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SECURITIES AND EXCHANGE COMMISSION

FORM 8-K

Current Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (date of earliest event reported): October 28, 2003

AMB PROPERTY CORPORATION

Pier 1, Bay 1, San Francisco, California 94111

415-394-9000

n/a

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ITEM 5 OTHER EVENTS.

On October 28, 2003, we reported that earnings per share (EPS) in the third quarter 2003, excluding the effects of SFAS 150, were $0.26, including $0.10 per share of gains on disposition of real estate, compared with EPS of $0.30 for the same period in 2002, which included $0.04 in gains.

For the year-to-date, excluding the effects of SFAS 150, EPS was $1.15, including $0.57 per share of gains on disposition of real estate, up from $0.94 per share for the year-to-date 2002, which included $0.07 of gains.

The third quarter and year-to-date EPS numbers include a $0.04 charge consistent with the SEC’s July 31, 2003 statement that costs associated with redemption of preferred stock should be factored into the calculation of net income per share (EITF Issue D-42). Absent this required accounting change, EPS in the quarter was $0.31.

The Financial Accounting Standards Board (FASB) is scheduled to review the application of SFAS 150 with respect to minority interests in finite-lived entities at its meeting on Wednesday, October 29, 2003. Any action taken by the FASB could have an impact on the manner and timing in which we and other companies are required to account for minority interests in certain consolidated joint ventures. If the FASB elects to implement SFAS 150 in its current form, we will adopt SFAS 150 and present our financial statements, including the effects of SFAS 150 in our Quarterly Report on Form 10-Q for the quarter ended September 30, 2003. A presentation of the liability amounts that would be required under SFAS 150, as well as the impact on the periods reported, is presented in the tables attached to this report.

Occupancy in our industrial operating portfolio increased 50 basis points over the prior quarter reaching 92.0% at September 30, 2003, compared with 94.4% at September 30, 2002. Cash-basis same store net operating income decreased 7.7% in the quarter and decreased 2.2% year-to-date, reflecting the impact of lower occupancy and rental rate levels from the year-ago period.

Investment Activities

During the third quarter, we continued to be an opportunistic seller of non-strategic assets selling one 332,900 square foot retail asset in Miami for $56.7 million and nine industrial buildings in various markets totaling 483,600 square feet for $45.5 million. The stabilized cash capitalization rate for these dispositions averaged 7.9%.

We acquired 13 buildings totaling 839,300 square feet for a total investment of $57.4 million, adding to our market presence in Chicago, Miami, Northern New Jersey and to our on-tarmac holdings during the third quarter.

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We began development of two new projects in Mexico City and the LA Basin in the third quarter totaling an approximate 1.6 million square feet for an estimated investment of $67.5 million. Our committed industrial development and renovation pipeline through 2005 currently stands at $207.5 million and consists of an expected 4.0 million square feet.

We continue to create profits from development projects available for sale. During the third quarter, three such projects were sold generating a net cash gain to us of $2.2 million. Our build-to-sell program now includes a planned 603,200 square feet in four projects, consisting of both build-to-suit and speculative developments with an estimated total investment of $41.6 million.

Financing Activities

During the quarter, we redeemed all 3,995,800 of our outstanding shares of 8.5% Series A Cumulative Redeemable Preferred Stock (NYSE:AMB-A). The preferred redemption price was $25.0826 per share, which was equal to the original issuance price of $25.00 per share plus accumulated and unpaid dividends through the redemption date of July 28, 2003.

Also during the quarter, we obtained long-term secured debt financing on behalf of three of our co-investment joint ventures, totaling $137 million at an average rate of 4.5% and a weighted average maturity of approximately eight years.

Eugene F. Reilly Joins Senior Management Team

On October 7, 2003, we announced that Gene Reilly joined us as executive vice president, North American Development. Working from our Boston office, Reilly is responsible for all of our development activities in North America and is a member of our investment committee.

Supplemental Reporting Measure

We report funds from operations per fully diluted share and unit (FFOPS) in accordance with the standards established by NAREIT as a supplemental earnings measure. Third quarter 2003 FFOPS before the impact of required accounting changes was $0.52, compared with $0.58 in the same period of 2002. Including required accounting changes for preferred stock redemption costs of $0.04 per share, which are required under EITF Issue D-42, FFOPS in the quarter was $0.48, compared with $0.58 in 2002.

Similarly, FFOPS for the nine months ended September 30, 2003 before required accounting changes was $1.65 compared with $1.78 for the same period in 2002. FFOPS for the year-to-date inclusive of changes in accounting for impairment losses and offering costs for preferred stock redemptions totaling $0.10 per share was $1.54, compared with $1.79 for the same period in 2002. These numbers exclude any changes to the definition of FFO that NAREIT may implement in connection with SFAS 150.

Previously, in accordance with NAREIT’s FFO implementation guidance, we excluded unrealized impairment losses on real estate investment either held for sale or for long-term investment. Recently, NAREIT issued guidance that such losses should no longer be added back for purposes of calculating FFO.

In the footnotes to the attached financial statements, we provide a discussion of why management believes FFO is a useful measure of operating performance; of ways in which investors might use FFO when assessing our financial performance; and of FFO’s limitations as a measurement tool.

A reconciliation from the net income to funds from operations is provided in the attached tables.

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Consolidated Balance Sheets
(dollars in thousands)

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Consolidated Statement of Operations
(dollars in thousands, except share data)

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Insert 1

Consolidated Statements of Funds from Operations (4)
(dollars in thousands, except share data)

1

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While FFO is a relevant and widely used measure of operating performance of real estate investment trusts, it does not represent cash flow from operations or net income as defined by U.S. GAAP and should not be considered as an alternative to those measures in evaluating the Company’s liquidity or operating performance. FFO also does not consider the costs associated with capital expenditures related to its real estate assets nor is FFO necessarily indicative of cash available to fund its future cash requirements. Further, the Company’s computation of FFO may not be comparable to FFO reported by other real estate investment trusts that do not define the term in accordance with the current NAREIT definition or that interpret the current NAREIT definition differently than the Company does.

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SFAS 150 Summary Financial Information ⁽¹⁾
(dollars in thousands, except share data)

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ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS.

(c)

Exhibits:

ITEM 12 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On October 28, 2003, we issued a press release entitled “AMB Property Corporation Announces Third Quarter 2003 Results,” which sets forth our results of operations for the third quarter of 2003. A copy of the press release is attached hereto as Exhibit 99.1. This Form 8-K and the attached exhibit are provided under Item 12 of Form 8-K and are furnished to, but not filed with, the Securities and Exchange Commission.

Forward Looking Statements

Some of the information included in this report contains forward-looking statements, such as statements pertaining to earnings and results of operations and future plans. Forward-looking statements involve numerous risks and uncertainties and you should not rely on them as predictions of future events. The events or circumstances reflected in forward-looking statements might not occur. You can identify forward-looking statements by the use of forward-looking terminology such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “pro forma,” “estimates” or “anticipates” or the negative of these words and phrases or similar words or phrases. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements are necessarily dependent on assumptions, data or methods that may be incorrect or imprecise and we may not be able to realize them. We caution you not to place undue reliance on forward-looking statements, which reflect our analysis only and speak only as of the date of this report or the dates indicated in the statements. We assume no obligation to update or supplement forward-looking statements. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements: defaults on or non-renewal of leases by tenants, increased interest rates and operating costs, our failure to obtain necessary outside financing, difficulties in identifying properties to acquire and in effecting acquisitions, our failure to successfully integrate acquired properties and operations, our failure to divest of properties we have contracted to sell or to timely reinvest proceeds from any divestitures, risks and uncertainties affecting property development and construction (including construction delays, cost overruns, our inability to obtain necessary permits and public opposition to these activities), our failure to qualify and maintain our status as a real estate investment trust, environmental uncertainties, risks related to natural disasters, financial market fluctuations, changes in real estate and zoning laws, risks related to doing business internationally and increases in real property tax rates. Our success also depends upon economic trends generally, including interest rates, income tax laws, governmental regulation, legislation, population changes and certain other matters discussed under the heading “Management’s Discussion and Analysis of Financial

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Condition and Results of Operations—Business Risks” and elsewhere in our most recent annual report on Form 10-K and quarterly report on Form 10-Q.

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SIGNATURES

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