UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



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

For the quarterly period ended September 30, ~~2013~~2016



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 Number: 1-9044 (Duke Realty Corporation) 0-20625 (Duke Realty Limited Partnership)

DUKE REALTY CORPORATION

DUKE REALTY LIMITED PARTNERSHIP

(Exact Name of Registrant as Specified in Its Charter)



Indiana (Duke Realty Corporation)		35-1740409 (Duke Realty Corporation)
Indiana (Duke Realty Limited Partnership)		35-1898425 (Duke Realty Limited Partnership)
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification Number)
600 East 96^thStreet, Suite 100 Indianapolis, Indiana		46240
(Address of Principal Executive Offices)		(Zip Code)

Registrant's Telephone Number, Including Area Code: (317) 808-6000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.



Duke Realty Corporation	Yes x	No o	Duke Realty Limited Partnership	Yes x	No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).



Duke Realty Corporation	Yes x	No o	Duke Realty Limited Partnership	Yes x	No o

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

Duke Realty Corporation:



Large accelerated filer x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o

Duke Realty Limited Partnership:



Large accelerated filer o	Accelerated filer o	Non-accelerated filer x	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):



Duke Realty Corporation	Yes o	No x	Duke Realty Limited Partnership	Yes o	No x

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date:

Class		Outstanding Common Shares of Duke Realty Corporation at ~~November~~October 126, ~~2013~~2016
Common Stock, $.01 par value per share		~~325~~354,~~790~~693,~~455~~496

EXPLANATORY NOTE

This report combines the quarterly reports on Form 10-Q for the period ended September 30, ~~2013~~2016 of both Duke Realty Corporation and Duke Realty Limited Partnership. Unless stated otherwise or the context otherwise requires, references to "Duke Realty Corporation" or the "General Partner" mean Duke Realty Corporation and its consolidated subsidiaries; and references to the "Partnership" mean Duke Realty Limited Partnership and its consolidated subsidiaries. The terms the "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership.

Duke Realty Corporation is a self-administered and self-managed real estate investment trust ("REIT") and is the sole general partner of the Partnership, owning 9899.70% of the common partnership interests of the Partnership ("General Partner Units") as of September 30, ~~2013~~2016. The remaining 1.30% of the common partnership interests ("Limited Partner Units" and, together with the General Partner Units, the "Common Units") are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership. ~~The General Partner also owns preferred partnership interests in the Partnership ("Preferred Units").~~

The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.

We believe combining the quarterly reports on Form 10-Q of the General Partner and the Partnership into this single report results in the following benefits:


•	enhances investors' understanding of the General Partner and the Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;


•	eliminates duplicative disclosure and provides a more streamlined and readable presentation of information since a substantial portion of the Company's disclosure applies to both the General Partner and the Partnership; and


•	creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

We believe it is important to understand the few differences between the General Partner and the Partnership in the context of how we operate as an interrelated consolidated company. The General Partner's only material asset is its ownership of partnership interests in the Partnership. As a result, the General Partner does not conduct business itself, other than acting as the sole general partner of the Partnership and issuing public equity from time to time. The General Partner does not issue any indebtedness, but does guarantee some of the unsecured debt of the Partnership. The Partnership holds substantially all the assets of the business, directly or indirectly, and holds the ownership interests related to certain of the Company's investments. The Partnership conducts the operations of the business and has no publicly traded equity. Except for net proceeds from equity issuances by the General Partner, which are contributed to the Partnership in exchange for General Partner Units or Preferred Units, the Partnership generates the capital required by the business through its operations, its incurrence of indebtedness and the issuance of Limited Partner Units to third parties.

Noncontrolling interests, shareholders' equity and partners' capital are the main areas of difference between the consolidated financial statements of the General Partner and those of the Partnership. The noncontrolling interests in the Partnership's financial statements include the interests in consolidated investees not wholly owned by the Partnership. The noncontrolling interests in the General Partner's financial statements include the same noncontrolling interests at the Partnership level, as well as the common limited partnership interests in the Partnership, which are accounted for as partners' capital by the Partnership.

In order to highlight the differences between the General Partner and the Partnership, there are separate sections in this report, as applicable, that separately discuss the General Partner and the Partnership, including separate financial statements and separate Exhibit 31 and 32 certifications. In the sections that combine disclosure of the General Partner and the Partnership, this report refers to actions or holdings as being actions or holdings of the collective Company.

DUKE REALTY CORPORATION/DUKE REALTY LIMITED PARTNERSHIP

INDEX

			Page
Part I - Financial Information
Item 1.		Financial Statements
	Duke Realty Corporation:
		Consolidated Balance Sheets - September 30, 2013 (Unaudited) and December 31, 2012	3
		Consolidated Balance Sheets - September 30, 2016 (Unaudited) and December 31, 2015	3
		Consolidated Statements of Operations and Comprehensive Income (Unaudited) - Three and Nine Months Ended September 30, 2013 and 2012	4
		Consolidated Statements of Operations and Comprehensive Income (Unaudited) - Three and Nine Months Ended September 30, 2016 and 2015	4
		Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2013 and 2012	5
		Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2016 and 2015	5
		Consolidated Statement of Changes in Equity (Unaudited) - Nine Months Ended September 30, 2013	6
		Consolidated Statement of Changes in Equity (Unaudited) - Nine Months Ended September 30, 2016	6
	Duke Realty Limited Partnership:
		Consolidated Balance Sheets - September 30, 2013 (Unaudited) and December 31, 2012	7
		Consolidated Balance Sheets - September 30, 2016 (Unaudited) and December 31, 2015	7
		Consolidated Statements of Operations and Comprehensive Income (Unaudited) - Three and Nine Months Ended September 30, 2013 and 2012	8
		Consolidated Statements of Operations and Comprehensive Income (Unaudited) - Three and Nine Months Ended September 30, 2016 and 2015	8
		Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2013 and 2012	9
		Consolidated Statements of Cash Flows (Unaudited) - Nine Months Ended September 30, 2016 and 2015	9
		Consolidated Statement of Changes in Equity (Unaudited) - Nine Months Ended September 30, 2013	10
		Consolidated Statement of Changes in Equity (Unaudited) - Nine Months Ended September 30, 2016	10
	Duke Realty Corporation and Duke Realty Limited Partnership:
		Notes to Consolidated Financial Statements (Unaudited)	11
Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations	2225
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	4248
Item 4.		Controls and Procedures	4249
Part II - Other Information
Item 1.		Legal Proceedings	4351
Item 1A.		Risk Factors	4351
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	4451
Item 3.		Defaults Upon Senior Securities	4451
Item 4.		Mine Safety Disclosures	4451
Item 5.		Other Information	4451
Item 6.		Exhibits	4552

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands, except per share amounts)

	September 30, 2013			December 31, 2012
	September 30, 2016			December 31, 2015
	(Unaudited)
ASSETS
Real estate investments:
Land and improvements	$	1,~~443~~494,~~643~~196		$	1,~~284~~391,~~081~~763
Buildings and tenant improvements	54,~~720~~919,~~356~~897			54,~~398~~740,~~886~~837
Construction in progress	~~197~~290,~~472~~647			~~234~~321,~~918~~062
Investments in and advances to unconsolidated companies	~~328~~261,~~660~~447			~~372~~268,~~256~~390
Undeveloped land	~~580~~316,~~052~~369			~~614~~383,~~208~~045
	8,270,183			7,904,349
	7,282,556			7,105,097
Accumulated depreciation	(1,~~384~~282,~~219~~033		)	(1,~~296~~192,~~396~~425		)
Net real estate investments	6,~~885~~000,~~964~~523			65,~~607~~912,~~953~~672
Real estate investments and other assets held-for-sale	5718,~~790~~184			3045,~~937~~801
Cash and cash equivalents	24110,~~112~~211			3322,~~889~~533
Accounts receivable, net of allowance of $3,818 and $3,374	20,073			22,283
Accounts receivable, net of allowance of $1,185 and $1,113	26,180			18,846
Straight-line rent receivable, net of allowance of $7,472 and $6,091	124,574			120,303
Straight-line rent receivable, net of allowance of $6,664 and $6,155	118,594			116,781
Receivables on construction contracts, including retentions	288,~~650~~528			3916,~~754~~459
Deferred financing costs, net of accumulated amortization of $52,370 and $48,218	38,029			40,083
Deferred leasing and other costs, net of accumulated amortization of $255,300 and $245,426	335,109			346,374
Deferred leasing and other costs, net of accumulated amortization of $413,227 and $372,047	498,025			497,827
Escrow deposits and other assets	244,752			416,049
Escrow deposits and other assets	209,622			167,072
	$	6,862,081		$	6,895,515
	$	7,886,839		$	7,560,101
LIABILITIES AND EQUITY
Indebtedness:
Secured debt	$	1,158,456		$	1,167,953
Secured debt, net of deferred financing costs of $1,062 and $1,552	$	385,763		$	738,444
Unsecured debt	3,066,755			2,993,217
Unsecured debt, net of deferred financing costs of $23,692 and $20,046	2,605,288			2,510,697
Unsecured line of credit	~~210,000~~—			~~285~~71,000
	4,435,211			4,446,170
	2,991,051			3,320,141
Liabilities related to real estate investments held-for-sale	~~2,919~~238			~~807~~972
Construction payables and amounts due subcontractors, including retentions	7851,~~376~~339			8454,~~679~~921
Accrued real estate taxes	~~104~~93,~~144~~722			7471,~~565~~617
Accrued interest	3630,~~439~~601			5934,~~215~~447
Other accrued expenses	4041,~~567~~314			~~104~~61,~~719~~827
Other liabilities	~~130~~103,~~537~~602			~~121~~106,~~097~~283
Tenant security deposits and prepaid rents	4541,~~702~~292			4240,~~731~~506
Total liabilities	43,~~873~~353,~~895~~159			43,~~933~~690,~~983~~714
Shareholders' equity:
Preferred shares ($.01 par value); 5,000 shares authorized; 1,791 and 2,503 shares issued and outstanding	447,683			625,638
Common shares ($0.01 par value); 600,000 shares authorized; 354,616 and 345,285 shares issued and outstanding, respectively	3,546			3,453
Common shares ($.01 par value); 400,000 shares authorized; 325,319 and 279,423 shares issued and outstanding	3,253			2,794
Additional paid-in capital	5,187,374			4,961,923
Additional paid-in capital	4,601,224			3,953,497
Accumulated other comprehensive income	938			1,806
Accumulated other comprehensive income	3,780			2,691
Distributions in excess of net income	(1,710,215		)	(1,785,250		)
Distributions in excess of net income	(2,076,299		)	(1,993,206		)
Total shareholders' equity	3,481,643			3,181,932
Total shareholders' equity	2,979,641			2,591,414
Noncontrolling interests	27,279			22,869
Noncontrolling interests	33,303			34,704
Total equity	3,508,922			3,204,801
Total equity	3,012,944			2,626,118
	$	6,862,081		$	6,895,515
	$	7,886,839		$	7,560,101

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

For the three and nine months ended September 30,

(in thousands, except per share amounts)

	Three Months Ended						Nine Months Ended
	2013			2012			2013			2012
Revenues:
Rental and related revenue	$	228,883		$	199,326		$	668,230		$	586,570
General contractor and service fee revenue	62,807			93,932			161,004			226,507
	291,690			293,258			829,234			813,077
Expenses:
Rental expenses	42,888			37,187			122,753			104,430
Real estate taxes	30,450			27,303			90,729			81,505
General contractor and other services expenses	59,392			87,719			142,925			209,519
Depreciation and amortization	103,594			90,202			296,791			264,435
	236,324			242,411			653,198			659,889
Other operating activities:
Equity in earnings (loss) of unconsolidated companies	(27		)	2,280			50,442			4,056
Gain on sale of properties	—			403			1,108			245
Gain on land sales	3,365			—			3,365			—
Undeveloped land carrying costs	(2,108		)	(2,140		)	(6,837		)	(6,606		)
Impairment charges	—			—			(3,777		)	—
Other operating expenses	(47		)	(130		)	(150		)	(591		)
General and administrative expenses	(10,373		)	(8,934		)	(33,225		)	(32,367		)
	(9,190		)	(8,521		)	10,926			(35,263		)
Operating income	46,176			42,326			186,962			117,925
Other income (expenses):
Interest and other income, net	145			150			1,219			394
Interest expense	(58,100		)	(58,812		)	(176,005		)	(175,726		)
Acquisition-related activity	(726		)	(954		)	(2,506		)	(2,563		)
Income (loss) from continuing operations before income taxes	(12,505		)	(17,290		)	9,670			(59,970		)
Income tax benefit	4,500			103			4,500			103
Income (loss) from continuing operations	(8,005		)	(17,187		)	14,170			(59,867		)
Discontinued operations:
Income (loss) before gain on sales	901			(1,970		)	70			(4,699		)
Gain on sale of depreciable properties	8,441			1,608			101,052			11,179
Income (loss) from discontinued operations	9,342			(362		)	101,122			6,480
Net income (loss)	1,337			(17,549		)	115,292			(53,387		)
Dividends on preferred shares	(7,356		)	(11,081		)	(24,261		)	(35,356		)
Adjustments for redemption of preferred shares	—			—			(5,932		)	(5,730		)
Net (income) loss attributable to noncontrolling interests	(48		)	400			(1,629		)	1,371
Net income (loss) attributable to common shareholders	$	(6,067	)	$	(28,230	)	$	83,470		$	(93,102	)
Basic net income (loss) per common share:
Continuing operations attributable to common shareholders	$	(0.05	)	$	(0.11	)	$	(0.06	)	$	(0.38	)
Discontinued operations attributable to common shareholders	0.03			—			0.31			0.02
Total	$	(0.02	)	$	(0.11	)	$	0.25		$	(0.36	)
Diluted net income (loss) per common share:
Continuing operations attributable to common shareholders	$	(0.05	)	$	(0.11	)	$	(0.06	)	$	(0.38	)
Discontinued operations attributable to common shareholders	0.03			—			0.31			0.02
Total	$	(0.02	)	$	(0.11	)	$	0.25		$	(0.36	)
Weighted average number of common shares outstanding	324,895			270,289			320,810			265,153
Weighted average number of common shares and potential dilutive securities	324,895			270,289			325,380			265,153
Comprehensive income (loss):
Net income (loss)	$	1,337		$	(17,549	)	$	115,292		$	(53,387	)
Other comprehensive income (loss):
Amortization of interest contracts	(116		)	457			567			1,371
Other	(54		)	(47		)	522			(181		)
Total other comprehensive income (loss)	(170		)	410			1,089			1,190
Comprehensive income (loss)	$	1,167		$	(17,139	)	$	116,381		$	(52,197	)

(Unaudited)



	Three Months Ended						Nine Months Ended
	2016			2015			2016			2015
Revenues:
Rental and related revenue	$	206,848		$	200,938		$	609,171		$	617,549
General contractor and service fee revenue	19,351			33,599			68,546			110,320
	226,199			234,537			677,717			727,869
Expenses:
Rental expenses	26,084			30,137			81,092			96,355
Real estate taxes	31,313			27,702			90,888			86,228
General contractor and other services expenses	17,182			29,694			60,330			98,455
Depreciation and amortization	80,688			79,898			238,647			240,135
	155,267			167,431			470,957			521,173
Other operating activities:
Equity in earnings (loss) of unconsolidated companies	12,010			(5,088		)	37,404			16,281
Gain on dissolution of unconsolidated company	—			—			30,697			—
Promote income	2,212			—			26,299			—
Gain on sale of properties	82,698			71,259			137,589			202,153
Gain on land sales	1,601			1,659			2,438			24,096
Other operating expenses	(1,424		)	(1,467		)	(3,496		)	(4,579		)
Impairment charges	(3,042		)	(2,426		)	(15,098		)	(7,896		)
General and administrative expenses	(12,534		)	(11,340		)	(42,216		)	(47,582		)
	81,521			52,597			173,617			182,473
Operating income	152,453			119,703			380,377			389,169
Other income (expenses):
Interest and other income, net	507			1,343			3,597			3,056
Interest expense	(34,606		)	(41,615		)	(109,520		)	(134,576		)
(Loss) gain on debt extinguishment	(6,243		)	64			(8,673		)	(82,589		)
Acquisition-related activity	(7		)	(5,660		)	(82		)	(6,993		)
Income from continuing operations before income taxes	112,104			73,835			265,699			168,067
Income tax benefit	359			3,305			173			4,109
Income from continuing operations	112,463			77,140			265,872			172,176
Discontinued operations:
Income (loss) before gain on sales	377			(43		)	741			10,546
Gain on sale of depreciable properties, net of tax	319			111			485			414,620
Income from discontinued operations	696			68			1,226			425,166
Net income	113,159			77,208			267,098			597,342
Net income attributable to noncontrolling interests	(1,145		)	(774		)	(2,710		)	(6,284		)
Net income attributable to common shareholders	$	112,014		$	76,434		$	264,388		$	591,058
Basic net income per common share:
Continuing operations attributable to common shareholders	$	0.32		$	0.22		$	0.75		$	0.49
Discontinued operations attributable to common shareholders	—			—			—			1.22
Total	$	0.32		$	0.22		$	0.75		$	1.71
Diluted net income per common share:
Continuing operations attributable to common shareholders	$	0.32		$	0.22		$	0.75		$	0.49
Discontinued operations attributable to common shareholders	—			—			—			1.21
Total	$	0.32		$	0.22		$	0.75		$	1.70
Weighted average number of common shares outstanding	351,856			345,256			348,341			344,986
Weighted average number of common shares and potential dilutive securities	358,981			352,150			355,405			352,013

Comprehensive income:
Net income	$	113,159		$	77,208		$	267,098		$	597,342
Other comprehensive loss:
Amortization of interest contracts	(255		)	(274		)	(845		)	(837		)
Other	(23		)	—			(23		)	(123		)
Total other comprehensive loss	(278		)	(274		)	(868		)	(960		)
Comprehensive income	$	112,881		$	76,934		$	266,230		$	596,382

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30,

(in thousands)

(Unaudited)

	2013			2012
	2016			2015
Cash flows from operating activities:
Net income (loss)	$	115,292		$	(53,387	)
Net income	$	267,098		$	597,342
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements	~~214~~191,~~118~~554			~~193~~192,~~479~~135
Amortization of deferred leasing and other costs	8947,~~359~~093			8651,~~859~~517
Amortization of deferred financing costs	93,~~913~~998			95,~~878~~543
Straight-line rent adjustment	(12,421		)	(15,725		)
Straight-line rental income and expense, net	(10,832		)	(18,498		)
Impairment charges	315,~~777~~098			—7,896
Gain on acquisitions	(962		)	—
Loss on debt extinguishment	8,673			82,589
Gains on land and depreciated property sales	(105,525		)	(11,424		)
Gain on dissolution of unconsolidated company	(30,697		)	—
Third-party construction contracts, net	27,117			(4,295		)
Gains on land and depreciated property sales	(140,512		)	(644,044		)
Other accrued revenues and expenses, net	11,367			(14,621		)
Third-party construction contracts, net	5,601			(3,805		)
Operating distributions received in excess of (less than) equity in earnings from unconsolidated companies	(34,411		)	10,772
Other accrued revenues and expenses, net	14,773			7,129
Net cash provided by operating activities	317,624			201,536
Operating distributions received (less than) in excess of equity in earnings from unconsolidated companies	(24,476		)	414
Net cash provided by operating activities	347,371			278,218
Cash flows from investing activities:
Development of real estate investments	(~~320~~308,~~698~~199		)	(~~176~~221,~~340~~201		)
Acquisition of real estate investments and related intangible assets	(~~372~~16,~~934~~029		)	(~~321~~28,~~099~~849		)
Acquisition of undeveloped land	(3077,~~101~~593		)	(3739,~~166~~881		)
Second generation tenant improvements, leasing costs and building improvements	(6039,~~052~~169		)	(4645,~~682~~688		)
Other deferred leasing costs	(2625,~~647~~949		)	(2226,~~727~~940		)
Other assets	~~(14~~164,~~725~~450		)	~~674~~(38,104		)
Proceeds from land and depreciated property sales, net	~~330~~369,~~740~~118			~~112~~1,~~559~~534,177
Capital distributions from unconsolidated companies	~~106~~52,~~306~~514			468,~~890~~915
Capital contributions and advances to unconsolidated companies	(3854,~~959~~853		)	(1955,~~262~~020		)
Net cash used for investing activities	(427,070		)	(505,153		)
Net cash provided by investing activities	64,290			1,147,409
Cash flows from financing activities:
Proceeds from issuance of common shares, net	~~632~~217,~~531~~513			~~236~~4,~~301~~592
Payments for redemption of preferred shares	(177,955		)	(168,272		)
Proceeds from unsecured debt	375,000			—
Proceeds from unsecured debt	500,000			600,000
Payments on unsecured debt	(285,339		)	(759,948		)
Payments on unsecured debt	(426,462		)	(172,374		)
Payments on secured indebtedness including principal amortization	(352,723		)	(221,085		)
Proceeds from secured debt financings	1,933			13,305
Repayments of line of credit, net	(71,000		)	(106,000		)
Payments on secured indebtedness including principal amortization	(112,097		)	(107,240		)
Distributions to common shareholders	(187,885		)	(175,967		)
Payments on lines of credit, net	(75,000		)	(20,293		)
Distributions to noncontrolling interests	(1,955		)	(1,403		)
Distributions to common shareholders	(164,811		)	(135,083		)
Change in book overdrafts	(11,025		)	(7,754		)
Distributions to preferred shareholders	(24,261		)	(31,630		)
Deferred financing costs	(6,569		)	(110		)
Contributions from (distributions to) noncontrolling interests	(2,692		)	2,788
Net cash used for financing activities	(323,983		)	(1,267,675		)
Buyout of noncontrolling interests	—			(6,208		)
Net increase in cash and cash equivalents	87,678			157,952
Change in book overdrafts	(44,225		)	—
Cash and cash equivalents at beginning of period	22,533			17,922
Deferred financing costs	(7,292		)	(8,334		)
Cash and cash equivalents at end of period	$	110,211		$	175,874
Net cash provided by financing activities	99,669			202,960
Net decrease in cash and cash equivalents	(9,777		)	(100,657		)
Cash and cash equivalents at beginning of period	33,889			213,809
Cash and cash equivalents at end of period	$	24,112		$	113,152
Non-cash investing and financing activities:
Assumption of indebtedness and other liabilities in real estate acquisitions	$	106,555		$	19,992
Mortgage notes receivable from buyers in property sales	$	1,685		$	204,428
Carrying amount of pre-existing ownership interest in acquired property	$	630		$	—
Conversion of Limited Partner Units to common shares	$	1,015		$	2,416
Conversion of Limited Partner Units to common shares	$	338		$	29,002
Preferred distributions declared but not paid	$	—		$	3,726

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND SUBSIDIARIES

Consolidated Statement of Changes in Equity

For the nine months ended September 30, ~~2013~~2016

(in thousands, except per share data)

(Unaudited)

	Common Shareholders
	PreferredStock			CommonStock			AdditionalPaid-inCapital				AccumulatedOtherComprehensiveIncome				Distributionsin Excess ofNet Income				Non-ControllingInterests				Total
		CommonStock			AdditionalPaid-inCapital			AccumulatedOtherComprehensiveIncome				Distributionsin Excess ofNet Income				NoncontrollingInterests				Total
Balance at December 31, 2012	$	625,638		$	2,794		$	3,953,497			$	2,691			$	(1,993,206	)		$	34,704			$	2,626,118
Balance at December 31, 2015		$	3,453		$	4,961,923		$	1,806			$	(1,785,250	)		$	22,869			$	3,204,801
Net income	—			—	—		—	—			—	264,388			~~113,663~~	2,710			~~1,629~~	267,098			~~115,292~~
Other comprehensive income	—			—			—				1,089				—				—				1,089
Other comprehensive loss		—			—			(868		)		—				—				(868		)
Issuance of common shares	—	84		~~451~~	217,429		~~632,080~~	—			—	—			—	—			—	217,513			~~632,531~~
Stock-based compensation plan activity	—	8		7	7,008		~~9,378~~	—			—	(1,468		)	~~(1,752~~	4,670	)		—	10,218			~~7,633~~
Conversion of Limited Partner Units	—	1		1	1,014		~~337~~	—			—	—			—	(1,015		)	~~(338~~	—	)		—
Distributions to preferred shareholders	—			—			—				—				(24,261		)		—				(24,261		)
Distributions to common shareholders ($0.54 per share)		—			—			—				(187,885		)		—				(187,885		)
Redemption of preferred shares	(177,955		)	—			5,932				—				(5,932		)		—				(177,955		)
Distributions to noncontrolling interests		—			—			—				—				(1,955		)		(1,955		)
Distributions to common shareholders ($0.51 per share)	—			—			—				—				(164,811		)		—				(164,811		)
Balance at September 30, 2016		$	3,546		$	5,187,374		$	938			$	(1,710,215	)		$	27,279			$	3,508,922
Distributions to noncontrolling interests	—			—			—				—				—				(2,692		)		(2,692		)
Balance at September 30, 2013	$	447,683		$	3,253		$	4,601,224			$	3,780			$	(2,076,299	)		$	33,303			$	3,012,944

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Balance Sheets

(in thousands)

	September 30, 2013			December 31, 2012
	September 30, 2016			December 31, 2015
	(Unaudited)
ASSETS
Real estate investments:
Land and improvements	$	1,~~443~~494,~~643~~196		$	1,~~284~~391,~~081~~763
Buildings and tenant improvements	54,~~720~~919,~~356~~897			54,~~398~~740,~~886~~837
Construction in progress	~~197~~290,~~472~~647			~~234~~321,~~918~~062
Investments in and advances to unconsolidated companies	~~328~~261,~~660~~447			~~372~~268,~~256~~390
Undeveloped land	~~580~~316,~~052~~369			~~614~~383,~~208~~045
	8,270,183			7,904,349
	7,282,556			7,105,097
Accumulated depreciation	(1,~~384~~282,~~219~~033		)	(1,~~296~~192,~~396~~425		)
Net real estate investments	6,~~885~~000,~~964~~523			65,~~607~~912,~~953~~672
Real estate investments and other assets held-for-sale	5718,~~790~~184			3045,~~937~~801
Cash and cash equivalents	24110,~~112~~211			3322,~~889~~533
Accounts receivable, net of allowance of $3,818 and $3,374	20,073			22,283
Accounts receivable, net of allowance of $1,185 and $1,113	26,180			18,846
Straight-line rent receivable, net of allowance of $7,472 and $6,091	124,574			120,303
Straight-line rent receivable, net of allowance of $6,664 and $6,155	118,594			116,781
Receivables on construction contracts, including retentions	288,~~650~~528			3916,~~754~~459
Deferred financing costs, net of accumulated amortization of $52,370 and $48,218	38,029			40,083
Deferred leasing and other costs, net of accumulated amortization of $255,300 and $245,426	335,109			346,374
Deferred leasing and other costs, net of accumulated amortization of $413,227 and $372,047	498,025			497,827
Escrow deposits and other assets	244,752			416,049
Escrow deposits and other assets	209,622			167,072
	$	6,862,081		$	6,895,515
	$	7,886,839		$	7,560,101
LIABILITIES AND EQUITY
Indebtedness:
Secured debt	$	1,158,456		$	1,167,953
Secured debt, net of deferred financing costs of $1,062 and $1,552	$	385,763		$	738,444
Unsecured debt	3,066,755			2,993,217
Unsecured debt, net of deferred financing costs of $23,692 and $20,046	2,605,288			2,510,697
Unsecured line of credit	~~210,000~~—			~~285~~71,000
	4,435,211			4,446,170
	2,991,051			3,320,141
Liabilities related to real estate investments held-for-sale	~~2,919~~238			~~807~~972
Construction payables and amounts due subcontractors, including retentions	7851,~~376~~339			8454,~~679~~921
Accrued real estate taxes	~~104~~93,~~144~~722			7471,~~565~~617
Accrued interest	3630,~~439~~601			5934,~~215~~447
Other accrued expenses	4041,~~772~~314			~~104~~61,~~886~~827
Other liabilities	~~130~~103,~~537~~602			~~121~~106,~~097~~283
Tenant security deposits and prepaid rents	4541,~~702~~292			4240,~~731~~506
Total liabilities	43,~~874~~353,~~100~~159			43,~~934~~690,~~150~~714
Partners' equity:
General Partner:
Common equity (354,616 and 345,285 General Partner Units issued and outstanding, respectively)	3,480,705			3,180,126
Common equity (325,319 and 279,423 General Partner Units issued and outstanding)	2,532,146			1,967,091
	3,480,705			3,180,126
Preferred equity (1,791 and 2,503 Preferred Units issued and outstanding)	447,683			625,638
Limited Partners' common equity (3,427 and 3,487 Limited Partner Units issued and outstanding, respectively)	24,478			20,032
	2,979,829			2,592,729
Accumulated other comprehensive income	938			1,806
Limited Partners' common equity (4,388 and 4,419 Limited Partner Units issued and outstanding)	19,944			21,383
Total partners' equity	3,506,121			3,201,964
Accumulated other comprehensive income	3,780			2,691
Noncontrolling interests	2,801			2,837
Total partners' equity	3,003,553			2,616,803
Total equity	3,508,922			3,204,801
Noncontrolling interests	9,186			9,148
	$	6,862,081		$	6,895,515
Total equity	3,012,739			2,625,951
	$	7,886,839		$	7,560,101

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Operations and Comprehensive Income

For the three and nine months ended September 30,

(in thousands, except per unit amounts)

	Three Months Ended						Nine Months Ended
	2013			2012			2013			2012
Revenues:
Rental and related revenue	$	228,883		$	199,326		$	668,230		$	586,570
General contractor and service fee revenue	62,807			93,932			161,004			226,507
	291,690			293,258			829,234			813,077
Expenses:
Rental expenses	42,888			37,187			122,753			104,430
Real estate taxes	30,450			27,303			90,729			81,505
General contractor and other services expenses	59,392			87,719			142,925			209,519
Depreciation and amortization	103,594			90,202			296,791			264,435
	236,324			242,411			653,198			659,889
Other operating activities:
Equity in earnings (loss) of unconsolidated companies	(27		)	2,280			50,442			4,056
Gain on sale of properties	—			403			1,108			245
Gain on land sales	3,365			—			3,365			—
Undeveloped land carrying costs	(2,108		)	(2,140		)	(6,837		)	(6,606		)
Impairment charges	—			—			(3,777		)	—
Other operating expenses	(47		)	(130		)	(150		)	(591		)
General and administrative expenses	(10,373		)	(8,934		)	(33,225		)	(32,367		)
	(9,190		)	(8,521		)	10,926			(35,263		)
Operating income	46,176			42,326			186,962			117,925
Other income (expenses):
Interest and other income, net	145			150			1,219			394
Interest expense	(58,100		)	(58,812		)	(176,005		)	(175,726		)
Acquisition-related activity	(726		)	(954		)	(2,506		)	(2,563		)
Income (loss) from continuing operations before income taxes	(12,505		)	(17,290		)	9,670			(59,970		)
Income tax benefit	4,500			103			4,500			103
Income (loss) from continuing operations	(8,005		)	(17,187		)	14,170			(59,867		)
Discontinued operations:
Income (loss) before gain on sales	901			(1,970		)	70			(4,699		)
Gain on sale of depreciable properties	8,441			1,608			101,052			11,179
Income (loss) from discontinued operations	9,342			(362		)	101,122			6,480
Net income (loss)	1,337			(17,549		)	115,292			(53,387		)
Distributions on Preferred Units	(7,356		)	(11,081		)	(24,261		)	(35,356		)
Adjustments for redemption of Preferred Units	—			—			(5,932		)	(5,730		)
Net income attributable to noncontrolling interests	(140		)	(59		)	(487		)	(365		)
Net income (loss) attributable to common unitholders	$	(6,159	)	$	(28,689	)	$	84,612		$	(94,838	)
Basic net income (loss) per Common Unit:
Continuing operations attributable to common unitholders	$	(0.05	)	$	(0.11	)	$	(0.06	)	$	(0.38	)
Discontinued operations attributable to common unitholders	0.03			—			0.31			0.02
Total	$	(0.02	)	$	(0.11	)	$	0.25		$	(0.36	)
Diluted net income (loss) per Common Unit:
Continuing operations attributable to common unitholders	$	(0.05	)	$	(0.11	)	$	(0.06	)	$	(0.38	)
Discontinued operations attributable to common unitholders	0.03			—			0.31			0.02
Total	$	(0.02	)	$	(0.11	)	$	0.25		$	(0.36	)
Weighted average number of Common Units outstanding	329,283			274,800			325,203			270,095
Weighted average number of Common Units and potential dilutive securities	329,283			274,800			325,380			270,095
Comprehensive income (loss):
Net income (loss)	$	1,337		$	(17,549	)	$	115,292		$	(53,387	)
Other comprehensive income (loss):
Amortization of interest contracts	(116		)	457			567			1,371
Other	(54		)	(47		)	522			(181		)
Total other comprehensive income (loss)	(170		)	410			1,089			1,190
Comprehensive income (loss)	$	1,167		$	(17,139	)	$	116,381		$	(52,197	)

(Unaudited)



	Three Months Ended						Nine Months Ended
	2016			2015			2016			2015
Revenues:
Rental and related revenue	$	206,848		$	200,938		$	609,171		$	617,549
General contractor and service fee revenue	19,351			33,599			68,546			110,320
	226,199			234,537			677,717			727,869
Expenses:
Rental expenses	26,084			30,137			81,092			96,355
Real estate taxes	31,313			27,702			90,888			86,228
General contractor and other services expenses	17,182			29,694			60,330			98,455
Depreciation and amortization	80,688			79,898			238,647			240,135
	155,267			167,431			470,957			521,173
Other operating activities:
Equity in earnings (loss) of unconsolidated companies	12,010			(5,088		)	37,404			16,281
Gain on dissolution of unconsolidated company	—			—			30,697			—
Promote income	2,212			—			26,299			—
Gain on sale of properties	82,698			71,259			137,589			202,153
Gain on land sales	1,601			1,659			2,438			24,096
Other operating expenses	(1,424		)	(1,467		)	(3,496		)	(4,579		)
Impairment charges	(3,042		)	(2,426		)	(15,098		)	(7,896		)
General and administrative expenses	(12,534		)	(11,340		)	(42,216		)	(47,582		)
	81,521			52,597			173,617			182,473
Operating income	152,453			119,703			380,377			389,169
Other income (expenses):
Interest and other income, net	507			1,343			3,597			3,056
Interest expense	(34,606		)	(41,615		)	(109,520		)	(134,576		)
(Loss) gain on debt extinguishment	(6,243		)	64			(8,673		)	(82,589		)
Acquisition-related activity	(7		)	(5,660		)	(82		)	(6,993		)
Income from continuing operations before income taxes	112,104			73,835			265,699			168,067
Income tax benefit	359			3,305			173			4,109
Income from continuing operations	112,463			77,140			265,872			172,176
Discontinued operations:
Income (loss) before gain on sales	377			(43		)	741			10,546
Gain on sale of depreciable properties, net of tax	319			111			485			414,620
Income from discontinued operations	696			68			1,226			425,166
Net income	113,159			77,208			267,098			597,342
Net income attributable to noncontrolling interests	(14		)	(23		)	(40		)	(72		)
Net income attributable to common unitholders	$	113,145		$	77,185		$	267,058		$	597,270
Basic net income per Common Unit:
Continuing operations attributable to common unitholders	$	0.32		$	0.22		$	0.75		$	0.49
Discontinued operations attributable to common unitholders	—			—			—			1.22
Total	$	0.32		$	0.22		$	0.75		$	1.71
Diluted net income per Common Unit:
Continuing operations attributable to common unitholders	$	0.32		$	0.22		$	0.75		$	0.49
Discontinued operations attributable to common unitholders	—			—			—			1.21
Total	$	0.32		$	0.22		$	0.75		$	1.70
Weighted average number of Common Units outstanding	355,351			348,760			351,840			348,595
Weighted average number of Common Units and potential dilutive securities	358,981			352,150			355,405			352,013

Comprehensive income:
Net income	$	113,159		$	77,208		$	267,098		$	597,342
Other comprehensive loss:
Amortization of interest contracts	(255		)	(274		)	(845		)	(837		)
Other	(23		)	—			(23		)	(123		)
Total other comprehensive loss	(278		)	(274		)	(868		)	(960		)
Comprehensive income	$	112,881		$	76,934		$	266,230		$	596,382

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the nine months ended September 30,

(in thousands)

(Unaudited)

	2013			2012
	2016			2015
Cash flows from operating activities:
Net income (loss)	$	115,292		$	(53,387	)
Net income	$	267,098		$	597,342
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of buildings and tenant improvements	~~214~~191,~~118~~554			~~193~~192,~~479~~135
Amortization of deferred leasing and other costs	8947,~~359~~093			8651,~~859~~517
Amortization of deferred financing costs	93,~~913~~998			95,~~878~~543
Straight-line rent adjustment	(12,421		)	(15,725		)
Straight-line rental income and expense, net	(10,832		)	(18,498		)
Impairment charges	315,~~777~~098			—7,896
Gain on acquisitions	(962		)	—
Loss on debt extinguishment	8,673			82,589
Gains on land and depreciated property sales	(105,525		)	(11,424		)
Gain on dissolution of unconsolidated company	(30,697		)	—
Third-party construction contracts, net	27,117			(4,295		)
Gains on land and depreciated property sales	(140,512		)	(644,044		)
Other accrued revenues and expenses, net	11,405			(14,582		)
Third-party construction contracts, net	5,601			(3,805		)
Operating distributions received in excess of (less than) equity in earnings from unconsolidated companies	(34,411		)	10,772
Other accrued revenues and expenses, net	14,773			6,949
Net cash provided by operating activities	317,662			201,575
Operating distributions received (less than) in excess of equity in earnings from unconsolidated companies	(24,476		)	414
Net cash provided by operating activities	347,371			278,038
Cash flows from investing activities:
Development of real estate investments	(~~320~~308,~~698~~199		)	(~~176~~221,~~340~~201		)
Acquisition of real estate investments and related intangible assets	(~~372~~16,~~934~~029		)	(~~321~~28,~~099~~849		)
Acquisition of undeveloped land	(3077,~~101~~593		)	(3739,~~166~~881		)
Second generation tenant improvements, leasing costs and building improvements	(6039,~~052~~169		)	(4645,~~682~~688		)
Other deferred leasing costs	(2625,~~647~~949		)	(2226,~~727~~940		)
Other assets	~~(14~~164,~~725~~450		)	~~674~~(38,104		)
Proceeds from land and depreciated property sales, net	~~330~~369,~~740~~118			~~112~~1,~~559~~534,177
Capital distributions from unconsolidated companies	~~106~~52,~~306~~514			468,~~890~~915
Capital contributions and advances to unconsolidated companies	(3854,~~959~~853		)	(1955,~~262~~020		)
Net cash used for investing activities	(427,070		)	(505,153		)
Net cash provided by investing activities	64,290			1,147,409
Cash flows from financing activities:
Contributions from the General Partner	~~632~~217,~~531~~513			~~236~~4,~~301~~772
Payments for redemption of Preferred Units	(177,955		)	(168,272		)
Proceeds from unsecured debt	375,000			—
Proceeds from unsecured debt	500,000			600,000
Payments on unsecured debt	(285,339		)	(759,948		)
Payments on unsecured debt	(426,462		)	(172,374		)
Payments on secured indebtedness including principal amortization	(352,723		)	(221,085		)
Proceeds from secured debt financings	1,933			13,305
Repayments of line of credit, net	(71,000		)	(106,000		)
Payments on secured indebtedness including principal amortization	(112,097		)	(107,240		)
Distributions to common unitholders	(189,764		)	(177,815		)
Payments on lines of credit, net	(75,000		)	(20,293		)
Contributions from (distributions to) noncontrolling interests, net	(76		)	445
Distributions to common unitholders	(167,092		)	(137,662		)
Change in book overdrafts	(11,025		)	(7,754		)
Distributions to preferred unitholders	(24,261		)	(31,630		)
Deferred financing costs	(6,569		)	(110		)
Contributions from (distributions to) noncontrolling interests	(449		)	5,311
Net cash used for financing activities	(323,983		)	(1,267,495		)
Buyout of noncontrolling interests	—			(6,208		)
Net increase in cash and cash equivalents	87,678			157,952
Change in book overdrafts	(44,225		)	—
Cash and cash equivalents at beginning of period	22,533			17,922
Deferred financing costs	(7,292		)	(8,334		)
Cash and cash equivalents at end of period	$	110,211		$	175,874
Net cash provided by financing activities	99,631			202,904
Net decrease in cash and cash equivalents	(9,777		)	(100,674		)
Cash and cash equivalents at beginning of period	33,889			213,826
Cash and cash equivalents at end of period	$	24,112		$	113,152
Non-cash investing and financing activities:
Assumption of indebtedness and other liabilities in real estate acquisitions	$	106,555		$	19,992
Mortgage notes receivable from buyers in property sales	$	1,685		$	204,428
Carrying amount of pre-existing ownership interest in acquired property	$	630		$	—
Conversion of Limited Partner Units to common shares of the General Partner	$	1,015		$	2,416
Conversion of Limited Partner Units to common shares of the General Partner	$	338		$	29,002
Preferred distributions declared but not paid	$	—		$	3,726

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY LIMITED PARTNERSHIP AND SUBSIDIARIES

Consolidated Statement of Changes in Equity

For the nine months ended September 30, ~~2013~~2016

(in thousands, except per unit data)

(Unaudited)

	Common Unitholders
							Limited			Accumulated
	General			Limited			Accumulated
	General Partner						Partners'			Other			Total
	Partner's			Partners'			Other			Total
	Common Equity			~~Preferred~~Common Equity			~~Common Equity~~ComprehensiveIncome			~~ComprehensiveIncome~~Partners' Equity			~~Partners' Equity~~NoncontrollingInterests			~~NoncontrollingInterests~~Total Equity			~~Total Equity~~
Balance at December 31, 2012	$	1,967,091		$	625,638		$	21,383		$	2,691		$	2,616,803		$	9,148		$	2,625,951
Balance at December 31, 2015	$	3,180,126		$	20,032		$	1,806		$	3,201,964		$	2,837		$	3,204,801
Net income	89264,~~402~~388			242,~~261~~670			~~1,142~~—			—267,058			~~114,805~~40			~~487~~267,098			~~115,292~~
Other comprehensive income	—			—			—			1,089			1,089			—			1,089
Other comprehensive loss	—			—			(868		)	(868		)	—			(868		)
Capital contribution from the General Partner	~~632~~217,~~531~~513			—			—			—217,513			~~632,531~~—			—217,513			~~632,531~~
Stock-based compensation plan activity	75,~~633~~548			—4,670			—			—10,218			~~7,633~~—			—10,218			~~7,633~~
Conversion of Limited Partner Units to common shares of the General Partner	~~338~~1,015			—(1,015		)	~~(338~~—		)	—			—			—			—
Distributions to Preferred Unitholders	—			(24,261		)	—			—			(24,261		)	—			(24,261		)
Distributions to Partners ($0.54 per Common Unit)	(187,885		)	(1,879		)	—			(189,764		)	—			(189,764		)
Redemption of Preferred Units	—			(177,955		)	—			—			(177,955		)	—			(177,955		)
Distributions to noncontrolling interests	—			—			—			—			(76		)	(76		)
Distributions to Partners ($0.51 per Common Unit)	(164,849		)	—			(2,243		)	—			(167,092		)	—			(167,092		)
Balance at September 30, 2016	$	3,480,705		$	24,478		$	938		$	3,506,121		$	2,801		$	3,508,922
Distributions to noncontrolling interests	—			—			—			—			—			(449		)	(449		)
Balance at September 30, 2013	$	2,532,146		$	447,683		$	19,944		$	3,780		$	3,003,553		$	9,186		$	3,012,739

See accompanying Notes to Consolidated Financial Statements

DUKE REALTY CORPORATION AND DUKE REALTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. General Basis of Presentation

The interim consolidated financial statements included herein have been prepared by ~~Duke Realty Corporation (~~the "General Partner") and ~~Duke Realty Limited Partnership (~~the "Partnership"). In this Report, unless the context indicates otherwise, the terms "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership. The ~~2012~~2015 year-end consolidated balance sheet data included in this ~~Quarterly~~ Report ~~on Form 10-Q (this "Report")~~ was derived from the audited financial statements in the combined Annual Report on Form 10-K of the General Partner and the Partnership for the year ended December 31, ~~2012~~2015 (the "2015 Annual Report"), but does not include all disclosures required by accounting principles generally accepted in the United States of America ("GAAP"). The financial statements have been prepared in accordance with GAAP for interim financial information and in accordance with Rule 10-01 of Regulation S-X of the Securities Exchange Act of 1934, as amended. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and revenue and expenses during the reporting period. Our actual results could differ from those estimates and assumptions. These financial statements should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations included herein and the consolidated financial statements and notes thereto included in the ~~combined~~2015 Annual Report ~~on Form 10-K of the General Partner and the Partnership for the year ended December 31, 2012~~.

The General Partner was formed in 1985, and we believe that it qualifies as a ~~real estate investment trust ("~~REIT") under the provisions of the Internal Revenue Code of 1986, as amended (the "Code"). The Partnership was formed on October 4, 1993, when the General Partner contributed all of its properties and related assets and liabilities, together with the net proceeds from an offering of additional shares of its common stock, to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972.

The General Partner is the sole general partner of the Partnership, owning approximately 9899.70% of the ~~common~~Common ~~partnership interests of the Partnership ("General Partner~~ Units") at September 30, ~~2013~~2016. The remaining 1.30% of the ~~common partnership interests ("Limited Partner Units" and, together with the General Partner Units, the "~~Common Units") are owned by limited partners. As the sole general partner of the Partnership, the General Partner has full, exclusive and complete responsibility and discretion in the day-to-day management and control of the Partnership. The General Partner and the Partnership are operated as one enterprise. The management of the General Partner consists of the same members as the management of the Partnership. As the sole general partner with control of the Partnership, the General Partner consolidates the Partnership for financial reporting purposes, and the General Partner does not have any significant assets other than its investment in the Partnership. Therefore, the assets and liabilities of the General Partner and the Partnership are substantially the same.

Limited Partners have the right to redeem their Limited Partner Units, subject to certain restrictions. Pursuant to the ~~Fourth~~Fifth Amended and Restated Agreement of Limited Partnership, as amended (the "Partnership Agreement"), the General Partner is obligated to redeem the Limited Partner Units in shares of its common stock, unless it determines in its reasonable discretion that the issuance of shares of its common stock could cause it to fail to qualify as a REIT. Each Limited Partner Unit shall be redeemed for one share of the General Partner's common stock, or, in the event that the issuance of shares could cause the General Partner to fail to qualify as a REIT, cash equal to the fair market value of one share of the General Partner's common stock at the time of redemption, in each case, subject to certain adjustments described in the Partnership Agreement. The Limited Partner Units are not required, per the terms of the Partnership Agreement, to be redeemed in registered shares of the General Partner. ~~The General Partner also owns preferred partnership interests in the Partnership ("Preferred Units").~~

As of September 30, 2016, we owned and operated a portfolio consisting primarily of industrial and medical office properties and provided real estate services to third-party owners. Substantially all of our Rental Operations (see Note 10) are conducted through the Partnership. We conduct our Service Operations (see Note 10) through Duke Realty Services, LLC, Duke Realty Services Limited Partnership and Duke Construction Limited Partnership ("DCLP"), which are consolidated entities that are 100% owned by a combination of the General Partner and the Partnership. DCLP is owned through a taxable REIT subsidiary. The consolidated financial statements include our accounts and the accounts of our majority-owned or controlled subsidiaries.

~~We own and operate a portfolio primarily consisting of industrial and office properties and provide real estate services to third-party owners~~2. New ~~Substantially~~Accounting all of our Rental Operations (see Note 10) are conducted through the Partnership. We conduct our Service Operations (see Note 10) through Duke Realty Services, LLC, Duke Realty Services Limited Partnership and Duke Construction Limited Partnership ("DCLP"), which are consolidated entities that are 100% owned by a combination of the General Partner and the Partnership. DCLP is owned through a taxable REIT subsidiary. The consolidated financial statements include our accounts and the accounts of our majority-owned or controlled subsidiaries. Pronouncements

~~2. Reclassifications~~Revenue Recognition

~~Certain~~In ~~amounts~~May in2014, the ~~accompanying~~Financial ~~consolidated~~Accounting ~~financial~~Standards ~~statements~~Board ~~for~~("FASB") ~~2012~~issued ~~have~~Accounting ~~been~~Standards ~~reclassified~~Update to("ASU") ~~conform~~2014-09, Revenue from Contracts with Customers ("ASU 2014-09"). ASU 2014-09 is a comprehensive revenue recognition standard that will supersede nearly all existing GAAP revenue recognition guidance as well as impact the existing GAAP guidance governing the sale of nonfinancial assets. The standard’s core principle is that a company will recognize revenue when it satisfies performance obligations, by transferring promised goods or services to customers, in an amount that reflects the ~~2013~~consideration ~~consolidated~~to ~~financial~~which ~~statement~~an ~~presentation~~entity expects to be entitled in exchange for fulfilling those performance obligations. ASU 2014-09 will be effective for public entities for annual and interim reporting periods beginning after December 15, 2017 and early adoption is permitted in periods ending after December 15, 2016. ASU 2014-09 allows for either full or modified retrospective adoption.

3We have begun to evaluate each of our revenue streams under the new standard and the pattern of recognition is not expected to change significantly. ~~Other~~ ~~Comprehensive~~Additionally, ~~Income~~we have primarily disposed of property and land in all cash transactions with no contingencies and no future involvement in the operations, and therefore, do not expect the new standard to significantly impact the recognition of property and land sales. We have not yet selected a transition method.

In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02, Other Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income ("ASU 2013-02"), which was effective for us beginning with the three months ended March 31, 2013. ASU 2013-02 requires presentation of significant amounts reclassified out of accumulated other comprehensive income. Activity within other comprehensive income or loss includes the amortization to interest expense, over the lives of previously hedged loans, of the values of interest rate swaps that have been settled, as well as changes in the fair values of currently outstanding interest rate swaps that we have designated as cash flow hedges. Activity within other comprehensive income is not material for any individual type of activity, as well as for all activities in the aggregate, for all periods presented in this Report.Consolidation

4In February 2015, the FASB issued ASU 2015-02, Amendments to the Consolidation Analysis ("ASU 2015-02"). ~~Variable~~ ASU ~~Interest~~2015-02 ~~Entities~~made targeted amendments to the current consolidation guidance and ended the deferral granted to investment companies from applying the existing variable interest entity ("VIE") guidance. ASU 2015-02 was effective for public entities for annual and interim reporting periods beginning after December 15, 2015. We adopted ASU 2015-02 during the three months ended March 31, 2016, and it has not had a significant impact on our consolidated financial statements.

AtDebt ~~September 30,~~Issuance 2013, there were three unconsolidated joint ventures that met the criteria to be considered variable interest entities ("VIEs"). These three unconsolidated joint ventures were formed with the sole purpose of developing, constructing, leasing, marketing and selling or operating properties. The business activities of these unconsolidated joint ventures have been financed through a combination of equity contributions, partner/member loans, and third-party debt that is guaranteed by a combination of us and the other partner/member of each entity. All significant decisions for these unconsolidated joint ventures, including those decisions that most significantly impact each venture's economic performance, require unanimous approval of each joint venture's partners or members. In certain cases, these decisions also require lender approval. Unanimous approval requirements for these unconsolidated joint ventures include entering into new leases, setting annual operating budgets, selling underlying properties, and incurring additional indebtedness. Because no single entity exercises control over the decisions that most significantly affect each joint venture's economic performance, we determined there to be no individual primary beneficiary and that the equity method of accounting is appropriate.Costs

~~The~~In ~~following~~April is2015, athe ~~summary~~FASB ofissued ASU 2015-03, Simplifying the ~~carrying~~Presentation ~~value~~of inDebt ~~our~~Issuance ~~consolidated~~Costs ("ASU 2015-03"). ASU 2015-03 required that debt issuance costs related to a recognized debt liability be presented in the balance sheet, as ~~well~~a asdirect ~~our~~deduction ~~maximum~~from ~~loss~~the ~~exposure~~carrying ~~under~~amount ~~guarantees~~of that debt liability. ASU 2015-03 was effective for ~~the~~us ~~three~~retrospectively ~~unconsolidated~~for ~~subsidiaries~~financial ~~that~~statements weissued ~~have~~for ~~determined~~annual toand beinterim ~~VIEs~~reporting atperiods ~~September 30~~beginning after December 15, ~~2013~~2015. We ~~(in~~adopted ~~millions):~~ASU 2015-03 during the three months ended March 31, 2016.

	Carrying Value			Maximum Loss Exposure
Investment in unconsolidated companies	$	44.6		$	44.6
Guarantee obligations (1)	$	(20.3	)	$	(141.9	)

Debt issuance costs related to the Partnership's unsecured line of credit continue to be presented as assets in the consolidated balance sheets, as part of escrow deposits and other assets, pursuant to ASU 2015-15, Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements.

~~(1)~~Business We are party to guarantees of the third-party debt of these joint ventures, and our maximum loss exposure is equal to the maximum monetary obligation pursuant to the guarantee agreements. We have also recorded a liability for our probable future obligation under a guarantee to the lender of one of these ventures, which is included within the carrying value of our guarantee obligations. Pursuant to an agreement with the lender, we may make partner loans to this joint venture that will reduce our maximum guarantee obligation on a dollar-for-dollar basis. The carrying value of our recorded guarantee obligations is included in other liabilities in our Consolidated Balance Sheets.Combinations

In September 2015, the FASB issued ASU 2015-16, Business Combinations - Simplifying the Accounting for Measurement-Period Adjustments ("ASU 2015-16"). ASU 2015-16 amended the retroactive requirement to apply adjustments made to provisional amounts recognized in a business combination. The update required that the acquirer record, in the same period’s financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. ASU 2015-16 was effective for annual and interim periods beginning after December 15, 2015. We adopted ASU 2015-16 during the three months ended March 31, 2016 and it has not had a significant impact on our consolidated financial statements.

Leases

In February 2016, the FASB issued ASU 2016-02, Leases ("ASU 2016-02"), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e. lessees and lessors). ASU 2016-02 supersedes existing leasing standards.

ASU 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. ASU 2016-02 requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 also requires that lessors expense certain initial direct costs, which are capitalizable under existing leasing standards, as incurred.

ASU 2016-02 is effective for us retrospectively for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted. A set of practical expedients for implementation, which must be elected as a package and for all leases, may also be elected. These practical expedients include relief from re-assessing lease classification at the adoption date for expired or existing leases, although a right-of-use asset and lease liability would still be recorded for such leases. We are currently assessing the method of adoption and the impact that ASU 2016-02 will have on our consolidated financial statements.

Stock Based Compensation

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Accounting ("ASU 2016-09"). ASU 2016-09 requires that all excess tax benefits and tax deficiencies related to stock based compensation arrangements must be recognized in the income statement as they occur as opposed to the current guidance where excess tax benefits are recorded in equity. ASU 2016-09 also allows entities to make an accounting policy election to either continue to estimate forfeitures on stock based compensation arrangements or to account for forfeitures as they occur. ASU 2016-09 is effective for annual and interim reporting periods beginning after December 15, 2016 with early adoption permitted. We do not believe ASU 2016-09 will have a material impact on our consolidated financial statements.

Statement of Cash Flows

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows ("ASU 2016-15"). ASU 2016-15 clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows and how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 is effective for us retrospectively for annual and interim reporting periods beginning after December 15, 2017 with early adoption permitted. We do not believe ASU 2016-15 will have a material impact on our consolidated financial statements.

3. Reclassifications

Certain amounts in the accompanying consolidated financial statements for 2015, including the change in presentation of deferred financing costs pursuant to ASU 2015-03, have been reclassified to conform to the 2016 consolidated financial statement presentation.

4. Variable Interest Entities

Partnership

As the result of the adoption of ASU 2015-02, which stipulates that limited partnerships (and similar entities) where the limited partners do not have substantive participating or kick-out rights are VIEs, we determined that the Partnership is a VIE. Prior to the adoption of ASU 2015-02, the General Partner consolidated the Partnership pursuant to the voting interest model. We concluded that, because it holds majority ownership and exercises control

over every aspect of the Partnership's operations, the General Partner is the primary beneficiary of the Partnership and, as such, will continue to consolidate the Partnership.

The assets and liabilities of the General Partner and the Partnership are substantially the same, as the General Partner does not have any significant assets other than its investment in the Partnership. All of the Company's debt is also an obligation of the Partnership.

Unconsolidated Joint Ventures

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

To the extent that we own interests in a VIE and we (i) are the sole entity that has the power to direct the activities of the VIE and (ii) have the obligation or rights to absorb the VIE's losses or receive its benefits, then we would be determined to be the primary beneficiary and would consolidate the VIE. To the extent we own interests in a VIE, then at each reporting period, we re-assess our conclusions as to which, if any, party within the VIE is considered the primary beneficiary.

There were no unconsolidated joint ventures, in which we have any recognized assets or liabilities or have retained any economic exposure to loss at September 30, 2016 that met the criteria to be considered VIEs. Our maximum loss exposure for guarantees of joint venture indebtedness, none of which relate to VIEs, totaled $52.7 million at September 30, 2016.

5. Acquisitions and Dispositions

~~2013~~ Acquisitions and dispositions for the periods presented were completed in accordance with our strategy to reposition our investment concentration among the product types and markets in which we operate. The results of operations for all acquired properties have been included in continuing operations within our consolidated financial statements since their respective dates of acquisition.

We acquired 15 operating properties during the nine months ended September 30, 2013. These acquisitions consisted of three industrial properties in Central and Southern New Jersey, three industrial properties in Southern California, two industrial properties in Central California, one industrial property in Houston, Texas, one industrial property near Kansas City, Missouri, one industrial property near St. Louis, Missouri, two industrial properties in Northeast and Central Pennsylvania, one industrial property near Indianapolis, Indiana and one medical office property in Central Florida. The following table summarizes the fair value of amounts recognized for each major class of asset and liability (in thousands) for these acquisitions:Acquisitions

Real estate assets	$	422,538
Lease related intangible assets	58,826
Total acquired assets	481,364
Secured debt	103,638
Below market lease liability	1,469
Other liabilities	1,448
Total assumed liabilities	106,555
Fair value of acquired net assets	$	374,809

We acquired two properties during the nine months ended September 30, 2016, which included a property received as part of a non-cash distribution in connection with the dissolution of an unconsolidated joint venture. The following table summarizes amounts recognized for each major class of asset and liability (in thousands) for these acquisitions during the nine months ended September 30, 2016:

The leases in the acquired properties had a weighted average remaining life at acquisition of approximately 7.6 years.



Real estate assets	$	72,824
Lease related intangible assets	6,427
Fair value of acquired net assets	$	79,251

Acquired leases had an average remaining life at acquisition of approximately 8.9 years.

We have included $2.1 million in rental revenues and a net loss of $28,000 in continuing operations during the nine months ended September 30, 2016 for the properties since their respective dates of acquisition.

Distribution of Joint Venture Properties

Included in our property acquisitions for the nine months ended September 30, 2016 was an industrial property that we received as part of a non-cash distribution of properties from Duke/Hulfish LLC ("Duke/Hulfish"), a 20%

owned unconsolidated joint venture. On June 30, 2016, as part of a plan of dissolution, Duke/Hulfish distributed its ownership in seven properties to our partner in the joint venture while distributing its ownership interest in one property to us. We also received $2.8 million in cash from the joint venture in order to balance the value of the distributions received in accordance with the applicable ownership percentages. As the result of this dissolution transaction, we recognized a gain equal to the excess of the fair value of the one property distributed to us, plus the cash that we received, over the carrying value of our 20% investment in the eight properties that were distributed from Duke/Hulfish (both to us and our partner). The computation of this gain is shown as follows (in thousands):



Fair value of one property received in non-cash distribution	$	63,000
Cash received at dissolution	2,760
Carrying value of investment in properties distributed to partners	(35,063		)
Gain on dissolution of unconsolidated company	$	30,697

In connection with the dissolution of Duke/Hulfish, and the sale of its final property to a third party in July 2016, we recognized promote income (additional incentive-based cash distributions from the joint venture, in excess of our 20% ownership interest) totaling $26.3 million for the nine months ended September 30, 2016.

Fair Value Measurements

The fair value estimates used in allocating the aggregate purchase price of ~~each~~an acquisition, to the extent accounted for as a business combination, among the individual components of real estate assets and liabilities were determined primarily through calculating the "as-if vacant" value of ~~each~~a building, using the income approach, and relied significantly upon internally determined assumptions. We have determined that these estimates ~~to have been~~ primarily ~~based~~rely upon ~~Level~~level 3 inputs, which are unobservable inputs based on our own assumptions. The ~~range of~~ most significant assumptions utilized in making the lease-up and future disposition estimates used in calculating the "as-if vacant" value offor ~~each~~acquisition ~~building~~activity ~~acquired~~ during the nine months ended September 30, ~~2013~~2016 ~~were~~are as follows:

	Low	High	~~High~~
Discount rate	67.6046%	8.10%	~~9.67~~	%
Exit capitalization rate	56.1046%	6.96%	~~7.67~~	%
Lease-up period (months)	12	12	24
Net rental rate per square foot – Industrial	$2.95		$8.28
Net rental rate per square foot - Industrial	$3.39	$3.39
Net rental rate per square foot – Medical Office	$18.00		$18.00
Net rental rate per square foot - Medical Office	$15.40	$15.40

Acquisition-Related Activity

The acquisition-related activity in our ~~Consolidated~~consolidated Statements of Operations and Comprehensive Income ~~for the nine months ended September 30, 2013 and 2012~~ consisted of ~~transaction~~adjustments ~~costs related~~ to ~~completed~~the ~~acquisitions,~~fair ~~which~~value ~~are~~of ~~expensed~~contingent asconsideration ~~incurred,~~from ~~as well as gains or losses related to~~ acquisitions ~~where~~after ~~we had a pre-existing non-controlling ownership interest. We recognized a gain of $962,000 on~~ the ~~pre-existing~~measurement ~~ownership~~period ~~interest~~was ~~that~~complete ~~we held in one of the industrial properties we acquired~~ and ~~expenses of $3.5 million for~~ transaction costs ~~during~~for ~~the~~completed ~~nine months ended September 30, 2013~~acquisitions.

Activity during the nine months ended September 30, 2012 consisted of transaction costs related to acquisitions, which were expensed as incurred.

Dispositions

WeDispositions ~~disposed~~of buildings (see Note 11 for the number of ~~certain~~buildings ~~consolidated~~sold ~~income-producing~~as ~~real~~well ~~estate~~as ~~assets~~for their classification between continuing and ~~undeveloped~~discontinued ~~land~~operations) and ~~received~~undeveloped land generated net cash proceeds of $~~330~~369.71 million and $~~112~~1.653 ~~million~~billion during the nine months ended September 30, ~~2013~~2016 and ~~2012~~2015, respectively.

During the nine months ended September 30, 2013, 17 office properties and one industrial property were sold from certain of our unconsolidated joint ventures for which our capital distributions totaled $89.5 million. Our share of gains from joint venture property sales, which are included in equity in earnings, related almost entirely to these sales and totaled $49.0 million.

6. Indebtedness

All debt is held directly or indirectly by the Partnership. The General Partner does not have any indebtedness, but does guarantee ~~all~~some of the unsecured debt of the Partnership. The following table summarizes the book value and changes in the fair value of our debt (in thousands):

~~The~~ ~~following table summarizes the book value and changes in the fair value of our debt for the nine months ended September 30, 2013 (in thousands):~~15

Book Valueat 12/31/12

Book Valueat 9/30/13

Fair Valueat 12/31/12

Issuances andAssumptions

Payments/Payoffs

Adjustmentsto Fair Value

Fair Valueat 9/30/13

Book Value at 12/31/2015

Book Value at 9/30/2016

Fair Value at 12/31/2015

Issuances andAssumptions

Payments/Payoffs

Adjustmentsto Fair Value

Fair Value at 9/30/2016

Fixed rate secured debt

1736,~~149,541~~896

1384,~~139,262~~025

1789,~~251,477~~095

~~103,638~~—

(~~110~~352,~~946~~382

)

(2311,~~801~~765

)

1424,~~220,368~~948

Variable rate secured debt

183,~~412~~100

192,~~194~~800

183,~~386~~100

~~1,933~~—

(~~1,151~~300

)

27—

192,~~195~~800

Unsecured debt

2,~~993~~530,~~217~~743

32,~~066~~628,~~755~~980

32,~~336~~624,~~386~~795

~~500~~375,000

(~~426~~276,~~462~~764

)

~~(135~~93,~~936~~015

)

32,~~273~~816,~~988~~046

Unsecured line of credit

~~285~~71,000

~~210,000~~—

~~285~~70,~~632~~852

—

(7571,000

)

~~403~~148

~~211,035~~—

Total

43,~~446~~341,~~170~~739

43,~~435~~015,~~211~~805

43,~~891~~487,~~881~~842

~~605~~375,~~571~~000

(~~613~~700,~~559~~446

)

~~(159~~81,~~307~~398

)

43,~~724~~243,~~586~~794

Less: Deferred financing costs

21,598

24,754

Total indebtedness as reported on the consolidated balance sheets

3,320,141

2,991,051

Secured Debt

Because our fixed rate secured debt is not actively traded in any marketplace, we utilized a discounted cash flow methodology to determine its fair value. Accordingly, we calculated fair value by applying an estimate of the current market rate to discount the debt's remaining contractual cash flows. Our estimate of a current market rate, which is the most significant input in the discounted cash flow calculation, is intended to replicate debt of similar maturity and loan-to-value relationship. The estimated rates ranged from 32.50% to 43.9030%, depending on the attributes of the specific loans. The current market rates we utilized were internally estimated; therefore, we have concluded that our determination of fair value for our fixed rate secured debt was primarily based upon ~~Level~~level 3 inputs.

During the nine months ended September 30, ~~2013~~2016, we repaid ~~nine~~five ~~secured~~ loans, ~~at their maturity dates,~~ totaling $~~100~~346.14 million~~. These~~, ~~loans~~which had a weighted average stated ~~interest~~ rate of 5.6690%.

During the nine months ended September 30, 2013, we assumed three secured loans, in conjunction with our acquisition activity, with a total face value of $99.3 million and a fair value of $103.6 million. These assumed loans had a weighted average remaining term at acquisition of 1.8 years and carry a weighted average stated interest rate of 5.59%. We used an estimated market interest rate of 3.00% in determining the fair value of these loans. Between the date of acquisition and the end of the most recent reporting period, interest rates increased, resulting in our estimated market interest rate for these loans increasing to 3.50%.

Unsecured Debt

At September 30, ~~2013~~2016, with the exception of ~~the~~one ~~$250.0 million~~ variable rate term note ~~described below~~, all of our unsecured debt bore interest at fixed rates and primarily consisted of unsecured notes that are publicly traded. We utilized broker estimates in estimating the fair value of our fixed rate unsecured debt. Our unsecured notes are thinly traded and, in certain cases, the broker estimates were not based upon comparable transactions. The broker estimates took into account any recent trades within the same series of our fixed rate unsecured debt, comparisons to recent trades of other series of our fixed rate unsecured debt, trades of fixed rate unsecured debt from companies with profiles similar to ours, as well as overall economic conditions. We reviewed these broker estimates for reasonableness and accuracy, considering whether the estimates were based upon market participant assumptions within the principal and most advantageous market and whether any other observable inputs would be more accurate indicators of fair value than the broker estimates. We concluded that the broker estimates were representative of fair value. We have determined that our estimation of the fair value of our fixed rate unsecured debt was primarily based upon level 3 inputs. The estimated trading values of our fixed rate unsecured debt, depending on the maturity and coupon rates, ranged from 103.00% to 137.00% of face value.

During 14the nine months ended September 30, 2016, we issued $375.0 million of senior unsecured notes that bear interest at a stated interest rate of 3.25%, have an effective interest rate of 3.36%, and mature on June 30, 2026. A portion of these proceeds were used to repurchase, through a tender offer, $72.0 million of our 5.95% senior unsecured notes due February 2017 ("5.95% Senior Unsecured Notes"), for a cash payment of $74.5 million in June 2016. In July 2016, we redeemed the remaining $203.0 million of 5.95% Senior Unsecured Notes for a cash payment of $209.0 million. Together, the repurchase and the redemption resulted in an $8.7 million loss on debt extinguishment, which included repurchase premiums, redemption premiums and the write-off of unamortized deferred financing costs.

~~reasonableness~~We ~~and~~utilize ~~accuracy,~~a ~~considering~~discounted ~~whether~~cash ~~the~~flow ~~estimates~~methodology ~~were~~in ~~based~~order ~~upon~~to ~~market~~estimate ~~participant assumptions within~~ the ~~principal and most advantageous market and whether any other observable inputs would be more accurate indicators of~~ fair value ~~than~~of ~~the~~our ~~broker estimates~~$250.0 Wemillion ~~concluded~~variable ~~that~~rate ~~the~~term ~~broker estimates were representative of fair value~~loan. WeOur ~~have~~estimate ~~determined that our estimation~~ of the ~~fair~~current ~~value~~market ofrate for our ~~fixed~~variable rate ~~unsecured~~term ~~debt~~loan was ~~primarily~~1.68% and was based primarily upon ~~Level~~level 3 inputs. To ~~The~~the ~~estimated~~extent ~~trading~~that ~~values~~credit ofspreads ~~our~~have ~~fixed~~changed ~~rate~~since ~~unsecured debt, depending on~~ the ~~maturity~~origination ~~and~~of ~~coupon~~this ~~rates~~term loan, ~~ranged from 93.00% to 124.00% of face value.~~

In ~~March 2013, we issued $250.0 million of unsecured notes that bear interest at 3.625%, have an effective rate of 3.72%, and mature on April 15, 2023.~~ 16

Inthe ~~May~~net ~~2013,~~present wevalue ~~issued~~of the difference between future contractual interest payments and ~~fully~~future ~~drew~~interest ~~down~~payments based on our estimate of a ~~term~~current ~~loan~~market ~~with~~rate anwould ~~aggregate~~represent ~~commitment~~the ofdifference ~~$250.0~~between ~~million~~the ~~that~~book ~~bears~~value ~~interest~~and atthe fair value. Our estimate of a ~~variable~~current market rate ofis ~~LIBOR~~based ~~plus~~upon ~~1.35%~~the ~~(equal~~rate, toconsidering ~~1.54%~~current ~~for~~market ~~outstanding~~conditions ~~borrowings~~and our specific credit profile, at ~~September 30~~which we estimate we could obtain similar borrowings. As our credit spreads have not changed appreciably, ~~2013)~~we believe that the contractual interest rate and ~~matures~~the ~~May~~current ~~14,~~market ~~2018~~rate on the term loan are the same.

~~During~~The ~~the~~indentures ~~nine~~(and ~~months~~related ~~ended~~supplemental ~~September 30,~~indentures) ~~2013,~~governing weour ~~repaid~~outstanding ~~two~~series ~~unsecured~~of notes atalso ~~their~~require ~~maturity~~us ~~dates~~to ~~totaling~~comply ~~$425.0~~with ~~million.~~financial ~~These~~ratios ~~notes~~and ~~had~~other acovenants ~~weighted~~regarding ~~average~~our ~~effective~~operations. ~~rate~~We ofwere ~~6.40%~~in ~~and~~compliance awith ~~weighted~~all ~~average~~such ~~stated~~covenants ~~rate~~at ofSeptember 530, 2016.~~68%.~~

The indentures (and related supplemental indentures) governing our outstanding series of notes also require us to comply with financial ratios and other covenants regarding our operations. We were in compliance with all such covenants at September 30, 2013.

Unsecured Line of Credit

Our unsecured line of credit at September 30, ~~2013~~2016 is described as follows (in thousands):

Description	MaximumCapacity				Maturity Date		~~OutstandingBalance~~Outstanding ~~atSeptember~~Balance at September 30, ~~2013~~2016
Unsecured Line of Credit - Partnership	$	~~850~~1,200,000			~~December~~January ~~2015~~2019		$	~~210,000~~—

The Partnership's unsecured line of credit has an interest rate on borrowings of LIBOR plus 1.2505% ~~(equal~~and toa ~~1.43%~~maturity ~~for~~date ~~outstanding~~of ~~borrowings~~January at2019 ~~September 30,~~(with ~~2013)~~extension ~~and~~options athat could extend the maturity date ofto ~~December~~January ~~2015~~2020). Subject to certain conditions, the terms also include an option to increase the facility by up to an additional $400.0 million, for a total of up to $1.2560 billion. This line of credit provides us with an option to obtain borrowings from financial institutions that participate in the line at rates that may be lower than the stated interest rate, subject to certain restrictions.

This line of credit ~~provides~~contains financial covenants that require us ~~with~~to anmeet ~~option~~certain financial ratios and defined levels of performance, including those related to ~~obtain~~fixed ~~borrowings~~charge ~~from~~coverage, ~~financial~~unsecured ~~institutions~~interest ~~that~~expense ~~participate~~coverage and debt-to-asset value (with asset value being defined in the Partnership's unsecured line atof ~~rates~~credit ~~that~~agreement). ~~may~~At beSeptember 30, ~~lower~~2016, ~~than~~we ~~the~~were ~~stated~~in ~~interest~~compliance ~~rate,~~with ~~subject~~all tocovenants ~~certain~~under ~~restrictions~~this line of credit.

~~This~~To the extent that there are outstanding borrowings, we utilize a discounted cash flow methodology in order to estimate the fair value of our unsecured line of credit. ~~contains~~To ~~financial~~the ~~covenants~~extent that ~~require~~credit usspreads tohave ~~meet~~changed ~~certain~~since ~~financial~~the ~~ratios~~origination ~~and~~of ~~defined~~the ~~levels~~line of ~~performance~~credit, ~~including~~the ~~those~~net ~~related~~present tovalue ~~fixed~~of ~~charge~~the ~~coverage,~~difference ~~unsecured~~between ~~interest~~future ~~expense~~contractual ~~coverage~~interest payments and ~~debt-to-asset~~future interest payments based on our estimate of a current market rate would represent the difference between the book value ~~(with~~and ~~asset~~the fair value. ~~being~~Our ~~defined~~estimate inof a current market rate is based upon the ~~Partnership's~~rate, ~~unsecured~~considering ~~line~~current ofmarket conditions and our specific credit ~~agreement)~~profile, at which we estimate we could obtain similar borrowings. AtAs ~~September 30,~~our ~~2013~~credit spreads have not changed appreciably, we ~~were~~believe inthat ~~compliance~~the ~~with~~contractual ~~all~~interest ~~covenants~~rate ~~under~~and ~~this~~the current market rate on the line of credit are the same. To the extent there are outstanding borrowings, this current market rate is internally estimated and therefore would be primarily based upon a level 3 input.

To the extent that there are outstanding borrowings, we utilize a discounted cash flow methodology in order to estimate the fair value of our unsecured line of credit. The net present value of the difference between future contractual interest payments and future interest payments based on our estimate of a current market rate represents the difference between the book value and the fair value. Our estimate of a current market rate is based upon the rate, considering current market conditions and our specific credit profile, at which we estimate we could obtain similar borrowings. The current market rate of 1.48% that we utilized was internally estimated; therefore, we have concluded that our determination of fair value for our unsecured line of credit was primarily based upon a Level 3 input.

7. Shareholders' Equity of the General Partner and Partners' Capital of the Partnership

General Partner

InDuring ~~January~~the ~~2013~~nine months ended September 30, 2016, the General Partner ~~completed~~issued ~~a public offering of 41~~8.43 million common shares atpursuant anto ~~issue~~its ~~price~~at ofthe ~~$14.25~~market ~~per~~("ATM") ~~share~~equity program, ~~resulting~~generating in gross proceeds of approximately $~~590~~216.02 million and, after deducting ~~underwriting~~commissions ~~fees~~ and ~~estimated~~other ~~offering~~ costs, net proceeds of approximately $~~571~~213.96 million. A ~~portion~~The ~~of the net~~ proceeds from ~~this~~these ~~offering~~offerings were ~~used~~contributed to ~~repay all of~~ the ~~outstanding borrowings under the~~ Partnership's ~~existing revolving credit facility, which had an outstanding balance of $285.0 million at December 31, 2012,~~ and ~~the remaining proceeds were~~ used to ~~redeem~~fund ~~all~~development ofactivities ~~the General Partner's outstanding 8.375% Series O Cumulative Redeemable Preferred Shares ("Series O Shares")~~ and ~~for~~loan ~~general corporate purposes~~repayments.

In February 2013, the General Partner redeemed all of the outstanding shares of its Series O Shares at their liquidation amount of $178.0 million. Original offering costs of $5.9 million were included as a reduction to net income attributable to common shareholders in conjunction with the redemption of these shares.17

In the first nine months of 2013, the General Partner issued 3.7 million common shares pursuant to its at the market equity program, generating gross proceeds of approximately $61.9 million and, after deducting commissions and other costs, net proceeds of approximately $60.7 million. The General Partner paid approximately $897,000 in commissions related to the sale of these common shares. The proceeds from these offerings were used for general corporate purposes, which include the funding of development costs.

Partnership

For each common share or preferred share that the General Partner issues, the Partnership issues a corresponding General Partner Unit or Preferred Unit, as applicable, to the General Partner in exchange for the contribution of the proceeds from the stock issuance. Similarly, when the General Partner redeems or repurchases common shares or preferred shares, the Partnership redeems the corresponding Common Units or Preferred Units held by the General Partner at the same price.

8. Related Party Transactions

We provide property management, asset management, leasing, construction and other tenant-related services to unconsolidated companies in which we have equity interests. We recorded the corresponding fees based on contractual terms that approximate market rates for these types of services and have eliminated our ownership percentage of these fees in the consolidated financial statements. The following table summarizes the fees earned from these companies, prior to ~~elimination, for~~ the ~~three~~elimination ~~and~~of ~~nine~~our ~~months~~ownership ~~ended~~percentage ~~September 30, 2013 and 2012, respectively~~ (in thousands):

Three Months Ended

Nine Months Ended

September 30,

2013

2012

2013

2012

2016

2015

2016

2015

Management fees

21,~~246~~035

21,~~796~~835

63,~~872~~585

85,~~251~~388

Leasing fees

~~310~~629

~~622~~692

12,~~432~~061

21,~~856~~714

Construction and development fees

~~681~~1,307

12,~~860~~247

36,~~258~~666

3,~~615~~377

9. Net Income ~~(Loss)~~ Per Common Share or Common Unit

Basic net income ~~(loss)~~ per common share or Common Unit is computed by dividing net income ~~(loss)~~ attributable to common shareholders or common unitholders, less dividends or distributions on share-based awards expected to vest (referred to as "participating securities" and primarily composed of unvested restricted stock units), by the weighted average number of common shares or Common Units outstanding for the period.

Diluted net income ~~(loss)~~ per common share is computed by dividing the sum of basic net income ~~(loss)~~ attributable to common shareholders and the noncontrolling interest in earnings allocable to Limited Partner Units (to the extent the Limited Partner Units are dilutive) by the sum of the weighted average number of common shares outstanding and, to the extent they are dilutive, units outstanding and any potential dilutive securities for the period. Diluted net income per Common Unit is computed by dividing the basic net income attributable to common unitholders by the sum of the weighted average number of Common Units outstanding and any potential dilutive securities for the period. The following table reconciles the components of basic and diluted net income per common share or Common Unit (in thousands):

and, to the extent they are dilutive, Units outstanding and any potential dilutive securities for the period. Diluted net income (loss) per Common Unit is computed by dividing the basic net income (loss) attributable to common unitholders by the sum of the weighted average number of Common Units outstanding and any potential dilutive securities for the period.

The following table reconciles the components of basic and diluted net income (loss) per common share or Common Unit for the three and nine months ended September 30, 2013 and 2012, respectively (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
General Partner
Net income (loss) attributable to common shareholders	$	(6,067	)	$	(28,230	)	$	83,470		$	(93,102	)
Less: Dividends on participating securities	(650		)	(680		)	(2,024		)	(2,388		)
Basic net income (loss) attributable to common shareholders	(6,717		)	(28,910		)	81,446			(95,490		)
Noncontrolling interest in earnings of common unitholders	—			—			1,142			—
Diluted net income (loss) attributable to common shareholders	$	(6,717	)	$	(28,910	)	$	82,588		$	(95,490	)
Weighted average number of common shares outstanding	324,895			270,289			320,810			265,153
Weighted average Limited Partner Units outstanding	—			—			4,393			—
Other potential dilutive shares	—			—			177			—
Weighted average number of common shares and potential dilutive securities	324,895			270,289			325,380			265,153
Partnership
Net income (loss) attributable to common unitholders	$	(6,159	)	$	(28,689	)	$	84,612		$	(94,838	)
Less: Distributions on participating securities	(650		)	(680		)	(2,024		)	(2,388		)
Basic and diluted net income (loss) attributable to common unitholders	$	(6,809	)	$	(29,369	)	$	82,588		$	(97,226	)
Weighted average number of Common Units outstanding	329,283			274,800			325,203			270,095
Other potential dilutive units	—			—			177			—
Weighted average number of Common Units and potential dilutive securities	329,283			274,800			325,380			270,095

The Limited Partner Units are anti-dilutive to the General Partner for the three months ended September 30, 2013 and the three and nine months ended September 30, 2012 as a result of the net loss for those periods. In addition, substantially all potential shares related to our stock-based compensation plans are anti-dilutive for all periods presented. The following table summarizes the data that is excluded from the computation of net income (loss) per common share or Common Unit as a result of being anti-dilutive (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013		2012
General Partner
Noncontrolling interest in loss of common unitholders	$	(92	)	$	(459	)	$	—	$	(1,736	)
Weighted average Limited Partner Units outstanding	4,388			4,511			—		4,942
General Partner and Partnership
Other potential dilutive shares or units:
Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans	1,373			1,763			1,373		1,763
Outstanding participating securities	3,866			4,045			3,866		4,045

10. Segment Reporting

We have four reportable operating segments at September 30, 2013, the first three of which consist of the ownership and rental of (i) industrial, (ii) office and (iii) medical office real estate investments. The operations of our industrial, office and medical office properties, along with our retail properties, are collectively referred to as "Rental Operations." Our retail properties, as well as any other properties not included in our reportable segments, do not by themselves meet the quantitative thresholds for separate presentation as a reportable segment. The fourth reportable segment consists of various real estate services such as property management, asset management,

maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise.

We assess and measure the overall operating results of the General Partner and the Partnership based upon Funds From Operations ("FFO"), which is an industry performance measure that management believes is a useful indicator of consolidated operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. The National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. The most comparable GAAP measure is net income (loss) attributable to common shareholders or common unitholders. FFO attributable to common shareholders or common unitholders should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the use of FFO attributable to common shareholders or common unitholders, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assist them in comparing these operating results between periods or between different companies.

Other revenue consists of other operating revenues not identified with one of our operating segments. We do not allocate interest expense and certain other non-property specific revenues and expenses ("Non-Segment Items," as shown in the table below) to our individual operating segments in determining our performance measure. Thus, the operational performance measure presented here on a segment-level basis represents net earnings, excluding depreciation expense and the Non-Segment Items not allocated, and is not meant to present FFO as defined by NAREIT. The following table shows (i) the revenues for each of the reportable segments and (ii) a reconciliation of FFO attributable to common shareholders or common unitholders to net income (loss) attributable to common shareholders or common unitholders for the three and nine months ended September 30, 2013 and 2012, respectively (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2013		2012		2013		2012
Revenues
Rental Operations:
Industrial	$	123,749	$	107,345	$	357,777	$	321,524
Office	66,691		65,290		198,890		194,038
Medical Office	35,093		21,108		101,733		59,336
Non-reportable Rental Operations	1,765		1,429		5,807		5,276
Service Operations	62,807		93,932		161,004		226,507
Total segment revenues	290,105		289,104		825,211		806,681
Other revenue	1,585		4,154		4,023		6,396
Consolidated revenue from continuing operations	291,690		293,258		829,234		813,077
Discontinued operations	3,912		9,774		18,419		32,868
Consolidated revenue	$	295,602	$	303,032	$	847,653	$	845,945

Reconciliation of Funds From Operations
	Three Months Ended September 30,								Nine Months Ended September 30,
Net earnings excluding depreciation and Non-Segment Items:
	2016				2015				2016				2015
Industrial		$	92,052			$	79,803			$	266,044			$	240,605
General Partner
Office		38,842				37,193				116,385				113,425
Net income attributable to common shareholders	$	112,014			$	76,434			$	264,388			$	591,058
Medical Office		23,533				13,756				67,976				38,842
Less: Dividends on participating securities	(580		)		(593		)		(1,751		)		(1,803		)
Non-reportable Rental Operations		1,150				806				3,853				3,644
Basic net income attributable to common shareholders	111,434				75,841				262,637				589,255
Service Operations		3,415				6,213				18,079				16,988
Add back dividends on dilutive participating securities	580				593				1,751				1,803
		158,992				137,771				472,337				413,504
Noncontrolling interest in earnings of common unitholders	1,131				751				2,670				6,212
Non-Segment Items:
Diluted net income attributable to common shareholders	$	113,145			$	77,185			$	267,058			$	597,270
Interest expense		(58,100		)		(58,812		)		(176,005		)		(175,726		)
Weighted average number of common shares outstanding	351,856				345,256				348,341				344,986
Impairment charges on non-depreciable properties		—				—				(3,777		)		—
Weighted average Limited Partner Units outstanding	3,495				3,504				3,499				3,609
Interest and other income, net		145				150				1,219				394
Other potential dilutive shares	3,630				3,390				3,565				3,418
Other operating expenses		(47		)		(130		)		(150		)		(591		)
Weighted average number of common shares and potential dilutive securities	358,981				352,150				355,405				352,013
General and administrative expenses		(10,373		)		(8,934		)		(33,225		)		(32,367		)
Partnership
Gain on land sales		3,365				—				3,365				—
Net income attributable to common unitholders	$	113,145			$	77,185			$	267,058			$	597,270
Undeveloped land carrying costs		(2,108		)		(2,140		)		(6,837		)		(6,606		)
Less: Distributions on participating securities	(580		)		(593		)		(1,751		)		(1,803		)
Acquisition-related activity		(726		)		(954		)		(2,506		)		(2,563		)
Basic net income attributable to common unitholders	$	112,565			$	76,592			$	265,307			$	595,467
Income tax benefit		4,500				103				4,500				103
Add back distributions on dilutive participating securities	580				593				1,751				1,803
Other non-segment income		(32		)		3,278				490				4,119
Diluted net income attributable to common unitholders	$	113,145			$	77,185			$	267,058			$	597,270
Net income attributable to noncontrolling interests - consolidated entities not wholly owned by the Partnership		(140		)		(59		)		(487		)		(365		)
Weighted average number of Common Units outstanding	355,351				348,760				351,840				348,595
Joint venture items		6,945				8,997				22,212				27,999
Other potential dilutive units	3,630				3,390				3,565				3,418
Dividends on preferred shares/Preferred Units		(7,356		)		(11,081		)		(24,261		)		(35,356		)
Weighted average number of Common Units and potential dilutive securities	358,981				352,150				355,405				352,013
Adjustments for redemption of preferred shares/Preferred Units		—				—				(5,932		)		(5,730		)
Discontinued operations		1,745				2,967				6,756				11,204
FFO attributable to common unitholders of the Partnership		96,810				71,156				257,699				198,019
Net (income) loss attributable to noncontrolling interests - common limited partnership interests in the Partnership		92				459				(1,142		)		1,736
Noncontrolling interest share of FFO adjustments		(1,384		)		(1,638		)		(2,339		)		(5,358		)
FFO attributable to common shareholders of the General Partner		95,518				69,977				254,218				194,397
Depreciation and amortization on continuing operations		(103,594		)		(90,202		)		(296,791		)		(264,435		)
Depreciation and amortization on discontinued operations		(844		)		(4,937		)		(6,686		)		(15,903		)
Company's share of joint venture adjustments		(7,127		)		(8,782		)		(20,730		)		(26,008		)
Gains on depreciated property sales on continuing operations		—				403				1,108				245
Gains on depreciated property sales on discontinued operations		8,441				1,608				101,052				11,179
Gains on depreciated property sales - share of joint venture		155				2,065				48,960				2,065
Noncontrolling interest share of FFO adjustments		1,384				1,638				2,339				5,358
Net income (loss) attributable to common shareholders of the General Partner		$	(6,067	)		$	(28,230	)		$	83,470			$	(93,102	)
Add back: Net income (loss) attributable to noncontrolling interests - common limited partnership interests in the Partnership		(92		)		(459		)		1,142				(1,736		)
Net income (loss) attributable to common unitholders of the Partnership		$	(6,159	)		$	(28,689	)		$	84,612			$	(94,838	)

The following table summarizes the potentially dilutive shares or units excluded from the computation of net income per common share or Common Unit as a result of being anti-dilutive (in thousands):



	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
General Partner and Partnership
Potential dilutive shares or units:
Anti-dilutive outstanding potential shares or units under fixed stock option and other stock-based compensation plans	170	997	170	997
Outstanding participating securities	—	—	—	—

10. Segment Reporting

Reportable Segments

We had three reportable operating segments at September 30, 2016, the first two of which consist of the ownership and rental of (i) industrial and (ii) medical office real estate investments. Beginning in 2016, our office properties are no longer presented as a separate reportable segment, as they no longer meet the quantitative thresholds for separate presentation, and are referred to as part of our non-reportable Rental Operations. The operations of our industrial and medical office properties as well as our non-reportable Rental Operations, are collectively referred to as "Rental Operations." Our third reportable segment consists of various real estate services such as property management, asset management, maintenance, leasing, development, general contracting and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise.

Revenues by Reportable Segment

The following table shows the revenues for each of the reportable segments, as well as a reconciliation to consolidated revenues (in thousands):

The assets for each of the reportable segments at September 30, 2013 and December 31, 2012 were as follows (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Revenues
Rental Operations:
Industrial	$	149,746	$	136,276	$	432,945	$	419,391
Medical Office	45,353		39,911		130,713		120,213
Non-reportable Rental Operations	10,065		23,277		38,490		72,103
Service Operations	19,351		33,599		68,546		110,320
Total segment revenues	224,515		233,063		670,694		722,027
Other revenue	1,684		1,474		7,023		5,842
Consolidated revenue from continuing operations	226,199		234,537		677,717		727,869
Discontinued operations	380		7		735		32,171
Consolidated revenue	$	226,579	$	234,544	$	678,452	$	760,040

	September 30, 2013		December 31, 2012
Assets
Rental Operations:
Industrial	$	4,293,447	$	3,836,721
Office	1,672,180		1,683,314
Medical Office	1,270,802		1,202,929
Non-reportable Rental Operations	84,619		175,197
Service Operations	154,672		162,219
Total segment assets	7,475,720		7,060,380
Non-segment assets	411,119		499,721
Consolidated assets	$	7,886,839	$	7,560,101

Supplemental Performance Measure

11Property-level net operating income on a cash basis ("PNOI") is the non-GAAP supplemental performance measure that we use to evaluate the performance of, and to allocate resources among, the real estate investments in the reportable and operating segments that comprise our Rental Operations. ~~Discontinued~~ PNOI for our Rental Operations segments is comprised of rental revenues from continuing operations less rental expenses and ~~Assets~~real ~~Held~~estate ~~for~~taxes ~~Sale~~from continuing operations, along with certain other adjusting items (collectively referred to as "Rental Operations revenues and expenses excluded from PNOI," as shown in the following table). Additionally, we do not allocate interest expense, depreciation expense and certain other non-property specific revenues and expenses (collectively referred to as "Non-Segment Items," as shown in the following table) to our individual operating segments.

~~The~~We ~~following~~evaluate ~~table illustrates~~ the ~~number~~performance of ~~properties~~our inService ~~discontinued~~Operations ~~operations:~~reportable segment using net income or loss, as allocated to that segment ("Earnings from Service Operations").

	Held for Sale at September 30, 2013	Sold in 2013	Sold in 2012	Total
Office	4	2	10	16
Industrial	1	5	17	23
Medical Office	1	3	0	4
Retail	0	1	1	2
	6	11	28	45

The following table shows a reconciliation of our segment-level measures of profitability to consolidated income from continuing operations before income taxes (in thousands and excluding discontinued operations):

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

The following table illustrates the operations of the buildings reflected in discontinued operations for the three and nine months ended September 30, 2013 and 2012, respectively (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Revenues	$	3,912		$	9,774		$	18,419		$	32,868
Operating expenses	(1,398		)	(3,985		)	(6,993		)	(12,623		)
Depreciation and amortization	(844		)	(4,937		)	(6,686		)	(15,903		)
Operating income	1,670			852			4,740			4,342
Interest expense	(769		)	(2,822		)	(4,670		)	(9,041		)
Income (loss) before gain on sales	901			(1,970		)	70			(4,699		)
Gain on sale of depreciable properties	8,441			1,608			101,052			11,179
Income (loss) from discontinued operations	$	9,342		$	(362	)	$	101,122		$	6,480

Dividends or distributions on preferred shares or Preferred Units and adjustments for the redemption or repurchase of preferred shares or Preferred Units are allocated entirely to continuing operations for both the General Partner and the Partnership.



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
PNOI
Industrial	$	109,350		$	96,966		$	314,349		$	285,087
Medical Office	29,401			25,827			84,822			76,878
Non-reportable Rental Operations	4,083			4,636			12,273			14,100
PNOI, excluding all sold/held-for-sale properties	142,834			127,429			411,444			376,065
PNOI from sold/held-for-sale properties included in continuing operations	1,840			12,136			16,512			46,635
PNOI, continuing operations	$	144,674		$	139,565		$	427,956		$	422,700

Earnings from Service Operations	2,169			3,905			8,216			11,865

Rental Operations revenues and expenses excluded from PNOI:
Straight-line rental income and expense, net	5,008			5,723			10,832			16,830
Revenues related to lease buyouts	1,491			408			1,725			1,366
Amortization of lease concessions and above and below market rents	(303		)	(357		)	(1,361		)	(2,559		)
Intercompany rents and other adjusting items	(27		)	(434		)	(246		)	(1,306		)
Non-Segment Items:
Equity in earnings (loss) of unconsolidated companies	12,010			(5,088		)	37,404			16,281
Gain on dissolution of unconsolidated company	—			—			30,697			—
Promote income	2,212			—			26,299			—
Interest expense	(34,606		)	(41,615		)	(109,520		)	(134,576		)
Depreciation and amortization expense	(80,688		)	(79,898		)	(238,647		)	(240,135		)
Gain on sale of properties	82,698			71,259			137,589			202,153
Impairment charges on non-depreciable properties	(3,042		)	(2,426		)	(15,098		)	(7,896		)
Interest and other income, net	507			1,343			3,597			3,056
General and administrative expenses	(12,534		)	(11,340		)	(42,216		)	(47,582		)
Gain on land sales	1,601			1,659			2,438			24,096
Other operating expenses	(1,424		)	(1,467		)	(3,496		)	(4,579		)
(Loss) gain on extinguishment of debt	(6,243		)	64			(8,673		)	(82,589		)
Acquisition-related activity	(7		)	(5,660		)	(82		)	(6,993		)
Other non-segment revenues and expenses, net	(1,392		)	(1,806		)	(1,715		)	(2,065		)
Income from continuing operations before income taxes	$	112,104		$	73,835		$	265,699		$	168,067

The most comparable GAAP measure to PNOI is income from continuing operations before income taxes. PNOI excludes expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for income from continuing operations before income taxes or any other measures derived in accordance with GAAP. Furthermore, PNOI may not be comparable to other similarly titled measures of other companies.

Assets by Reportable Segment

The assets for each of the reportable segments were as follows (in thousands):



	September 30, 2016		December 31, 2015
Assets
Rental Operations:
Industrial	$	4,712,532	$	4,552,107
Medical Office	1,319,955		1,269,546
Non-reportable Rental Operations	214,130		367,469
Service Operations	129,775		137,257
Total segment assets	6,376,392		6,326,379
Non-segment assets	485,689		569,136
Consolidated assets	$	6,862,081	$	6,895,515

11. Discontinued Operations, Assets Held-for-Sale and Impairments

Discontinued Operations

The following table illustrates the number of sold or held-for-sale properties included in, or excluded from, discontinued operations:



	Held-for-Sale at September 30, 2016	Sold Year-to-Date in 2016	Sold in 2015	Total


Industrial	0	0	5	5
Medical Office	0	0	1	1
Non-reportable Rental Operations	0	0	56	56
Total properties included in discontinued operations	0	0	62	62
Properties excluded from discontinued operations	1	22	91	114
Total properties sold or classified as held-for-sale	1	22	153	176

For the properties that were classified in discontinued operations, we allocated interest expense to discontinued operations and have included such interest expense in computing income from discontinued operations. Interest expense allocable to discontinued operations includes interest on any secured debt for properties included in discontinued operations and an allocable share of our consolidated unsecured interest expense for unencumbered properties. The allocation of unsecured interest expense to discontinued operations was based upon the gross book value of the unencumbered real estate assets included in discontinued operations as it related to the total gross book value of our unencumbered real estate assets. There were no additional properties classified as discontinued operations during the nine months ended September 30, 2016 and, as such, no interest expense was allocated to discontinued operations during that period.

The following table illustrates the operational results of the buildings reflected in discontinued operations (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016		2015
Revenues	$	380		$	7		$	735	$	32,171
Operating expenses	(3		)	(50		)	6		(12,449		)
Depreciation and amortization	—			—			—		(3,517		)
Operating income	377			(43		)	741		16,205
Interest expense	—			—			—		(5,659		)
Income before gain on sales	377			(43		)	741		10,546
Gain on sale of depreciable properties	319			66			485		417,795
Income from discontinued operations before income taxes	696			23			1,226		428,341
Income tax expense	—			45			—		(3,175		)
Income from discontinued operations	$	696		$	68		$	1,226	$	425,166

We had no capital expenditures for the nine months ended September 30, 2016 and $7.4 million for the nine months ended September 30, 2015 related to properties classified within discontinued operations.

Allocation of Noncontrolling Interests - General Partner

The following table illustrates the General Partner's share of the income ~~(loss)~~ attributable to common shareholders from continuing operations and discontinued operations, reduced by the allocation of income ~~or loss~~ between continuing and discontinued operations to the Limited Partner Units, ~~for the three and nine months ended September 30, 2013 and 2012, respectively~~ (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	2016			2015			2016			2015
Loss from continuing operations attributable to common shareholders	$	(15,285	)	$	(27,874	)	$	(16,286	)	$	(99,463	)
Income from continuing operations attributable to common shareholders	$	111,325		$	76,367		$	263,174		$	170,294
Income (loss) from discontinued operations attributable to common shareholders	9,218			(356		)	99,756			6,361
Income from discontinued operations attributable to common shareholders	689			67			1,214			420,764
Net income (loss) attributable to common shareholders	$	(6,067	)	$	(28,230	)	$	83,470		$	(93,102	)
Net income attributable to common shareholders	$	112,014		$	76,434		$	264,388		$	591,058

Allocation of Noncontrolling Interests - Partnership

Substantially all of the income ~~(loss)~~ from discontinued operations for all periods presented in the Partnership's Consolidated Statements of Operations and Comprehensive Income is attributable to the common unitholders.

Properties Held -for -Sale

At September 30, ~~2013~~2016, weone ~~classified six~~ in-service ~~properties~~property asand ~~held-for-sale,~~14 ~~which~~acres ~~were~~of ~~included~~undeveloped inland ~~discontinued~~were ~~operations,~~classified ~~due~~as toheld-for-sale ~~our~~but ~~intention~~did ~~and~~not ~~ability~~meet tothe ~~sell~~criteria ~~these~~to ~~properties~~be inclassified ~~the~~within ~~fourth~~discontinued ~~quarter of 2013~~operations. The following table illustrates aggregate balance sheet information offor ~~these~~all held-for-sale properties ~~at September 30, 2013~~ (in thousands):

	September 30, 2013
	Held-for-Sale Properties Included in Continuing Operations
Real estate investment, net	$	49,821
	September 30, 2016			December 31, 2015
Other assets	7,969
Land and improvements	$	5,142		$	9,797
Total assets held-for-sale	$	57,790
Buildings and tenant improvements	6,032			39,480
Accrued expenses	$	1,536
Undeveloped land	9,939			—
Other liabilities	1,383
Accumulated depreciation	(3,763		)	(7,183		)
Total liabilities held-for-sale	$	2,919
Deferred leasing and other costs, net	419			3,293
Other assets	415			414
Total assets held-for-sale	$	18,184		$	45,801
Accrued expenses	$	150		$	322
Other liabilities	88			650
Total liabilities held-for-sale	$	238		$	972

Impairment Charges

The following table illustrates impairment charges recognized (in thousands):



	Three Months Ended September 30,				Nine Months Ended September 30,
	2016		2015		2016		2015
Impairment charges - land	$	—	$	2,426	$	12,056	$	7,032
Impairment charges - building	3,042		—		3,042		864
Impairment charges	$	3,042	$	2,426	$	15,098	$	7,896

As the result of changes in our intended use or plans for sale of certain of our undeveloped land holdings, we recognized land impairment charges of $12.1 million for the nine months ended September 30, 2016. The various land holdings written down to fair value totaled 174 acres. The fair value of the land upon which we recognized impairment charges was estimated based on asset-specific offers to purchase and comparable transactions. Our valuation estimates primarily relied upon level 3 inputs.

12. Subsequent Events

Declaration of Dividends/Distributions

The General Partner's board of directors declared the following dividends/distributions at its regularly scheduled board meeting held on October 3019, ~~2013~~2016:

Class of stock/units	Quarterly Amount per Share or Unit	Record Date	Payment Date
Common	$0.17	November 14, 2013	November 29, 2013
Common - Quarterly	$0.19	November 16, 2016	November 30, 2016
Preferred (per depositary share or unit):
Series J	$0.414063	November 14, 2013	November 29, 2013
Series K	$0.406250	November 14, 2013	November 29, 2013
Series L	$0.412500	November 14, 2013	November 29, 2013

Debt 21Extinguishment

On October 20, 2016, we redeemed $129.5 million in unsecured notes that had a scheduled maturity in August of 2019. We will recognize a net loss on the extinguishment of these notes in the fourth quarter totaling approximately $25.0 million, which is comprised of a make-whole payment to the bondholders as well as the write-off of unamortized deferred financing costs.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand our operations and our present business environment. Management's Discussion and Analysis is provided as a supplement to and should be read in conjunction with our consolidated financial statements and the notes thereto, contained in Part I, Item I of this ~~Quarterly~~ Report ~~on Form 10-Q (this "Report")~~ and the consolidated financial statements and notes thereto, contained in Part IV, Item 15 of our ~~combined~~2015 Annual Report on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission (the "SEC") on February 22, 2013 for Duke Realty Corporation (the "General Partner") and Duke Realty Limited Partnership (the "Partnership"). As used herein, the terms the "Company," "we," "us" and "our" refer to the General Partner and the Partnership, collectively, and those entities owned or controlled by the General Partner and/or the Partnership.

Cautionary Notice Regarding Forward-Looking Statements

Certain statements contained in or incorporated by reference into this Report, including, without limitation, those related to our future operations, constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "believe," "estimate," "expect," "anticipate," "intend," "plan," "seek," "may," "could" and similar expressions or statements regarding future periods are intended to identify forward-looking statements, although not all forward-looking statements contain such words.

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


•	Changes in general economic and business conditions, including the financial condition of our tenants and the value of our real estate assets;

• The General Partner's continued qualification as a ~~real estate investment trust ("~~REIT") for U.S. federal income tax purposes;


•	Heightened competition for tenants and potential decreases in property occupancy;


•	Potential changes in the financial markets and interest rates;


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

• Our continuing ability to raise funds on favorable terms, or at all;


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


•	Potential increases in real estate construction costs;


•	Our ability to successfully dispose of properties on terms that are favorable to us, including, without limitation, through one or more transactions that are consistent with our previously disclosed strategic plans;


•	Our ability to retain our current credit ratings;


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

• Other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the Securities and Exchange Commission (the "SEC").

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

The 22above list of risks and uncertainties is only a summary of some of the most important factors and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included in our 2015 Annual Report. The risk factors contained in our Annual Report are updated by us from time to time in Quarterly Reports on Form 10-Q and other public filings.

~~This~~ list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included under the caption "Risk Factors" in Part II, Item 1A of this Report, and in our combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012, which we filed with the SEC on February 22, 2013 for the General Partner and the Partnership. The risk factors contained in our Annual Report are updated by us from time to time in Quarterly Reports on Form 10-Q and other public filings. 25

Business Overview

The General Partner is a self-administered and self-managed REIT that began operations in 1986 and is the sole general partner of the Partnership. The Partnership is a limited partnership formed in 1993, at which time all of the properties and related assets and liabilities of the General Partner, as well as proceeds from a secondary offering of the General Partner's common shares, were contributed to the Partnership. Simultaneously, the Partnership completed the acquisition of Duke Associates, a full-service commercial real estate firm operating in the Midwest whose operations began in 1972. We operate the General Partner and the Partnership as one enterprise, and therefore, our discussion and analysis refers to the General Partner and its consolidated subsidiaries, including the Partnership, collectively. A more complete description of our business, and of management's philosophy and priorities, is included in our ~~2012~~2015 Annual Report ~~on Form 10-K~~.

At September 30, ~~2013~~2016, we:

• Owned or jointly controlled ~~771~~566 primarily industrial, ~~office,~~and medical office ~~and other~~ properties, of which ~~753~~545 properties with ~~more than 147~~131.09 million square feet were in service and 1821 properties with ~~approximately 2~~7.32 million square feet were under development. The ~~753~~545 in-service properties were comprised of ~~645~~486 consolidated properties with ~~approximately 124~~118.86 million square feet and ~~108~~59 jointly controlled unconsolidated properties with ~~more than 22~~13.23 million square feet. The 1821 properties under development consisted of 1720 consolidated properties with ~~approximately 2~~6.05 million square feet and one jointly controlled unconsolidated property with ~~more than 273~~708,000 square feet.

• Owned directly, ~~including~~or through ownership interests in unconsolidated joint ventures, ~~more~~(with ~~than~~acreage 4not adjusted for our percentage ownership interest),~~400~~ approximately 2,600 acres of land and controlled ~~more~~approximately ~~than~~ 1,600 acres through purchase options.

AOur ~~key component of our~~ overall strategy is to continue to increase our investment in quality industrial properties in both existing and select new markets and to ~~reduce~~continue to increase our investment in ~~suburban~~on-campus ~~office~~or ~~properties~~hospital ~~and~~affiliated ~~other~~medical ~~non-strategic~~office ~~assets~~properties.

We ~~have~~had ~~four~~three reportable operating segments at September 30, ~~2013~~2016, the first ~~three~~two of which consist of the ownership and rental of (i) industrial, ~~(ii) office~~ and (~~iii~~ii) medical office real estate investments. ~~The~~Beginning ~~operations~~in of2016, our ~~industrial,~~ office ~~and~~properties ~~medical~~are ~~office~~no ~~properties~~longer presented as a separate reportable segment, ~~along~~as ~~with~~they ~~our~~no ~~retail~~longer ~~properties~~meet the quantitative thresholds for separate presentation, and are ~~collectively~~ referred to as "part of our non-reportable Rental Operations." ~~Our~~The ~~retail~~operations ~~properties,~~of asour ~~well~~industrial asand ~~any~~medical ~~other~~office properties ~~not~~as ~~included~~well inas our non-reportable ~~segments~~Rental Operations, doare ~~not~~collectively byreferred ~~themselves~~to ~~meet the quantitative thresholds for separate presentation~~ as a"Rental ~~reportable segment~~Operations." The ~~fourth~~third reportable segment consists of various real estate services such as property management, asset management, maintenance, leasing, development, general contractor and construction management to third-party property owners and joint ventures, and is collectively referred to as "Service Operations." Our reportable segments offer different products or services and are managed separately because each segment requires different operating strategies and management expertise. Our Service Operations segment also includes our taxable REIT subsidiary, a legal entity through which certain of the segment's operations are conducted.

Key Performance Indicators

Our operating results depend primarily upon rental income from our Rental Operations. The following discussion highlights the areas of Rental Operations that we consider critical drivers of future revenues.

Occupancy Analysis

Our ability to maintain high occupancy rates is a principal driver of maintaining and increasing rental revenue. The following table sets forth percent leased and average net effective rent information regarding our in-service portfolio of ~~consolidated~~ rental properties, including properties classified within both continuing and discontinued operations, at September 30, ~~2013~~2016 and ~~2012~~2015, respectively ~~(in thousands, except percentage data)~~:

	Total Square Feet		Percent ofTotal Square Feet				Percent Leased*				Average Annual Net Effective Rent**
Type	2013	2012	2013		2012		2013		2012		2013	2012
Industrial	103,310	91,808	82.8	%	81.9	%	94.7	%	94.0	%	$3.91	$3.89
Office	15,950	15,741	12.8	%	14.0	%	87.2	%	84.1	%	$13.40	$13.27
Medical Office	5,172	3,756	4.1	%	3.4	%	93.4	%	91.7	%	$21.93	$21.01
Other	348	739	0.3	%	0.7	%	83.7	%	89.4	%	$19.80	$24.12
Total	124,780	112,044	100.0	%	100.0	%	93.7	%	92.5	%	$5.82	$5.79
*Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced.
**Represents average annual base rental payments per leased square foot, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. This amount excludes additional amounts paid by tenants as reimbursement for operating expenses.

Leasing activity within our existing portfolio of properties as well as, to a lesser extent, acquisitions of fully leased industrial properties drove the increase in our total percent leased from September 30, 2012.



	Total Square Feet (in thousands)		Percent of Total Square Feet				Percent Leased*				Average Annual Net Effective Rent**
Type	2016	2015	2016		2015		2016		2015		2016	2015
Industrial	111,148	105,258	93.7	%	91.7	%	97.5	%	96.7	%	$4.10	$4.02
Medical Office	5,580	5,172	4.7	%	4.5	%	95.0	%	94.8	%	$23.75	$23.13
Non-reportable Rental Operations	1,876	4,407	1.6	%	3.8	%	79.3	%	87.6	%	$14.73	$12.85
Total Consolidated	118,604	114,837	100.0	%	100.0	%	97.1	%	96.3	%	$5.14	$5.18

Unconsolidated Joint Ventures	13,269	19,145					94.8	%	92.8	%	$6.24	$5.33
Total Including Unconsolidated Joint Ventures	131,873	133,982					96.9	%	95.8	%	$5.54	$5.19
* Represents the percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced.
**Represents average annual base rental payments per leased square foot, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. This amount excludes additional amounts paid by tenants as reimbursement for operating expenses.

Vacancy Activity

The following table sets forth vacancy activity, shown in square feet, regarding our in-service rental properties, including properties classified within both continuing and discontinued operations, at September 30, 2016, (in thousands):



	Consolidated Properties		Unconsolidated Joint Venture Properties		Total Including Unconsolidated Joint Venture Properties
Vacant square feet at December 31, 2015	4,015		1,310		5,325
Vacant space in completed developments	2,368		359		2,727
Dispositions	(202	)	(938	)	(1,140	)
Expirations	3,984		334		4,318
Early lease terminations	440		42		482
Property structural changes/other	6		—		6
Leasing of previously vacant space	(7,160	)	(413	)	(7,573	)
Vacant square feet at September 30, 2016	3,451		694		4,145

Total Leasing Activity

The initial leasing of ~~newly~~development ~~completed~~projects or vacant space in acquired properties is referred to as first generation lease activity. The leasing of such space that we have previously held under lease is referred to as second generation lease activity. The total leasing activity for our ~~consolidated~~ rental properties, expressed in square feet of leases signed during the period, is as follows ~~for the three and nine months ended September 30, 2013 and 2012, respectively~~ (in thousands):

	Three Months Ended September 30,		Nine Months Ended September 30,
	2013	2012	2013	2012
New Leasing Activity - First Generation	1,461	902	3,307	4,058
New Leasing Activity - Second Generation	1,759	1,074	6,088	4,153
Renewal Leasing Activity	2,143	5,083	7,015	9,089
Total Leasing Activity	5,363	7,059	16,410	17,300



	Three Months Ended September 30,		Nine Months Ended September 30,
	2016	2015	2016	2015
New Leasing Activity - First Generation	2,394	750	6,721	3,690
New Leasing Activity - Second Generation	594	1,851	3,961	4,031
Renewal Leasing Activity	1,445	1,743	6,993	6,371
Total Consolidated Leasing Activity	4,433	4,344	17,675	14,092
Unconsolidated Joint Venture Leasing Activity	184	106	1,928	1,576
Total Including Unconsolidated Joint Venture Leasing Activity	4,617	4,450	19,603	15,668

New Second Generation Leases

The following table sets forth the estimated costs of tenant improvements and leasing commissions, on a per square foot basis, that we are obligated to fulfill under the new second generation leases signed for our rental properties during the three and nine months ended September 30, 2016 and 2015, respectively:

The following table sets forth the estimated costs of tenant improvements and leasing commissions, on a per square foot basis, that we are obligated to fulfill under the new second generation leases signed for our consolidated rental properties during the three and nine months ended September 30, 2013 and 2012, respectively (square feet data in thousands):



	Square Feet of New Second Generation Leases Signed (in thousands)		Average Term in Years		Estimated Tenant Improvement Cost per Square Foot		Leasing Commissions per Square Foot
	2016	2015	2016	2015	2016	2015	2016	2015
Three Months
Industrial	589	1,833	5.8	5.2	$2.68	$1.86	$2.05	$1.49
Medical Office	3	1	9.6	7.0	$87.58	—	$16.82	$9.37
Non-reportable Rental Operations	2	17	5.9	6.0	$8.25	$18.90	$5.90	$6.96
Total Consolidated	594	1,851	5.8	5.2	$3.13	$2.02	$2.14	$1.55

Nine Months
Industrial	3,908	3,798	6.8	5.1	$2.49	$2.76	$1.83	$1.70
Medical Office	10	41	7.6	6.5	$35.35	$5.22	$15.18	$5.34
Non-reportable Rental Operations	43	192	7.0	6.0	$10.46	$13.72	$9.92	$6.36
Total Consolidated	3,961	4,031	6.8	5.2	$2.66	$3.30	$1.95	$1.96
Unconsolidated Joint Ventures	346	314	7.4	5.7	$5.15	$6.00	$2.64	$4.82
Total Including Unconsolidated Joint Ventures	4,307	4,345	6.8	5.2	$2.86	$3.50	$2.00	$2.17

	Square Feet of New Second Generation Leases Signed		Average Term in Years		Estimated Tenant Improvement Cost per Square Foot		Leasing Commissions per Square Foot
	2013	2012	2013	2012	2013	2012	2013	2012
Three Months
Industrial	1,462	817	4.6	5.5	$1.72	$4.70	$1.28	$1.86
Office	293	253	6.0	5.9	$14.21	$18.71	$6.80	$6.96
Medical Office	4	4	4.2	5.8	$10.00	$20.00	$2.80	$7.93
Total	1,759	1,074	4.9	5.6	$3.82	$8.05	$2.20	$3.08
Nine Months
Industrial	5,125	3,343	5.0	7.1	$2.18	$2.61	$1.42	$1.50
Office	931	783	6.7	6.6	$16.97	$15.98	$7.34	$7.35
Medical Office	32	27	4.6	7.1	$10.05	$13.20	$1.43	$6.12
Total	6,088	4,153	5.2	7.0	$4.48	$5.20	$2.32	$2.63

Estimated tenant improvements and leasing commissions per square foot for industrial leases signed during the three months ended September 30, 2013 were lower when compared to the same period in 2012. The decrease is largely the result of executing longer-term leases of smaller industrial spaces that required a greater investment per square foot during the three months ended September 30, 2012. Industrial leases executed during the three months ended September 30, 2013 trended more towards larger spaces with shorter terms.

Lease Renewals

The following table summarizes our lease renewal activity within our ~~consolidated~~ rental properties for the three and nine months ended September 30, ~~2013~~2016 and ~~2012~~2015, respectively ~~(square feet data in thousands)~~:

	Square Feet of Leases Renewed		Percent of Expiring Leases Renewed				Average Term in Years		Growth (Decline) in Net Effective Rents*				Estimated Tenant Improvement Cost per Square Foot				Leasing Commissions per Square Foot
	2013	2012	2013		2012		2013	2012	2013		2012		2013		2012		2013		2012
Three Months
Industrial	1,459	4,907	51.8	%	93.8	%	4.2	6.5	8.6	%	0.2	%	$	0.92	$	0.41	$	1.18	$	0.90
Office	669	169	78.5	%	47.9	%	5.0	2.4	(2.7	)%	8.2	%	$	7.21	$	2.42	$	5.28	$	1.78
Medical Office	15	7	61.2	%	48.4	%	4.0	2.8	2.5	%	5.3	%	$	4.25	$	4.43	$	2.04	$	1.15
Total	2,143	5,083	58.0	%	90.8	%	4.4	6.4	1.8	%	1.0	%	$	2.91	$	0.48	$	2.47	$	0.93
Nine Months
Industrial	5,461	8,007	54.7	%	84.2	%	4.3	5.8	3.4	%	0.5	%	$	0.68	$	0.40	$	0.85	$	0.93
Office	1,524	1,057	81.7	%	70.7	%	4.8	4.1	(1.2	)%	2.5	%	$	5.53	$	3.27	$	4.70	$	3.06
Medical Office	30	25	27.3	%	43.4	%	4.0	6.7	1.7	%	6.3	%	$	4.96	$	1.70	$	3.74	$	1.13
Total	7,015	9,089	58.7	%	82.2	%	4.4	5.6	1.1	%	1.2	%	$	1.75	$	0.74	$	1.70	$	1.18
* Represents the percentage change in net effective rent between the original leases and the renewal leases. Net effective rents represent average annual base rental payments, on a straight-line basis for the term of each lease, excluding operating expense reimbursements.

Although the industrial lease renewal rates for the three and nine months ended September 30, 2013 were lower than the comparable periods in 2012, we were able to backfill a significant portion of our industrial leases that expired in 2013 with new tenants and, when considering backfill leases and lease-up of vacant space, slightly increased in-service occupancy for our industrial properties to 94.7% at September 30, 2013, from 94.0% at September 30, 2012.



	Square Feet of Leases Renewed (in thousands)		Percent of Expiring Leases Renewed				Average Term in Years		Growth (Decline) in Net Effective Rents*				Estimated Tenant Improvement Cost per Square Foot		Leasing Commissions per Square Foot
	2016	2015	2016		2015		2016	2015	2016		2015		2016	2015	2016	2015
Three Months
Industrial	1,377	1,556	66.5	%	73.1	%	4.1	4.3	20.9	%	13.9	%	$0.58	$0.98	$0.83	$1.25
Medical Office	21	110	62.4	%	95.4	%	4.9	10.7	11.0	%	14.3	%	$2.00	$18.32	$5.64	$6.36
Non-reportable Rental Operations	47	77	98.5	%	59.7	%	5.1	4.7	12.0	%	3.9	%	$1.05	$4.26	$5.67	$3.23
Total Consolidated	1,445	1,743	67.1	%	73.5	%	4.1	4.8	19.4	%	13.1	%	$0.62	$2.22	$1.06	$1.66
Unconsolidated Joint Ventures	134	106	100.0	%	91.9	%	4.3	5.1	18.9	%	2.3	%	$3.14	$1.06	$1.35	$1.33
Total Including Unconsolidated Joint Ventures	1,579	1,849	69.0	%	74.3	%	4.1	4.8	19.4	%	12.7	%	$0.83	$2.15	$1.08	$1.64

Nine Months
Industrial	6,459	5,996	68.6	%	74.9	%	3.5	6.1	15.8	%	12.8	%	$0.45	$1.41	$0.73	$1.36
Medical Office	88	136	78.2	%	83.5	%	6.0	9.4	14.4	%	13.1	%	$7.44	$15.53	$4.05	$5.45
Non-reportable Rental Operations	446	239	79.5	%	59.1	%	10.1	4.4	2.9	%	6.8	%	$2.43	$5.29	$2.41	$3.48
Total Consolidated	6,993	6,371	69.3	%	74.3	%	4.0	6.1	13.1	%	12.3	%	$0.67	$1.86	$0.88	$1.52
Unconsolidated Joint Ventures	1,403	557	82.9	%	87.0	%	5.1	3.2	(1.5	)%	0.1	%	$0.75	$0.88	$2.02	$1.00
Total Including Unconsolidated Joint Ventures	8,396	6,928	71.3	%	75.2	%	4.2	5.8	9.8	%	11.1	%	$0.68	$1.78	$1.07	$1.48
* Represents the percentage change in net effective rent between the original leases and the renewal leases. Net effective rents represent average annual base rental payments, on a straight-line basis for the term of each lease, excluding operating expense reimbursements.

Lease Expirations

Our ability to maintain and improve occupancy rates and net effective rents primarily depends upon our continuing ability to re-lease expiring space. The table below reflects our consolidated in-service portfolio lease expiration schedule, ~~including~~excluding ~~square~~the ~~footage~~leases ~~and~~in ~~annualized~~properties ~~net~~designated ~~effective~~as ~~rent~~held-for-sale, ~~for expiring leases by property type~~ at September 30, ~~2013~~2016 (in thousands, except percentage data and number of leases):

	Total Consolidated Portfolio						Industrial				Office				Medical Office				Other
Year ofExpiration	SquareFeet		Ann. RentRevenue*		% ofRevenue		SquareFeet		Ann. RentRevenue*		SquareFeet		Ann. RentRevenue*		SquareFeet		Ann. Rent Revenue*		SquareFeet		Ann. Rent Revenue*
Remainder of 2013	3,162		$	15,381	2	%	2,913		$	12,150	209		$	2,610	40		$	621	—		$	—
2014	11,541		57,859		9	%	9,910		37,535		1,506		18,117		121		2,087		4		120
2015	11,743		62,650		9	%	9,905		38,944		1,767		22,260		63		1,270		8		176
2016	14,529		75,353		11	%	12,397		45,773		1,869		24,297		244		4,926		19		357
2017	13,244		71,575		11	%	11,445		44,435		1,451		19,772		275		5,659		73		1,709
2018	12,885		80,822		12	%	10,253		39,565		1,963		26,244		592		13,541		77		1,472
2019	11,163		58,275		9	%	9,538		33,671		1,327		17,325		289		7,046		9		233
2020	10,773		62,202		9	%	9,280		37,369		977		14,691		508		9,920		8		222
2021	7,119		42,497		6	%	5,959		23,853		806		10,317		341		8,055		13		272
2022	5,664		31,106		5	%	4,917		16,721		276		4,679		450		9,287		21		419
2023 and Thereafter	15,029		122,773		17	%	11,309		52,441		1,751		25,997		1,910		43,543		59		792
Total Leased	116,852		$	680,493	100	%	97,826		$	382,457	13,902		$	186,309	4,833		$	105,955	291		$	5,772
Total Portfolio Square Feet	124,780						103,310				15,950				5,172				348
Percent Leased	93.7	%					94.7	%			87.2	%			93.4	%			83.7	%
* Annualized rental revenue represents average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. Annualized rental revenue excludes additional amounts paid by tenants as reimbursement for operating expenses.



	Total Consolidated Portfolio					Industrial				Medical Office				Non-reportable
Year of Expiration	Square Feet		Ann. Rent Revenue*		Number of Leases	Square Feet		Ann. Rent Revenue*		Square Feet		Ann. Rent Revenue*		Square Feet		Ann. Rent Revenue*
Remainder of 2016	1,697		$	5,980	42	1,622		$	5,056	34		$	429	41		$	495
2017	11,727		45,819		154	11,499		41,523		188		3,860		40		436
2018	12,932		57,025		189	12,473		46,323		390		9,791		69		911
2019	14,248		64,000		211	13,724		53,222		317		7,546		207		3,232
2020	12,538		64,350		171	12,063		55,097		423		8,772		52		481
2021	12,063		56,252		181	11,694		49,067		257		5,739		112		1,446
2022	11,137		48,909		99	10,776		41,352		337		7,075		24		482
2023	3,693		26,028		64	3,137		16,139		415		7,725		141		2,164
2024	7,446		38,282		47	6,991		30,916		131		2,713		324		4,653
2025	7,913		35,423		39	7,682		31,308		212		3,877		19		238
2026 and Thereafter	19,562		149,641		126	16,507		73,894		2,597		68,369		458		7,378
Total Leased	114,956		$	591,709	1,323	108,168		$	443,897	5,301		$	125,896	1,487		$	21,916

Total Portfolio Square Feet	118,409					110,953				5,580				1,876
Percent Leased	97.1	%				97.5	%			95.0	%			79.3	%
* Annualized rental revenue represents average annual base rental payments, on a straight-line basis for the term of each lease, from space leased to tenants at the end of the most recent reporting period. Annualized rental revenue excludes additional amounts paid by tenants as reimbursement for operating expenses.

Information on current market rents can be difficult to obtain, is highly subjective, and is often not directly comparable between properties. As a result, we believe the increase or decrease in net effective rent on lease renewals, as previously defined, is the most objective and meaningful relationship between rents on leases expiring in the near-term and current market rents.

~~Acquisition~~Building ~~Activity~~Acquisitions

Our decision process in determining whether or not to acquire a target property or portfolio of properties involves several factors, including expected rent growth, multiple yield metrics, property locations and expected demographic growth in each location, current occupancy of the target properties, tenant profile and remaining terms of the in-place leases in the target properties. We pursue both brokered and non-brokered acquisitions, and it is difficult to predict which markets and product types may present acquisition opportunities that align with our strategy. Because of the numerous factors considered in our acquisition decisions, we do not establish specific target yields for future acquisitions.

We acquired 15two ~~properties~~buildings during the nine months ended September 30, ~~2013~~2016 and 37two ~~properties~~buildings during the year ended December 31, ~~2012~~2015. The following table summarizes the acquisition price, percent leased at time of acquisition and in-place yields, by product type, for these acquisitions (in thousands, except percentage data):

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	Year-to-Date 2013 Acquisitions						Full Year 2012 Acquisitions
	Year-to-Date 2016 Acquisitions						Full Year 2015 Acquisitions
Type	Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***		Acquisition Price*		In-Place Yield**		Percent Leased at Acquisition Date***
Industrial	$	~~459~~63,~~395~~000	6.25	%	100.0	%	$	~~265~~28,~~203~~277	6.60	%	94100.90	%
Medical Office	2016,~~500~~251		67.90	%	82100.30	%	~~514,455~~—		~~6.5~~—	%	~~92.9~~—	%
Total	$	~~479~~79,~~895~~251	6.36	%	99100.70	%	$	~~779~~28,~~658~~277	6.50	%	94100.40	%
* Includes real estate assets and net acquired lease-related intangible assets, including above or below market leases, but excludes other acquired working capital assets and liabilities.
** In-place yields of completed acquisitions are calculated as the current annualized net rental payments from space leased to tenants at the date of acquisition, divided by the acquisition price of the acquired real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.
*** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of acquisition.

~~Disposition~~As ~~Activity~~described in Note 5 to the consolidated financial statements included in Part I, Item 1 of this Report, a $63.0 million property was acquired during the nine months ended September 30, 2016 through a non-monetary distribution of its ownership interest from an unconsolidated joint venture, in connection with that joint venture's dissolution.

Building Dispositions

We regularly work to identify, consider and pursue opportunities to dispose of properties on an opportunistic basis and on a basis that is generally consistent with our strategic plans.

We sold 1122 wholly owned buildings during the nine months ended September 30, ~~2013~~2016 and 28153 wholly owned buildings during the year ended December 31, ~~2012~~2015. The following table summarizes the sales prices, in-place yields and percent leased, by product type, of these buildings (in thousands, except percentage data):

	Year-to-Date 2013 Dispositions						Full Year 2012 Dispositions
	Year-to-Date 2016 Dispositions						Full Year 2015 Dispositions
Type	Sales Price		In-Place Yield*		Percent ~~Leased~~Occupied**		Sales Price		In-Place Yield*		Percent ~~Leased~~Occupied**
Industrial	$	14135,~~160~~517	76.3	%	5496.37	%	$	60410,~~913~~647	86.46	%	7993.35	%
Office	27,500		8.0	%	95.5	%	58,881		7.1	%	79.4	%
Medical Office	—		—	%	—	%	20,400		6.8	%	100.0	%
Medical Office	76,050		5.7	%	77.3	%	—		—	%	—	%
Non-reportable Rental Operations	233,134		7.8	%	84.2	%	1,310,538		7.2	%	85.5	%
Other	~~188,000~~—		~~5.0~~—	%	~~89.8~~—	%	1140,~~400~~250		9.0	%	8083.54	%
Total	$	~~305~~368,~~710~~651	57.63	%	7990.49	%	$	~~131~~1,~~194~~781,835	7.91	%	7988.47	%
* In-place yields of completed dispositions are calculated as current annualized net rental payments from space leased to tenants at the date of sale, divided by the sales price of the real estate. Annualized net rental payments are comprised of base rental payments, excluding additional amounts payable by tenants as reimbursement for operating expenses, less current annualized operating expenses not recovered through tenant reimbursements.
** Represents percentage of total square feet leased based on executed leases and without regard to whether the leases have commenced, at the date of sale.
** Represents percentage of total square feet leased based on executed leases where the leases have commenced.

Sales of wholly-owned properties during the nine months ended September 30, 2013 included a 391,000 square foot retail property in South Florida for $188.0 million.

During the nine months ended September 30, 2013, 17 office properties and one industrial property were sold by two of our unconsolidated joint ventures for which capital distributions to us totaled $89.5 million. Our share of gains from joint venture property sales, which are included in equity in earnings, related almost entirely to these sales and totaled $49.0 million.

Development

At September 30, ~~2013~~2016, we had 27.32 million square feet of property under development with total estimated costs upon completion of $~~435~~588.58 million compared to 4.7.4 million square feet with total estimated costs upon completion of $~~537~~692.52 million at September 30, ~~2012~~2015. The square footage and estimated costs include both consolidated properties and unconsolidated joint venture development activity at 100%.

2731

The following table summarizes our properties under development at September 30, 2016 (in thousands, except percentage data):

Ownership Type	SquareFeet	PercentLeased	~~PercentLeased~~	TotalEstimatedProject Costs	~~TotalEstimatedProject Costs~~		TotalIncurredto Date	~~TotalIncurredto Date~~		AmountRemainingto be Spent	~~AmountRemainingto be Spent~~
Consolidated properties	16,~~980~~537	64%	~~83%~~	$	$561,063	~~347,367~~	$	$267,462	~~168,786~~	$	$293,601	~~178,581~~
Joint venture properties	273		100%		88,169			68,992			19,177
Unconsolidated joint venture property	708	—%		27,722			11,737			15,985
Total	27,~~253~~245	58%	~~85%~~	$	$588,785	~~435,536~~	$	$279,199	~~237,778~~	$	$309,586	~~197,758~~

Funds From Operations

In addition to net income (loss) computed in accordance with GAAP, we assess and measure the overall operating results of the General Partner and the Partnership based upon Funds From Operations ("FFO"), which is an industry performance measure that management believes is a useful indicator of consolidated operating performance. FFO is used by industry analysts and investors as a supplemental operating performance measure of a REIT. The National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. The most comparable GAAP measure is net income (loss) attributable to common shareholders or common unitholders. FFO attributable to common shareholders or common unitholders should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders or any other measures derived in accordance with GAAP and may not be comparable to other similarly titled measures of other companies. FFO is calculated in accordance with the definition that was adopted by the Board of Governors of NAREIT.

Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the use of FFO attributable to common shareholders or common unitholders, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful. Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REITs activity and assist them in comparing these operating results between periods or between different companies.

The following table shows a reconciliation of net income (loss) attributable to common shareholders or common unitholders to the calculation of FFO attributable to common shareholders or common unitholders for the three and nine months ended September 30, 2013 and 2012, respectively (in thousands):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Net income (loss) attributable to common shareholders of the General Partner	$	(6,067	)	$	(28,230	)	$	83,470		$	(93,102	)
Add back: Net income (loss) attributable to noncontrolling interests - common limited partnership interests in the Partnership	(92		)	(459		)	1,142			(1,736		)
Net income (loss) attributable to common unitholders of the Partnership	(6,159		)	(28,689		)	84,612			(94,838		)
Adjustments:
Depreciation and amortization	104,438			95,139			303,477			280,338
Company share of joint venture depreciation and amortization	7,127			8,782			20,730			26,008
Gains on depreciable property sales—wholly owned	(8,441		)	(2,011		)	(102,160		)	(11,424		)
Gains on depreciable property sales—share of joint venture	(155		)	(2,065		)	(48,960		)	(2,065		)
Funds From Operations attributable to common unitholders of the Partnership	$	96,810		$	71,156		$	257,699		$	198,019
Additional General Partner Adjustments:
Net (income) loss attributable to noncontrolling interests - common limited partnership interests in the Partnership	92			459			(1,142		)	1,736
Noncontrolling interest share of adjustments	(1,384		)	(1,638		)	(2,339		)	(5,358		)
Funds From Operations attributable to common shareholders of the General Partner	$	95,518		$	69,977		$	254,218		$	194,397

Results of Operations

A summary of our operating results and property statistics ~~for the three and nine months ended September 30, 2013 and 2012, respectively,~~ is as follows (in thousands, except number of properties and per share or Common Unit data):

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
	2016			2015			2016			2015
Rental and related revenue from continuing operations	$	~~228~~206,~~883~~848		$	~~199~~200,~~326~~938		$	~~668~~609,~~230~~171		$	~~586~~617,~~570~~549
General contractor and service fee revenue	6219,~~807~~351			9333,~~932~~599			~~161~~68,~~004~~546			~~226~~110,~~507~~320
Operating income	46152,~~176~~453			42119,~~326~~703			~~186~~380,~~962~~377			~~117~~389,~~925~~169
General Partner
Net income (loss) attributable to common shareholders	$	(6,067	)	$	(28,230	)	$	83,470		$	(93,102	)
Net income attributable to common shareholders	$	112,014		$	76,434		$	264,388		$	591,058
Weighted average common shares outstanding	~~324~~351,~~895~~856			~~270~~345,~~289~~256			~~320~~348,~~810~~341			~~265~~344,~~153~~986
Weighted average common shares and potential dilutive securities	~~324~~358,~~895~~981			~~270~~352,~~289~~150			~~325~~355,~~380~~405			~~265~~352,~~153~~013
Partnership
Net income (loss) attributable to common unitholders	$	(6,159	)	$	(28,689	)	$	84,612		$	(94,838	)
Net income attributable to common unitholders	$	113,145		$	77,185		$	267,058		$	597,270
Weighted average Common Units outstanding	~~329~~355,~~283~~351			~~274~~348,~~800~~760			~~325~~351,~~203~~840			~~270~~348,~~095~~595
Weighted average Common Units and potential dilutive securities	~~329~~358,~~283~~981			~~274~~352,~~800~~150			~~325~~355,~~380~~405			~~270~~352,~~095~~013
General Partner and Partnership
Basic income (loss) per common share or Common Unit:
Basic income per common share or Common Unit:
Continuing operations	$	(0.0532	)	$	(0.1122	)	$	(0.0675	)	$	(0.3849	)
Discontinued operations	$	~~0.03~~—		$	—		$	~~0.31~~—		$	01.0222
Diluted income (loss) per common share or Common Unit:
Diluted income per common share or Common Unit:
Continuing operations	$	(0.0532	)	$	(0.1122	)	$	(0.0675	)	$	(0.3849	)
Discontinued operations	$	~~0.03~~—		$	—		$	~~0.31~~—		$	01.0221
Number of in-service consolidated properties at end of period	~~645~~486			~~616~~491			~~645~~486			~~616~~491
In-service consolidated square footage at end of period	~~124~~118,~~780~~604			~~112~~114,~~044~~837			~~124~~118,~~780~~604			~~112~~114,~~044~~837
Number of in-service joint venture properties at end of period	~~108~~59			~~125~~70			~~108~~59			~~125~~70
In-service joint venture square footage at end of period	2213,~~224~~269			2519,~~238~~145			2213,~~224~~269			2519,~~238~~145

Supplemental 29Performance Measures

~~Comparison~~In addition to net income computed in accordance with GAAP, we assess and measure the overall operating results of ~~Three~~the ~~Months~~General ~~Ended~~Partner ~~September 30~~and the Partnership using certain non-GAAP supplemental performance measures, ~~2013~~which toinclude ~~Three~~(i) ~~Months~~Funds ~~Ended~~From ~~September 30~~Operations ("FFO"), ~~2012~~(ii) PNOI and (iii) Same-Property Net Operating Income - Cash Basis ("SPNOI").

These non-GAAP metrics are commonly used by industry analysts and investors as supplemental operating performance measures of REITs and are viewed by management to be useful indicators of operating performance. Historical cost accounting for real estate assets in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry analysts and investors have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Management believes that the

use of FFO, PNOI and SPNOI, combined with net income (which remains the primary measure of performance), improves the understanding of operating results of REITs among the investing public and makes comparisons of REIT operating results more meaningful.

The most comparable GAAP measure to FFO is net income (loss) attributable to common shareholders or common unitholders, while the most comparable GAAP measure to PNOI and SPNOI is income (loss) from continuing operations before income taxes.

FFO, PNOI and SPNOI each exclude expenses that materially impact our overall results of operations and, therefore, should not be considered as a substitute for net income (loss) attributable to common shareholders or common unitholders, income (loss) from continuing operations before income taxes, or any other measures derived in accordance with GAAP. Furthermore, these metrics may not be comparable to other similarly titled measures of other companies.

Funds From Operations

The National Association of Real Estate Investment Trusts ("NAREIT") created FFO as a non-GAAP supplemental measure of REIT operating performance. FFO, as defined by NAREIT, represents GAAP net income (loss), excluding extraordinary items as defined under GAAP, gains or losses from sales of previously depreciated real estate assets, impairment charges related to depreciable real estate assets, plus certain non-cash items such as real estate asset depreciation and amortization, and after similar adjustments for unconsolidated partnerships and joint ventures. We calculate FFO in accordance with the definition that was adopted by the Board of Governors of NAREIT.

Management believes that the use of FFO as a performance measure enables investors and analysts to readily identify the operating results of the long-term assets that form the core of a REIT's activity and assists them in comparing these operating results between periods or between different companies that use the NAREIT definition of FFO.

The following table shows a reconciliation of net income attributable to common shareholders or common unitholders to the calculation of FFO attributable to common shareholders or common unitholders (in thousands):



	Three Months Ended September 30,						Nine Months Ended September 30,
	2016			2015			2016			2015
Net income attributable to common shareholders of the General Partner	$	112,014		$	76,434		$	264,388		$	591,058
Add back: Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	1,131			751			2,670			6,212
Net income attributable to common unitholders of the Partnership	113,145			77,185			267,058			597,270
Adjustments:
Depreciation and amortization	80,688			79,898			238,647			243,652
Company share of joint venture depreciation, amortization and other adjustments	3,772			12,501			11,664			22,247
Gain on dissolution of unconsolidated company	—			—			(30,697		)	—
Impairment charges - depreciable property	3,042			—			3,042			864
Gains on depreciable property sales - wholly owned	(83,017		)	(71,325		)	(138,074		)	(619,948		)
Income tax benefit triggered by depreciable property sales	(359		)	(3,350		)	(173		)	(934		)
Gains on depreciable property sales - share of joint venture	(5,668		)	(189		)	(23,700		)	(13,722		)
FFO attributable to common unitholders of the Partnership	$	111,603		$	94,720		$	327,767		$	229,429
Additional General Partner Adjustments:
Net income attributable to noncontrolling interests - common limited partnership interests in the Partnership	(1,131		)	(751		)	(2,670		)	(6,212		)
Noncontrolling interest share of adjustments	15			(176		)	(604		)	3,808
FFO attributable to common shareholders of the General Partner	$	110,487		$	93,793		$	324,493		$	227,025

The increase in FFO during the nine months ended September 30, 2016, compared to the nine months ended

September 30, 2015, was primarily the result of $82.6 million in losses on debt extinguishment that were recognized during the second quarter of 2015. Development properties being placed in service, operational improvements and lower interest expense also contributed to the increased FFO in 2016 as compared to the corresponding periods in 2015.

Property-Level Net Operating Income - Cash Basis

PNOI is comprised of rental revenues from continuing operations less rental expenses and real estate taxes from continuing operations, along with certain other adjusting items. As a performance metric that consists of only the cash-based revenues and expenses directly related to ongoing real estate rental operations, PNOI is narrower in scope than FFO.

PNOI, as we calculate it, may not be directly comparable to similarly titled, but differently calculated, measures for other REITs. We believe that PNOI is another useful supplemental performance measure, as it is an input in many REIT valuation models and it provides a means by which to evaluate the performance of the properties within our Rental Operations segments.

The major factors influencing PNOI are occupancy levels, acquisitions and sales, development properties that achieve stabilized operations, rental rate increases or decreases, and the recoverability of operating expenses.

Note 10 to the consolidated financial statements included in Part I, Item 1 of this Report shows a calculation of our PNOI for the three and nine months ended September 30, 2015 and 2016 and provides a reconciliation of PNOI for our Rental Operations segments to income from continuing operations before income taxes.

Same Property Net Operating Income - Cash Basis

We also evaluate the performance of our properties, including our share of properties we jointly control, on a "same property" basis, using a metric referred to as SPNOI. We view SPNOI as a useful supplemental performance measure because it improves comparability between periods by eliminating the effects of changes in the composition of our portfolio.

On an individual property basis, SPNOI is generally computed in a consistent manner as PNOI.

We have defined our same-property portfolio, for the three months ended September 30, 2016, as those properties that have been owned and in operation throughout the twenty-four months ended September 30, 2016. In addition to excluding properties that have not been owned and in operation for the twenty-four months ended September 30, 2016, we have also excluded properties from our same-property portfolio where revenues from individual lease buyouts in excess of $250,000 have been recognized. A reconciliation of SPNOI to income from continuing operations before income taxes is presented as follows (in thousands):



	Three Months Ended September 30,						Percent
	2016			2015			Change
Income from continuing operations before income taxes	$	112,104		$	73,835
Share of SPNOI from unconsolidated joint ventures	5,205			5,120
PNOI excluded from the same property population	(25,559		)	(16,636		)
Earnings from Service Operations	(2,169		)	(3,905		)
Rental Operations revenues and expenses excluded from PNOI	(8,009		)	(17,476		)
Non-Segment Items	40,908			74,975
SPNOI	$	122,480		$	115,913		5.7	%

The composition of the line items titled "Rental Operations revenues and expenses excluded from PNOI" and "Non-Segment Items" from the table above are shown in greater detail in Note 10 to the consolidated financial statements included in Part I, Item 1 of this Report.

We believe that the factors that impact SPNOI are generally the same as those that impact PNOI. The following table details the number of properties, square feet, average occupancy and cash rental rates for the properties included in SPNOI for the respective periods:



		Three Months Ended September 30,
		2016

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