payment of, or (as the case may be) the
      reimbursement of the Agent for or in respect of all reasonable costs,
      expenses, disbursements and losses which shall have been incurred or
      sustained by the Agent in connection with the collection of such monies by
      the Agent, for the exercise, protection or enforcement by the Agent of all
      or any of the rights, remedies, powers and privileges of the Agent or the
      Lenders under

                                       85


      this Agreement or any of the other Loan Documents or in support of any
      provision of adequate indemnity to the Agent against any taxes or liens
      which by law shall have, or may have, priority over the rights of the
      Agent to such monies;

            (b) Second, to all other Obligations in such order or preference as
      the Requisite Lenders may determine; provided, however, that distribution
      in respect of such Obligations shall be made among the Lenders pro rata in
      accordance with each Lender's respective Credit Exposure; and provided,
      further, that the Agent may in its discretion make proper allowance to
      take into account any Obligations not then due and payable;

            (c) Third, upon payment and satisfaction in full or other provisions
      for payment in full satisfactory to the Requisite Lenders and the Agent of
      all of the Obligations, and the deposit in any cash collateral account
      established pursuant to Section 2.9(f) of the amount required thereby, to
      the payment of any obligations required to be paid pursuant to laws
      applicable to the enforcement proceedings; and

            (d) Fourth, the excess, if any, shall be returned to the Borrower or
      to such other Persons as are legally entitled thereto.

      Section 13. SETOFF. Borrower hereby grants to each Lender, a continuing
lien, security interest and right of setoff as security for all liabilities and
obligations to such Lender hereunder, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of such Lender or
in transit to it. At any time, without demand or notice (any such notice being
expressly waived by Borrower), any Lender may setoff the same or any part
thereof and apply the same to any liability or obligation of Borrower hereunder
even though unmatured and regardless of the adequacy of any other collateral
securing the Obligations. ANY AND ALL RIGHTS TO REQUIRE ANY LENDER TO EXERCISE
ITS RIGHTS OR REMEDIES WITH RESPECT TO ANY COLLATERAL WHICH SECURES THE
OBLIGATIONS, PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH
DEPOSITS, CREDITS OR OTHER PROPERTY OF BORROWER OR ANY GUARANTOR, ARE HEREBY
KNOWINGLY, VOLUNTARILY AND IRREVOCABLY WAIVED BY THE BORROWER. Each of the
Lenders agrees with each other Lender that if such Lender shall receive from the
Borrower, whether by voluntary payment, exercise of the right of setoff,
counterclaim, cross action, enforcement of the claim evidenced by the Notes held
by such Lender by proceedings against the Borrower at law or in equity or by
proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by such Lender any amount in excess of its ratable
portion of the payments received by all of the Lenders with respect to the Notes
held by all of the Lenders, such Lender will make such disposition-and
arrangements with the other Lenders with respect to such excess, either by way
of distribution, pro tanto assignment of claims, subrogation or otherwise as
shall result in each Lender receiving in respect of the Notes held by it its
proportionate payment as contemplated by this Agreement; provided that if all or
any part of such excess payment is thereafter recovered from such Lender, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest, unless the Lender from whom such
payment is recovered is required to pay

                                       86


interest thereon, in which case each Lender returning funds to such Lender shall
pay its allocable share of such interest based on the period of time that it was
in possession of the funds being returned.

      Section 14. THE AGENT.

      Section 14.1. Authorization. The Agent is authorized to take such action
on behalf of each of the Lenders and to exercise all such powers as are
hereunder and under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably incident
thereto, provided that no duties or responsibilities not expressly assumed
herein or therein shall be implied to have been assumed by the Agent. The
relationship between the Agent and the Lenders is and shall be that of agent and
principal only, and nothing contained in this Agreement or any of the other Loan
Documents shall be construed to constitute the Agent as a trustee for any
Lender.

      Section 14.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent in its sole discretion may
reasonably determine, and all reasonable fees and expenses of any such Persons
shall be paid by the Borrower.

      Section 14.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.

      Section 14.4. No Representations. The Agent shall not be responsible for
the execution or validity or enforceability of this Agreement, the Notes, any of
the other Loan Documents or any instrument at any time constituting, or intended
to constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the Borrower, or be bound to ascertain or inquire as to the performance or
observance of any of the terms, conditions, covenants or agreements herein or in
any instrument at any time constituting, or intended to constitute, collateral
security for the Notes. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrower or any holder
of any of the Notes shall have been duly authorized or is true, accurate and
complete. The Agent has not made nor does it now make any representations or
warranties, express or implied, nor does it assume any liability to the Lenders,
with respect to the credit worthiness or financial condition of the Borrower.
Each Lender acknowledges that it has, independently and without reliance upon
the Agent or any other Lender, and based upon such information and documents as
it has deemed appropriate, made its

                                       87


own credit analysis and decision to enter into this Agreement. Each Lender has
been independently represented by separate counsel on all matters regarding this
Agreement.

      Section 14.5. Payment.

            (a) A payment by the Borrower, any Guarantor or the Company to the
      Agent hereunder or any of the other Loan Documents for the account of any
      Lender shall constitute a payment to such Lender subject to the pro rata
      rights to repayment based upon the Commitment of each Lender, as
      applicable, provided that payments made with respect to Competitive Bid
      Loans shall be allocated and distributed to the applicable Lenders holding
      such Competitive Bid Loans. The Agent agrees promptly to distribute to
      each Lender such Lender's pro rata share of payments received by the Agent
      for the account of the Lenders except as otherwise expressly provided
      herein or in any of the other Loan Documents. Notwithstanding the
      foregoing, the amounts advanced by the Additional Commitment Lenders on
      the Commitment Increase Date and certain Eurocurrency Prepayment Fees and
      Letter of Credit fees shall be distributed on a non pro rata basis as
      provided in Section 2.2(b) and the Facility Fees for the quarter which
      included the Commitment Increase Date shall be paid as provided in Section
      4.2(a).

            (b) If in the opinion of the Agent the distribution of any amount
      received by it in such capacity hereunder, under the Notes or under any of
      the other Loan Documents might involve it in liability, it may refrain
      from making distribution until its right to make distribution shall have
      been adjudicated by a court of competent jurisdiction. If a court of
      competent jurisdiction shall adjudge that any amount received and
      distributed by the Agent is to be repaid, each Person to whom any such
      distribution shall have been made shall either repay to the Agent its
      proportionate share of the amount so adjudged to be repaid or shall pay
      over the same in such manner and to such Persons as shall be determined by
      such court.

            (c) Notwithstanding anything to the contrary contained in this
      Agreement or any of the other Loan Documents, any Lender that fails (i) to
      make available to the Agent its pro rata share of any Loan or (ii) to
      comply with the provisions of Section 13 with respect to making
      dispositions and arrangements with the other Lenders, where such Lender's
      share of any payment received, whether by setoff or otherwise, is in
      excess of its pro rata share of such payments due and payable to all of
      the Lenders, in each case as, when and to the full extent required by the
      provisions of this Agreement, or to adjust promptly such Lender's
      outstanding principal and its pro rata Commitment Percentage as provided
      in Section 2.1 hereof, shall be deemed delinquent (a "DELINQUENT LENDER")
      and shall be deemed a Delinquent Lender until such time as such
      delinquency is satisfied. A Delinquent Lender shall be deemed to have
      assigned any and all payments due to it from the Borrower, whether on
      account of outstanding Loans, interest, fees or otherwise, to the
      remaining non-delinquent Lenders for application to, and reduction of,
      their respective pro rata shares of all outstanding Loans. The Delinquent
      Lender hereby authorizes the Agent to distribute such payments to the
      non-delinquent Lenders in proportion to their respective pro rata shares
      of all outstanding Loans. A Delinquent Lender shall be deemed to have
      satisfied in full a delinquency when and if, as a result of application of
      the assigned

                                       88


      payments to all outstanding Loans of the non-delinquent Lenders, the
      Lenders' respective pro rata shares of all outstanding Loans have returned
      to those in effect immediately prior to such delinquency and without
      giving effect to the nonpayment causing such delinquency.

            (d) If any amount which the Agent is required to distribute to the
      Lenders pursuant to this Section 14.5 is actually distributed to any
      Lender on a date which is later than the first Business Day following the
      Agent's receipt of the corresponding payment from the Borrower, the Agent
      shall pay to such Lender on demand an amount equal to the product of (i)
      the average computed for the period referred to in clause (iii) below, of
      the weighted average interest rate paid by the Agent for federal funds
      acquired by the Agent during each day included in such period, times (ii)
      the amount of such late distribution to such Lender, times (iii) a
      fraction, the numerator of which is the number of days or portion thereof
      that elapsed from and including the second Business Day after the Agent's
      receipt of such corresponding payment from the Borrower to the date on
      which the amount so required to be distributed to such Lender actually is
      distributed, and the denominator of which is 365.

      Section 14.6. Holders of Notes. The Agent may deem and treat the payee of
any Note as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder assignee or transferee.

      Section 14.7. Indemnity. The Lenders ratably agree hereby to indemnify and
hold harmless the Agent (to the extent not reimbursed by the Borrower, the
Company or any other Related Company and without limiting the obligation of the
Borrower, the Company or any Related Company to do so) from and against any and
all claims, actions and units (whether groundless or otherwise), losses,
damages, costs, expenses (including any expenses for which the Agent has not
been reimbursed by the Borrower as required by Section 15), and liabilities of
every nature and character arising out of or related to this Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence.

      Section 14.8. Agent as Lender. In its individual capacity, Bank of America
shall have the same obligations and the same rights, powers and privileges in
respect to its Commitment and the Loans made by it, and as the holder of any of
the Notes as it would have were it not also the Agent.

      Section 14.9. Resignation and Removal. The Agent may (i) resign at any
time by giving sixty (60) days' prior written notice thereof to the Lenders and
the Borrower, or (ii) be removed for willful misconduct or gross negligence by
written notice from the Requisite Lenders and with the consent of the Borrower.
Upon any such resignation or removal, the Requisite Lenders shall have the right
to appoint a successor Agent. Unless a Default or Event of Default shall have
occurred and be continuing, appointment of such successor Agent shall be subject
to the reasonable approval of the Borrower. If no successor Agent shall have
been so appointed by the Requisite Lenders and shall have accepted such
appointment within thirty (30) days after (x) the giving of notice of
resignation by the retiring Agent, (y) the giving of a notice of removal by the
Requisite

                                       89


Lenders with the consent of the Borrower, or if the Borrower has disapproved or
failed to approve a successor agent within such period, then the retiring or
removed Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a financial institution which satisfies the definition of Eligible
Assignee. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Agent, and the retiring or removed Agent shall be discharged from its
duties and obligations as Agent hereunder. Such successor Agent shall issue
replacement Letters of Credit and any outstanding Letters of Credit issued by
the retiring or removed Agent shall be canceled and returned to it. Such
successor Agent shall also replace the retiring or removed Agent in its capacity
as Swingline Lender. After any retiring Agent's resignation or any removal of
the Agent, the provisions of this Agreement and the other Loan Documents shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent.

      Section 14.10. Notification of Defaults and Events of Default and other
Notices. Each Lender hereby agrees that, upon learning of the existence of a
Default or an Event of Default, it shall promptly notify the Agent thereof. The
Agent hereby agrees that upon receipt of any notice under this Section 14.10 it
shall promptly notify the other Lenders of the existence of such Default or
Event of Default. The Agent shall also promptly provide each Lender with a copy
of any notices which the Agent receives from the Borrower pursuant to Section
7.5 or Section 7.13.

      Section 14.11. Duties in the Case of Enforcement. In case one of more
Events of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent may, with the
consent of the Requisite Lenders (which consents may be obtained orally in
emergency situations), and the Agent shall, if (a) so requested by the Requisite
Lenders and (b) the Lenders have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Loan Documents and
exercise all or any such other legal and equitable and other rights or remedies
as it may have. The Requisite Lenders may direct the Agent in writing as to the
method and the extent of any such enforcement actions, the Lenders hereby
agreeing to indemnify and hold the Agent harmless from all liabilities incurred
in respect of all actions taken or omitted in accordance with such directions,
provided that the Agent need not comply with any such direction to the extent
that the Agent reasonably believes the Agent's compliance with such direction to
be unlawful or commercially unreasonable in any applicable jurisdiction.

      Section 15. EXPENSES. The Borrower agrees to pay (a) the reasonable costs
of producing and reproducing this Agreement, the other Loan Documents and the
other agreements and instruments mentioned herein, (b) any taxes (including any
interest and penalties in respect thereto) payable by the Agent, the L/C Issuer
or any of the Lenders (other than taxes based upon the Agent's, the L/C Issuer's
or any Lender's net income), including any recording, mortgage, documentary or
intangibles taxes in connection with the Loan Documents, or other taxes payable
on or with respect to the transactions contemplated by this Agreement, including
any taxes payable by the Agent, the L/C Issuer or any of the Lenders after the
Effective Date (the Borrower hereby agreeing to indemnify the Agent, the L/C
Issuer and the Lenders with respect thereto), (c) all title examination costs,
appraisal fees, engineers', inspectors' and surveyors' fees, recording

                                       90


costs and the reasonable fees, expenses and disbursements of the Agent's counsel
or any local counsel to the Agent incurred in connection with the preparation,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, and amendments, modifications,
approvals, consents or waivers hereto or hereunder, (d) the fees, costs,
expenses and disbursements of the Agent and the L/C Issuer incurred in
connection with the preparation, administration or interpretation of the Loan
Documents and other instruments mentioned herein including without limitation,
the costs incurred by the Agent in connection with its inspection of the
Unencumbered Properties and the Unencumbered Development Properties, and the
fees and disbursements of the Agent's or , the L/C Issuer's counsel and the
Borrower's legal counsel in preparing documentation, (e) the fees, costs,
expenses and disbursements of the Agent and the Arranger incurred in connection
with the syndication and/or participation of the Loans, (f) all reasonable
out-of-pocket expenses (including reasonable attorneys' fees and costs, which
attorneys may be employees of any Lender, the L/C Issuer or the Agent and the
fees and costs of appraisers, engineers, investment bankers, surveyors or other
experts retained by the Agent, the L/C Issuer or any Lender in connection with
any such enforcement proceedings) incurred by any Lender or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or the administration thereof after the
occurrence of a Default or Event of Default (including, without limitation,
expenses incurred in any restructuring and/or "workout" of the Loans), and (ii)
any litigation, proceeding or dispute whether arising hereunder or otherwise, in
any way related to the Agent's, the L/C Issuer's or the Lender's relationship
with the Borrower, the Company, any Unconsolidated Entity or any of the Related
Companies, (g) all reasonable fees, expenses and disbursements of the Agent
incurred in connection with UCC searches, and (h) all costs incurred by the
Agent in the future in connection with its inspection of the Unencumbered
Properties and the Unencumbered Development Properties. The covenants of this
Section 15 shall survive payment or satisfaction of payment of amounts owing
with respect to the Notes.

      Section 16. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent, the L/C Issuer, the Arranger and the Lenders and the
shareholders, directors, agents, officers, employees, subsidiaries, and
affiliates of the Agent, the L/C Issuer, the Arranger and the Lenders from and
against any and all claims, actions or causes of action and suits whether
groundless or otherwise, and from and against any and all Liabilities, losses,
settlement payments, obligations, damages and expenses of every nature and
character arising out of this Agreement or any of the other Loan Documents or
the transactions contemplated hereby or which otherwise arise in connection with
the financing including, without limitation except to the extent directly caused
by the gross negligence or willful misconduct of a Lender or the Agent (but such
limitation on indemnification shall only apply to the Agent, the L/C Issuer, the
Arranger or Lender being grossly negligent or committing willful misconduct),
(a) any actual or proposed use by the Borrower or any Guarantor of the proceeds
of any of the Loans, (b) any actual or alleged infringement of any patent,
copyright, trademark, service mark or similar right of the Borrower, (c) the
Borrower entering into or performing this Agreement or any of the other Loan
Documents or (d) with respect to the Borrower and its respective properties, the
violation of any Environmental Law, the Release or threatened Release of any
Hazardous Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to claims with respect to wrongful death, personal injury or damage to
property), (e) any cost, claim liability, damage or expense in connection with
any

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harm the Borrower may be found to have caused in the role of a broker, in each
case including, without limitation, the reasonable fees and disbursements of
counsel and allocated costs of internal counsel incurred in connection with any
such investigation, litigation, settlement or other proceeding. In litigation,
or the preparation therefor, the Lenders and the Agent shall each be entitled to
select their own separate counsel and, in addition to the foregoing indemnity,
the Borrower agrees to pay promptly the reasonable fees and expenses of such
counsel. If, and to the extent that the obligations of the Borrower under this
Section 16 are unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The provisions of this Section 16
shall survive the repayment of the Loans and the termination of the obligations
of the Lenders hereunder and shall continue in full force and effect as to the
Lenders so long as the possibility of any such claim, action, cause of action or
suit exists.

      Section 17. SURVIVAL OF COVENANTS, ETC. All covenants, agreements,
representations and warranties made herein, in the Notes, in any of the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrower, any Guarantor or the Company pursuant hereto shall be deemed to
have been relied upon by the Lenders, the L/C Issuer and the Agent,
notwithstanding any investigation heretofore or hereafter made by it, and shall
survive the making by the Lenders of the Loans, as herein contemplated, and
shall continue in full force and effect so long as any amount due under this
Agreement or the Notes or any of the other Loan Documents remains outstanding or
the Lenders have any obligation to make any Loans or the L/C Issuer has any
obligation to issue any Letters of Credit. The indemnification obligations of
the Borrower provided herein and the other Loan Documents shall survive the full
repayment of amounts due and the termination of the obligations of the Lenders
hereunder and thereunder to the extent provided herein and therein. All
statements contained in any certificate or other paper delivered to the Agent,
the L/C Issuer or any Lender at any time by or on behalf of the Borrower
pursuant hereto or in connection with the transactions contemplated hereby shall
constitute representations and warranties by the Borrower hereunder.

      Section 18. ASSIGNMENT; PARTICIPATIONS; ETC.

      Section 18.1. Conditions to Assignment by Lenders. Except as provided
herein, each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement (including
all or a portion of its Commitment Percentage and Commitment and the same
portion of the Loans at the time owing to it, and the Notes held by it);
provided that (a) the Agent, the L/C Issuer, and the Borrower, shall have given
its prior written consent to such assignment, which consent shall not be
unreasonably withheld or delayed, except that such consent of the Borrower shall
not be needed if a Default or an Event of Default has occurred and is continuing
or with respect to an assignment from a Lender to either one of its Affiliated
Lenders or to another Lender hereunder, (b) each such assignment shall be of a
portion of the assigning Lender's rights and obligations under this Agreement
relating to a specified Tranche A Commitment or Tranche B Commitment amount and
Commitment Percentage, (c) each assignment shall be in an amount of not less
than $2,000,000 that is a whole multiple of $1,000,000, (d) each Lender either
shall assign all of its Commitment and cease to be a Lender hereunder or shall
retain, free of any such assignment, an amount of its Commitment of not less
than $2,000,000, and (e) the parties to such assignment shall execute and
deliver to the Agent,

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for recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit E hereto (an "ASSIGNMENT AND
ACCEPTANCE"), together with any Notes subject to such assignment. Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder, and (ii) the assigning Lender shall, to the extent provided in such
assignment and upon payment to the Agent of the registration fee referred to in
Section 18.3, be released from its obligations under this Agreement.

      Section 18.2. Certain Representations and Warranties; Limitations;
Covenants. By executing and delivering an Assignment and Acceptance, the parties
to the assignment thereunder confirm to and agree with each other and the other
parties hereto as follows: (a) other than the representation and warranty that
it is the legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto; (b) the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any other Person primarily or secondarily
liable in respect of any of the Obligations, or the performance or observance by
the Borrower or any other Person primarily or secondarily liable in respect of
any of the Obligations of any of their obligations under this Agreement or any
of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto; (c) such assignee confirms that it has received a
copy of this Agreement, together with copies of the most recent financial
statements referred to in Section 6.4 and Section 7.4 and such other documents
and information as it haS deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (d) such assignee will,
independently and without reliance upon the assigning Lender, the Agent or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement, (e) such assignee represents and
warrants that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Agent to take such action as "Agent" on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to the Agent by the terms hereof or thereof, together with such powers
as are reasonably incidental thereto; (g) such assignee agrees that it will
perform in accordance with their terms all of the obligations that by the terms
of this Agreement are required to be performed by it as a Lender; and (h) such
assignee represents and warrants that it is legally authorized to enter into
such Assignment and Acceptance.

      Section 18.3. Register. The Agent shall maintain a copy of each Assignment
and Acceptance delivered to it and a register or similar list (the "REGISTER")
for the recordation of the names and addresses of the Lenders and the Commitment
Percentages of, and principal amount of the Loans owing to the Lenders from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may treat each
Person whose name is recorded in the Register as a Lender hereunder for all
purposes of this

                                       93


Agreement. The Register shall be available for inspection by the Borrower and
the Lenders at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Lender agrees to pay to the
Agent a registration fee in the sum of $2,500.00, provided that such
registration fee shall not be required for assignments to an Eligible Assignee
which is an affiliate of the assigning Lender. The Agent may, without action by
any other party, amend Schedules 1 and 1.2 hereof to reflect the recording of
any such assignments.

      Section 18.4. New Notes. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note subject to
such assignment, the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrower and the Lenders
(other than the assigning Lender). Within five (5) Business Days after receipt
of such notice, the Borrower, at its own expense, shall execute and deliver to
the Agent, in exchange for each surrendered Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Lender
has retained some portion of its Loans hereunder, a new Note to the order of the
assigning Lender in an amount equal to the amount retained by it hereunder. Such
new Notes shall provide that they are replacements for the surrendered Notes and
that they do not constitute a novation, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the assigned Notes. The surrendered
Notes shall be cancelled and returned to the Borrower.

      Section 18.5. Participations. Each Lender may sell participations to one
or more banks or other entities (but excluding any Related Companies) in a
portion of such Lender's rights and obligations under this Agreement and the
other Loan Documents; provided that (a) each such participation, other than
participations to its Affiliated Lenders or to another Lender hereunder, shall
be in an amount of not less than $2,000,000 that is a whole multiple of
$1,000,000, (b) any such sale or participation shall not affect the rights,
duties and obligations of the selling Lender hereunder to the Borrower, the
selling Lender shall continue to exercise all approvals, disapprovals and other
functions of a Lender and remain solely responsible to the other parties hereto
for the performance of its obligations, and the others parties hereto shall
continue to deal solely and directly with such Lender, (c) the only rights
granted to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents shall be
the rights to approve the vote of the Lender as to waivers, amendments or
modifications that would reduce the principal of or the interest rate on any
Loans, extend the term or increase the amount of the Commitment of such Lender
as it relates to such participant, reduce the amount of any fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest or release all or substantially all of any collateral held
hereunder, and (d) no participant which is not a Lender hereunder shall have the
right to grant further participations or assign its rights, obligations or
interests under such participation to other Persons without the prior written
consent of the Agent. Each entity with a participation shall be entitled to the
benefits of Section 4.5 and Section 13 and shall fulfill the obligations of
Section 4.13. The Agent shall promptly advise the Borrower in writing of any
such sale or participation.

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      Section 18.6. Pledge by Lender. Any Lender may at anytime pledge all or
any portion of its interest and rights under this Agreement (including all or
any portion of its Note) to secure obligations of such Lender, including to any
of the twelve Federal Reserve Banks organized under Section 4 of the Federal
Reserve Act, 12 U.S.C. Section 341. No such pledge or the enforcement thereof
shall release the pledgor Lender from its obligations hereunder or under any of
the other Loan Documents.

      Section 18.7. No Assignment by Borrower. The Borrower and the Guarantors
shall not assign or transfer any of their respective rights or obligations under
any of the Loan Documents without the prior written consent of each of the
Lenders, and any such attempted assignment shall be null and void.

      Section 18.8. Disclosure. The Borrower and each Guarantor agrees that in
addition to disclosures made in accordance with standard banking practices any
Lender may disclose information obtained by such Lender pursuant to this
Agreement to assignees or participants and potential assignees or participants
hereunder.

      Section 18.9. Designated Banks. Any Lender (each, a "DESIGNATING LENDER")
may at any time designate one Designated Bank, which shall be an Affiliate of
the Designating Lender, to fund Competitive Bid Loans on behalf of such
Designating Lender subject to the terms of this Section 18.9 and the provisions
in Section 18.1 anD Section 18.5 shall not apply to such designation. No Lender
may designate more than one (1) Designated Bank. The parties to each such
designation shall execute and deliver to the Agent for its acceptance a
Designation Agreement. Upon such receipt of an appropriately completed
Designation Agreement executed by a Designating Lender and a designee
representing that it is a Designated Bank, the Agent will accept such
Designation Agreement and will give prompt notice thereof to the Borrower,
whereupon, (i) the Borrower shall execute and deliver to the Designating Bank a
Designated Bank Note payable to the order of the Designated Bank, (ii) from and
after the effective date specified in the Designation Agreement, the Designated
Bank shall become a party to this Agreement with a right to make Competitive Bid
Loans on behalf of its Designating Lender pursuant to Section 2.10 after the
Borrower has accepted a Competitive Bid Loan (or portion thereof) of such
Designating Lender, and (iii) the Designated Bank shall not be required to make
payments with respect to any obligations in this Agreement except to the extent
of excess cash flow of such Designated Bank which is not otherwise required to
repay obligations of such Designated Bank which are then due and payable;
provided, however, that regardless of such designation and assumption by the
Designated Bank, the Designating Lender shall be and remain obligated to the
Borrower, the Agent and the other Lenders for each and every of the obligations
of the Designating Lender and its related Designated Bank with respect to this
Agreement, including, without limitation, any indemnification obligations
hereunder and any sums otherwise payable to the Borrower by the Designated Bank.
Each Designating Lender shall serve as the administrative agent of the
Designated Bank and shall on behalf of, and to the exclusion of, the Designated
Bank: (i) receive any and all payments made for the benefit of the Designated
Bank and (ii) give and receive all communications and notices and take all
actions hereunder, including, without limitation, votes, approvals, waivers,
consents and amendments under or relating to this Agreement and the other Loan
Documents. Any such notice, communication, vote, approval, waiver, consent or
amendment shall be signed by the Designating Lender as administrative agent for
the Designated

                                       95


Bank and shall not be signed by the Designated Bank on its own behalf but shall
be binding on the Designated Bank to the same extent as if actually signed by
the Designated Bank. The Borrower, the Agent, and Lenders may rely thereon
without any requirement that the Designated Bank sign or acknowledge the same.
No Designated Bank may assign or transfer all or any portion of its interest
hereunder or under any other Loan Document, other than assignments to the
Designating Lender which originally designated such Designated Bank.

      Section 19. NOTICES, ETC. (a) Notices Generally. Except in the case of
notices and other communications expressly permitted to be given by telephone
(and except as provided in subsection (b) below), all notices and other
communications provided for herein shall be in writing and shall be delivered by
hand or overnight courier service, mailed by certified or registered mail or
sent by telecopier as follows:

                        (i) if to the Borrower or any Guarantor, at 500
                  Chesterfield Parkway, Malvern, PA 19355, Attention: Chief
                  Financial Officer, facsimile: (610) 644-4129 or at such other
                  address for notice as the Borrower shall last have furnished
                  in writing to the Agent;

                        (ii) if to the Agent, the L/C Issuer or the Swingline
                  Lender, at Independence Center, 101 North Tryon Street,
                  Charlotte, North Carolina 28255-0001, Attention: Cindy Fisher,
                  facsimile: (704) 409-0180 or such other address for notice as
                  the Agent shall last have furnished in writing to the
                  Borrower, with a copy to the Agent at the Agent's Head Office;
                  or

                        (iii) if to any Lender, at such Lender's address set
                  forth on Schedule 1, hereto, or such other address for notice
                  as such Lender shall have last furnished in writing to the
                  Person giving the notice.

Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in subsection (b) below, shall be effective as provided in such
subsection (b).

            (b) Electronic Communications. Notices and other communications to
      the Lenders and the L/C Issuer hereunder may be delivered or furnished by
      electronic communication (including e-mail and internet or intranet
      websites) pursuant to procedures approved by the Agent, provided that the
      foregoing shall not apply to notices to any Lender or the L/C Issuer
      pursuant to Section 2 if such Lender or the L/C Issuer, as applicable, has
      notified the Agent that it is incapable of receiving notices under such
      section by electronic communication. The Agent or the Borrower may, in its
      discretion, agree to accept notices and other communications to it
      hereunder by electronic communications pursuant to procedures approved by
      it, provided that approval of such procedures may be limited to particular
      notices or communications.

                                       96


      Unless the Agent otherwise prescribes, (i) notices and other
      communications sent to an e-mail address shall be deemed received upon the
      sender's receipt of an acknowledgement from the intended recipient (such
      as by the "return receipt requested" function, as available, return e-mail
      or other written acknowledgement), provided that if such notice or other
      communication is not sent during the normal business hours of the
      recipient, such notice or communication shall be deemed to have been sent
      at the opening of business on the next business day for the recipient, and
      (ii) notices or communications posted to an Internet or intranet website
      shall be deemed received upon the deemed receipt by the intended recipient
      at its e-mail address as described in the foregoing clause (i) of
      notification that such notice or communication is available and
      identifying the website address therefor.

            (c) The Platform. THE PLATFORM IS PROVIDED "AS IS" AND "AS
      AVAILABLE." THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE
      ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE
      PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM
      THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR
      STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
      PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
      VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION
      WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Agent
      or any of its Related Parties (collectively, the "AGENT PARTIES") have any
      liability to any Borrower, any Lender, the L/C Issuer or any other Person
      for losses, claims, damages, liabilities or expenses of any kind (whether
      in tort, contract or otherwise) arising out of any Borrower's or the
      Agent's transmission of Borrower Materials through the internet, except to
      the extent that such losses, claims, damages, liabilities or expenses are
      determined by a court of competent jurisdiction by a final and
      non-appealable judgment to have resulted from the gross negligence or
      willful misconduct of such Agent Party; provided, however, that in no
      event shall any Agent Party have any liability to any Borrower, any
      Lender, the L/C Issuer or any other Person for indirect, special,
      incidental, consequential or punitive damages (as opposed to direct or
      actual damages).

            (d) Change of Address, Etc. Each of the Borrower, the Agent, the L/C
      Issuer and the Swingline Lender may change its address, telecopier or
      telephone number for notices and other communications hereunder by notice
      to the other parties hereto. Each other Lender may change its address,
      telecopier or telephone number for notices and other communications
      hereunder by notice to the Borrower, the Agent, the L/C Issuer and the
      Swingline Lender. In addition, each Lender agrees to notify the Agent from
      time to time to ensure that the Agent has on record (i) an effective
      address, contact name, telephone number, telecopier number and electronic
      mail address to which notices and other communications may be sent and
      (ii) accurate wire instructions for such Lender.

            (e) Reliance by the Agent, L/C Issuer and Lenders. The Agent, the
      L/C Issuer and the Lenders shall be entitled to rely and act upon any
      notices purportedly given by or on behalf of any Borrower even if (i) such
      notices were not made in a manner specified

                                       97


      herein, were incomplete or were not preceded or followed by any other form
      of notice specified herein, or (ii) the terms thereof, as understood by
      the recipient, varied from any confirmation thereof. The Borrower shall
      indemnify the Agent, the L/C Issuer, each Lender and the Related Parties
      of each of them from all losses, costs, expenses and liabilities resulting
      from the reliance by such Person on each notice purportedly given by or on
      behalf of the Borrower.

      Section 20. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE. This
agreement and each of the other Loan Documents, except as otherwise specifically
provided therein, and the rights and obligations of the parties hereunder shall
be construed and interpreted in accordance with the laws of the State of New
York (excluding the laws applicable to conflicts or choice of law to the extent
that would require application of substantive laws of another jurisdiction). THE
BORROWER, ON BEHALF OF ITSELF AND EACH GUARANTOR, AGREES THAT ANY SUIT BY IT FOR
THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT ONLY IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
THEREIN AND BORROWER, ON BEHALF OF ITSELF AND EACH GUARANTOR, CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT FOR ANY SUIT BY AGENT OR ANY LENDER AND
THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER BY MAIL AT
THE ADDRESS SPECIFIED IN Section 19. THE BORROWER, ON BEHALF OF ITSELF AND EACH
GUARANTOR, HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT-IS BROUGHT IN AN
INCONVENIENT FORUM.

      Section 21. HEADINGS. The captions in this Agreement are for convenience
of reference only and shall not define or limit the provisions hereof.

      Section 22. COUNTERPARTS. This Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which when so executed and delivered shall be an original, and all of
which together shall constitute one instrument. In proving this Agreement it
shall not be necessary to produce or account for more than one such counterpart
signed by the party against whom enforcement is sought. Delivery of an executed
counterpart of a signature page of this Agreement by facsimile shall be
effective as delivery of a manually executed counterpart of this Agreement;
provided, that at the request of any party, each party shall confirm such
facsimile transmission by providing duplicate original counterparts.

      Section 23. ENTIRE AGREEMENT. The Loan Documents, the Fee Letter and any
other documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided in Section 25.

      Section 24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS. THE BORROWER,
THE AGENT AND EACH LENDER MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED
HEREON, ARISING OUT OF, UNDER OR IN

                                       98


CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION HEREWITH OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS OR
ACTIONS OF AGENT OR ANY LENDER RELATING TO THE ADMINISTRATION OF THE LOANS OR
ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE THAT NO PARTY WILL SEEK TO
CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER ACTION IN WHICH A JURY TRIAL CANNOT
BE OR HAS NOT BEEN WAIVED. EXCEPT AS PROHIBITED BY LAW, BORROWER (ON BEHALF OF
ITSELF AND EACH GUARANTOR) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER
(ON BEHALF OF ITSELF AND EACH GUARANTOR) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF AGENT OR ANY LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER. THIS WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR LENDERS TO
PROVIDE THE COMMITMENTS AND MAKE THE LOANS.

      Section 25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or approval
required or permitted by this Agreement, may be given, and any term of this
Agreement or of any other instrument related hereto or mentioned herein may be
amended, and the performance or observance by the Borrower of any terms of this
Agreement or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively), but only with, the written consent of the
Requisite Lenders, other than amendments to schedules made in the ordinary
course as contemplated by this Agreement and, in the case of amendments, with
the written consent of the Borrower. Notwithstanding the foregoing, any
amendment, modification, termination, waiver or consent with respect to any of
the following provisions of this Agreement shall be effective only with the
written consent of each of the Lenders affected thereby (and, in the case of all
such amendments, with the consent of the Borrower): (i) reduction of the
principal amount of or rate or amount of interest on the Loans or any fees or
other amounts payable to any Lender (other than by payment or prepayment
thereof) (ii) postponement or extension of any date fixed for any payment of
principal of, or interest on, the Loans or Letters of Credit or any fees or
other amounts payable to such Lender (other than the one-year extension of the
Maturity Date as permitted by Section 3.1), or (iii) increase in the amount of
the Total Commitment or the Commitments of the Lenders (other than changes in
Commitments pursuant to Assignments under Section 18 or pursuant to changes in
the Tranche A Commitment and the Total Commitment under Section 2.2); provided
that the written consent of all Lenders shall be required to (x) change any
provision herein or in any of the Loan Documents which expressly requires
consent of all the Lenders, (y) change the definition of Requisite Lenders or
(z) release (1) the Borrower from the Obligations, (2) any Guarantor from its
obligations under the Loan Documents (other than the release of a Guaranty of a
Guarantor (other than the Company) which no longer owns any Unencumbered
Properties or Unencumbered Development Properties) or (3) all or substantially
all of any collateral pledged to or held by the Agent hereunder (other than as
provided in Section 2.9(a)); and

                                       99


provided further that no such amendment, waiver or consent shall amend, modify
or otherwise affect the rights and duties of the Agent or the L/C Issuer
hereunder without the prior written consent of the Agent or the L/C Issuer, as
the case may be. Each Lender shall respond to any request for a consent pursuant
to this Section 25 within ten (10) Business Days after the notice from the Agent
or the Borrower setting forth such request. No waiver shall extend to or affect
any obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.
Notwithstanding the foregoing, no amendment, waiver or consent shall, unless in
writing and signed by the Designating Lender on behalf of its Designated Bank
affected thereby, (a) subject such Designated Bank to any additional
obligations, (b) reduce the principal of, interest on, or other amounts due with
respect to, the Designated Bank Note made payable to such Designated Bank, or
(c) postpone any date fixed for any payment of principal of, or interest on, or
other amounts due with respect to, the Designated Bank Note made payable to the
Designated Bank.

      Section 26. SEVERABILITY. The provisions of this Agreement are severable,
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.

      Section 27. ACKNOWLEDGMENTS. The Borrower hereby acknowledges that: (i)
neither the Agent nor any Lender has any fiduciary relationship with, or
fiduciary duty to, the Borrower arising out of or in connection with this
Agreement or any of the other Loan Documents; (ii) the relationship in
connection herewith between the Agent and the Lenders, on the one hand, and the
Borrower, on the other hand, is solely that of debtor and creditor and (iii) no
joint venture or partnership among any of the parties hereto is created hereby
or by the other Loan Documents, or otherwise exists by virtue of the Facility or
the Loans.

      Section 28. NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender, the
Company, the Borrower or the Agent to exercise, and no delay by any such Person
in exercising, any right, remedy, power or privilege hereunder shall operate as
a waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.

      Section 29. INTEREST RATE LIMITATION. Notwithstanding anything to the
contrary contained in any Loan Document, the interest paid or agreed to be paid
under the Loan Documents shall not exceed the maximum rate of non-usurious
interest permitted by applicable Law (the "MAXIMUM RATE"). If the Agent or any
Lender shall receive interest in an amount that exceeds the Maximum Rate, the
excess interest shall be applied to the principal of the Loans or, if it exceeds
such unpaid principal, refunded to the Borrower. In determining whether the
interest contracted for, charged, or received by the Agent or a Lender exceeds
the Maximum Rate, such Person may, to the extent permitted by applicable Law,
(a) characterize any payment

                                       100


that is not principal as an expense, fee, or premium rather than interest, (b)
exclude voluntary prepayments and the effects thereof, and (c) amortize,
prorate, allocate, and spread in equal or unequal parts the total amount of
interest throughout the contemplated term of the Obligations hereunder.

      Section 30. USA PATRIOT ACT NOTICE. Each Lender that is subject to the Act
(as hereinafter defined) and the Agent (for itself and not on behalf of any
Lender) hereby notifies the Borrowers that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001))
(the "ACT"), it is required to obtain, verify and record information that
identifies the Borrowers, which information includes the name and address of
each Borrower and Guarantor and other information that will allow such Lender or
the Agent, as applicable, to identify such Borrower in accordance with the Act.
The Borrower hereby agrees to comply with any requests for information by any
Lender or the Agent under this Section 30.

      Section 31. JUDGMENT CURRENCY. If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or any other Loan
Document in one currency (other than Dollars) into another currency, the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the first currency with such other currency
on the Business Day preceding that on which final judgment is given. The
obligation of the Borrower in respect of any such sum due from it to the Agent
or the Lenders hereunder or under the other Loan Documents shall,
notwithstanding any judgment in a currency (the "JUDGMENT CURRENCY") other than
that in which such sum is denominated in accordance with the applicable
provisions of this Agreement (the "AGREEMENT CURRENCY"), be discharged only to
the extent that on the Business Day following receipt by the Agent of any sum
adjudged to be so due in the Judgment Currency, the Agent may in accordance with
normal banking procedures purchase the Agreement Currency with the Judgment
Currency. If the amount of the Agreement Currency so purchased is less than the
sum originally due to the Agent from the Borrower in the Agreement Currency, the
Borrower agrees, as a separate obligation and notwithstanding any such judgment,
to indemnify the Agent or the Person to whom such obligation was owing against
such loss. If the amount of the Agreement Currency so purchased is greater than
the sum originally due to the Agent in such currency, the Agent agrees to return
the amount of any excess to the Borrower (or to any other Person who may be
entitled thereto under applicable law).

      Section 32. TRANSITIONAL ARRANGEMENTS.

            (a) Existing Credit Agreements Superseded. This Agreement shall
      supersede the each of the Existing Credit Agreements in its entirety,
      except as provided in this Section 32. On the Effective Date, the rights
      and obligations of the parties under each of the Existing Credit
      Agreements and the "Notes" defined therein shall be subsumed within and be
      governed by this Agreement and the Notes; provided however, that any of
      the "Outstanding Obligations" (as defined in each of the Original Credit
      Agreement and Multi-Currency Credit Agreement) outstanding under the
      Original Credit Agreement and Multi-Currency Credit Agreement shall, for
      purposes of this Agreement, be Outstanding Obligations hereunder. The
      Lenders' interests in such Outstanding Obligations, and

                                       101


      participations in such Letters of Credit shall be reallocated on the
      Effective Date in accordance with each Lender's applicable Commitment
      Percentage.

            (b) Return and Cancellation of Notes. Upon its receipt of the Notes
      to be delivered hereunder on the Effective Date, each Lender will promptly
      return to the Borrower, marked "Cancelled" or "Replaced", the notes of the
      Borrower held by such Lender pursuant to the Existing Credit Agreements.

            (c) Interest and Fees Existing Credit Agreements. All interest and
      all commitment, facility and other fees and expenses owing or accruing
      under or in respect of the Existing Credit Agreements shall be calculated
      as of the Effective Date (prorated in the case of any fractional periods),
      and shall be paid on the Effective Date in accordance with the method
      specified in the Existing Credit Agreements as if such agreements were
      still in effect.

                  [Remainder of Page Intentionally Left Blank]

                                       102


      IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first above written.

                                      LIBERTY PROPERTY LIMITED PARTNERSHIP

                                      By: LIBERTY PROPERTY TRUST,
                                          its general partner

                                      By: /s/ GEORGE J. ALBURGER, JR.
                                          --------------------------------
                                          Name: George J. Alburger, Jr.
                                          Title: Chief Financial Officer



                                      LIBERTY PROPERTY TRUST

                                      By: /s/ GEORGE J. ALBURGER, JR.
                                          ------------------------------
                                          George J. Alburger, Jr.
                                          Executive Vice President and Chief
                                          Financial Officer



                                      BANK OF AMERICA, N A.,
                                      individually and as Agent, Swingline
                                      Lender and L/C Issuer

                                      By: /s/ MICHAEL W. EDWARDS
                                          ----------------------------------
                                          Name: MICHAEL W. EDWARDS
                                          Title: SENIOR VICE PRESIDENT



                                      JPMORGANCHASE BANK, N.A,
                                      individually and as Syndication Agent

                                      By: /s/ MARC E. COSTANTINO
                                          ----------------------------------
                                          Name: MARC E. COSTANTINO
                                          Title: VICE PRESIDENT



                                      CITIZENS BANK OF
                                      PENNSYLVANIA, individually and as
                                      Documentation Agent

                                      By: /s/ KELLIE ANDERSON
                                          ----------------------------------
                                          Name: Kellie Anderson
                                          Title: Vice President



                                      SUNTRUST BANK, individually and as
                                      Documentation Agent

                                      By: /s/ BLAKE K. THOMPSON
                                          ---------------------------------
                                          Name: Blake K. Thompson
                                          Title: Vice President



                                      WACHOVIA BANK, NATIONAL
                                      ASSOCIATION, individually and as
                                      Documentation Agent

                                      By: /s/ ROE E. RUDY
                                          -------------------------------
                                          Name: Roe E. Rudy
                                          Title: Managing Director



                                      PNC BANK, NATIONAL
                                      ASSOCIATION, individually and as
                                      Managing Agent

                                      By: /s/ SHARI L. REAMS
                                          -------------------------------
                                          Name: Shari L. Reams
                                          Title: Senior Vice President



                                      WELLS FARGO BANK, N.A.,
                                      individually and as Managing Agent

                                      By: /s/ CHARLES COOKE
                                          -------------------------------
                                          Name: Charles Cooke
                                          Title: Vice President



                                      KEYBANK, NATIONAL
                                      ASSOCIATION

                                      BY: /s/ JANE E. MCGRATH
                                          -------------------------------
                                          Name: Jane E. McGrath
                                          Title: Vice President



                                      EMIGRANT BANK

                                      By: /s/ DANIEL LEPAGE
                                          -------------------------------
                                          Name: Daniel LePage
                                          Title: Vice President



                                      MANUFACTURERS AND TRADERS
                                      TRUST COMPANY

                                      By: /s/ DANIEL A. SHIELDS
                                          -------------------------------
                                          Name: Daniel A. Shields
                                          Title: Vice President



                                      WESTLB AG,
                                      NEW YORK BRANCH

                                      By: /s/ LILLIAN TUNG LUM
                                          -------------------------------
                                          Name: Lillian Tung Lum
                                          Title: Executive Director

                                      By: /s/ SAL BATTINELLI
                                          -------------------------------
                                          Name: Sal Battinelli
                                          Title: Managing Director



                                      THE GOVERNOR AND COMPANY
                                      OF THE BANK OF IRELAND

                                      By: /s/ GWEN EVANS
                                          -------------------------------
                                          Name: Gwen Evans
                                          Title: Authorised Signatory

                                      By: /s/ DANIEL MCANENEY
                                          -------------------------------
                                          Name: Daniel McAneney
                                          Title: Authorised Signatory



                                      THE BANK OF NOVA SCOTIA

                                      By: /s/ R. H. BOESE
                                          -------------------------------
                                          Name: R. H. BOESE
                                          Title: MANAGING DIRECTOR



                                      CHANG HWA COMMERCIAL
                                      BANK, LTD., NEW YORK BRANCH

                                      By: /s/ JIM C. Y CHEN
                                          -------------------------------
                                          Name: Jim C. Y Chen
                                          Title: VP & General Manager



                                      CHEVY CHASE BANK, FSB

                                      By: /s/ MARIE NWOFOR
                                          -------------------------------
                                          Name: Marie Nwofor
                                          Title: AVP



                                      CITICORP NORTH AMERICA INC.

                                      By:  /s/ DAVID BOUTIN
                                          -------------------------------
                                          Name: David Boutin
                                          Title: Vice President



                                      CREDIT SUISSE,
                                      CAYMAN ISLANDS BRANCH

                                      By: /s/ BILL O'DALY
                                          -------------------------------
                                          Name: Bill O'Daly
                                          Title: Director

                                      By: /s/ CASSANDRA DROOGAN
                                          -------------------------------
                                          Name: CASSANDRA DROOGAN
                                          Title: ASSOCIATE



                                      MIZUHO CORPORATE BANK, LTD.

                                      By: /s/ NOEL P. PURCE II
                                          -------------------------------
                                          Name: Noel P. Purcell
                                          Title: Senior Vice President



                                      PEOPLE'S BANK

                                      By: /s/ STEVEN JONASSEN
                                          -------------------------------
                                          Name: Steven Jonassen
                                          Title: Vice President



                                      UBS LOAN FINANCE LLC

                                      By: /s/ JOSELIN FERNANDES
                                          -------------------------------
                                          Name: Joselin Fernandes
                                          Associate Director Banking Products
                                          Services, US

                                      By: /s/ DORIS MESA
                                          -------------------------------
                                          Name: Doris Mesa
                                          Title: Associate Director
                                                 Banking Products Services, US



                                      UFJ BANK LIMITED

                                      By: /s/ GILDA ACOSTA
                                          -------------------------------
                                          Name: Gilda Acosta
                                          Title: Vice President



                                      U.S. BANK NATIONAL ASSOCIATION

                                      By: /s/ DENNIS REDPATH
                                          -------------------------------
                                          Name: Dennis Redpath
                                          Title: Senior Vice President



                                                                       EXHIBIT A

                                  FORM OF NOTE

                                                                          [Date]

$[___________]

      FOR VALUE RECEIVED, the undersigned, LIBERTY PROPERTY LIMITED PARTNERSHIP,
a Pennsylvania limited partnership (the "BORROWER"), promises to pay, without
offset or counterclaim, to the order of ____________ (hereinafter, together with
its successors in title and assigns, the "LENDER") at the Agent's Head office
(as defined in the Credit Agreement referred to below), the principal sum of, or
the Dollar Equivalent of which is equal to, _____________ DOLLARS ($__________)
or, if less, the aggregate unpaid principal amount of all Loans made by the
Lender to the Borrower pursuant to the Amended and Restated Credit Agreement,
dated as of December [__], 2005, among the Lender, the Borrower, Liberty
Property Trust, the other lending institutions named therein and Bank of
America, N.A., as administrative agent (the "AGENT") (as amended, restated,
replaced, supplemented or modified from time to time, the "CREDIT AGREEMENT").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to them in the Credit Agreement. Unless otherwise provided
herein, the rules of interpretation set forth in Section 1.2 of the Credit
Agreement shall be applicable to this Note.

      The Borrower also promises to pay (a) principal from time to time at the
times provided in the Credit Agreement and (b) interest from the date hereof on
the principal amount from time to time unpaid at the rates and times set forth
in the Credit Agreement and in all cases in accordance with the terms of the
Credit Agreement. Late charges and other charges and default rate interest shall
be paid by Borrower in accordance with the terms of the Credit Agreement. The
entire outstanding principal amount of this Note, together with all accrued but
unpaid interest thereon, shall be due and payable in full on the Maturity Date.
The Lender may endorse the record relating to this Note with appropriate
notations evidencing advances and payments of principal hereunder as
contemplated by the Credit Agreement. Such notations shall, to the extent not
inconsistent with the notations made by the Agent in the Register, be conclusive
and binding on the Borrower in the absence of manifest error; provided, however,
that the failure of any Lender to make any such notations shall not limit or
otherwise affect any Obligations of the Borrower.

      Payments of both principal and interest are to be made in the currency in
which such Loan was made and as specified in the Credit Agreement in Same Day
Funds to the account designated by the Agent pursuant to the Credit Agreement.

      This Note is issued pursuant to, is entitled to the benefits of, and is
subject to the provisions of the Credit Agreement. The principal of this Note is
subject to prepayment in whole or in part in the manner and to the extent
specified in the Credit Agreement. The principal of this Note, the interest
accrued on this Note and all other obligations of the Borrower are full recourse
obligations of the Borrower, and all Real Estate Assets and



other properties shall be available for the payment and performance of this
Note, the interest accrued on this Note, and all of such other Obligations.

      In case an Event of Default shall occur and be continuing, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.

      The Borrower and all the parties hereto, whether as makers, endorsers, or
otherwise, hereby waive presentment for payment, demand protest and notice of
any kind in connection with the delivery, acceptance, performance and
enforcement of this Note, and also hereby assent to extensions of time of
payment or forbearance or other indulgences without notice.

      THIS NOTE SHALL BE INTERPRETED, AND THE RIGHTS AND LIABILITIES OF THE
PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW TO THE
EXTENT THAT WOULD REQUIRE APPLICATION OF SUBSTANTIVE LAWS OF ANOTHER
JURISDICTION).

      IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
in its name as of the date first above written.

                                        LIBERTY PROPERTY LIMITED
                                        PARTNERSHIP

                                            By: LIBERTY PROPERTY TRUST,
                                                its general partner

                                                By: ________________________
                                                    Name:
                                                    Title:



                          LOANS AND PRINCIPAL PAYMENTS




           Amount of                               Amount of            Unpaid
           Loan Made                          Principal Repaid    Principal Balance
      -------------------     Interest      -------------------  -------------------
      Prime  Eurocurrency      Period       Prime  Eurocurrency  Prime  Eurocurrency         Notation
Date  Rate      Rate       (If Applicable)   Rate     Rate       Rate       Rate      Total   Made By
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
                                                                  
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------
- ----  -----  ------------  ---------------  -----  ------------  -----  ------------  -----  --------




                                                                       EXHIBIT B

                              FORM OF LOAN REQUEST

                      Liberty Property Limited Partnership
                            500 Chesterfield Parkway
                                Malvern, PA 19355

                                                                          [Date]

Bank of America, N.A., as Agent
901 Main Street, 14th Floor
Dallas, Texas 75202-3714
Attention: Nora Taylor (Fax: (214) 290-9673)

Ladies and Gentlemen:

      Re:   Loan Request under Amended and Restated Credit Agreement dated as of
            December [ ], 2005.

      This Loan Request is delivered pursuant to Section 2.5 of the Amended and
Restated Credit Agreement, dated as of December __, 2005, among LIBERTY PROPERTY
LIMITED PARTNERSHIP, a Pennsylvania limited partnership (the "BORROWER"), Bank
of America, N.A. and the other lending institutions from time to time party
thereto (the "LENDERS"), Bank of America, N.A., as administrative agent for
itself and the Lenders (the "AGENT") and the other parties thereto (as amended,
restated, replaced, supplemented or modified from time to time, the "CREDIT
AGREEMENT"). Capitalized terms used herein without definitions herein shall have
the meaning given to them in the Credit Agreement.

      We hereby request that the Lenders make a Loan under the Credit Agreement
as follows:

(A)   Principal amount requested(1)                                 _________

(B)   Proposed Borrowing Date(2)                                    _________

(C)   Interest Period(3)                                            _________

- ----------
      (1) If this request is for an Alternative Currency Loan, indicate such
amount in the requested currency. Each Loan shall be in a minimum amount of the
Dollar Equivalent of $3,000,000 and an integral multiple of the Dollar
Equivalent of $1,000,000 in excess thereof. The Dollar Equivalent of any
Alternative Currency Loans requested herein shall not exceed the Tranche B
Availability.

      (2) Shall be a Business Day at least (a) one (1) Business Day in the case
of Prime Rate Loans, (b) two (2) Business Days in the case of LIBOR Rate Loans,
or (c) four (4) Business days in the case of Eurocurrency Rate Loans denominated
in Alternative Currency, in each case after the date hereof.

      (3) For any Eurocurrency Rate Loan 1, 2, or 3 months.



(D)   Type of Borrowing(4)                                         _________

(E)   [Type of Alternative Currency(5)]                           [_________]

      This Loan Request is submitted pursuant to, and shall be governed by, and
subject to satisfaction of, the terms, conditions and provisions set forth in
Section 2.5 of the Credit Agreement. The Borrower hereby certifies that [, based
upon a conversion rate of ______,] the Tranche [A][B] availability as of the
date hereof, before giving effect to the requested Loan, is __________________,
and that after giving effect to the requested Loan, the sum of the Tranche
[A][B] Obligations and the Tranche [A][B] Letter of Credit Obligations will not
exceed the Tranche [A][B] Commitments.

      [The Borrower also certifies that after giving effect to the requested
Loans, the Dollar Equivalent of the sum of (i) all Tranche B Obligations
denominated in Alternative Currency and (ii) all outstanding Tranche B Letter of
Credit Obligations denominated in Alternative Currency is less than or equal to
the lesser of (a) $50,000,000 or (b) the Tranche B Commitments based upon a
conversion rate of ___________.]

      The undersigned hereby further certifies to you that it is in compliance
with the covenants specified in Section 9.1 through Section 9.6 of the Credit
Agreement, and will remain in compliance with such covenants after the making of
the requested Loan, as evidenced by a Compliance Certificate in the form of
Exhibit C to the Credit Agreement of even date, herewith delivered to you
simultaneously with this Loan Request. We also understand that if you grant this
request, this request obligates us to accept the requested Loan on such date.

      The undersigned hereby certifies to you, in accordance with the provisions
of Section 11.1 of the Credit Agreement, that (i) the representations and
warranties contained in the Credit Agreement and in each document and instrument
delivered pursuant to or in connection therewith, were true as of the date as of
which they were made, are also true at and as of the date hereof, and will also
be true at and as of the proposed Borrowing Date of the Loan requested hereby,
in each case except as otherwise permitted pursuant to the provisions of Section
11.1 of the Credit Agreement, (ii) the Borrower has performed and complied with
all terms and conditions required by Section 11.1 of the Credit Agreement to be
performed by it on or prior to the Borrowing Date, and (iii) no Default or Event
of Default has occurred and is continuing, or is reasonably likely to occur as a
result of making the Loan requested herein.

      Please wire transfer the proceeds of the Borrowing in the requested
currency to the accounts [of the following persons](6/) [listed below in the
name of the Borrower and denominated

- ----------
      (4)  The Borrower shall indicate whether the requested Borrowing is for a
Prime Rate Loan or Eurocurrency Rate Loan.

      (5)  Sterlings or Euros.

      (6/) For Loans denominated in Dollars.



in the currency in which the amount is borrowed](7/) at the financial
institutions indicated respectively:

                                           Person to be Paid

Amount to be                                  Name, Account No.,
Transferred                                   Address, etc.

[$][(euro)][(pound)]______________            __________________________________
                                              __________________________________
                                              Attention: _______________________
                                              Account No.: _____________________

[$][(euro)][(pound)]______________            __________________________________
                                              __________________________________
                                              Attention: _______________________
                                              Account No.: _____________________

                                                  Very truly yours,

                                                  Liberty Property Limited
                                                  Partnership

                                                     By: Liberty Property Trust,
                                                         its general partner

                                                      By: ______________________
                                                          Name:
                                                          Title:

                         [ATTACH COMPLIANCE CERTIFICATE]

- ----------
(7/) For Loans denominated in Alternative Currency.



                                                                       EXHIBIT C

                         FORM OF COMPLIANCE CERTIFICATE

                      Liberty Property Limited Partnership
                            500 Chesterfield Parkway
                                Malvern, PA 19355

                                                                          [Date]

      Liberty Property Trust, general partner of Liberty Property Limited
Partnership (the "BORROWER"), hereby certifies as of the date hereof the
following:

      1. No Defaults. The Responsible Officer signing this Compliance
Certificate on behalf of the Borrower has read a copy of the Amended and
Restated Credit Agreement dated as of December __, 2005 (as amended, restated,
replaced, supplemented or modified from time to time, the "CREDIT AGREEMENT"),
among the Borrower, Liberty Property Trust (the "COMPANY"), Bank of America,
N.A., the other lending institutions party thereto, and BANK OF AMERICA, N.A.,
as administrative agent (the "AGENT"). Terms used herein and not otherwise
defined herein shall have the meanings set forth in Section 1.1 of the Credit
Agreement. No Default is continuing in the performance or observance of any of
the covenants, terms or provisions of the Credit Agreement or any of the other
Loan Documents. Without limiting the foregoing, the Borrower has not taken any
actions which are prohibited by the negative covenants set forth in Section 8 of
the Credit Agreement. Attached hereto as Appendix I are all relevant
calculations needed to determine whether the Borrower is in compliance with
Section 9.1 through Section 9.6, inclusive, and Section 8.2(g), and Section 8.6
of the Credit Agreement as of the end of the most recently completed fiscal
quarter (except that in the case of Compliance Certificates delivered pursuant
to Section 2.5(a), Section 2.10(k), Section 11.1 or Section 7.13, the
calculations determining compliance with Section 9.1, Section 9.2 and Section
9.3 have been computed on a pro forma basis after giving effect to the proposed
transaction and, if the list of Unencumbered Properties and Unencumbered
Development Properties attached hereto has been updated since the list attached
to the most recent Compliance Certificate delivered pursuant to Section 7.4(d),
Value of All Unencumbered Properties and Unencumbered Net Operating Income have
been computed on the basis of such updated list).

      2. No Material Changes, Etc. Except as disclosed on Appendix II hereto,
since the Balance Sheet Date, there has been no event or circumstance in the
business, operations, financial or other conditions or prospects of the
Borrower, the Company or any other Related Company, that has had or could
reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect.

      3. No Materially Adverse Contracts, Etc. Neither the Borrower nor the
Company is subject to any charter, corporate, trust, partnership or other legal
restriction, or any judgment, decree, order, rule or regulation that has or is
expected, in the reasonable judgment of the Company's officers, in the future to
have a Materially Adverse Effect. Neither the Borrower nor the Company is a
party to any contract or agreement that has or is expected, in the reasonable
judgment of the Company's officers, to have a Materially Adverse Effect.



      4. [Include for Compliance Certificates delivered pursuant to Section
7.4(d) and Section 7.13 and for other Compliance Certificates as described in
Section 5.1]. Attached hereto as Appendix III is a list of the Unencumbered
Properties as of _____________. The Borrower certifies that each of the Real
Estate Assets listed on Appendix III satisfied on said date, each of the
conditions set forth in the definition of Unencumbered Property, except to the
extent that waivers may have been granted pursuant to Section 5.2. Appendix III
lists for each Unencumbered Property, its street address, name of the owner,
number of square feet and number of leased square feet.

                                            LIBERTY PROPERTY LIMITED PARTNERSHIP

                                              By: LIBERTY PROPERTY TRUST,
                                                  its general partner

                                                By: _______________________
                                                   Name:
                                                   Title:



                                                                       EXHIBIT D

                         FORM OF SWINGLINE LOAN REQUEST

                      Liberty Property Limited Partnership
                            500 Chesterfield Parkway
                                Malvern, PA 19355

                                                                          [Date]

Bank of America, N.A., as Agent
901 Main Street, 14th Floor
Dallas, Texas 75202-3714
Attention: Nora Taylor (Fax: (214) 290-9673)

Ladies and Gentlemen:

      Re:   Swingline Loan Request under Amended and Restated Credit Agreement
            dated as of December [ ], 2005

      Pursuant to Section 2.8(b) of the Amended and Restated Credit Agreement,
dated as of December __, 2005, among, Liberty Property Limited Partnership, a
Pennsylvania limited partnership (the "BORROWER"), Liberty property Trust, a
Maryland trust, Bank of America, N.A. and the other lending institutions which
are or may become parties thereto from time to time (the "LENDERS"), and Bank of
America, N.A., as administrative agent for itself and the other Lenders (the
"AGENT") (as amended, restated, replaced, supplemented or otherwise modified,
the "CREDIT AGREEMENT"), we hereby request that the Swingline Lender make a
Swingline Loan as follows:

      (i) Principal amount requested: $__________

      (ii) Proposed Borrowing Date: __________

      This Swingline Loan Request is submitted pursuant to, and shall be
governed by, and subject to satisfaction of, the terms, conditions and
provisions set forth in Section 2.8 of the Credit Agreement. As provided
therein, all Swingline Loans are Prime Rate Loans.

      The undersigned hereby further certifies to you that it is in compliance
with the covenants specified in Section 9.1 through Section 9.6 of the Credit
Agreement, and will remain in compliance with such covenants after the making of
the requested Swingline Loan. The Borrower also certifies that after giving full
effect to the requested Loans the aggregate principal amount of all outstanding
Swingline Loans is less than or equal to $50,000,000.

      We also understand that if you grant this request this request obligates
us to accept the requested Swingline Loan on such date. All terms defined in the
Credit Agreement and used herein without definition shall have the meanings set
forth in Section 1.1 of the Credit Agreement.



      The undersigned hereby certifies to you, in accordance with the provisions
of Section 11.1 of the Credit Agreement, that (i) the representations and
warranties contained in the Credit Agreement and in each document and instrument
delivered pursuant to or in connection therewith were true as of the date as of
which they were made, are also true at and as of the date hereof, and will also
be true at and as of the proposed Borrowing Date of the Swingline Loan requested
hereby, in each case except as otherwise permitted pursuant to the provisions of
Section 11.1 of the Credit Agreement, (ii) the Borrower has performed and
complied with all terms and conditions required by Section 11.1 of the Credit
Agreement to be performed by it on or prior to the Borrowing Date, and (iii) no
Default or Event of Default has occurred and is continuing, or will occur as a
result of the making of the Loan requested herein.

                                            Very truly yours,

                                            Liberty Property Limited Partnership

                                               By: Liberty Property Trust,
                                                   its general partner

                                                  By: ______________________
                                                      Name:
                                                      Title:



                                                                       EXHIBIT E

                                     FORM OF
                            ASSIGNMENT AND ACCEPTANCE

                                                                         [Dated]

      This Assignment and Acceptance (the "ASSIGNMENT AND ACCEPTANCE") is dated
as of the effective date set forth below (the "EFFECTIVE DATE") and is entered
into by and between ________________________ (the "ASSIGNOR") and
_________________________ (the "ASSIGNEE"). Capitalized terms used but not
defined herein shall have the meanings given to them in the Credit Agreement
identified below (as amended, supplemented, amended and restated or otherwise
modified and in effect from time to time, the "CREDIT AGREEMENT"), receipt of a
copy of which is hereby acknowledged by the Assignee. The Standard Terms and
Conditions set forth in Annex 1 attached hereto are hereby agreed to and
incorporated herein by reference and made a part of this Assignment and
Acceptance as if set forth herein in full.

      For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent (as contemplated below), (i) all of the Assignor's rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of all of such outstanding
rights and obligations of the Assignor under the respective facilities
identified below (including without limitation any letters of credit and
swingline loans included in such facilities), and (ii) to the extent permitted
to be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other documents or instruments delivered pursuant thereto or the
loan transactions governed thereby or in any way based on or related to any of
the foregoing, including, but not limited to, contract claims, tort claims,
malpractice claims, statutory claims and all other claims at law or in equity
related to the rights and obligations sold and assigned pursuant to clause (i)
above (the rights and obligations sold and assigned pursuant to clauses (i) and
(ii) above being referred to herein collectively as the "ASSIGNED INTEREST").
Such sale and assignment is without recourse to the Assignor and, except as
expressly provided in this Assignment and Acceptance, without representation or
warranty by the Assignor.

1.   Assignor:

2.   Assignee:    _____________________________________
                  [and is an Affiliate/Approved Fund of ______________(1)]

3.   Borrower:    Liberty Property Limited Partnership

4.   Agent:       Bank of America, N.A., as administrative agent under the
                  Credit Agreement

- ----------
(1) Select Lender as applicable.



5.   Credit Agreement:    The Amended and Restated Credit Agreement, dated as of
                          December __, 2005, by and among Liberty Property
                          Limited Partnership (the "BORROWER"), Liberty Property
                          Trust, Bank of America, N.A., the other lenders
                          party thereto (the "LENDERS"), and the Agent.

6.   Assigned Interest:   _______________________



                        Dollar Equivalent of and
                          Alternative Currency      Dollar Equivalent of
                          Aggregate Amount of         and Alternative
                        Commitment/Loans for all     Currency Amount of       Percentage
                         Lenders (including any       Commitment/Loans        Assigned of
Facility Assigned      Letter of Credit Draws) *        Assigned  *       Commitment/Loans(2)  CUSIP Number
- ---------------------  ---------------------------  --------------------  -------------------  ------------
                                                                                   
Tranche A Commitment     $                             $                        ________%

Tranche B Commitment     $                             $                        ________%

Tranche A Loans

    Prime Rate Loans     $                             $                        ________%

    LIBOR Rate Loans     $                             $                        ________%

Tranche B Loans

    Prime Rate Loans     $                             $                        ________%

                         $                             $
    Eurocurrency Rate    (euro)                        (euro)                   ________%
    Loans                (pound)                       (pound)


- ----------
*   Amount to be adjusted by the counterparties to take into account any
payments or prepayments made between the Trade Date and the Effective Date.

(2) Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.



                                                 
                          $         $
Competitive Bid Loans     (euro)    (euro)    _______%
                          (pound)   (pound)

                          $         $
Letter of Credit          (euro)    (euro)    _______%
participations interest   (pound)   (pound)

                          $         $
Swingline Loan                                _______%
participations interest



[7. Trade Date: ______________](3)

Effective Date: _____________ ___, 20___ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]

The terms set forth in this Assignment and Acceptance are hereby agreed to:

                                    ASSIGNOR
                                    ------------------
                                    [NAME OF ASSIGNOR]

                                    By: ______________________________
                                        Name:
                                        Title:

                                    ASSIGNEE
                                    -------------------
                                    [NAME OF ASSIGNEE]

                                    By: ______________________________
                                        Name:
                                        Title:

- ----------
(3) To be completed if the Assignor and the Assignee intend that the minimum
assignment amount is to be determined as of the Trade Date.



Consented to and Accepted:

BANK OF AMERICA, N.A.,
acting in its capacity as Agent

By: ________________________________
    Name:
    Title:

BANK OF AMERICA, N.A.,
acting in its capacity as L/C Issuer

By: ________________________________
    Name:
    Title:

[Consented to:

LIBERTY PROPERTY LIMITED PARTNERSHIP,

       By:  Liberty Property Trust,
            its general partner

            By: ____________________________
                Name:
                Title:](4)

- ----------
(4) To the extent required under the Credit Agreement.



                                                                         ANNEX 1

                        STANDARD TERMS AND CONDITIONS FOR
                            ASSIGNMENT AND ACCEPTANCE

            1. Representations and Warranties.

            1.1 Assignor. The Assignor (a) represents and warrants that (i) it
is the legal and beneficial owner of the Assigned Interest, (ii) the Assigned
Interest is free and clear of any lien, encumbrance or other adverse claim and
(iii) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Acceptance and to consummate the
transactions contemplated hereby; and (b) assumes no responsibility with respect
to (i) any statements, warranties or representations made in or in connection
with the Credit Agreement or any other Loan Document, (ii) the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Loan Documents or any collateral thereunder, (iii) the financial condition of
the Borrower, Liberty Property Trust (the "COMPANY"), any other Guarantor, or
any of their Subsidiaries or Affiliates or any other Person obligated in respect
of any Loan Document or (iv) the performance or observance by the Borrower, the
Company, any Guarantor, or any of their Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.

            1.2. Assignee. The Assignee (a) represents and warrants that (i) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
satisfies the requirements of an Eligible Assignee under the Credit Agreement
(subject to the receipt of such consents as may be required under the Credit
Agreement), (iii) from and after the Effective Date, it shall be bound by the
provisions of the Credit Agreement as a Lender thereunder and, to the extent of
the Assigned Interest, shall have the obligations of a Lender thereunder, (iv)
it has received a copy of the Credit Agreement, together with copies of the most
recent financial statements delivered pursuant to Section 6.4 and Section 7.4 of
the Credit Agreement, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance, and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Agent or any other Lender, (v) if it is a Lender which is not a "United
States person" for United States federal income tax purposes, attached to this
Assignment and Acceptance is any documentation required to be delivered by it
pursuant to the terms of the Credit Agreement, duly completed and executed by
the Assignee, and (vi) if the Assignee is not already a Lender under the Credit
Agreement, attached to this Assignment and Acceptance is an administrative
questionnaire, in a form acceptable to the Agent, duly completed by the
Assignee; and (b) agrees that (i) it will, independently and without reliance on
the Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Loan Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Loan Documents are required to be performed by it as a
Lender.



            2. Payments. From and after the Effective Date, the Agent shall make
all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts, which
have accrued to, but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.



                                                                       EXHIBIT F

                        FORM OF LETTER OF CREDIT REQUEST

                      Liberty Property Limited Partnership
                            500 Chesterfield Parkway
                                Malvern, PA 19355

                                                                          [Date]

Trade Finance Operations
1 Fleet Way, 2nd Floor
(Fax: (800) 755-8743)
Scranton, PA  19507
Charlotte, North Carolina  28255-0001

Bank of America, N.A., as Agent
901 Main Street, 14th Floor
Dallas, Texas 75202-3714
Attention: Nora Taylor (Fax: (214) 290-9673)

Ladies and Gentlemen:

      Re:   Letter of Credit Request under the Amended and Restated Credit
            Agreement dated as of December [ ], 2005

      Pursuant to Section 2.9 of the Amended and Restated Credit Agreement,
dated as of December __, 2005, among you, the lending institutions which are or
may become parties thereto from time to time, other parties thereto, and us (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), we hereby request that you issue a Letter of
Credit as follows:

      (i)   Name and address of beneficiary: ______________

      (ii)  Face amount: [$][(euro)][(pound)] ____________

      (iii) Proposed Issuance Date:______________________________

            Proposed Expiration Date(1):___________________________

      (iv)  Other terms and conditions as set forth in the proposed form of
            Letter of Credit attached hereto.

      (v)   Purpose of Letter of Credit: _______________

- ----------
(1)  Each Letter of Credit shall have an initial term of not more than one (1)
year, and shall expire no later than fifteen (15) days (thirty (30) days in the
case of a Letter of Credit denominated in Alternative Currency) prior to the
Maturity Date, except as otherwise provided in the Credit Agreement.



      This Letter of Credit Request is submitted pursuant to, and shall be
governed by, and subject to satisfaction of, the terms, conditions and
provisions set forth in Section 2.9 of the Credit Agreement.

      The undersigned hereby certifies to you that it is in compliance with the
covenants specified in Section 9.1 through Section 9.6 of the Credit Agreement,
and will remain in compliance with such covenants after the outstanding balance
of the Loans is adjusted to include the face amount of the requested Letter of
Credit.

      Pursuant to Section 2.9(a) of the Credit Agreement, the undersigned hereby
further certifies that after giving effect to all Letters of Credit (i) the sum
of the outstanding Tranche A Letter of Credit Obligations and the Dollar
Equivalent of the Tranche B Letter of Credit Obligations does not exceed fifty
million dollars ($50,000,000); (ii) the Dollar Equivalent of the aggregate
Credit Exposure of all the Lenders does not exceed the Maximum Credit Amount;
(iii) the sum of the outstanding Tranche A Obligations and the Tranche A Letter
of Credit Obligations does not exceed the Tranche A Commitments; and (iv) the
sum of the Dollar Equivalent of the outstanding Tranche B Obligations and the
Dollar Equivalent of the outstanding Tranche B Letter of Credit Obligations does
not exceed the Tranche B Commitments.

      We also understand that if you grant this request this request obligates
us to accept the requested Letter of Credit and pay the issuance fee and Letter
of Credit fee as required by Section 2.9(c). All terms defined in the Credit
Agreement and used herein without definition shall have the meanings set forth
in Section 1.1 of the Credit Agreement.

      The undersigned hereby certifies to you, in accordance with the provisions
of Section 11.1 of the Credit Agreement, that (i) the representations and
warranties contained in the Credit Agreement and in each document and instrument
delivered pursuant to or in connection therewith were true as of the date as of
which they were made, are also true at and as of the date hereof, and will also
be true at and as of the proposed issuance date of the Letter of Credit
requested hereby, in each case except as otherwise permitted pursuant to the
provisions of Section 11.1 of the Credit Agreement, (ii) the Borrower has
performed and complied with all terms and conditions required by Section 11.1 of
the Credit Agreement to be performed by it on or prior to the issuance date of
this Letter of Credit, (iii) and no Default or Event of Default has occurred and
is continuing, or will occur as a result of the issuance of the Letter of Credit
requested herein.

                                            Very truly yours,

                                            Liberty Property Limited Partnership

                                                By:  Liberty Property Trust,
                                                     its general partner

                                                   By: ________________________
                                                       Name:
                                                       Title:

              [ATTACH LETTER OF CREDIT APPLICATION, IF APPLICABLE]



                                                                       EXHIBIT G

                        FORM LETTER OF CREDIT APPLICATION



                                                                       EXHIBIT H

                      FORM OF COMPETITIVE BID QUOTE REQUEST

                      Liberty Property Limited Partnership
                            500 Chesterfield Parkway
                                Malvern, PA 19355

                                                                          [Date]

Bank of America, N.A., as Agent
901 Main Street, 14th Floor
Dallas, Texas 75202-3714
Attention: Nora Taylor (Fax: (214) 290-9673)

Ladies and Gentlemen:

      Re:   Competitive Bid Quote Request under Amended and Restated Credit
            Agreement dated as of December [ ],2005

      Pursuant to Section 2.10 of the Amended and Restated Credit Agreement,
dated as of December __, 2005 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Liberty
Property Limited Partnership, a Pennsylvania limited partnership (the
"BORROWER"), Liberty property Trust, a Maryland trust, Bank of America, N.A. and
the other lending institutions which are or may become parties thereto from time
to time (the "LENDERS"), and Bank of America, N.A., as administrative agent for
itself and the other Lenders (the "AGENT"), we hereby request that the Agent
obtain quotes for Competitive Bid Loans based upon the following:

      1. The requested Borrowing Date(s), amounts and Interest Periods of the
Competitive Bid Loans shall be as follows:



Borrowing Dates     Amount in the requested currency (1)    Interest Period
- ---------------     ------------------------------------    ---------------
                                                      
- ---------------     ------------------------------------    ---------------
- ---------------     ------------------------------------    ---------------


      2. The aggregate amount of the requested Competitive Bid Loans shall be
the Dollar Equivalent of $_______.

      3. Dollar Equivalent of all Competitive Bid Loans currently outstanding is
$__________.

- ----------
(1) The Dollar Equivalent of any requested Competitive Bid Loan shall be in a
minimum amount of $5,000,000 and integral multiples of $1,000,000.



      4. Type of Loan requested: _______________.

      6. [Tranche B Availability: _______________.](2)

      This Competitive Bid Quote Request is submitted pursuant to, and shall be
governed by, and subject to satisfaction of, the terms, conditions and
provisions set forth in Section 2.10 of the Credit Agreement. The undersigned
hereby certifies to you that the Borrower maintains the required ratings from
the Ratings Agencies to request a Competitive Bid Loan under the Credit
Agreement in accordance with Section 2.10(a).

      The undersigned hereby further certifies to you that it is in compliance
with the covenants specified in Section 9.1 through Section 9.6 of the Credit
Agreement, and will remain in compliance with such covenants after the making of
the requested Competitive Bid Loans, as evidenced by a Compliance Certificate in
the form of Exhibit C to the Credit Agreement of even date herewith delivered to
you simultaneously with this Competitive Bid Quote Request.

      The undersigned hereby certifies to you, in accordance with the provisions
of Section 11.1 of the Credit Agreement, that (i) the representations and
warranties contained in the Credit Agreement and in each document and instrument
delivered pursuant to or in connection therewith were true as of the date as of
which they were made, are also true at and as of the date hereof, and will also
be true at and as of the proposed Borrowing Date of the Competitive Bid Loans
requested hereby, in each case except as otherwise permitted pursuant to the
provisions of Section 11.1 of the Credit Agreement, (ii) the Borrower has
performed and complied with all the terms and conditions required by Section
11.1 of the Credit Agreement to be performed by it on or prior to the Borrowing
Date, and (iii) no Default or Event of Default has occurred and is continuing,
or will occur as a result of making the Loans requested herein.

                                            Very truly yours,

                                            Liberty Property Limited Partnership

                                              By: Liberty Property Trust,
                                                  its general partner

                                                  By: ______________________
                                                      Name:
                                                      Title:

                         [ATTACH COMPLIANCE CERTIFICATE]

- ----------
(2) Include for Alternative Currency Loans.



                                                                       EXHIBIT I

                  FORM OF INVITATION FOR COMPETITIVE BID QUOTES

                                                               ___________, 20__

To:   Each Lender that is a party to the Amended and Restated Credit Agreement
      identified below

Re:   Invitation for Competitive Bid Quotes

      Reference is hereby made to that certain Amended and Restated Credit
Agreement, dated as of December __, 2005 (as amended, supplemented, amended and
restated or otherwise modified from time to time, the "CREDIT AGREEMENT"), among
Liberty Property Limited Partnership, a Pennsylvania limited partnership (the
"BORROWER"), Liberty property Trust, a Maryland trust, Bank of America, N.A. and
the other lending institutions which are or may become parties thereto from time
to time (the "LENDERS"), and Bank of America, N.A., as administrative agent for
itself and the other Lenders (the "AGENT"). Capitalized terms which are used
herein without definition and which are defined in the Credit Agreement shall
have the same meanings herein as in the Credit Agreement.

      Pursuant to Section 2.10 of the Credit Agreement, you are invited to
submit a competitive bid quote to the Borrower for the following proposed
Competitive Bid Loan(s):



Requested Borrowing Date       Principal Amount       Interest Period
- ------------------------       ----------------       ---------------
                                                
- ------------------------       ----------------       ---------------
- ------------------------       ----------------       ---------------


      All Competitive Bid Quotes should specify a Competitive Bid margin and
must be submitted to the Agent by facsimile transmission at its offices as
specified in or pursuant to Section 19 of the Credit Agreement not later than
(a) 10:00 a.m.(eastern time) on the third Business Day prior to the proposed
Borrowing Date (five (5) Business Days in the case of a request for a
Competitive Bid Quote denominated in Alternative Currency). Quotes received
after these deadlines will not be forwarded to the Borrower.

      Submitted bids must be for the Dollar Equivalent of $1,000,000 or a larger
multiple of $500,000 and may not exceed the aggregate principal amount of
Competitive Bid Loans for which offers were requested. All Competitive Bid
Quotes should be submitted in substantially the form of Exhibit J to the Credit
Agreement. Please follow-up your submitted written bids with telephone
verification to confirm receipt.

                                                 Very truly yours,

                                                 Bank of America, N.A., as Agent

                                                 By:_________________________



                                                                       EXHIBIT J

                          FORM OF COMPETITIVE BID QUOTE

                                                                          [Date]

Bank of America, N.A., as Agent
901 Main Street, 14th Floor
Dallas, Texas 75202-3714
Attention: Nora Taylor (Fax: (214) 290-9673)

Ladies and Gentlemen:

      Re: Competitive Bid Quote to Liberty Property Limited Partnership

      This Competitive Bid Quote is given in accordance with Section 2.10 of the
Amended and Restated Credit Agreement, dated as of December __, 2005 (as
amended, supplemented, amended and restated or otherwise modified from time to
time, the "CREDIT AGREEMENT"), among Liberty Property Limited Partnership, a
Pennsylvania limited partnership (the "BORROWER"), Liberty property Trust, a
Maryland trust, Bank of America, N.A. and the other lending institutions which
are or may become parties thereto from time to time (the "LENDERS"), and Bank of
America, N.A., as administrative agent for itself and the other Lenders (the
"AGENT"). Capitalized terms used herein shall have the meanings ascribed thereto
in the Credit Agreement.

      In response to the Competitive Bid Quote Request of the Borrower, dated
________________, 20_, we hereby make the following Competitive Bid Quote on the
following terms:

      1. Quoting Lender:_______________________________________________

      2. Person to contact at Quoting Lender: _________________________

      3. Borrowing Date:_______________________________________________

      4. We hereby offer to make Competitive Bid Loan(s) in the following
maximum principal amounts for the following Interest Period(s) and at the
following rates:



Maximum Principal Amount(1)
  [$] [(euro)] [(pound)]      Interest Period    Competitive Bid Margin
- ---------------------------   ---------------    ----------------------
                                           
- ---------------------------   ---------------    ----------------------
- ---------------------------   ---------------    ----------------------


- ----------
(1)  The Dollar Equivalent of such amount shall be a minimum of $1,000,000 and
an integral multiple of $500,000 and may be greater than the Commitment of the
Quoting Lender.



      We understand and agree that the offer(s) set forth above, subject to the
satisfaction of the applicable conditions set forth in the Credit Agreement,
irrevocably obligate(s) us to make the Competitive Bid Loan(s) for which any
offer(s) [is][are] accepted, in whole or in part.

                                                     Very truly yours,

                                                     [NAME OF LENDER]

                                                     By:________________________
                                                        Name:
                                                        Title:



                                                                       EXHIBIT K

                         FORM OF NOTICE OF ACCEPTANCE OR
                   NON-ACCEPTANCE OF COMPETITIVE BID QUOTE(S)

                                                                          [Date]

Bank of America, N.A., as Agent
901 Main Street, 14th Floor
Dallas, Texas 75202-3714
Attention: Nora Taylor (Fax: (214) 290-9673)

Ladies and Gentlemen:

      Under Section 2.10 of the Amended and Restated Credit Agreement, dated as
of December __, 2005 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Liberty
Property Limited Partnership, a Pennsylvania limited partnership (the
"BORROWER"), Liberty property Trust, a Maryland trust, Bank of America, N.A. and
the other lending institutions which are or may become parties thereto from time
to time (the "LENDERS"), and Bank of America N.A., as administrative agent for
itself and the other Lenders (the "AGENT"), this response is given with respect
to the Competitive Bid Loan Quotes for Loans to be made on the following
Requested Borrowing Date: [_______ __, 20_]

      Liberty Property Limited Partnership hereby accepts the following
Competitive Bid Quote(s):



                                Competitive Bid
Lender     Borrowing Date            Margin              Interest Period       Principal Amount Accepted
- ------     --------------       ---------------          ---------------       -------------------------
                                                                   
- ------     --------------       ---------------          ---------------       -------------------------
- ------     --------------       ---------------          ---------------       -------------------------
- ------     --------------       ---------------          ---------------       -------------------------
- ------     --------------       ---------------          ---------------       -------------------------


      Liberty Property Limited Partnership hereby rejects the following
Competitive Bid Quote(s):



                                Competitive Bid
Lender     Borrowing Date            Margin              Interest Period       Principal Amount Accepted
- ------     --------------       ---------------          ---------------       -------------------------
                                                                   
- ------     --------------       ---------------          ---------------       -------------------------
- ------     --------------       ---------------          ---------------       -------------------------
- ------     --------------       ---------------          ---------------       -------------------------




      The accepted and rejected competitive Bid Quotes described above
constitute all Competitive Bid Quotes submitted by the Lenders in accordance
with Section 2.10 of the Credit Agreement.

                                            Very truly yours,

                                            Liberty Property Limited Partnership

                                                   By: Liberty Property Trust,
                                                       its general partner

                                                     By: _______________________
                                                         Name:
                                                         Title:



                                                                       EXHIBIT L

                            FORM OF JOINDER AGREEMENT

                                                                          [Date]

Bank of America, N.A., as Agent
Independence Center
101 North Tyron Street
Charlotte, North Carolina 28255-001
Attention: Cindy Fisher (Fax: (704) 409-0180)

      Reference is made to the Amended and Restated Credit Agreement, dated as
of December __, 2005 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Liberty
Property Limited Partnership, a Pennsylvania limited partnership (the
"BORROWER"), Liberty property Trust, a Maryland trust, Bank of America, N.A. and
the other lending institutions which are or may become parties thereto from time
to time (the "LENDERS"), and Bank of America, N.A., as administrative agent for
itself and the other Lenders (the "AGENT"). Capitalized terms used herein and
not otherwise defined shall have the meanings assigned to such terms in the
Credit Agreement.

      Reference is further made to the Guaranty, dated as of December __, 2005,
by the Guarantors in favor of the Agent and the Lenders (the "GUARANTY"):

      The undersigned, ________________, a ________________ ("NEW GUARANTOR")
certifies that it is a Related Company that is at least 85% owned by the
Borrower. In order that Real Estate Assets owned by the New Guarantor may be
eligible to satisfy the requirements contained in the definitions of
Unencumbered Property and Unencumbered Development Property in Section 1.1 of
the Agreement, and for other good and valuable consideration, the New Guarantor
hereby agrees to be bound as a Guarantor by all of the terms, covenants and
conditions set forth in the Agreement and the Guaranty to the same extent that
it would have been bound if it had been a signatory to the Agreement and the
Guaranty on the Effective Date of the Agreement. The New Guarantor hereby makes
each of the representations and warranties and agrees to each of the covenants
applicable to the Guarantor contained in the Credit Agreement. From and after
the date hereof, all references in the Loan Documents to the "Guarantors" shall
for all purposes be deemed to include the undersigned.

      The New Guaranty hereby waives presentment, demand, protest and notice of
any kind in connection with the delivery, acceptance, performance and
enforcement of the Guaranty, and also hereby assents to extensions of time of
payment or forbearance or other indulgences without notice.

      This Joinder Agreement and the obligations of the New Guarantor hereunder
shall be governed by, interpreted and construed in accordance with all of the
same provisions applicable under the Credit Agreement and the Guaranty
including, without limitation, all definitions set forth in Section 1.1, the
rules of interpretation set forth in Section 1.2, the provisions relating to
governing law set forth in Section 20, the provisions relating to counterparts
in Section 22 and the provision relating to



severability in Section 26. The New Guarantor acknowledges that it has waived
its right to a jury trial with respect to any action or claim arising out of
this Joinder Agreement, the Credit Agreement and the Guaranty.

      IN WITNESS WHEREOF, the New Guarantor has caused this Joinder Agreement to
be executed and delivered by its duly authorized officer as of the
_________________ day of ____________, 20_.

                                                 [Name of New Guarantor]

                                                 By:____________________________
                                                 Name:
                                                 Title:



                                                                       EXHIBIT M

                                FORM OF GUARANTY

      Guaranty, dated as of December [__], 2005, by and among the undersigned
and such other Persons which may become party hereto from time to time by
executing a joinder (in the form of Appendix 1 hereto) (each a "GUARANTOR" and
collectively the "GUARANTORS"), in favor of each of the Lenders (as defined
herein) and Bank of America, N.A., as administrative agent (the "AGENT") for
itself and for the other financial institutions (the "LENDERS") which are or may
become parties to the Amended and Restated Credit Agreement, dated as of
December [__], 2005, among Liberty Property Limited Partnership, a Maryland
limited partnership (the "BORROWER"), Liberty Property Trust, the Agent, and the
Lenders (as amended, supplemented, amended and restated or otherwise modified
from time to time, the "CREDIT AGREEMENT"). Capitalized terms used herein
without definition shall have the meanings ascribed to them in the Credit
Agreement.

      WHEREAS, the Borrower, the Agent, the Lenders and the other parties
thereto have entered into the Credit Agreement;

      WHEREAS, the Borrower and each Guarantor are members of a group of related
entities, the success of each of which is dependent in part on the success of
the other members of such group;

      WHEREAS, each Guarantor expects to receive substantial direct and indirect
benefits from the extensions of credit to the Borrower by the Lenders pursuant
to the Credit Agreement (which benefits are hereby acknowledged);

      WHEREAS, it is a condition precedent to the Agent's and the Lenders'
willingness to extend, and to continue to extend, credit to the Borrower under
the Credit Agreement that each Guarantor execute and deliver this Guaranty; and

      WHEREAS, each Guarantor wishes to guaranty the Borrower's obligations to
the Lenders and the Agent under and in respect of the Credit Agreement as herein
provided.

      NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:

      1. Guaranty of Payment and Performance of Obligations. In consideration of
the Lenders' extending credit or otherwise in their discretion giving time,
financial or banking facilities or accommodations to the Borrower, each
Guarantor hereby jointly and severally, absolutely, irrevocably and
unconditionally guarantees to the Agent and each Lender that the Borrower will
duly and punctually pay or perform, at the place specified therefor, or if no
place is specified, at the Agent's Head Office, (i) all indebtedness,
obligations and liabilities of the Borrower to any of the Lenders and the Agent,
individually or collectively, under the Credit Agreement or any of the other
Loan Documents or in respect of any of the Loans or the Notes or other
instruments at any time evidencing any thereof, whether existing on the date of
the Credit Agreement or arising or incurred thereafter, direct or indirect,
secured or unsecured, joint or



several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, arising by contract, operation of law or otherwise, including all
such which would become due but for the operation of the automatic stay pursuant
to Section 362(a) of the Federal Bankruptcy Code and the operation of Sections
502(b) and 506(b) of the Federal Bankruptcy Code; and (ii) without limitation of
tHe foregoing, all reasonable fees, costs and expenses incurred by the Agent or
the Lenders in attempting to collect or enforce any of the foregoing, accrued in
each case to the date of payment hereunder (collectively the "OBLIGATIONS" and
individually an "OBLIGATION"). This Guaranty is an absolute, unconditional and
continuing guaranty of the full and punctual payment and performance by the
Borrower of the Obligations and not of their collectibility only, and is in no
way conditioned upon any requirement that any Lender or the Agent first attempt
to collect any of the Obligations from the Borrower or resort to any security or
other means of obtaining payment of any of the Obligations which any Lender or
the Agent now has or may acquire after the date hereof or upon any other
contingency whatsoever. Upon any Event of Default which is continuing by the
Borrower in the full and punctual payment and performance of the Obligations,
the liabilities and obligations of each Guarantor hereunder shall, at the option
of the Agent, become forthwith due and payable to the Agent and to the Lender or
Lenders owed the same without demand or notice of any nature, all of which are
expressly waived by each Guarantor, except for notices required to be given to
the Borrower under the Loan Documents. Payments by the Guarantors hereunder may
be required by any Lender or the Agent on any number of occasions.

      2. Guarantor's Further Agreements to Pay. Each Guarantor further jointly
and severally agrees, as the principal obligor and not as a guarantor only, to
pay to each Lender and the Agent forthwith upon demand, in funds immediately
available to such Lender or the Agent, all costs and expenses (including court
costs and legal fees and expenses) incurred or expended by the Agent or such
Lender in connection with this Guaranty and the enforcement hereof, together
with interest on amounts recoverable under this Guaranty from the time after
such amounts become due at the default rate of interest set forth in the Credit
Agreement; provided that if such interest exceeds the maximum amount permitted
to be paid under applicable law, then such interest shall be reduced to such
maximum permitted amount.

      3. Payments. Each Guarantor jointly and severally covenants and agrees
that the Obligations will be paid strictly in accordance with their respective
terms regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of the Agent or any
Lender with respect thereto. Without limiting the generality of the foregoing,
each Guarantor's obligations hereunder with respect to any Obligation shall not
be discharged by a payment in a currency other than the currency in which the
Obligation is denominated (the "OBLIGATION CURRENCY") or at a place other than
the place specified for the payment of the Obligation, whether pursuant to a
judgment or otherwise, to the extent that the amount so paid on conversion to
the Obligation Currency and transferred to the Agent's Head Office, under normal
banking procedures does not yield the amount of Obligation Currency due
thereunder.

      4. Taxes. All payments hereunder shall be made without any counterclaim or
set-off, free and clear of, and without reduction by reason of, any taxes,
levies, imposts, charges and withholdings, restrictions or conditions of any
nature ("TAXES"), which are now or may hereafter be imposed, levied or assessed
by the United States or any political subdivision or taxing



authority thereof (or any non-United States jurisdiction in which there is Real
Estate) on payments hereunder, all of which will be for the account of and paid
by the Guarantors. If for any reason, any such reduction is made or any Taxes
are paid by the Agent or any Lender (except for taxes on income or profits of
such Agent or Lender), each Guarantor jointly and severally agrees to pay to the
Agent or such Lender such additional amounts as may be necessary to ensure that
the Agent or such Lender receives the same net amount which it would have
received had no reduction been made or Taxes paid.

      5. Consent to Jurisdiction. Each Guarantor agrees that any suit for the
enforcement of this Guaranty or any of the other Loan Documents may be brought
in the courts of the State of New York sitting in New York, New York or any
federal court sitting in New York, New York and consents to the non-exclusive
jurisdiction of such courts and the service of process in any such suit being
made upon such Guarantor by mail at the address specified herein. Except to the
extent such waiver is expressly prohibited by law, each Guarantor hereby waives
any objection that it may now or hereafter have to the venue of any such suit or
any such court or that such suit is brought in an inconvenient court.

      6. Liability of each Guarantor. The Agent and each Lender have and shall
have the absolute right to enforce the liability of each Guarantor hereunder
without resort to any other right or remedy including any right or remedy under
any other guaranty or against any other Guarantor, and the release or discharge
of any Guarantor or other guarantor of any Obligations shall not affect the
continuing liability of each Guarantor hereunder that has not been released or
discharged.

      It is the intention and agreement of each Guarantor, the Agent and the
Lenders that the obligations of each Guarantor under this Guaranty shall be
joint and several and valid and enforceable against each Guarantor to the
maximum extent permitted by applicable law. Accordingly, if any provision of
this Guaranty creating any obligation of any Guarantor in favor of the Agent and
the Lenders shall be declared to be invalid or unenforceable in any respect or
to any extent, it is the stated intention and agreement of the Guarantors, the
Agent and the Lenders that any balance of the obligation created by such
provision and all other obligations of each of the other Guarantors to the Agent
and the Lenders created by other provisions of this Guaranty shall remain valid
and enforceable. Likewise, if by final order a court of competent jurisdiction
shall declare any sums which the Agent or the Lenders may be otherwise entitled
to collect from any Guarantor under this Guaranty to be in excess of those
permitted under any law (including any federal or state fraudulent conveyance or
like statute or rule of law) applicable to such Guarantor's obligations under
this Guaranty, it is the stated intention and agreement of the Guarantors, the
Agent and the Lenders that all sums not in excess of those permitted under such
applicable law shall remain fully collectible by the Agent and the Lenders from
each of the other Guarantors, jointly and severally.

      7. Representations and Warranties; Covenants. (a) Each Guarantor hereby
makes and confirms the representations and warranties made on its behalf by the
Borrower pursuant to Section 6 of the Credit Agreement, as if such
representations and warranties were set forth herein. Each Guarantor hereby
agrees to perform the covenants set forth in Sections 7 and 8 of the Credit
Agreement (to the extent such covenants expressly apply to the Guarantor) as if
such covenants were set forth herein. Each Guarantor acknowledges that it is, on
a collective basis with the Borrower and



all other "Guarantors" (as defined in the Credit Agreement), bound by the
covenants set forth in Section 9 of the Credit Agreement. Each Guarantor hereby
confirms that it shall be bound by all acts or omissions of the Borrower
pursuant to the Credit Agreement.

            (b) Each Guarantor is a limited liability company, limited
partnership, corporation, or other legal entity, as applicable, duly formed or
organized, validly existing and in good standing under the laws of the state of
its formation or organization and each other state in which its business
necessitates it to foreign qualify; each Guarantor has all requisite limited
liability company, limited partnership, corporate or other legal entity power,
as applicable, to own its respective properties and conduct its respective
business as now conducted and as presently contemplated; and such Guarantor is
in good standing as a foreign entity and is duly authorized to do business in
the jurisdictions where the Unencumbered Properties or other Real Estate owned
or ground-leased by it are located and in each other jurisdiction where such
qualification is necessary except where a failure to be so qualified in such
other jurisdiction would not have a materially adverse effect on any of its
businesses, assets or financial condition. The execution, delivery and
performance of this Guaranty and the transactions contemplated hereby (i) are
within the authority of such Guarantor, (ii) have been duly authorized by all
necessary proceedings on the part of such Guarantor and any member, manager, or
other controlling Person thereof, (iii) do not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which such Guarantor is subject or any judgment, order, writ, injunction,
license or permit applicable to such Guarantor, (iv) do not conflict with any
provision of the Certificate of Organization or Formation, the limited liability
company agreement, articles of incorporation, bylaws, or other authority
documents of such Guarantor or the authority documents of any controlling Person
thereof, and (v) do not contravene any provisions of, or constitute a default,
Default or Event of Default hereunder or a failure to comply with any term,
condition or provision of, any other agreement, instrument, judgment, order,
decree, permit, license or undertaking binding upon or applicable to such
Guarantor or any of such Guarantor's properties (except for any such failure to
comply under any such other agreement, instrument, judgment, order, decree,
permit, license, or undertaking as would not materially and adversely affect the
condition (financial or otherwise), properties, business or results of
operations of such Guarantor) or result in the creation of any mortgage, pledge,
security interest, lien, encumbrance or charge upon any of the properties or
assets of such Guarantor.

            (c) The Guaranty has been duly executed and delivered and
constitutes the legal, valid and binding obligations of each Guarantor, subject
only to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and general equitable principles.

            (d) The execution, delivery and performance by each Guarantor of
this Guaranty and the transactions contemplated hereby do not require (i) the
approval or consent of any governmental agency or authority other than those
already obtained, or (ii) filing with any governmental agency or authority,
other than filings which will be made with the SEC when and as required by law.

      8. Effectiveness. The obligations of each Guarantor under this Guaranty
shall continue in full force and effect and shall remain in operation until all
of the Obligations shall



have been paid in full or otherwise fully satisfied, and continue to be
effective or be reinstated, as the case may be, if at any time payment or other
satisfaction of any of the Obligations is rescinded or must otherwise be
restored or returned upon the bankruptcy, insolvency, or reorganization of the
Borrower, or otherwise, as though such payment had not been made or other
satisfaction occurred. No invalidity, irregularity or unenforceability of the
Obligations by reason of applicable bankruptcy laws or any other similar law, or
by reason of any law or order of any government or agency thereof purporting to
reduce, amend or otherwise affect the Obligations, shall impair, affect, be a
defense to or claim against the obligations of any Guarantor under this
Guaranty.

      9. Freedom of Lender to Deal with Borrower and Other Parties. The Agent
and each Lender shall be at liberty, without giving notice to or obtaining the
assent of any Guarantor and without relieving any Guarantor of any liability
hereunder, to deal with the Borrower and with each other party who now is or
after the date hereof becomes liable in any manner for any of the Obligations,
in such manner as the Agent or such Lender in its sole discretion deems fit, and
to this end each Guarantor gives to the Agent and each Lender full authority in
its sole discretion to do any or all of the following things: (a) extend credit,
make loans and afford other financial accommodations to the Borrower at such
times, in such amounts and on such terms as the Agent or such Lender may
approve, (b) vary the terms and grant extensions of any present or future
indebtedness or obligation of the Borrower or of any other party to the Agent or
such Lender, (c) grant time, waivers and other indulgences in respect thereto,
(d) vary, exchange, release or discharge, wholly or partially, or delay in or
abstain from perfecting and enforcing any security or guaranty or other means of
obtaining payment of any of the Obligations which the Agent or any Lender now
has or may acquire after the date hereof, (e) accept partial payments from the
Borrower or any such other party, (f) release or discharge, wholly or partially,
any endorser or guarantor, and (g) compromise or make any settlement or other
arrangement with the Borrower or any such other party.

      10. Unenforceability of Obligations Against Borrower; Invalidity of
Security or Other Guaranties. If for any reason the Borrower has no legal
existence or are under no legal obligation to discharge any of the Obligations
undertaken or purported to be undertaken by it or on its behalf, or if any of
the moneys included in the Obligations have become irrecoverable from the
Borrower by operation of law or for any other reason, this Guaranty shall
nevertheless be binding on each Guarantor to the same extent as if such
Guarantor at all times had been the principal debtor on all such Obligations.
This Guaranty shall be in addition to any other guaranty or other security for
the Obligations, and it shall not be prejudiced or rendered unenforceable by the
invalidity of any such other guaranty or security.

      11. Waivers by Guarantor. Each Guarantor waives notice of acceptance
hereof, notice of any action taken or omitted by the Agent or any Lender in
reliance hereon, and any requirement that the Agent or any Lender be diligent or
prompt in making demands hereunder, giving notice of any default by the Borrower
or asserting any other rights of the Agent or any Lender hereunder. Each
Guarantor also irrevocably waives, to the fullest extent permitted by law, all
defenses in the nature of suretyship that at any time may be available in
respect of such Guarantor's obligations hereunder by virtue of any statute of
limitations, valuation, stay, moratorium law or other similar law now or
hereafter in effect.



      12. Restriction on Subrogation and Contribution Rights. Notwithstanding
any other provision to the contrary contained herein or provided by applicable
law, unless and until all of the Obligations have been indefeasibly paid in full
in cash and satisfied in full, each Guarantor hereby irrevocably defers and
agrees not to enforce any and all rights it may have at any time (whether
arising directly or indirectly, by operation of law or by contract) to assert
any claim against the Borrower on account of payments made under this Guaranty,
including, without limitation, any and all rights of or claim for subrogation,
contribution, reimbursement, exoneration and indemnity, and further waives any
benefit of and any right to participate in any collateral which may be held by
the Agent or any Lender or any affiliate of the Agent or any Lender. In
addition, each Guarantor will not claim any set-off or counterclaim against the
Borrower in respect of any liability it may have to the Borrower unless and
until all of the Obligations have been indefeasibly paid in full in cash and
satisfied in full.

      Subject to the foregoing and the indefeasible performance and payment in
full of the Obligations, each Guarantor acknowledges that all other "Guarantors"
shall have contribution rights against such Guarantor in accordance with
applicable law and in accordance with each such Person's benefits received under
the Credit Agreement and the Loans.

      13. Demands. Any demand on or notice made or required to be given pursuant
to this Guaranty shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, return
receipt requested, sent by overnight courier, or sent by telegraph, telecopy,
telefax or telex and confirmed by delivery via courier or postal service,
addressed as follows:

          (a) if to the Guarantors, at:

          Liberty Property Trust
          500 Chesterfield Parkway,
          Malvern, PA  19355
          Attention: Chief Financial Officer

          or at such other address for notice as the Guarantors shall
          last have furnished in writing to the Agent with a copy to:

          Wolf, Block, Schorr and Solis-Cohen LLP
          1650 Arch Street
          22nd Floor
          Philadelphia, PA 19103
          Attention: Michael Sherman, Esq.

          or at such other address for notice as the Guarantors shall last
          have furnished in writing to the Agent; and

          (b) if to the Agent, at

          Bank of America, N.A.
          Independence Center



          101 North Tyron Street
          Charlotte, North Carolina  28255-0001
          Attention: Cindy Fisher (Fax: (704) 409-0180)

          or at such other address for notice as the Agent shall last have
          furnished in writing to the Guarantors; and

          Bingham McCutchen, LLP,
          150 Federal Street
          Boston, Massachusetts  02110-1726
          Attention: Stephen M. Miklus, Esq.

          or at such other address for notice as the Agent shall last have
          furnished in writing to the Guarantors; and

          (c) if to any Lender, at such Lender's address as set forth in
          Schedule 1.2 to the Credit Agreement or as shall have last
          been furnished in writing to the Person giving the notice.

      Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (i) if delivered by hand, overnight courier or
facsimile to the party to which it is directed, at the time of the receipt
thereof by such party or the sending of such facsimile or (ii) if sent by
registered or certified first-class mail, postage prepaid, return receipt
requested, on the fifth Business Day following the mailing thereof.

      14. Amendments, Waivers, Etc. No provision of this Guaranty can be
changed, waived, discharged or terminated except by an instrument in writing
signed by the Agent and the Guarantors expressly referring to the provision of
this Guaranty to which such instrument relates; and no such waiver shall extend
to, affect or impair any right with respect to any Obligation which is not
expressly dealt with therein. No course of dealing or delay or omission on the
part of the Agent or the Lenders or any of them in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto.

      15. Further Assurances. Each Guarantor at its sole cost and expense agrees
to do all such things and execute, acknowledge and deliver all such documents
and instruments as the Agent from time to time may reasonably request in order
to give full effect to this Guaranty and to perfect and preserve the rights and
powers of the Agent and the Lenders hereunder.

      16. Miscellaneous Provisions. This Guaranty is intended to take effect as
a sealed instrument to be governed by and construed in accordance with the laws
of the State of New York and shall inure to the benefit of the Agent, each
Lender and its respective successors in title and assigns permitted under the
Credit Agreement, and shall be binding on each Guarantor and each Guarantor's
successors in title, assigns and legal representatives. The rights and remedies
herein provided are cumulative and not exclusive of any remedies provided by law
or any other agreement. The invalidity or unenforceability of any one or more
sections of this Guaranty shall not affect the validity or enforceability of its
remaining provisions. Captions are for ease of reference only and shall not
affect the meaning of the relevant provisions. The meanings of all



defined terms used in this Guaranty shall be equally applicable to the singular
and plural forms of the terms defined.

      17. WAIVER OF JURY TRIAL. EXCEPT TO THE EXTENT SUCH WAIVER IS EXPRESSLY
PROHIBITED BY LAW, EACH GUARANTOR HEREBY IRREVOCABLY WAIVES TRIAL BY JURY IN ANY
JURISDICTION AND IN ANY COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING
OUT OF THIS GUARANTY, THE OBLIGATIONS, OR ANY INSTRUMENT OR DOCUMENT DELIVERED
PURSUANT HERETO OR THERETO OR ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING,
AMONG THE GUARANTORS, THE BORROWER, THE AGENT AND/OR THE LENDERS. THIS WAIVER OF
JURY TRIAL SHALL BE EFFECTIVE FOR EACH AND EVERY DOCUMENT EXECUTED BY THE
GUARANTORS, THE AGENT OR THE LENDERS AND DELIVERED TO THE AGENT OR THE LENDERS,
AS THE CASE MAY BE, WHETHER OR NOT SUCH DOCUMENTS SHALL CONTAIN SUCH A WAIVER OF
JURY TRIAL. EACH GUARANTOR CONFIRMS THAT THE FOREGOING WAIVERS ARE INFORMED AND
FREELY MADE.

      IN WITNESS WHEREOF, each Guarantor has executed and delivered this
Guaranty as of the date first above written.

                                   GUARANTOR

                                   ___________________________________

                                   By: _______________________________
                                    Name:
                                    Title:



                                                                       EXHIBIT N

                          FORM OF DESIGNATED BANK NOTE

$______________                                                           [Date]

      FOR VALUE RECEIVED, the undersigned Liberty Property Limited Partnership,
a Pennsylvania limited partnership (the "BORROWER"), hereby promises to pay to
the order of __________________ (the "DESIGNATED BANK") at the Agent's Head
Office (as defined in the Credit Agreement defined below):

            (a) prior to or on the Maturity Date (as defined in the Credit
      Agreement referred to below) the principal sum of, or the Dollar
      Equivalent of which is equal to, ______________________ Dollars
      ($_______________) or, if less, the aggregate unpaid principal amount of
      Competitive Bid Loans advanced by the Lender to the Borrower pursuant to
      the Amended and Restated Credit Agreement dated as of December __, 2005
      (as amended, restated, replaced, supplemented or otherwise modified from
      time to time, the "CREDIT AGREEMENT"), among the Borrower, Bank of
      America, N.A., as Agent, and other parties thereto; and

            (b) interest on the principal balance hereof from time to time
      outstanding at the times and at the rates provided in the Credit
      Agreement.

      Payments of both principal and interest are to be made in the currency in
which such Loans were made and as specified in the Credit Agreement in Same Day
Funds to the account designated by the Agent pursuant to the Credit Agreement.

      This Designated Bank Note evidences borrowings under and has been issued
by the Borrower in accordance with the terms of the Credit Agreement. The
Designated Bank and any holder hereof pursuant to the Credit Agreement or by
operation of law is entitled to the benefits of the Credit Agreement and the
other Loan Documents, and may enforce the agreements of the Borrower contained
therein, and any holder hereof may exercise the respective remedies provided for
thereby or otherwise available in respect thereof, all in accordance with the
respective terms thereof. All capitalized terms used in this Designated Bank
Note and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.

      The Borrower irrevocably authorizes the Lender to make or cause to be
made, at the time of receipt of any payment of principal of this Designated Bank
Note, an appropriate notation on the grid attached to this Designated Bank Note,
or the continuation of such grid, or any other similar record, including
computer records, reflecting the making of such Competitive Bid Loan or the
receipt of such payment. The outstanding amount of the Competitive Bid Loan set
forth on the grid attached to this Designated Bank Note, or the continuation of
such grid, or any other similar record, including computer records, maintained
by the Designated Bank with respect to any Competitive Bid Loans shall be prima
facie evidence of the principal amount thereof



owing and unpaid to the Designated Bank, but the failure to record, or any error
in so recording, any such amount on any such grid, continuation or other record
shall not limit or otherwise affect the obligation of the Borrower hereunder or
under the Credit Agreement to make payments of principal of and interest on this
Designated Bank Note when due to the extent of the unpaid principal and interest
amount as of any date of determination.

      The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Designated Bank Note on the terms and conditions specified in the Credit
Agreement.

      If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Designated Bank Note and all of the unpaid interest
accrued thereon may become or be declared due and payable in the manner and with
the effect provided in the Credit Agreement.

      No delay or omission on the part of the Designated Bank or any holder
hereof in exercising any right hereunder shall operate as a waiver of such right
or of any other rights of the Designated Bank or such holder, nor shall any
delay, omission or waiver on any one occasion be deemed a bar or waiver of the
same or any other right on any further occasion.

      The Borrower and every endorser and guarantor of this Designated Bank Note
or the obligation represented hereby waives presentment, demand, notice, protest
and all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Designated Bank Note, and assents to
any extension or postponement of the time of payment or any other indulgence, to
any substitution, exchange or release of collateral and to the addition or
release of any other party or person primarily or secondarily liable.

      THIS DESIGNATED BANK NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER
SHALL FOR ALL PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW
OF THE STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE
OF LAW TO THE EXTENT THAT WOULD REQUIRE APPLICATION OF SUBSTANTIVE LAWS OF
ANOTHER JURISDICTION). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF
THIS DESIGNATED BANK NOTE MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK
OR ANY FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 19 OF THE
CREDIT AGREEMENT. THE BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT.



      IN WITNESS WHEREOF, the undersigned has caused this Designated Bank Note
to be signed in its partnership name by its duly authorized officer as of the
day and year first above written.

                                          LIBERTY PROPERTY LIMITED PARTNERSHIP

                                            By: LIBERTY PROPERTY TRUST,
                                                its general partner

                                               By: _______________________
                                                  Name:
                                                  Title:





                  Amount of    Balance of
      Amount   Principal Paid   Principal  Notation
Date  of Loan    or Prepaid      Unpaid    Made By:
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                                                                       EXHIBIT O

                          FORM OF DESIGNATION AGREEMENT

                                                                          [Date]

      Reference is hereby made to the Amended and Restated Credit Agreement,
dated as of December __, 2005 (as amended, supplemented, amended and restated or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among Liberty
Property Limited Partnership, a Pennsylvania limited partnership (the
"BORROWER"), LIBERTY PROPERTY TRUST, a Maryland Trust, Bank of America, N.A. and
the other lending institutions which are or may become parties thereto from time
to time (the "LENDERS"), and Bank of America, N.A., as Agent for itself and the
other Lenders (the "AGENT"). Terms used but not otherwise defined herein shall
have the meanings given to them in the Credit Agreement.

      [NAME OF DESIGNOR] (the "DESIGNOR") and [NAME OF DESIGNEE] (the
"DESIGNEE") agree as follows:

      1. The Designor hereby designates the Designee, and the Designee hereby
accepts such designation, to have a right to make Competitive Bid Loans on
behalf of the Designor, pursuant to Section 2.10 of the Credit Agreement. Any
assignment by Designor to Designee of its rights to make a Competitive Bid Loan
pursuant to Section 18.9 of the Credit Agreement shall be effective as of the
effective date specified in this Designation Agreement.

      2. Except as set forth in Section 7 below (solely with respect to the
Designor), none of the Designor, any other Lender or the Agent makes any
representation or warranty or assumes any responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or any other
instrument or document furnished pursuant thereto or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of any Loan Document
or any other instrument and document furnished pursuant thereto or (b) the
financial condition of the Borrower or the performance or observance by the
Borrower of any of their obligations under any Loan Document or any other
instrument or document furnished pursuant thereto.

      3. The Designee (a) confirms that it has received a copy of each Loan
Document, together with copies of the financial statements referred to in the
Credit Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Designation Agreement; (b) agrees that it will independently and without
reliance upon the Agent, the Arranger, the L/C Issuer, the Swingline Lender, any
other agent named in the Credit Agreement, the Designor or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under any Loan Document; (c) confirms that it is a Designated Bank; (d) appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers and discretion under any Loan Document as are delegated to
the Agent by the terms thereof, together with such powers and discretion as are
reasonably incidental



thereto; and (e) agrees to be bound by each and every provision of each Loan
Document and further agrees that it will perform in accordance with their terms
all of the obligations which by the terms of any Loan Document are required to
be performed by it as a Designated Bank, including any and all obligations set
forth in Section 18.9 of the Credit Agreement.

      4. The Designee hereby appoints Designor as Designee's agent and attorney
in fact, and grants to Designor an irrevocable power of attorney, to receive
payments made for the benefit of Designee under the Credit Agreement, to deliver
and receive all communications and notices under the Credit Agreement and other
Loan Documents and to exercise on Designee's behalf all rights to vote and to
grant and make approvals, waivers, consents or amendments to or under the Credit
Agreement or other Loan Documents. Any document executed by the Designor on the
Designee's behalf in connection with the Credit Agreement or other Loan
Documents shall be binding on the Designee to the same extent as if actually
signed by the Designee. The Borrower, the Agent and each of the other Lenders
may rely on and are third-party beneficiaries of the preceding provisions
entitled to directly enforce the same.

      5. Following the execution of this Designation Agreement by the Designor
and Designee, it will be delivered to the Agent for acceptance and recording by
the Agent. The effective date for this Designation Agreement (the "EFFECTIVE
DATE") shall be the date of acceptance hereof by the Agent, unless otherwise
specified on the signature page hereto.

      6. The Designor unconditionally agrees to pay or reimburse the Designee
for, and save the Designee harmless against, all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever which may be imposed or asserted
by any of the parties to the Loan Documents against the Designee, in its
capacity as such, in any way relating to or arising out of this Designation
Agreement or any other Loan Documents or any action taken or omitted by the
Designee hereunder or thereunder.

      7. Upon such acceptance and recording by the Agent, as of the Effective
Date, the Designee shall be a party to the Credit Agreement with a right to make
Competitive Bid Loans as a Lender pursuant to Section 2.10 of the Credit
Agreement and the rights and obligations of a Lender related thereto; provided,
however, that the Designee shall not be required to make payments with respect
to such obligations except to the extent of excess cash flow of the Designee
which is not otherwise required to repay obligations of the Designee which are
then due and payable. Notwithstanding the foregoing, the Designor, as agent for
the Designee, shall be and remain obligated to the Borrower, the Agent, and the
other Lenders for each and every of the obligations of the Designee and the
Designor with respect to the Credit Agreement and any sums otherwise payable to
the Borrower by the Designee.

      8. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (excluding the laws
applicable to conflicts or choice of law to the extent that would require
application of substantive laws of another jurisdiction).

      9. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be


\
deemed to be an original and all of which taken together shall constitute one
and the same agreement. Delivery of an executed counterpart of a signature page
to this Designation Agreement by facsimile transmission shall be effective as
delivery of a manually executed counterpart of this Designation Agreement.

      IN WITNESS WHEREOF, the Designor and the Designee, intending to be legally
bound, have caused this Designation Agreement to be executed by their officers
thereunto duly authorized as of the date first above written.

Effective Date:                 ____________ ____, 200__

                                [NAME OF DESIGNOR], as
                                Designor

                                By: ___________________________________
                                  Name:
                                  Title:

                                [NAME OF DESIGNEE], as
                                Designee

                                By: ___________________________________
                                  Name:
                                  Title:

                                Eurocurrency Lending Office (and address for
                                notices):

                                         [ADDRESS]

Accepted this _____ day
of ____________, 200__

BANK OF AMERICA, N.A.,
as Agent

By: ________________________
Name:
Title:
____________________________

EX-12

                                                                      EXHIBIT 12

                       STATEMENT RE: COMPUTATION OF RATIO
                          OF EARNINGS TO FIXED CHARGES
                 AND RATIO OF EARNINGS TO COMBINED FIXED CHARGES

          LIBERTY PROPERTY TRUST / LIBERTY PROPERTY LIMITED PARTNERSHIP
                   (AMOUNTS IN THOUSANDS EXCEPT RATIO AMOUNTS)



                                                                         YEAR ENDED DECEMBER 31,
                                                -----------------------------------------------------------------------
                                                     2005           2004          2003           2002           2001
                                                -------------  ------------  ------------  -------------  -------------
                                                                                           
Earnings before fixed charges:
Income before allocation of minority interest
and income from investments in unconsolidated
subsidiaries (1)                                $     237,791  $    164,474  $    164,571  $     142,797  $     160,103
Add:    Interest expense                              125,302       112,617       113,775        106,313        100,504
        Depreciation expense on cap'd interest          3,829         3,442         3,140          2,944          2,311
        Amortization of deferred
          financing costs                               4,315         4,013         3,979          4,015          4,066
                                                -------------  ------------  ------------  -------------  -------------

Earnings before fixed charges                   $     371,237  $    284,546  $    285,465  $     256,069  $     266,984
                                                =============  ============  ============  =============  =============

Fixed charges:
Interest expense                                $     125,302  $    112,617  $    113,775  $     106,313  $     100,504
Amortization of deferred financing charges              4,315         4,013         3,979          4,015          4,066
Capitalized interest                                   17,748        13,242        10,947         16,498         22,347
                                                -------------  ------------  ------------  -------------  -------------

Fixed charges                                         147,365       129,872       128,701        126,826        126,917
                                                -------------  ------------  ------------  -------------  -------------

Preferred share distributions                               -             -             -          7,242         11,000
Preferred unit distributions                           12,095        11,846        12,416         11,619         10,612
                                                -------------  ------------  ------------  -------------  -------------

Combined fixed charges                          $     159,460  $    141,718  $    141,117  $     145,687  $     148,529
                                                =============  ============  ============  =============  =============

Ratio of earnings to fixed charges                       2.52          2.19          2.22           2.02           2.10
                                                =============  ============  ============  =============  =============

Ratio of earnings to combined fixed charges              2.33          2.01          2.02           1.76           1.80
                                                =============  ============  ============  =============  =============


(1)   Amounts for the years ended December 31, 2005, 2004, 2003, 2002 and 2001
      have been reclassified to present properties that have been sold during
      2005. As a result, operations have been reclassified to discontinued
      operations from continuing operations for all periods presented.

EX-21

                                                                      EXHIBIT 21

                             LIBERTY PROPERTY TRUST
                      LIBERTY PROPERTY LIMITED PARTNERSHIP
                              LIST OF SUBSIDIARIES

Liberty Lehigh Partnership
Liberty Property Philadelphia Limited Partnership
Liberty Property Philadelphia Limited Partnership II
Liberty Property Philadelphia Limited Partnership III
Liberty Property Philadelphia Corporation
Liberty Property Philadelphia Trust
Liberty Property Philadelphia Limited Partnership IV East
Liberty Property Philadelphia Limited Partnership IV West
Liberty Property Philadelphia Corporation IV East
Liberty Property Philadelphia Corporation IV West
Liberty Property Philadelphia Corporation V
Liberty Property Philadelphia Limited Partnership V
Liberty Property Development Corp.
Liberty Property Development Corp. II
Liberty Special Purpose Trust
Liberty UK Development Corp.
LP Malvern Limited Partnership
LP Malvern LLC
Land Holdings Realty LLC
Rivers Business Commons Associates Limited Partnership
Aymer House Limited
Liberty Property Philadelphia Navy Yard Limited Partnership
Liberty Property Philadelphia Navy Yard Corporation
Liberty Property/Synterra Limited Partnership
Liberty Venture I, LP
Liberty Venture I, LLC
Silversword Properties Limited
Vine Street Uxbridge Limited
Cambridge Medipark Limited
Rouse Kent Limited
Rouse Kent (Residential) Limited
UK Portfolio Management Company, Ltd.
Kings Hill Estate Management Company Limited
Rouse Kent Investments Limited
Rouse Kent Developments Limited
Rouse Kent (Central) Limited
Rouse Kent (1 Tower View)Limited
Kings Hill Property Management Limited
Kings Hill Residential Estate Management Company Limited
L/S One Crescent Drive, LP
L/S One Crescent Drive, LLC
Liberty Property Trust UK Limited
Liberty 600 Industrial, G.P.
Liberty AIPO Limited Partnership
Liberty West Allis, LLC
Perryman 159, LLC

EX-23.1

                                                                    Exhibit 23.1

            Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form
S-3 No. 333-120692), the Registration Statement (Form S-3 No. 33-94782), the
Registration Statement (Form S-3 No. 333-22211), the Registration Statement
(Form S-3 No. 333-43267), the Registration Statement (Form S-3 No. 333-39282),
the Registration Statement (Form S-3 No. 333-65592), and the Registration
Statement (Form S-3 No. 333-125571) of Liberty Property Trust and Liberty
Property Limited Partnership and the Registration Statement (Form S-3 No.
333-14139), the Registration Statement (Form S-8 No. 333-32244), the
Registration Statement (Form S-3 No. 333-53297), the Registration Statement
(Form S-3 No. 333-63115), the Registration Statement (Form S-3 No. 333-37218),
the Registration Statement (Form S-3 No. 333-45032), the Registration Statement
(Form S-8 No. 333-62504), the Registration Statement (Form S-8 No. 333-62506),
the Registration Statement (Form S-3 No. 333-63494), the Registration Statement
(Form S-3 No. 333-63978), the Registration Statement (Form S-3 No. 333-91702),
the Registration Statement (Form S-3 No. 333-107482), the Registration Statement
(Form S-3 No. 333-108040), the Registration Statement (Form S-3 No. 333-114609),
the Registration Statement (Form S-3 No. 333-118994), the Registration Statement
(Form S-3 No. 333-130948), the Registration Statement (Form S-3 No. 333-125572),
and the Registration Statement (Form S-3 No. 333-122365) of Liberty Property
Trust and in the related Prospectuses and the Registration Statement (Form S-8
No. 333-118995) pertaining to the Liberty Property Trust Amended and Restated
Share Incentive Plan of our reports dated March 10, 2006, with respect to the
consolidated financial statements and schedule of Liberty Property Trust,
Liberty Property Trust management's assessment of the effectiveness of internal
control over financial reporting, and the effectiveness of internal control over
financial reporting of Liberty Property Trust, included in this Annual Report
(Form 10-K) for the year ended December 31, 2005.

                                                           /s/ Ernst & Young LLP

Philadelphia, Pennsylvania
March 10, 2006

EX-23.2

                                                                    Exhibit 23.2

            Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form
S-3 No. 333-120692), the Registration Statement (Form S-3 No. 33-94782), the
Registration Statement (Form S-3 No. 333-22211), the Registration Statement
(Form S-3 No. 333-43267), the Registration Statement (Form S-3 No. 333-39282),
the Registration Statement (Form S-3 No. 333-65592), and the Registration
Statement (Form S-3 No. 333-125571) of Liberty Property Trust and Liberty
Property Limited Partnership and in the related Prospectuses of our reports
dated March 10, 2006, with respect to the consolidated financial statements and
schedule of Liberty Property Limited Partnership, Liberty Property Limited
Partnership management's assessment of the effectiveness of internal control
over financial reporting, and the effectiveness of internal control over
financial reporting of Liberty Property Limited Partnership, included in this
Annual Report (Form 10-K) for the year ended December 31, 2005.

                                                     /s/  Ernst & Young LLP

Philadelphia, Pennsylvania
March 10, 2006

EX-31.1

                                                                    EXHIBIT 31.1

                             LIBERTY PROPERTY TRUST

                           CERTIFICATIONS REQUIRED BY
            RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, William P. Hankowsky, certify that:

1. I have reviewed this Form 10-K of Liberty Property Trust;

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,

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.

Date: March 14, 2006                     By: /s/ WILLIAM P. HANKOWSKY
                                         ---------------------------------------
                                         William P. Hankowsky
                                         Chairman, President and Chief Executive
                                         Officer

EX-31.2

                                                                    EXHIBIT 31.2

                             LIBERTY PROPERTY TRUST

                           CERTIFICATIONS REQUIRED BY
            RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, George J. Alburger, Jr., certify that:

1. I have reviewed this Form 10-K of Liberty Property Trust;

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,

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.

Date: March 14, 2006                     By: /s/ GEORGE J. ALBURGER, JR.
                                         ---------------------------------------
                                         George J. Alburger, Jr.
                                         Executive Vice President and Chief
                                         Financial Officer

EX-31.3

                                                                    EXHIBIT 31.3

                      LIBERTY PROPERTY LIMITED PARTNERSHIP

                           CERTIFICATIONS REQUIRED BY
            RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, William P. Hankowsky, certify that:

1. I have reviewed this Form 10-K of Liberty Property Limited Partnership;

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,

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.

Date: March 14, 2006                By: /s/ WILLIAM P. HANKOWSKY
                                    --------------------------------
                                    William P. Hankowsky
                                    Chairman, President and Chief Executive
                                    Officer of Liberty Property Trust, the
                                    Registrant's sole general partner

EX-31.4

                                                                    EXHIBIT 31.4

                      LIBERTY PROPERTY LIMITED PARTNERSHIP

                           CERTIFICATIONS REQUIRED BY
            RULE 13a-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, George J. Alburger, Jr., certify that:

1. I have reviewed this Form 10-K of Liberty Property Limited Partnership;

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,

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.

Date: March 14, 2006                 By: /s/ GEORGE J. ALBURGER, JR.
                                     -------------------------------------------
                                     George J. Alburger, Jr.
                                     Executive Vice President and Chief
                                     Financial Officer of Liberty Property
                                     Trust, the Registrant's sole general
                                     partner

EX-32.1

                                                                    EXHIBIT 32.1

                             LIBERTY PROPERTY TRUST

                           CERTIFICATIONS REQUIRED BY
            RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

      In connection with the Annual Report of Liberty Property Trust (the
"Company") on Form 10-K for the year ended December 31, 2005, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, WILLIAM
P. HANKOWSKY, President and Chief Executive Officer of the Company, certify in
connection with Rule 13a-14(b) under the Securities Exchange Act of 1934, as
amended, that based on my knowledge:

      (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

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

/s/ WILLIAM P. HANKOWSKY
- -----------------------------------------------
William P. Hankowsky
Chairman, President and Chief Executive Officer

Date:  March 14, 2006

EX-32.2

                                                                    EXHIBIT 32.2

                             LIBERTY PROPERTY TRUST

                           CERTIFICATIONS REQUIRED BY
            RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

      In connection with the Annual Report of Liberty Property Trust (the
"Company") on Form 10-K for the year ended December 31, 2005, as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, GEORGE
J. ALBURGER, JR., Executive Vice President and Chief Financial Officer of the
Company, certify in connection with Rule 13a-14(b) under the Securities Exchange
Act of 1934, as amended, that based on my knowledge:

      (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

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

/s/ GEORGE J. ALBURGER, JR.
- ----------------------------------------------------
George J. Alburger, Jr.
Executive Vice President and Chief Financial Officer

Date:  March 14, 2006

EX-32.3

                                                                    EXHIBIT 32.3

                      LIBERTY PROPERTY LIMITED PARTNERSHIP

                           CERTIFICATIONS REQUIRED BY
            RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

      In connection with the Annual Report of Liberty Property Limited
Partnership (the "Company") on Form 10-K for the year ended December 31, 2005,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, WILLIAM P. HANKOWSKY, President and Chief Executive Officer of
Liberty Property Trust (the sole general partner of the Company), certify in
connection with Rule 13a-14(b) under the Securities Exchange Act of 1934, as
amended, that based on my knowledge:

      (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

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

/s/ WILLIAM P. HANKOWSKY
- ------------------------
William P. Hankowsky
Chairman, President and Chief Executive Officer
of Liberty Property Trust, the Company's sole general partner

Date:  March 14, 2006

EX-32.4

                                                                    EXHIBIT 32.4

                      LIBERTY PROPERTY LIMITED PARTNERSHIP

                           CERTIFICATIONS REQUIRED BY
            RULE 13a-14(b) UNDER THE SECURITIES EXCHANGE ACT OF 1934

      In connection with the Annual Report of Liberty Property Limited
Partnership (the "Company") on Form 10-K for the year ended December 31, 2005,
as filed with the Securities and Exchange Commission on the date hereof (the
"Report"), I, GEORGE J. ALBURGER, JR., Executive Vice President and Chief
Financial Officer of Liberty Property Trust (the sole general partner of the
Company), certify in connection with Rule 13a-14(b) under the Securities
Exchange Act of 1934, as amended, that based on my knowledge:

      (1) The Report fully complies with the requirements of section 13(a) or
15(d) of the Securities Exchange Act of 1934; and

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

/s/ GEORGE J. ALBURGER, JR.
- ---------------------------
George J. Alburger, Jr.
Executive Vice President and Chief Financial Officer
of Liberty Property Trust, the Company's sole general partner

Date:  March 14, 2006