8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 8-K

CURRENT REPORT

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

Date of Report (Date of earliest event reported): November 1, 2005

AmeriVest Properties Inc.

(Exact name of small business issuer as specified in its charter)

Maryland	1-14462	84-1240264
(State or other jurisdiction of incorporation or organization)	(Commission File No.)	(I.R.S. Employer Identification No.)

1780 South Bellaire Street Suite 100, Denver, Colorado 80222

(Address of principal executive offices)

(303) 297-1800

(Registrant’s telephone number)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o  Written communications pursuant to Rule 425 under the Securities Act

o  Soliciting material pursuant to Rule 14a-12 under the Exchange Act

o  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act

o  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Item 2.02. Results of Operations and Financial Condition.

On November 1, 2005, AmeriVest Properties Inc. (“AmeriVest”) announced its consolidated financial results for the quarter ended September 30, 2005.  A copy of AmeriVest’s earnings press release is furnished as Exhibit 99.1 to this report on Form 8-K.  A copy of AmeriVest’s Third Quarter 2005 Supplemental Operating and Financial Information package is furnished as Exhibit 99.2 to this report on Form 8-K.  The information contained in this report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed “filed” with the Securities and Exchange Commission nor incorporated by reference in any registration statement filed by AmeriVest under the Securities Act of 1933, as amended.

Item 9.01.	Financial Statements and Exhibits
(c)	Exhibits:
	Exhibit 99.1	Press Release, dated November 1, 2005.
	Exhibit 99.2	Third Quarter 2005 Supplemental Operating and Financial Information, dated  November 1, 2005.

2

SIGNATURES

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

	AMERIVEST PROPERTIES INC.
Dated: November 1, 2005
	By:	/s/ Kathryn L. Hale
		Kathryn L. Hale
		Chief Financial Officer

3

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press Release, dated November 1, 2005.
99.2	Third Quarter 2005 Supplemental Operating and Financial Information, dated November 1, 2005.

4

EX-99.1

Exhibit 99.1

	NEWS RELEASE
CONTACT:
Kim P. Boswood	1780 South Bellaire Street	Listed: AMEX
Investor Relations (ext. 118)	Suite 100	Trading Symbol: AMV
kimb@amvproperties.com	Denver, CO 80222	www.amvproperties.com
	Phone: (303) 297-1800
	Fax: (303) 296-7353

AMERIVEST ANNOUNCES PERFORMANCE AND OPERATING RESULTS FOR
THIRD QUARTER ENDED SEPTEMBER 30, 2005

DENVER, CO (November 1, 2005) — AmeriVest Properties Inc. (AMEX: AMV) reported results today for the quarter ended September 30, 2005.  Funds from operations (FFO) for the third quarter of 2005 was approximately ($849,000), or ($0.04) per share, compared to approximately $2,351,000, or $0.10 per share, for the same period in 2004.  The Company reported a net loss for the third quarter of 2005 of approximately $5,430,000, or $0.23 per share, compared to a loss of approximately $1,302,000, or $0.05 per share, for the same period of 2004.  For the nine months ended September 30, 2005, FFO totaled approximately $2,920,000, or $0.12 per share, compared to approximately $7,026,000, or $0.32 per share for the same period in 2004.  The net loss recognized by the Company was approximately $11,105,000, or $0.46 per share in 2005, compared to approximately $2,224,000, or $0.10 per share in 2004 for the same period.  Unusual charges incurred during the quarter include: $2,700,000 ($0.11/share) of impairment charges on the Company’s real estate assets, $421,000 of which is attributable to its Panorama joint venture interest, and approximately $213,000 ($0.01/share) in general and administrative costs related to certain severance and non-cash compensation charges.  General and administrative costs for the quarter also include $77,000 related to Sarbanes-Oxley compliance and $48,000 related to the Company’s strategic alternative review (a total of $0.01/share).

Rental revenue from continuing operations (not including properties held for sale) in the third quarter of 2005 increased $1.5 million or 21% over the prior year period due primarily to the Company’s 2004 acquisitions.  The third quarter 2005 results include the operating impact resulting from the acquisitions of Parkway Centre III in September of 2004 and Hampton Court in November of 2004.  Revenue for the quarter also increased by approximately $248,000 in properties held for the entire period in both 2004 and 2005, mainly due to increases in occupancy over the prior year.  All results of the Company for both 2004 and 2005 have been restated to reclassify the revenue and expenses of the properties held for sale into a separate discontinued operations category, as shown on the attached financial statements.

Third quarter 2005 property operating expenses, including real estate taxes, for continuing operations increased by $217,000 or 7.1% over the same period in 2004 due primarily to the Company’s growth and increases in property taxes and utility costs. This increase is net of approximately $160,000 of ground lease expense in the third quarter of 2004 that was eliminated upon the purchase of the Greenhill Park land in December of 2004. General and administrative expenses (“G&A”) decreased approximately $24,000, or 2.2%, for the third quarter of 2005 compared with the same period in 2004.  Quarterly G&A costs as a percent of revenue related to continuing operations decreased from 15.6% in 2004 to 12.6% in 2005; as a percent of total revenue (continuing plus discontinued operations), it decreased from 9.7% to 9.0%.  The Company has implemented and has additional plans to implement cost-cutting measures, including the elimination of certain corporate positions, which are expected to affect bottom-line results in future quarters.

Interest expense for the quarter (including discontinued operations) increased approximately $1.1 million, or 35%, during the third quarter of 2005 as compared to the same period of 2004, primarily due to increased borrowings for acquisitions and working capital and an increase in interest rates on the Company’s variable rate debt.

The September 30, 2005 occupancy results were issued in a separate detailed press release on October 13, 2005.  Total occupancy increased to 89.6% from 88.3% at December 31, 2004 and from 89.4% at June 30, 2005.  For properties classified as continuing operations, occupancy at September 30, 2005 was 91.4% versus 90.8% at December 31, 2004.  The average rental rate per square foot to date for properties not held for sale has increased from an average of $19.97 at the beginning of the year to $20.26 at September 30, 2005.  Current quarter-end occupancy results include approximately 53,000 square feet that is leased but not yet occupied.

“We are pleased with our operating results, which were in line with our expectations after adjustment for the unusual items discussed above”, said Charles Knight, Chief Executive Officer of the Company.  “Occupancy rates continue to increase marginally as we overcome the effects of the significant rent roll down we faced in 2005, due to our small tenant focus and shorter average lease terms.  As we head into 2006, we expect continued small increases in occupancy and better operating income and cash flow as the impact from rent roll down is expected to have significantly less impact on continuing operations in 2006 than in 2005 and rates are increasing in almost all of our markets.”

Third Quarter Highlights and Subsequent Events

•On September 1, 2005, the Company announced the commencement of a strategic asset sales plan including the following five office properties: Financial Plaza in Mesa, Arizona; AmeriVest Plaza and its 20% joint venture property at Panorama Falls in Englewood, Colorado; Chateau Plaza in Dallas, Texas; and Keystone Office Park in Indianapolis, Indiana.  Two of the properties are expected to be under contract and close in December 2005 and the other two in the first quarter of 2006.  The Company expects to generate sufficient proceeds from these sales to repay associated mortgage obligations, substantially reduce its outstanding secured and unsecured credit facilities and, depending on the amount of net proceeds actually received, a special dividend to shareholders may be necessary with respect to capital gains for such sales.  Depending on the timing of when such transactions occur, the Company could pay a dividend as early as January 2006.  No definitive agreements have been signed for any property, however, and there can be no assurance that the sales of any of the properties will be completed.

•On September 30, 2005, the Company completed the sale of its Panorama Falls joint venture interest to its joint venture partner.  On October 1, 2005, $4.4 million in net proceeds from the sale were paid in equal portions to the Company’s Secured and Unsecured Facilities, with an additional $1.0 million in borrowing netted against the payment on the Unsecured Facility.  The Company took back a six-month promissory note from the buyer in the amount of $364,170 as part of the sale.  As of the date of this release, the amounts outstanding under the Company’s Secured and Unsecured Facilities were $30,683,902 and $29,844,196, respectively.

•On September 1, 2005, the Company announced that its primary bank group had extended the payment date under its Secured and Unsecured Credit Facilities from September 1 to September 14, 2005 and had reached an agreement in principle with the Company to further amend the loan agreements for its Secured and Unsecured Credit Facilities.   On September 14, 2005, the Company and its primary bank group further amended the agreements to extend the

mandatory prepayments, now due only against the Secured Facility, to January 17, 2006, extend the maturity dates for both facilities to April 1, 2006, and revise certain other payment and covenant requirements.  For full detail on the amendments, refer to the press release and Form 8-K filed on September 14, 2005.

•On September 1, 2005, the Company also announced that it had commenced an operational restructuring of its property management and corporate operations culminating in the retention of Trammel Crow Services, Inc. as the property manager for its Denver portfolio.  As part of this restructuring, approximately ten property level and corporate positions in Denver were eliminated.  This restructuring will be reflected in operating results beginning in the fourth quarter of 2005.

Update on Strategic Direction

The Company and its advisor continue to evaluate various alternatives to maximize shareholder value in the near term, including the potential sale or merger of the Company or its assets and other possible transactions.  The Board has received proposals from several bidders, however, many of these proposals contain contingencies or conditions that make the proposals difficult to fully evaluate.  The Company will continue to evaluate proposals for a merger or sale of the Company or its assets as well as a complete liquidation of the Company in a continuing effort to maximize shareholder value.   The Company believes that completion of the strategic asset sales discussed above will positively impact the valuation and market perception of the Company and its remaining assets for the following reasons: the Company’s liquidity will be significantly improved once the associated mortgage debt and Secured and Unsecured Credit Facilities are repaid and the pressures of near-term debt maturities are eliminated; the markets and potential bidders for the Company will have clarity on the private market valuation of certain of the Company’s assets once the sales prices have been disclosed; and the remaining portfolio is expected to have significantly improved occupancy and cash flow as low occupancy and capital intensive properties are eliminated. The Company will then be able to focus its efforts on properties that will be accretive to earnings in the near term and which are located in improving markets where the Company can still add value.

Supplemental Operating and Financial Information

The Supplemental Operating and Financial Information for the third quarter of 2005 is available online at the Company’s website, www.amvproperties.com by clicking the Investor Relations link and then the Supplemental Information link.

Conference Call Information

The Company will hold an investor/analyst conference call on November 1, 2005, beginning at 11:30 am MST (1:30 pm EST, 12:30 pm CST and 10:30 am PST) to discuss its third quarter results.  To participate in the conference call, please dial (800) 548-8725 approximately ten minutes before the scheduled start of the call.  If you are calling from outside North America, please call (706) 634-5929.

An audio replay will be available two hours after the completion of the conference call until November 6, 2005 by calling (800) 642-1687 or for participants outside North America, please call (706) 645-9291 and enter conference ID# 1436333.  A live web cast of the conference call will be available at www.amvproperties.com.  You must have Windows Media Player installed on your computer in order to listen to the web cast, which may be downloaded for free at the website listed above.

Company Information

AmeriVest Properties Inc., with its principal office in Denver, Colorado, provides Smart Space for Small Business® in Denver, Phoenix, Dallas, and Indianapolis through the acquisition, repositioning and operation of multi-tenant office buildings in those markets.  To receive AmeriVest’s latest news and information, visit our website at www.amvproperties.com.

In addition to historical information, this press release contains forward-looking statements and information under the federal securities laws.  These statements are based on expectations, estimates and projections about the industry and markets in which AmeriVest operates, management’s beliefs and assumptions made by management.  While AmeriVest management believes the assumptions underlying its forward-looking statements and information are reasonable, such information is necessarily subject to uncertainties and may involve certain risks, many of which are difficult to predict and are beyond management’s control.  As such, these statements and information are not guarantees of future performance, and actual operating results may differ materially from what is expressed or forecasted in this press release.  In particular, the factors that could cause actual operating results to differ materially include, without limitation, continued qualification as a real estate investment trust, the effects of general and local economic and market conditions, competition, regulatory changes, the ability to enter into new leases or renew leases on favorable terms, dependence on tenants’ financial condition, the uncertainties of real estate development and acquisition activity, development and construction costs, insurance risks, the costs and availability of financing, potential liability relating to environmental matters and liquidity of real estate investments and other risks and uncertainties detailed in AmeriVest’s 2004 Annual Report on Form 10-K and any amendments thereof and from time to time in the Company’s filings with the Securities and Exchange Commission.

AMERIVEST PROPERTIES INC.

Summary Financial Information

(unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2005			2004			2005			2004
Real Estate Operating Revenue
Rental revenue	$	8,609,254		$	7,106,977		$	25,952,853		$	19,718,169
Real Estate Operating Expenses
Property operating expenses -
Operating expenses	2,307,499			2,244,619			6,901,892			6,017,444
Real estate taxes	974,461			820,352			3,527,521			2,312,209
General and administrative expenses	1,082,078			1,105,901			3,880,678			3,022,715
Interest expense	3,111,792			2,177,411			8,860,849			6,003,920
Depreciation and amortization expense	3,247,678			2,368,006			9,691,171			6,033,176
Total operating expenses	10,723,508			8,716,289			32,862,111			23,389,464
Loss From Continuing Operations	(2,114,254		)	(1,609,312		)	(6,909,258		)	(3,671,295		)
Other Income
Interest income	24,525			29,139			42,529			55,395
Total other income	24,525			29,139			42,529			55,395
Loss Before Discontinued Operations	(2,089,729		)	(1,580,173		)	(6,866,729		)	(3,615,900		)
Net Earnings/(Loss) from Discontinued Operations	(3,340,714		)	278,279			(4,238,559		)	1,391,407
Net Loss	$	(5,430,443	)	$	(1,301,894	)	$	(11,105,288	)	$	(2,224,493	)
Loss Per Share
Basic and Diluted	$	(0.23	)	$	(0.05	)	$	(0.46	)	$	(0.10	)
Weighted Average Common Shares Outstanding
Basic and Diluted (earnings)	24,074,937			23,934,094			24,044,762			21,807,943
Diluted (FFO)	24,074,937			23,934,094			24,044,762			21,807,943
Reconciliation to Funds from Operations (FFO):
Net Loss	$	(5,430,443	)	$	(1,301,894	)	$	(11,105,288	)	$	(2,224,493	)
Depreciation and amortization on real estate investments	4,582,164			3,653,356			13,788,012			9,824,592
Loss/(gain) on disposition of depreciated real estate	(1,001		)	—			20,803			(574,276		)
Loan costs associated with the disposition of real estate	—			—			215,993			—
FFO	$	(849,280	)	$	2,351,462		$	2,919,520		$	7,025,823
Funds from Operations per share - diluted	$	(0.04	)	$	0.10		$	0.12		$	0.32

Funds from operations (FFO) is a non-GAAP financial measure.  We believe FFO, as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT) in the October 1999 White Paper (amended in April 2002), to be an appropriate measure of performance for an equity REIT, for the reasons, and subject to the qualifications, specified in the paragraph entitled “Non-GAAP Financial Measures” below.  The above summary financial information table reflects the reconciliation of FFO from net income or (loss) and a comparison to earnings or (loss) per share, the most directly comparable GAAP measure, for the periods presented.

	September 30,			December 31,
	2005			2004
Selected Balance Sheet Information:
Assets at cost, excluding held-for-sale	269,204,301			260,477,110
Assets – held-for-sale, net	86,397,565			102,437,556
Less: accumulated depreciation and amortization	(23,083,166		)	(14,960,977		)
Total assets	$	332,518,700		$	347,953,689
Total mortgage loans, notes payable and unsecured line of credit	$	176,818,472		$	172,310,212
Total mortgage loans – held-for-sale	$	58,082,652		64,276,179
Total shareholders’ equity	$	82,947,577		$	93,469,915
Common shares issued and outstanding	24,105,464			23,982,233
Selected Property Information:
Number of operating properties owned	16			30
Total rentable square feet	2,451,002			2,732,957
Occupancy	89.6		%	88.3		%
Selected Stock Information:
Common share price (as of period end)	$	4.09		$	6.40
Equity market capitalization	$	98,591,348		$	153,486,291
Common share annualized dividends	—			$	0.52
Common share annualized dividend yield (as of period end)	N/A			8.1		%

Non-GAAP Financial Measures.  Funds from operations (FFO) is a non-GAAP financial measure.  FFO is defined as net income or loss, computed in accordance with generally accepted accounting principles (GAAP), excluding gains or losses from sales of properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.  We believe that FFO is helpful to investors as a measure of the performance of an equity REIT because, it facilitates an understanding of the operating performance of its properties without giving effect to real estate depreciation and amortization, which assumes that the value of real estate assets diminishes predictably over time.  Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a more meaningful and accurate indication of our performance.  We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do.  FFO does not represent cash generated from operating activities determined by GAAP and should not be considered as an alternative to net income or loss (determined in accordance with GAAP) as an indication of our financial performance or to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.  FFO may include funds that may not be available for our management’s discretionary use due to requirements to conserve funds for capital expenditures, debt repayments, property acquisitions and other commitments and uncertainties.

EX-99.2

Exhibit 99.2

Supplemental Operating and Financial Information

Third Quarter 2005

Table of Contents

Corporate Information

Selected Financial Data

Company Overview

AmeriVest Properties Inc. is a real estate investment trust (REIT) which owns and operates commercial office buildings in selected markets catering to small and medium size businesses.  At September 30, 2005, AmeriVest owned 16 properties totaling approximately 2,451,000 square feet located in metropolitan Denver, Dallas, Phoenix and Indianapolis.  The Company is currently marketing for sale four of its properties, with approximately 716,000 cumulative square feet.

Strategy

We believe that office space for small to medium size businesses is a large and underserved market.  According to data compiled by the Office of Advocacy of the U.S. Small Business Administration, 89% of all U.S. businesses employed fewer than 20 employees.  As a result, we believe that many businesses have office space requirements of no more than 4,000 square feet.

Small to medium size businesses often have specific needs and limitations that are different from larger businesses.  For example, small and medium size businesses generally cannot afford large corporate staffs to manage their office leasing requirements.  These businesses have needs similar to larger firms, such as access to cutting edge technology, conference facilities, high quality telecommunications services and other amenities, but may not have a comparable budget.  Our strategy is to focus on providing an office product targeted to this large market and its unmet needs in a cost effective manner.  The key elements of our strategy include:

Provide a superior, consistent product - We provide amenities for the small and medium size businesses in our office properties that usually only larger companies would be able to obtain, such as conference rooms with the latest telecommunication and presentation equipment, high levels of common area and tenant finish, including well-designed, pre-built move-in ready space, and depending on the location, various other technology and service amenities relative to the needs of our targeted small business tenant.

Streamline the leasing process - Our leasing process is designed to meet the unique needs of a small to medium size tenant with limited real estate expertise, through our “no hassle” leasing philosophy which reduces the lease transaction time and cost for the tenant and us.

Provide a high level of service - With our deliberate focus on small and medium size businesses, we have developed a positive, service-oriented approach specifically tailored for our customer base.

Target select cities - We target cities that have excellent small business growth demographics, where we hope to build meaningful multi-property portfolios over both the near and long term.

As a result of our focused strategy, we believe that our properties provide office space that is particularly attractive for small and medium size businesses.  By executing on our strategy, we believe we have been able to maintain high occupancy rates while still maintaining strong rent per square foot trends in our core markets as compared to the general office market.

Directors and Executive Officers

Name	Position	Initial Date as Director
Charles K. Knight	Chief Executive Officer, President and Director	1999
Kathryn L. Hale	Chief Financial Officer and Secretary	—
John B. Greenman	Chief Investment Officer and Vice President	—
William T. Atkins	Director and Chairman of the Board	1999
Patrice Derrington	Outside Director	2003
Harry P. Gelles	Outside Director	2000
Alexander S. Hewitt	Director and Vice Chairman	2004
Robert W. Holman, Jr.	Lead Outside Director	2001
John A. Labate	Outside Director	1995
Jerry J. Tepper	Outside Director	2000

Corporate Headquarters	Investor Relations
1780 South Bellaire Street	Kim P. Boswood
Suite 100	(303) 297-1800 x 118
Denver, Colorado 80222	kimb@amvproperties.com
(303) 297-1800
Stock Exchange	Ticker
American Stock Exchange	AMV

2

Financial Information

Selected Financial Data

	As of and for the three months ended
	9/30/2005			6/30/2005			3/31/2005			12/31/2004			9/30/2004
	(amounts in thousands, except share, per share and property data)
Operating Data
Real estate operating revenue  (1)	$	8,609		$	8,622		$	8,722		$	8,306		$	7,107
General and administrative expenses	$	1,082		$	1,483		$	1,316		$	1,348		$	1,106
G&A as a percentage of revenue	12.6		%	17.2		%	15.1		%	16.2		%	15.6		%
Real estate operating revenue (2)	$	11,995		$	12,242		$	12,903		$	12,644		$	11,435
G&A as a percentage of revenue (2)	9.0		%	12.1		%	10.2		%	10.7		%	9.7		%
Property operating expenses (1)	$	3,282		$	3,691		$	3,456		$	3,522		$	3,065
Net operating income  (1) (3)	$	5,327		$	4,931		$	5,266		$	4,784		$	4,042
Loss Per Share
Net loss	$	(5,430	)	$	(3,091	)	$	(2,584	)	$	(3,678	)	$	(1,302	)
Loss per share - basic	(0.23		)	(0.13		)	(0.11		)	(0.15		)	(0.05		)
Loss per share - diluted	(0.23		)	(0.13		)	(0.11		)	(0.15		)	(0.05		)
Funds from Operations (FFO)  (4)
FFO	$	(849	)	$	1,371		$	2,398		$	654		$	2,351
FFO per share - basic	(0.04		)	0.06			0.10			0.03			0.10
FFO per share - diluted	(0.04		)	0.06			0.10			0.03			0.10
Balance Sheet Data
Net investment in real estate	$	312,792		$	322,884		$	322,606		$	330,814		$	301,152
Total assets	332,519			338,743			338,705			347,954			317,767
Total liabilities	249,571			249,193			246,208			252,904			216,074
Minority interest - held-for-sale	—			1,379			1,492			1,580			1,671
Total shareholders’ equity	82,948			88,171			91,005			93,470			100,022
Common Stock Data
Common shares outstanding	24,105,464			24,062,639			24,022,597			23,982,233			23,948,056
Weighted average shares - basic	24,074,937			24,046,982			24,011,672			23,959,656			23,934,094
Weighted average shares - diluted (FFO)	24,074,937			24,093,637			24,098,003			24,076,729			24,050,124
Closing share price	$	4.09		$	4.17		$	5.18		$	6.40		$	6.68
Closing share price range for period (high - low)	$4.77 - $3.81			$5.45 - $3.95			$6.64 - $5.08			$ 7.30 -$6.26			$6.83 - $5.88
Dividends declared per share	$	—		$	—		$	—		$	0.13		$	0.13
Annualized dividend yield	N/A			N/A			N/A			8.1		%	7.8		%
Market value of common equity	$	98,591		$	100,341		$	124,437		$	153,486		$	159,973
Total liabilities	249,571			249,193			246,208			252,904			216,074
Total market capitalization	$	348,162		$	349,534		$	370,645		$	406,390		$	376,047
Property Data
Properties owned	16			17			17			30			29
Rentable square feet	2,451,002			2,508,066			2,508,115			2,732,957			2,628,044
Occupancy  (5)	89.6		%	89.4		%	89.0		%	88.3		%	86.2		%

(1)  All periods exclude the results from discontinued operations.

(2)  All periods include the results from discontinued operations.

(3)  See page 6 for a definition of net operating income and a reconciliation of net operating income to Loss From Continuing Operations.

(4)  See page 6 for a reconciliation of FFO to net loss and a comparison of FFO per share to loss per share, the most directly comparable GAAP measures.  FFO is not intended to be a measure of cash flow or liquidity.

(5)  See page 9 for more information on the Company’s occupancy at September 30, 2005.

3

Consolidated Statement of Operations

	Three months ended September 30,						Nine months ended September 30,
	2005			2004			2005			2004
Real Estate Operating Revenue
Rental revenue	$	8,609,254		$	7,106,977		$	25,952,853		$	19,718,169
Real Estate Operating Expenses
Property operating expenses -
Operating expenses	2,307,499			2,244,619			6,901,892			6,017,444
Real estate taxes	974,461			820,352			3,527,521			2,312,209
General and administrative expenses	1,082,078			1,105,901			3,880,678			3,022,715
Interest expense	3,111,792			2,177,411			8,860,849			6,003,920
Depreciation and amortization expense	3,247,678			2,368,006			9,691,171			6,033,176
Total operating expenses	10,723,508			8,716,289			32,862,111			23,389,464
Loss From Continuing Operations	(2,114,254		)	(1,609,312		)	(6,909,258		)	(3,671,295		)
Other Income
Interest income	24,525			29,139			42,529			55,395
Total other income	24,525			29,139			42,529			55,395
Loss Before Discontinued Operations	(2,089,729		)	(1,580,173		)	(6,866,729		)	(3,615,900		)
Net Earnings/(Loss) from Discontinued Operations  (1)	(3,340,714		)	278,279			(4,238,559		)	1,391,407
Net Loss	$	(5,430,443	)	$	(1,301,894	)	$	(11,105,288	)	$	(2,224,493	)
Loss Per Share
Basic	$	(0.23	)	$	(0.05	)	$	(0.46	)	$	(0.10	)
Diluted	$	(0.23	)	$	(0.05	)	$	(0.46	)	$	(0.10	)
Weighted Average Common Shares Outstanding
Basic	24,074,937			23,934,094			24,044,762			21,807,943
Diluted	24,074,937			23,934,094			24,044,762			21,807,943
Reconciliation to Funds from Operations (FFO): (2)
Net Loss	$	(5,430,443	)	$	(1,301,894	)	$	(11,105,288	)	$	(2,224,493	)
Depreciation and amortization expense on real estate investments	4,582,164			3,653,356			13,788,012			9,824,592
Loss/(gain) on disposition of depreciated real estate	(1,001		)	—			20,803			(574,276		)
Loan costs associated with the disposition of real estate	—			—			215,993			—
FFO	$	(849,280	)	$	2,351,462		$	2,919,520		$	7,025,823
Funds from Operations per share - diluted	$	(0.04	)	$	0.10		$	0.12		$	0.32
Weighted Average Common Shares Outstanding - FFO Diluted	24,074,937			24,050,124			24,104,293			21,926,986

(1)  The following amounts reflect net income/(loss) from real estate investments classified as discontinued operations, including net gains/(losses) on properties sold:

Rental revenue	$	3,385,491		$	4,328,151		$	11,186,449		$	12,985,506
Property operating expenses	(1,551,406		)	(1,888,991		)	(5,055,211		)	(5,714,446		)
Interest expense	(1,034,796		)	(892,101		)	(3,097,888		)	(2,643,066		)
Deferred financing costs associated with the disposition of real estate	—			—			(215,993		)	—
Depreciation and amortization expense	(1,504,598		)	(1,372,874		)	(4,599,656		)	(3,957,999		)
Impairment of real estate	(2,720,826		)	—			(2,720,826		)	—
Minority interest	84,420			104,094			285,369			165,212
Equity in loss of affiliate	—			—			—			(18,076		)
Gain/(loss) on sale	1,001			—			(20,803		)	574,276
Net income/(loss) from discontinued operations	$	(3,340,714	)	$	278,279		$	(4,238,559	)	$	1,391,407

(2)  See page 6 for a reconciliation of FFO to net loss and a comparison of FFO per share to loss per share, the most directly comparable GAAP measures.  FFO is not intended to be a measure of cash flow or liquidity.

4

Same Store Property Results and Analysis

	Three months ended September 30, (1)										Nine months ended September 30, (2)
	2005			2004			Change		% Change		2005			2004			Change			% Change
Real Estate Operating Revenue
Rental revenue (3)	$	7,038,339		$	6,949,233		$	89,106	1.3	%	$	15,999,557		$	15,847,670		$	151,887		1.0	%
Real Estate Operating Expenses
Property operating expenses -
Operating expenses (3)  (4)	1,847,296			2,210,569			363,273		16.4	%	4,527,174			5,184,449			657,275			12.7	%
Real estate taxes	777,718			793,359			15,641		2.0	%	1,924,912			1,872,214			(52,698		)	-2.8	%
Total property operating expenses	2,625,014			3,003,928			378,914		12.6	%	6,452,086			7,056,663			604,577			8.6	%
Net Operating Income  (5)	$	4,413,325		$	3,945,305		$	468,020	11.9	%	$	9,547,471		$	8,791,007		$	756,464		8.6	%
Average rent per sq. foot at September 30, (6) (7)	$	20.13		$	20.08		$	0.05	0.2	%	$	19.32		$	19.81		$	(0.49	)	-2.5	%
Occupancy at September 30, (7)	90.7		%	87.2		%			3.5	%	88.6		%	85.4		%				3.2	%

(1)  Includes the following properties, which were operational during the entire three months ended September 30, 2004 and 2005 (excludes properties classified as held-for-sale at September 30, 2005):

Property	Sq Foot
Arrowhead Fountains	96,203
Camelback Lakes	202,578
Centerra	187,562
Greenhill Park	247,269
Hackberry View	114,598
Kellogg Building	110,940
Parkway Centre II	151,880
Scottsdale Norte	78,800
Sheridan Center	139,561
Southwest Gas Building	144,821
Total	1,474,212

(2)  Includes the following properties, which were operational during the entire nine months ended September 30, 2004 and 2005 (excludes properties classified as held-for-sale at September 30, 2005):

Property	Sq Foot
Arrowhead Fountains	96,203
Centerra	187,562
Greenhill Park	247,269
Kellogg Building	110,940
Parkway Centre II	151,880
Scottsdale Norte	78,800
Sheridan Center	139,561
Southwest Gas Building	144,821
Total	1,157,036

(3)  AmeriVest recorded a reclass between rental revenues and expenses related to certain utility reimbursements during the three months ended September 30, 2005.  This adjustment decreased revenues and expenses by $159,000 and $68,000 during the three and nine months ended September 30, 2005, respectively.  The effect of this adjustment on the three and nine months ended September 30, 2004 would have been $120,000 and $60,000, respectively.

(4)  The three and nine months ended September 30, 2004 includes ground rent expense for Greenhill Park of approximately $161,000 and $482,000, respectively.

(5)  See page 6 for a reconciliation of Same Store Net Operating Income to Loss from Continuing Operations.

(6)  The average rent per square foot is calculated using the base rate and does not include any adjustments for straight-line rent or expense recoveries.

(7)  Reflects all signed leases, including leased but not yet occupied, at September 30, 2005 or 2004 for the respective same store populations. Signed leases do not impact revenues until the tenant has moved in and the lease has commenced, although the leased space is included in our occupancy rate.

5

Non-GAAP Financial Measures

Funds from Operations -

Funds from Operations (FFO) is a non-GAAP financial measure.  We believe FFO, as defined by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT) in the October 1999 White Paper (amended in April 2002), to be an appropriate measure of performance for an equity REIT, for reasons, and subject to the qualifications, specified in the paragraphs entitled “Non-GAAP Financial Measures” below.  The following table reflects the reconciliation of FFO from net loss and a comparison of FFO per share to loss per share, the most directly comparable GAAP measures:

	Three months ended
	9/30/05			6/30/05			3/31/05			12/31/04			9/30/04
	(amounts in thousands, except share, per share and property data)
Funds from Operations (FFO) -
Net loss	$	(5,430	)	$	(3,091	)	$	(2,584	)	$	(3,678	)	$	(1,302	)
Depreciation and amortization expense	4,582			4,462			4,744			4,332			3,653
Gain/loss on sale	(1		)	—			22			—			—
Loan costs associated with the disposition of real estate	—			—			216			—			—
FFO	$	(849	)	$	1,371		$	2,398		$	654		$	2,351
Loss per share - diluted	$	(0.23	)	$	(0.13	)	$	(0.11	)	$	(0.15	)	$	(0.05	)
FFO per share - diluted	$	(0.04	)	$	0.06		$	0.10		$	0.03		$	0.10
Common Stock Data -
Weighted average shares - diluted	24,074,937			24,093,637			24,098,003			24,076,729			24,050,124

Non-GAAP Financial Measures - Funds from Operations (FFO) is a non-GAAP financial measure.  FFO is defined as net income or loss, computed in accordance with generally accepted accounting principles (GAAP), excluding gains or losses from sale of properties, plus real estate related depreciation and amortization and after adjustments for unconsolidated partnerships and joint ventures.  We believe that FFO is helpful to investors as a measure of the performance of an equity REIT because it facilitates an understanding of the operations performance of its properties without giving effect to real estate depreciation and amortization, which assume that the value of real estate assets diminishes predictably over time.  Since real estate values have historically risen or fallen with market conditions, we believe that FFO provides a more meaningful and accurate indication of our performance.  We compute FFO in accordance with standards established by the Board of Governors of the National Association of Real Estate Investment Trusts (NAREIT), which may not be comparable to FFO reported by other REITs that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than we do.  FFO does not represent cash generated from operating activities determined by GAAP and should not be considered as an alternative to net income or loss (determined in accordance with GAAP) as an indication of our financial performance or to cash flows from operating activities (determined in accordance with GAAP) as a measure of our liquidity, nor is it indicative of funds available to fund our cash needs, including our ability to make cash distributions.  FFO may include funds that may not be available for our management’s discretionary use due to requirements to conserve funds for capital expenditures, debt repayments property acquisitions and other commitments and uncertainties.

Same Store Property Net Operating Income - 

Net Operating Income (NOI) is a non-GAAP financial measure.  NOI is defined as rental revenues less property operating expenses.  Because historically, acquisitions from year to year have had a material impact on the Company’s results of operations, we rely on Same Store NOI for assessing property performance.  We also believe Same Store property NOI is a valuable means of comparing period-to-period property performance.  The following is a reconciliation of Same Store Property NOI to Loss From Continuing Operations (amounts in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2005			2004			2005			2004
Same Store Property NOI	$	4,413		$	3,945		$	9,547		$	8,791
Non Same Store Property NOI	915			97			5,977			2,598
General and administrative expenses	(1,082		)	(1,106		)	(3,881		)	(3,023		)
Interest expense	(3,112		)	(2,177		)	(8,861		)	(6,004		)
Depreciation and amortization expense	(3,248		)	(2,368		)	(9,691		)	(6,033		)
Loss from Continuing Operations	$	(2,114	)	$	(1,609	)	$	(6,909	)	$	(3,671	)

6

Consolidated Balance Sheets

	September 30, 2005			December 31, 2004
Assets
Investment in real estate -
Land	$	48,059,765		$	48,059,138
Buildings and improvements	171,412,430			170,390,274
Furniture, fixtures and equipment	1,250,431			1,169,186
Tenant improvements	12,884,183			10,392,649
Tenant leasing commissions	3,024,893			2,026,004
Intangible assets	15,335,821			16,069,201
Real estate assets - held-for-sale, net	83,907,783			97,668,274
Less: accumulated depreciation and amortization	(23,083,166		)	(14,960,977		)
Net investment in real estate	312,792,140			330,813,749
Cash and cash equivalents	1,096,281			1,859,660
Escrow deposits	8,261,821			2,957,370
Accounts receivable, net	791,012			671,251
Deferred rents receivable	4,261,686			3,430,609
Deferred financing costs, net	1,950,620			2,927,696
Prepaid expenses and other assets	875,358			524,072
Other assets - held-for-sale	2,489,782			4,769,282
Total assets	$	332,518,700		$	347,953,689
Liabilities
Secured mortgage loans and notes payable	$	145,758,176		$	147,453,149
Unsecured line of credit	31,060,296			24,857,063
Secured mortgage loans - held-for-sale	58,082,652			64,276,179
Accounts payable and accrued expenses	5,902,687			4,524,282
Accrued real estate taxes	5,002,620			4,486,712
Prepaid rents, deferred revenue and security deposits	3,216,387			3,616,472
Dividends payable	—			3,116,130
Other liabilities - held-for-sale	548,305			573,730
Total liabilities	249,571,123			252,903,717
Minority Interest - held-for-sale	—			1,580,057
Shareholders’ Equity
Preferred stock, $.001 par value
Authorized - 5,000,000 shares
Issued and outstanding - none	—			—
Common stock, $.001 par value
Authorized - 75,000,000 shares
Issued and outstanding - 24,105,464 and 23,982,233 shares, respectively	24,106			23,982
Capital in excess of par value	133,168,666			132,585,840
Distributions in excess of accumulated earnings	(50,245,195		)	(39,139,907		)
Total shareholders’ equity	82,947,577			93,469,915
Total liabilities and shareholders’ equity	$	332,518,700		$	347,953,689

7

Debt Summary

		September 30, 2005					December 31, 2004
Lender	Mortgaged Property	Maturity Date	Principal Balance		Interest Rate (1)		Principal Balance		Interest Rate (1)
Fixed Rate -
Greenwich Capital Financial Products	Parkway Centre II Centerra Southwest Gas Building	10/1/2008	$	37,514,148	5.13	%	$	38,115,018	5.13	%
Metropolitan Life Insurance Company	Parkway Centre III	9/10/2009	14,900,494		4.47	%	15,154,645		4.47	%
Southern Farm Bureau Life Insurance Company	Scottsdale Norte	4/1/2011	6,522,943		7.90	%	6,568,596		7.90	%
J. P. Morgan Chase	Hackberry View - 1st	9/1/2012	11,322,908		6.57	%	11,424,345		6.57	%
J. P. Morgan Chase	Hackberry View - 2nd(2)	9/1/2012	945,484		8.00	%	967,654		8.00	%
Teachers Insurance and Annuity Association of America	Sheridan Center Arrowhead Fountains Kellogg Building	1/1/2013	28,487,104		7.40	%	28,852,678		7.40	%
Allstate Life Insurance Company	Camelback - 1st	9/5/2014	15,707,459		5.82	%	15,928,449		5.82	%
Allstate Life Insurance Company	Camelback - 2nd	9/5/2014	4,908,581		5.82	%	4,977,640		5.82	%
GEMSA	Hampton Court	11/1/2007	7,900,000		5.48	%	7,900,000		5.48	%
	Subtotal		128,209,121		5.98	%	129,889,025		5.98	%
Variable Rate -
KeyBank National Association -	Greenhill Park	(3)	17,500,000		5.87	%	17,500,000		4.96	%
Senior Secured Line of Credit
KeyBank National Association -
Unsecured Line of Credit	Unsecured	4/1/2006	31,060,296		6.64	%	24,857,063		5.63	%
		Subtotal	48,560,296		6.36	%	42,357,063		5.35	%
Other notes payable -
Lease Capital Corporation	Phone system	10/31/2007	49,055		11.11	%	64,124		11.11	%
	Subtotal, excluding held-for-sale properties		176,818,472		6.09	%	172,310,212		5.83	%
Held-for-Sale Portfolio:
Teachers Insurance and Annuity Association of America	AmeriVest Plaza at Inverness	1/10/2006	14,283,367		7.90	%	14,412,347		7.90	%
Security Life of Denver Insurance Company	Keystone Office Park - 1st	5/1/2022	4,149,592		8.00	%	4,236,333		8.00	%
Security Life of Denver Insurance Company	Keystone Office Park - 2nd	5/1/2022	466,140		8.63	%	474,284		8.63	%
Allstate Life Insurance Company	Financial Plaza	10/5/2010	23,783,553		5.25	%	24,173,324		5.25	%
KeyBank National Association - Senior Secured Line of Credit	Chateau Plaza	(3)	15,400,000		5.87	%	15,400,000		4.96	%
Transatlantic Capital Company, LLC (4)	Texas State Buildings	N/A	—		—		5,579,891		7.66	%
	Subtotal, held-for-sale properties		58,082,652		6.29	%	64,276,179		6.19	%
	Total debt		$	234,901,124	6.14	%	$	236,586,391	5.92	%

Scheduled maturities (for the years ended December 31,) -

	Including Held for Sale		Excluding Held for Sale
2005	$	765,913	$	552,730
2006	81,282,483		50,951,697
2007	11,167,321		10,433,756
2008	38,057,259		37,279,682
2009	15,526,679		14,702,341
Thereafter	88,101,469		62,898,266
Total	$	234,901,124	$	176,818,472

Debt information, including held-for-sale properties (for the nine months ended September 30, 2005) -

Additions	$	7,203,233
Repayments	(6,565,859		)
Scheduled principal payments	(2,322,641		)
Net change in mortgage payable	$	(1,685,267	)

(1)  Interest only, does not include amortization of deferred financing costs or unused facility fees.

(2)  The amount recorded reflects a net present value calculation based on a fair market value rate of 8%.  The actual loan balance assumed was $697,847 at an interest rate of 15%.

(3)  The secured facility amounts are per the original allocation under the agreement as determined when the properties were added to the facility.  Under certain amendments to the loan agreement, additional payment amounts would be due upon the sale of Chateau from the proceeds of the sale and the related escrow reserve.

(4)  On March 2, 2005, the Company completed a Deed-in-Lieu Agreement to return these properties to the lender to satisfy the outstanding balance of the mortgage payable.

8

Portfolio Information

Property Summary

			September 30, 2005				December 31, 2004
Building / Location	Year Acquired	Rentable Area (1)	Occupancy Rate (2)		Average Rent Per SF (3)		Occupancy Rate (4)		Average Rent Per SF (3)
Same Store -
Sheridan Center
Denver, CO	2000	139,561	80.5	%	$	15.70	82.0	%	$	15.94
Arrowhead Fountains
Peoria, AZ	2001	96,203	100.0	%	21.97		100.0	%	21.85
Kellogg Building
Littleton, CO	2001	110,940	97.7	%	20.14		93.0	%	19.56
Parkway Centre II
Plano, TX	2002	151,880	91.9	%	19.39		94.8	%	19.01
Centerra
Denver, CO	2002	187,562	83.5	%	17.34		85.2	%	18.09
Southwest Gas Building
Phoenix, AZ	2003	144,821	89.3	%	23.26		87.1	%	22.64
Scottsdale Norte
Scottsdale, AZ	2003	78,800	98.5	%	22.58		94.4	%	22.74
Greenhill Park
Addison, TX	2003	247,269	82.7	%	17.39		77.0	%	17.71
Camelback Lakes
Phoenix, AZ	2004	202,578	100.0	%	23.75		98.9	%	21.97
Hackberry View
Irving, TX	2004	114,598	95.7	%	21.01		100.0	%	19.78
Parkway Centre III
Plano, TX	2004	152,391	93.5	%	20.62		93.8	%	20.94
	Subtotal	1,626,603	91.0	%	20.18		90.2	%	19.88
Post September 30, 2004 Acquisitions -
Hampton Court
Dallas, TX	2004	108,183	98.0	%	21.35		100.0	%	21.13
	Subtotal	108,183	98.0	%	21.35		100.0	%	21.13
	Subtotal	1,734,786	91.4	%	20.26		90.8	%	19.97
Held-for-Sale
Keystone Office Park
Indianapolis, IN	1999/2003	114,980	76.8	%	17.24		76.8	%	17.69
AmeriVest Plaza at Inverness
Englewood, CO	2001	120,171	71.8	%	18.29		93.9	%	21.03
Chateau Plaza
Dallas, TX	2002	171,294	96.2	%	23.32		99.5	%	23.42
Financial Plaza
Mesa, AZ	2003	309,771	87.9	%	23.52		83.0	%	23.51
	Subtotal	716,216	76.8	%	21.82		87.7	%	22.23
Joint Ventures -
Panorama Falls (5)
Englewood, CO	2000	n/a	n/a		n/a		64.8	%	19.84
	Subtotal	n/a	n/a		n/a		64.8	%	19.84
Non-Core -
Texas State Buildings
Texas	1997/1998	n/a	n/a		n/a		77.1	%	9.06
	Subtotal	n/a	n/a		n/a		77.1	%	9.06
	Total	2,451,002	89.6	%	$	20.69	88.3	%	$	19.78

(1)  Includes office space but excludes storage, telecommunications and garage space.

(2)  Includes approximately 53,000 square feet (2.2% of total rentable area) that has been leased but is not yet occupied and approximately 12,000 square feet (0.5% of total rentable area) that is leased but has been vacated.  Excludes approximately 11,000 square feet (0.4% of total rentable area) that expired on or about September 30, 2005.

(3)  Annualized cash basis revenue divided by leased area.

(4)  Includes approximately 73,000 square feet (2.7% of total rentable area) that has been leased but is not yet occupied and approximately 28,000 square feet (1.0% of total rentable area) that is leased but has been vacated.  Excludes approximately 9,000 square feet (0.3% of total rentable area) that expired on or about December 31, 2004.

(5)  AmeriVest sold its 20% interest in the property on September 30, 2005.

9

Lease Expiration Information

The following schedules detail the tenant lease expirations at September 30, 2005 in total and by geographic region, or
classification: (1)

Consolidated (excludes held-for-sale properties)

Year	Number of Leases	Square Footage	Annual Revenue (2)		Percentage of Total Annual Revenue
2005	19	42,317	907,434		3.3	%
2006	91	246,386	5,029,830		18.2	%
2007	74	312,234	6,224,203		22.6	%
2008	84	258,467	1,250,882		4.5	%
2009	38	264,171	5,762,023		20.9	%
2010	39	279,249	5,819,781		21.1	%
2011	12	75,097	1,569,915		5.7	%
2012	4	18,988	371,940		1.3	%
2013	—	—	—		—
2014	3	34,201	487,774		1.8	%
2015	4	10,073	153,834		0.6	%
2016	—	—	—		—
Total	368	1,541,183	$	27,577,616	100.0	%

Denver (excludes held-for-sale properties)

Year	Number of Leases	Square Footage	Annual Revenue (2)		Percentage of Total Annual Revenue
2005	12	13,960	308,640		5.0	%
2006	53	69,162	1,192,372		19.5	%
2007	39	70,140	1,283,191		21.0	%
2008	42	89,502	1,653,222		27.0	%
2009	14	27,089	503,250		8.2	%
2010	6	22,001	299,802		4.9	%
2011	3	13,248	253,563		4.1	%
2012	2	3,713	71,101		1.2	%
2013	—	—	—		—
2014	2	29,937	402,494		6.6	%
2015	4	10,073	153,834		2.5	%
2016	—	—	—		—
Total	177	348,825	$	6,121,469	100.0	%

Phoenix (excludes held-for-sale properties)

Year	Number of Leases	Square Footage	Annual Revenue (2)		Percentage of Total Annual Revenue
2005	2	6,808	156,305		1.3	%
2006	19	95,831	2,133,925		18.3	%
2007	14	52,550	1,222,271		10.5	%
2008	20	57,340	1,305,805		11.2	%
2009	14	128,005	3,107,604		26.7	%
2010	14	136,156	3,228,505		27.7	%
2011	3	21,975	505,029		4.3	%
2012	—	—	—		—
2013	—	—	—		—
2014	—	—	—		—
2015	—	—	—		—
2016	—	—	—		—
Total	86	498,665	$	11,659,444	100.0	%

10

Dallas (excludes held-for-sale properties)

Year	Number of Leases	Square Footage	Annual Revenue (2)		Percentage of Total Annual Revenue
2005	5	21,549	442,489		3.3	%
2006	19	81,393	1,703,533		12.5	%
2007	21	189,544	3,718,741		27.4	%
2008	22	111,625	2,069,934		15.2	%
2009	10	109,077	2,151,169		15.8	%
2010	19	121,092	2,291,474		17.0	%
2011	6	39,874	811,323		6.0	%
2012	2	15,275	300,839		2.2	%
2013	—	—	—		—
2014	1	4,264	85,280		0.6	%
2015	—	—	—		—
2016	—	—	—		—
Total	105	693,693	$	13,574,782	100.0	%

Held-for-Sale Properties

Year	Number of Leases	Square Footage	Annual Revenue (2)		Percentage of Total Annual Revenue
2005	10	19,589	474,102		3.7	%
2006	23	57,452	1,189,517		9.2	%
2007	31	123,299	2,718,860		21.1	%
2008	20	63,240	1,250,882		9.7	%
2009	20	75,216	1,560,665		12.1	%
2010	16	188,339	4,136,804		32.1	%
2011	5	23,474	453,447		3.5	%
2012	4	38,237	869,926		6.7	%
2013	—	—	—		—
2014	—	—	—		—
2015	1	14,379	191,220		1.5	%
2016	1	3,126	57,049		0.4	%
Total	131	606,351	$	12,902,472	100.0	%

(1) Excludes Kellogg Executive Suite and month-to-month tenants.

(2) Represents the annual base rent and excludes any adjustments for straight-line rent or expense recoveries.

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Other Property Information

Geographic Distribution

The following chart illustrates the geographic distribution of our properties by square footage at September 30, 2005:

Regions including held-for-sale properties	Regions excluding held-for-sale properties

Portfolio by Lease Size, including held-for-sale-properties (1)

Lease Size	Occupied Area	% of Occupied Area		Number of Leases	% of Total Leases
2,500 square feet and under	367,749	17.1	%	272	54.6	%
2,501 to 5,000 square feet	411,407	19.2	%	117	23.4	%
5,001 to 10,000 square feet	486,135	22.6	%	71	14.2	%
10,001 to 25,000 square feet	518,951	24.2	%	32	6.4	%
25,001 to 50,000 square feet	127,312	5.9	%	4	0.8	%
50,000 square feet and greater	235,980	11.0	%	3	0.6	%
	2,147,534	100.0	%	499	100.0	%

Ten Largest Customers

Tenant Name	Tenant Industry	Property	Lease Expiration	Square Feet	Annualized Rent (1)	% of Total Consolidated Annual Revenue (1)
Dean Foods Company	Wholesale trade/manufacturing	Chateau Plaza	12/31/10	120,607	2,820,066	10.2	%
Southwest Gas Corporation	Energy	Southwest Gas	8/31/09	60,046	1,501,150	5.4	%
Capstar Radio Operating Co.	Entertainment	Camelback Lakes	5/31/10	55,327	1,438,502	5.2	%
Hewitt Associates L.L.C.	Consulting/business services	Hackberry View	1/31/10	43,137	938,230	3.4	%
Humana Health Plan, Inc.	Healthcare	Camelback Lakes	3/14/06	29,848	597,830	2.2	%
DNA Productions	Computer systems and software	Hackberry View	6/30/09	28,570	582,131	2.1	%
Allied Solutions	Financial services - insurance	Parkway Centre II	12/31/09	25,757	450,747	1.6	%
Schlumberger Technology Corp.	Energy	Greenhill Park	7/31/07	24,606	478,435	1.7	%
Vision Offices Mesa, L.L.C.	Consulting/business services	Financial Plaza	10/31/12	24,444	558,832	2.0	%
Compass Bank	Financial services - bank	Camelback Lakes	9/30/09	23,883	600,092	2.2	%
				436,225	9,966,015	36.0	%

Tenant Diversification by Industry

The following table categorizes the leased area of our properties, including held-for-sale, by our tenant’s industry at September 30, 2005:

Real estate	10.9	%
Wholesale trade and manufacturing	10.8	%
Consulting and business services	10.1	%
Healthcare	8.7	%
Financial services - mortgage	8.1	%
Financial services - advisement and brokerage	7.1	%
Financial services - insurance	6.9	%
Energy	6.0	%
Legal	5.9	%
Computer systems and software	5.7	%
Travel, entertainment and food service	4.2	%
Telecommunications	3.5	%
Accounting	2.7	%
Financial services - banks	2.1	%
Other	7.3	%

(1)  Represents the current annualized base rent and excludes any adjustments for straight-line rent or expense recoveries.  Effective January 1, 2006, the annualized rent for Dean Foods will be approximately $2.1 million.

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