EXHIBIT 99.1
Item 2. Properties
INDUSTRIAL PROPERTIES
     As of December 31, 2006, we owned and managed 964 industrial buildings aggregating approximately 100.7 million rentable square feet (on a consolidated basis, we had 820 industrial buildings aggregating approximately 80.3 million rentable square feet), excluding development and renovation projects and recently completed development projects available for sale or contribution, located in 34 markets throughout the United States and in China, France, Germany, Japan, Mexico and the Netherlands. Our industrial properties were 96.1% leased to 2,633 customers, the largest of which accounted for no more than 3.1% of our annualized base rent from our industrial properties. See Part IV, Item 15: Note 16 of “Notes to Consolidated Financial Statements” for segment information related to our operations.
     Property Characteristics. Our industrial properties, which consist primarily of warehouse distribution facilities suitable for single or multiple customers, are typically comprised of multiple buildings.
     The following table identifies types and characteristics of our industrial buildings and each type’s percentage, based on square footage, of our total owned and managed operating portfolio, which we define as properties in which we have at least a 10% ownership interest, for which we are the property or asset manager, and which we intend to hold for the long-term.
                     
        December 31,
Building Type   Description   2006   2005(1)
Warehouse  
Customers typically 15,000-75,000 square feet, single or multi-customer
     48.4 %     44.2 %
Bulk Warehouse  
Customers typically over 75,000 square feet, single or multi-customer
     38.3 %     40.0 %
Flex Industrial  
Includes assembly or research & development, single or multi-customer
     4.5 %     5.9 %
Light Industrial  
Smaller customers, 15,000 square feet or less, higher office finish
     3.5 %     4.6 %
Trans-Shipment  
Unique configurations for truck terminals and cross-docking
     1.5 %     1.7 %
Air Cargo  
On-tarmac or airport land for transfer of air cargo goods
     3.2 %     3.1 %
Office  
Single or multi-customer, used strictly for office
     0.6 %     0.5 %
   
 
                
   
 
     100.0 %     100.0 %
 
(1)   The information for 2005 is presented on a consolidated basis while the information for 2006 is presented on an owned and managed basis. Management believes that the difference in comparability between 2006 and 2005 is not significant.
     Lease Terms. Our industrial properties are typically subject to lease on a “triple net basis,” in which customers pay their proportionate share of real estate taxes, insurance and operating costs, or are subject to leases on a “modified gross basis,” in which customers pay expenses over certain threshold levels. In addition, most of our leases include fixed rental increases or Consumer Price Index-based rental increases. Lease terms typically range from three to ten years, with a weighted average of six years, excluding renewal options. However, the majority of our industrial leases do not include renewal options.
     Overview of Major Target Markets. Our industrial properties are typically located near major airports, key interstate highways and seaports in major U.S. metropolitan areas, which currently comprise Atlanta, Chicago, Dallas, Los Angeles, Miami, Northern New Jersey/New York City, the San Francisco Bay Area, and Seattle. Our other U.S. target markets include Austin, Baltimore/Washington D.C., Boston, Houston, Minneapolis and Orlando. Our non-U.S. industrial properties are located in major distribution markets, including Amsterdam, Frankfurt, Guadalajara, Hamburg, Lyon, Mexico City, Osaka, Paris, Queretaro, Shanghai, Singapore, Tokyo and Toronto.
     Within these metropolitan areas, our industrial properties are generally concentrated in locations with limited new construction opportunities within established, relatively large submarkets, which we believe should provide a higher rate of occupancy and rent growth than properties located elsewhere. These in-fill locations are typically near major airports, seaports or convenient to major highways and rail lines, and are proximate to large and diverse labor pools. There is typically broad demand for industrial space in these centrally located submarkets due to a diverse mix of industries and types of industrial uses, including warehouse distribution,

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light assembly and manufacturing. We generally avoid locations at the periphery of metropolitan areas where there are fewer constraints to the supply of additional industrial properties.

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Owned and Managed Market Operating Statistics (1)
     As of December 31, 2006, we held investments in operating properties in 34 markets in our owned and managed operating portfolio throughout the United States and in China, France, Germany, Japan, Mexico and the Netherlands. The following table represents properties in which we have at least a 10% ownership interest, for which we are the property or asset manager, and which we intend to hold for the long-term:
                                                                                 
                                                                            Total  
            No. New     San                                                     Principal  
    Southern     Jersey/     Francisco             U.S.     South                             Global  
    California (7)     New York     Bay Area     Chicago     On-Tarmac (2)     Florida     Seattle     Tokyo     Paris     Markets  
Rentable square feet
     14,858,376       10,538,097       10,499,059       11,321,419       2,681,328       5,678,594       7,430,006       2,849,618       1,885,532       67,742,029  
Occupancy percentage
     95.8 %     98.7 %     97.4 %     95.1 %     96.3 %     97.9 %     96.0 %     88.8 %     96.2 %     96.3 %
ABR (000’s) (3)
   $ 92,562     $ 75,719     $ 70,466     $ 56,603     $ 46,402     $ 42,148     $ 34,913     $ 31,179     $ 15,179       465,171  
% of total ABR (3)
     14.3 %     11.7 %     10.9 %     8.7 %     7.2 %     6.5 %     5.4 %     4.9 %     2.3 %     71.9 %
ABR per square foot
   $ 6.50     $ 7.28     $ 6.89     $ 5.26     $ 17.96     $ 7.58     $ 4.89     $ 12.32     $ 8.37     $ 7.13  
Lease expirations as a % of ABR: (3)
                                                                                
2007
     9.4 %     10.8 %     13.7 %     26.3 %     16.0 %     22.5 %     18.9 %     3.5 %     2.0 %     10.3 %
2008
     19.1 %     13.2 %     16.7 %     15.2 %     13.8 %     11.1 %     13.2 %     7.7 %     0.7 %     10.2 %
2009
     13.7 %     15.3 %     22.8 %     13.9 %     6.5 %     16.3 %     21.2 %     18.1 %     5.9 %     11.3 %
 
                                                                                
Weighted average lease terms:
                                                                                
Original
     5.9       6.9       5.6       4.8       8.6       5.6       6.0       5.5       9.0       6.0  
Remaining
     3.3       3.8       2.4       2.6       4.6       3.4       2.8       4.5       5.1       3.2  
 
                                                                                
Trailing four quarter tenant retention:
     78.5 %     75.6 %     71.2 %     69.7 %     90.8 %     77.0 %     76.2 %     33.9 %     0.0 %     73.5 %
 
                                                                                
Rent increases on renewals and rollovers:
                                                                                
Quarter
     13.9 %     11.2 %     (21.0 %)     3.9 %     4.9 %     10.2 %     13.5 %     1.0 %     0.0 %     5.4 %
Same space square feet leased
     990,934       305,275       317,314       557,402       85,242       155,519       155,385       20,744       —       2,587,815  
Year-to-Date
     7.5 %     3.4 %     (13.2 %)     (5.4 %)     4.1 %     5.2 %     4.1 %     1.0 %     0.0 %     0.3 %
Same space square feet leased
     2,842,876       2,175,615       1,505,411       2,270,278       418,545       1,083,300       1,080,155       192,391       —       11,568,571  
 
                                                                                
Same store cash basis NOI % change: (4)
                                                                                
Quarter
     (1.4 %)     (7.5 %)     6.5 %     0.0 %     1.9 %     15.6 %     (1.1 %)     (5.2 %)     9.9 %     0.7 %
Year-to-Date
     2.6 %     (1.2 %)     2.1 %     2.3 %     3.5 %     16.8 %     0.0 %     (7.2 %)     4.7 %     2.3 %
 
                                                                                
Same store square feet as % of aggregate square feet (5)
     81.9 %     83.7 %     93.7 %     74.9 %     95.6 %     82.4 %     82.4 %     32.4 %     54.2 %     80.6 %
 
                                                                                
AMB’s pro rata share of square feet (6)
     9,633,159       5,571,416       7,849,682       6,761,965       2,494,569       4,480,180       3,880,944       569,924       1,885,532       43,127,371  
AMB’s pro rata % share of square feet (6)
     64.8 %     52.9 %     74.8 %     59.7 %     93.0 %     78.9 %     52.2 %     20.0 %     100.0 %     63.7 %

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(1)   Our owned and managed portfolio excludes development and renovation projects and recently completed development projects available for sale or contribution. The markets included here are a subset of our regions defined as East, Southwest, and West Central in North America and Europe and Asia.
 
(2)   Includes domestic on-tarmac air cargo facilities at 14 airports.
 
(3)   Annualized base rent, or ABR, is calculated as monthly base rent (cash basis) per the terms of the lease, as of December 31, 2006, multiplied by 12.
 
(4)   See Part II Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Supplemental Earnings Measures” for a discussion of why management believes same store cash basis NOI is a useful supplemental measure for our management and investors, of ways to use this measure when assessing the Company’s financial performance, and the limitations of the measure as a measurement tool.
 
(5)   Same store pool excludes properties purchased and developments stabilized after December 31, 2004. Stabilized properties are generally defined as properties that are 90% leased or properties for which we have held a certificate of occupancy or where building has been substantially complete for at least 12 months.
 
(6)   Our pro rata share of square feet is calculated on the owned and managed portfolio only and no longer includes non-managed operating properties.
 
(7)   We also own a 19.9 acre land parcel, which is leased to a parking lot operator in the Los Angeles market immediately adjacent to the Los Angeles International Airport.

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Owned and Managed Operating Portfolio Overview (1)
     As of December 31, 2006, our 964 industrial buildings were diversified across 34 markets throughout the United States and in China, France, Germany, Japan, Mexico and the Netherlands. The average age of our industrial properties is approximately 23 years (since the property was built or substantially renovated). The following table represents our owned and managed properties which we define as properties in which we have at least a 10% ownership interest, for which we are the asset or property manager, and which we intend to hold for the long-term.
                                                 
    Rentable     AMB’s Pro Rata                            
    Square     % Share of     Occupancy             % of Total     ABR per  
    Feet     Square Feet     Percentage     ABR (2)     ABR (2)     Square Foot (2)  
Principal Global Markets
     67,742,029       63.7 %     96.3 %   $ 465,171       71.9 %   $ 7.13  
 
                                                
Other Global Target Markets
                                                
North America Markets
                                                
Atlanta
     4,622,651       51.0 %     92.7 %   $ 19,016       2.9 %   $ 4.44  
Baltimore
     3,046,324       88.6 %     99.6 %     20,580       3.2 %     6.78  
Boston
     5,188,593       73.5 %     92.5 %     31,452       4.9 %     6.55  
Dallas
     4,843,064       59.0 %     97.8 %     22,387       3.5 %     4.73  
Mexico City
     1,803,973       20.0 %     95.1 %     10,481       1.6 %     6.11  
Minneapolis
     3,886,858       83.4 %     96.2 %     17,216       2.7 %     4.61  
Other Markets (3)
     6,099,858       56.2 %     95.4 %     32,030       4.8 %     5.50  
 
                                    
Subtotal/Weighted Average
     29,491,321       63.6 %     95.4 %   $ 153,162       23.6 %   $ 5.44  
 
                                                
Europe Markets (4)
                                                
Amsterdam, Netherlands
     964,039       100.0 %     100.0 %   $ 8,377       1.3 %   $ 8.69  
Brussels, Belgium
     166,917       100.0 %     100.0 %     2,669       0.4 %     15.99  
Frankfurt, Germany
     959,214       98.2 %     98.9 %     7,931       1.2 %     8.36  
Hamburg, Germany
     262,491       100.0 %     100.0 %     1,758       0.3 %     6.70  
 
                                    
Subtotal/Weighted Average
     2,352,661       99.3 %     99.5 %   $ 20,735       3.2 %   $ 8.85  
 
                                                
Asia Markets (4)
                                                
Osaka, Japan
     965,155       20.0 %     90.3 %   $ 7,546       1.2 %   $ 8.66  
Shanghai, China
     151,749       100.0 %     100.0 %     550       0.1 %     3.62  
 
                                    
Subtotal/Weighted Average
     1,116,904       30.9 %     91.6 %   $ 8,096       1.3 %   $ 7.91  
 
                                    
Owned and Managed Total
     100,702,915       64.1 %     96.1 %   $ 647,164       100.0 %   $ 6.69  
 
                                    
 
                                                
Other (5)
     7,510,779               96.7 %                        
 
                                            
Total Stabilized Portfolio (6)
     108,213,694               96.1 %                        
 
                                            
 
                                                
Development Projects (7)
     16,617,487                                          
 
                                              
Total Portfolio (7)
     124,831,181                                          
 
                                              
 
(1)   Includes our owned and managed operating and development properties, investments in operating properties through non-managed unconsolidated joint ventures, and recently completed developments that have not yet been placed in operations but are being held for sale or contribution.
 
(2)   Annualized base rent is calculated as monthly base rent (cash basis) per the terms of the lease, as of December 31, 2006, multiplied by 12.
 
(3)   Other Markets includes other target markets (Austin, Guadalajara, Houston, Orlando and Querétaro) and non-target markets (Columbus and New Orleans).
 
(4)   Annualized base rent for leases denominated in foreign currencies is translated using the currency exchange rate at December 31, 2006.

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(5)   Includes investments in 7.4 million square feet of operating properties through our investments in unconsolidated joint ventures that it does not manage which it excludes from our owned and managed portfolio and 151,606 square feet for our investment in AMB Pier One, LLC.
 
(6)   Properties that are 90% leased or properties for which we have held a certificate of occupancy or building has been substantially complete for at least 12 months.
 
(7)   Total Portfolio includes recently completed development projects available for sale or contribution totaling ten projects and 3.0 million square feet.
Lease Expirations (1)
     The following table summarizes the lease expirations for our owned and managed operating properties for leases in place as of December 31, 2006, without giving effect to the exercise of renewal options or termination rights, if any, at or prior to the scheduled expirations:
                         
            Annualized     % of  
    Square     Base     Annualized  
    Feet     Rent (000’s)(2)     Base Rent  
2007
     15,946,335     $ 96,962       14.3 %
2008
     14,987,948       93,720       13.8 %
2009
     15,580,437       101,672       15.0 %
2010
     13,056,478       96,569       14.2 %
2011
     13,193,485       97,473       14.3 %
2012
     7,813,704       66,080       9.7 %
2013
     3,379,973       26,803       3.9 %
2014
     5,326,305       41,105       6.0 %
2015
     2,706,554       20,209       3.0 %
2016 and beyond
     4,925,182       39,118       5.8 %
 
                  
Total
     96,916,401     $ 679,711       100.0 %
 
                  
 
(1)   Schedule includes leases that expire on or after December 31, 2006. Schedule includes owned and managed operating properties which we define as properties in which we have at least a 10% ownership interest, for which we are the property or asset manager, and which we intend to hold for the long-term.
 
(2)   Calculated as monthly base rent at expiration multiplied by 12. Non-U.S. dollar projects are converted to U.S. dollars based on the forward exchange rate at expiration. Amounts represent 100% of the annualized base rent of the owned and managed operating properties.

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Customer Information (1)
     Largest Property Customers. As of December 31, 2006, our 25 largest property customers by annualized base rent, on an owned and managed basis, are set forth in the table below:
                             
                Percentage of           Percentage of
        Aggregate     Aggregate   Annualized     Aggregate
    Number of   Rentable     Leased Square   Base     Annualized
Customer Name (2)   Leases   Square Feet     Feet (3)   Rent (000’s) (4)     Base Rent (5)
United States Government (6) (7)
   47     1,407,748     1.5%   $ 20,295     3.1%
Deutsche Post World Net (DHL) (6)
   41     1,977,650     2.0%     17,791     2.7%
FedEx Corporation (6)
   30     1,361,619     1.4%     14,455     2.2%
Nippon Express
   12     967,039     1.0%     9,636     1.5%
Sagawa Express
   7     726,235     0.8%     9,008     1.4%
Harmonic Inc.
   4     285,480     0.3%     8,907     1.4%
BAX Global Inc/Schenker/Deutsche Bahn (6)
   16     711,117     0.7%     7,067     1.1%
La Poste
   2     854,427     0.9%     6,332     1.0%
City and County of San Francisco
   1     559,605     0.6%     5,714     0.9%
Panalpina, Inc.
   7     870,156     0.9%     5,585     0.9%
Expeditors International
   8     1,003,939     1.0%     4,836     0.7%
Worldwide Flight Services (6)
   14     327,622     0.3%     4,694     0.7%
Eagle Global Logistics, L.P.
   10     758,121     0.8%     4,424     0.7%
Forward Air Corporation
   9     547,544     0.6%     4,290     0.7%
FMI International
   3     764,343     0.8%     4,240     0.7%
UPS
   15     559,994     0.6%     3,911     0.6%
United Air Lines Inc. (6)
   6     191,085     0.2%     3,408     0.5%
World Logi K.K.
   10     343,883     0.4%     3,178     0.5%
Ahold NV
   6     693,280     0.7%     2,970     0.5%
Elmhult Limited Partnership
   5     760,253     0.8%     2,686     0.4%
Virco Manufacturing Corporation
   1     559,000     0.6%     2,566     0.4%
UTi United States Inc.
   11     314,029     0.3%     2,494     0.4%
Menzies Aviation (6)
   4     183,867     0.2%     2,323     0.4%
Integrated Airline Services (6)
   4     198,262     0.2%     2,284     0.4%
Kintetsu World Express
   7     180,027     0.2%     2,278     0.4%
 
                        
Total
         17,106,325     17.8%   $ 155,372     24.2%
 
                        
 
(1)   Schedule includes owned and managed operating properties which we define as properties in which we have at least a 10% ownership interest, for which we are the property or asset manager, and which we intend to hold for the long-term.
 
(2)   Customer(s) may be a subsidiary of or an entity affiliated with the named customer. We also own a 19.9 acre land parcel, adjacent to the Los Angeles International Airport which is leased to a parking lot operator with an annualized base rent of $7.5 million, which is not included.
 
(3)   Computed as aggregate leased square feet divided by the aggregate leased square feet of operating properties.
 
(4)   Annualized base rent is calculated as monthly base rent (cash basis) per the terms of the lease, as of December 31, 2006, multiplied by 12.
 
(5)   Computed as aggregate annualized base rent divided by the aggregate annualized base rent of operating properties.
 
(6)   Airport apron rental amounts (but not square footage) are included.
 
(7)   United States Government includes the United States Postal Service, United States Customs, United States Department of Agriculture and various other U.S. governmental agencies.

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OWNED AND MANAGED OPERATING AND LEASING STATISTICS
Owned and Managed Operating and Leasing Statistics (1)
     The following table summarizes key operating and leasing statistics for all of our owned and managed operating properties as of and for the years ended December 31, 2006, 2005 and 2004:
                         
Operating Portfolio   2006     2005 (2)     2004(2)  
Square feet owned (3) (6)
    100,702,915       87,772,104       90,278,803  
Occupancy percentage (6)
     96.1 %     95.8 %     94.8 %
Weighted average lease terms:
                        
Original
   6.1 years   6.1 years   6.1 years
Remaining
   3.3 years   3.3 years   3.3 years
 
                        
Tenant retention
     70.9 %     64.2 %     66.8 %
 
                        
Same Space Leasing Activity (4):
                        
Rent increases (decreases) on renewals and rollovers
     (0.1 )%     (9.7 )%     (13.2 )%
Same space square footage commencing (millions)
     16.2       13.6       17.5  
 
                        
Second Generation Leasing Activity (5):
                        
Tenant improvements and leasing commissions per sq. ft.:
                        
Retained
   $ 1.41     $ 1.60     $ 1.73  
Re-tenanted
     3.19       3.03       2.70  
 
                  
Weighted average
   $ 2.20     $ 2.34     $ 2.27  
 
                  
Square footage commencing (millions)
     19.1       18.5       22.5  
 
(1)   Schedule includes owned and managed operating properties which we define as properties in which we have at least a 10% ownership interest, for which we are the property or asset manager, and which we intend to hold for the long-term. This excludes development and renovation projects and recently completed development projects available for sale or contribution.
 
(2)   The information for 2005 and 2004 is presented on a consolidated basis while the information for 2006 is presented on an owned and managed basis. Management believes that the difference in comparability between 2006, 2005 and 2004, is not significant.
 
(3)   In addition to owned square feet as of December 31, 2006, we managed, but did not have an ownership interest in, approximately 0.2 million additional square feet of properties. As of December 31, 2006, one of our subsidiaries also managed approximately 1.1 million additional square feet of properties representing the IAT portfolio on behalf of the IAT Air Cargo Facilities Income Fund. As of December 31, 2006, we also had investments in 7.4 million square feet of operating properties through our investments in non-managed unconsolidated joint ventures.
 
(4)   Consists of second generation leases renewing or re-tenanting with current and prior lease terms greater than one year.
 
(5)   Second generation tenant improvements and leasing commissions per square foot are the total cost of tenant improvements, leasing commissions and other leasing costs incurred during leasing of second generation space divided by the total square feet leased. Costs incurred prior to leasing available space are not included until such space is leased. Second generation space excludes newly developed square footage or square footage vacant at acquisition.
 
(6)   On a consolidated basis, we had approximately 80.3 million rentable square feet with an occupancy rate of 97.0% at December 31, 2006.

8

 

Owned and Managed Same Store Operating Statistics (1)
     The following table summarizes key operating and leasing statistics for our owned and managed same store operating properties as of and for the years ended December 31, 2006, 2005 and 2004:
                         
Same Store Pool (2)   2006   2005 (3)   2004 (3)
Square feet in same store pool (4)
     77,291,866       72,452,609       74,516,427  
% of total industrial square feet
     76.8 %     82.5 %     82.5 %
Occupancy percentage (4)
     97.0 %     95.6 %     95.3 %
Weighted average lease terms:
                        
Original
   6.0 years   5.9 years   6.0 years
Remaining
   3.0 years   3.0 years   3.1 years
 
                        
Tenant retention
     72.5 %     63.7 %     66.4 %
 
                        
Rent increases (decreases) on renewals and rollovers
     (0.4 )%     (9.8 )%     (14.7 )%
Square feet leased (millions)
     15.7       13.0       16.2  
Growth % increase (decrease) (including straight-line rents):
                        
Revenues (5)
     2.1 %     (0.7 )%     (0.7 )%
Expenses (5)
     3.5 %     (0.2 )%     (0.5 )%
Net operating income (5)
     1.6 %     (0.8 )%     (0.8 )%
Growth % increase (decrease) (excluding straight-line rents):
                        
Revenues (5)
     2.8 %     0.0 %     (0.8 )%
Expenses (5)
     3.5 %     (0.2 )%     (0.5 )%
Net operating income (5)(6)
     2.6 %     0.1 %     (0.9 )%
 
(1)   Schedule includes owned and managed operating properties which we define as properties in which we have at least a 10% ownership interest, for which we are the property or asset manager, and which we intend to hold for the long-term. This excludes development and renovation projects and recently completed development projects available for sale or contribution.
 
(2)   Same store properties are those properties that we owned during both the current and prior year reporting periods, excluding development properties prior to being stabilized (generally defined as properties that are 90% leased or properties for which we have held a certificate of occupancy or where building has been substantially complete for at least 12 months).
 
(3)   The information for 2005 and 2004 is presented on a consolidated basis while the information for 2006 is presented on an owned and managed basis. Management believes that the difference in comparability between 2006, 2005 and 2004, is not significant.
 
(4)   On a consolidated basis, we had approximately 71.2 million square feet with an occupancy rate of 96.9% at December 31, 2006.
 
(5)   On a consolidated basis, the percentage change was 2.1%, 4.7% and 1.2%, respectively, for revenues, expenses and NOI (including straight-line rents) and 2.4%, 4.7% and 1.6%, respectively, for the revenues, expenses, and NOI (excluding straight line rents).
 
(6)   See Part II, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Supplemental Earnings Measures” for a discussion of same store net operating income and a reconciliation of same store net operating income and net income.

9

 

DEVELOPMENT PROPERTIES
Development Pipeline
     The following table sets forth the properties owned by us as of December 31, 2006, which were undergoing development, renovation or expansion. We cannot assure you that any of these projects will be completed on schedule or within budgeted amounts.
Industrial Development and Renovation Deliveries
                                         
                            Estimated        
                    Estimated     Total     Our  
                Estimated   Square Feet     Investment (1)     Ownership  
    Projects   Market   Developer   Stabilization (6)   at Stabilization (6)     (000’s)     Percentage  
                         
 
   2007 Deliveries                                    
1.
   Beacon Lakes Village - Phase 1 Bldg E1   Miami   Flagler   Q1     52,668     $ 6,100       50 %
2.
   AMB Annagem Distribution Centre   Toronto, Canada   AMB   Q1     198,169       13,800       100 %
3.
   AMB Des Plaines Logistics Center   Chicago   AMB   Q1     126,053       18,600       100 %
4.
   AMB DFW Logistics Center 1   Dallas   AMB   Q1     113,640       5,900       100 %
5.
   AMB Turnberry Distribution VI (7)   Chicago   AMB   Q1     179,400       10,600       20 %
6.
   Beacon Lakes - Bldg 6   Miami   Flagler   Q1     206,464       13,300       79 %
7.
   AMB Fokker Logistics Center 2A   Amsterdam, Netherlands   Delta Group   Q2     118,166       15,900       100 %
8.
   AMB Riverfront Distribution Center - Bldg B   Seattle   AMB   Q2     388,000       22,800       100 %
9.
   AMB Forest Park Freight Terminal   Atlanta   AMB   Q2     142,000       11,200       100 %
10.
   AMB Gonesse Distribution Center   Paris, France   GEPRIM   Q2     598,161       55,400       100 %
11.
   AMB Douglassingel Distribution Center   Amsterdam, Netherlands   Austin   Q3     148,714       22,800       100 %
12.
   AMB Port of Hamburg 1   Hamburg, Germany   BUSS Ports + Logistics   Q3     414,701       36,800       94 %
13.
   AMB Pearson Logistics Centre 1 - Bldg 200   Toronto, Canada   AMB   Q3     205,518       16,800       100 %
14.
   AMB Tres Rios Industrial Park - Bldg 3   Mexico City, Mexico   G. Accion   Q3     628,784       34,900       98 %
15.
   AMB Tres Rios Industrial Park - Bldg 4   Mexico City, Mexico   G. Accion   Q3     315,156       17,800       98 %
16.
   AMB Arrayanes - Bldg 2   Guadalajara, Mexico   G. Accion   Q4     473,720       17,800       90 %
17.
   AMB Aurora Industrial (4)   Minneapolis   AMB   Q4     125,200       7,100       100 %
18.
   AMB Milton 401 Business Park - Bldg 2   Toronto, Canada   AMB   Q4     281,358       21,700       100 %
19.
   AMB Sagamihara Distribution Center   Tokyo, Japan   AMB   Q4     543,056       87,100       100 %
20.
   AMB Pearson Logistics Centre 1 - Bldg 100   Toronto, Canada   AMB   Q4     446,338       31,700       100 %
21.
   AMB Dublin (3)   San Francisco Bay Area   AMB   Q4     —       13,600       100 %
22.
   AMB Hathaway (3)   San Francisco Bay Area   AMB   Q4     —       16,500       100 %
23.
   AMB Valley Distribution Center   Seattle   AMB   Q4     749,970       43,600       100 %
24.
   AMB Redlands - Parcel 2   Los Angeles   AMB   Q4     1,313,470       57,200       100 %
25.
   Platinum Triangle Land - Phase 1 (3)   Los Angeles   AMB   Q4     —       15,400       100 %
26.
   AMB Fokker Logistics Center 3   Amsterdam, Netherlands   Delta Group   Q4     324,725       44,900       50 %
27.
   AMB Isle d’Abeau Logistics Park Bldg C   Lyon, France   GEPRIM   Q4     277,817       21,800       100 %
28.
   AMB Torrance Matrix   Los Angeles   AMB   Q4     161,785       28,000       100 %
 
                                    
 
  
Total 2007 Deliveries
                 8,533,033     $ 709,100       94 %
 
                                    
 
  
Leased or Under Contract For Sale/Funded-to-date
                34 %   $ 516,800 (2)        
 
  
Weighted Average Estimated Yield (5)
                        8.0 %        
                                         
                            Estimated        
                    Estimated     Total     Our  
                Estimated   Square Feet     Investment (1)     Ownership  
    Projects   Market   Developer   Stabilization (6)   at Stabilization (6)     (000’s)     Percentage  
                         
 
   2008 Deliveries                                    
29.
   AMB Steel Road   Los Angeles   AMB   Q1     161,000     $ 10,400       100 %
30.
   Beacon Lakes Bldg 7   Miami   Flagler   Q1     193,090       14,400       79 %
31.
   AMB Amagasaki Distribution Center 2   Osaka, Japan   AMB   Q2     981,679       105,900       100 %
32.
   Agave - Bldg 5   Mexico City, Mexico   G. Accion   Q2     103,204       7,100       98 %
33.
   AMB Le Grand Roissy Distribution - Mitry   Paris, France   SIRIUS   Q2     37,954       4,600       100 %
34.
   AMB Shinkiba Distribution Center   Tokyo, Japan   AMB   Q2     328,764       90,000       100 %
35.
   AMB Theodore Park Logistics Center   Dusseldorf, Germany   Delta Group   Q2     140,566       17,000       100 %
36.
   AMB Narita Distribution Center 1 - Bldg C   Tokyo, Japan   AMB   Q2     348,891       43,500       100 %
37.
   AMB Barajas Logistics Park   Madrid, Spain   AMB   Q2     427,133       39,500       80 %
38
   AMB Funabashi Distribution Center 5   Tokyo, Japan   AMB   Q2     469,254       57,500       100 %
39.
   AMB Palmetto Distribution Center   Orlando   AMB   Q2     406,400       20,800       100 %
40.
   Platinum Triangle Land - Phase 2 (3)   Los Angeles   AMB   Q2     —       30,100       100 %
41.
   AMB Franklin Commerce Center   New Jersey   AMB   Q3     366,896       26,700       100 %
42.
   AMB Pompano Center of Commerce - Phase 1   Miami   AMB   Q3     218,835       21,400       100 %
43.
   AMB Lijnden Logistics Court 1   Amsterdam, Netherlands   Keystone Vasgoed   Q3     96,520       16,800       100 %
44.
   AMB Nanko Naka Distribution Center   Osaka, Japan   AMB   Q3     402,313       48,700       100 %
45.
   AMB Siziano Business Park - Bldg 1   Milan, Italy   Redilco   Q4     436,916       34,000       50 %
 
  
Total 2008 Deliveries
                 5,119,415     $ 588,400       95 %
 
                                    
 
  
Leased or Under Contract For Sale/Funded-to-date
                 7 %   $ 297,700 (2)        
 
  
Weighted Average Estimated Yield (5)
                        7.1 %        
 
   Total Scheduled Deliveries                 13,652,448     $ 1,297,500          
 
                                    
 
  
Leased or Under Contract For Sale/Funded-to-date
                 24 %   $ 814,500 (2)        
 
  
Weighted Average Estimated Yield (5)
                        7.6 %        

10

 

 
(1)   Represents total estimated cost of development, renovation or expansion, including initial acquisition costs, prepaid ground leases and associated carry costs. Estimated total investments are based on current forecasts and are subject to change. Non-U.S. dollar investments are translated to U.S. dollars using the exchange rate at December 31, 2006.
 
(2)   Our pro rata share of amounts funded to date for 2007 and 2008 deliveries was $489.0 million and $288.5, respectively, for a total of $777.5 million.
 
(3)   Represents a value-added conversion project.
 
(4)   Represents a renovation project.
 
(5)   Yields exclude value-added conversion projects and are calculated on an after-tax basis for international projects.
 
(6)   Stabilization is generally defined as properties that are 90% leased or properties for which we have held a certificate of occupancy or where building has been substantially complete for at least twelve months.
 
(7)   Represents projects in unconsolidated joint ventures.
     The following table sets forth completed development projects that we intend to either sell or contribute to co-investment funds as of December 31, 2006:
Completed Development Projects Available for Sale or Contribution (1)
                             
                Estimated         
        Estimated     Total     Our  
        Square Feet     Investment     Ownership  
Projects (1)   Market   at Completion     (000’s) (2)     Percentage  
  1. Agave — Bldg 4
   Mexico City, Mexico     217,514     $ 14,200       98 %
  2. AMB BRU Air Cargo Center
   Brussels, Belgium     102,655       12,900       100 %
  3. AMB Fengxian Logistics Center — Bldgs 2, 4 & 6 (3)
   Shanghai, China     1,040,633       41,500       60 %
  4. AMB Fokker Logistics Center 1
   Amsterdam, Netherlands     236,203       30,300       100 %
  5. AMB Jiuting Distribution Center 2
   Shanghai, China     187,866       7,300       100 %
  6. AMB Layline Distribution Center (3)
   Los Angeles     298,000       30,200       100 %
  7. AMB Milton 401 Business Park — Bldg 1
   Toronto, Canada     375,241       21,100       100 %
  8. Frankfurt Logistics Center 556 - Phase II
   Frankfurt, Germany     105,723       15,800       100 %
  9. Highway 17 - 55 Madison Street (3)
   New Jersey     150,446       12,900       100 %
10. Singapore Airport Logistics Center — Bldg 2 (4)
   Singapore City, Singapore     250,758       13,000       50 %
 
                        
Total Available for Sale or Contribution
         2,965,039     $ 199,200       88 %
 
                        
 
(1)   Represents projects where development activities have been completed and which we intend to sell or contribute within two years of construction completion.
 
(2)   Represents total estimated cost of development, renovation or expansion, including initial acquisition costs, prepaid ground leases and associated carry costs. The estimates are based on current estimates and forecasts and are subject to change. Non-U.S. Dollar investments are translated to U.S. Dollar using the exchange rate at December 31, 2006.
 
(3)   Renovation projects represent projects where the acquired buildings are less than 75% leased and require significant capital expenditures (generally more than 10% — 25% of acquisition cost) to bring the buildings up to operating standards and stabilization (generally 90% occupancy).
 
(4)   Represents a project in an unconsolidated joint venture.

11

 

Properties held through Joint Ventures, Limited Liability Companies and Partnerships
Consolidated Joint Ventures:
     As of December 31, 2006, we held interests in joint ventures, limited liability companies and partnerships with institutional investors and other third parties, which we consolidate in our financial statements. Such investments are consolidated because we own a majority interest or, as general partner, exercise significant control over major operating decisions such as acquisition or disposition decisions, approval of budgets, selection of property managers and changes in financing. Under the agreements governing the joint ventures, we and the other party to the joint venture may be required to make additional capital contributions and, subject to certain limitations, the joint ventures may incur additional debt. Such agreements also impose certain restrictions on the transfer of joint venture interests by us or the other party to the joint venture and typically provide certain rights to us or the other party to the joint venture to sell our or their interest in the joint venture to the joint venture or to the other joint-venture partner on terms specified in the agreement. In addition, under certain circumstances, many of the joint ventures include buy/sell provisions. See Part IV, Item 15: Note 9 of the “Notes to Consolidated Financial Statements” for additional details.
     The tables that follow summarize our consolidated joint ventures as of December 31, 2006:
Consolidated Co-Investment Joint Ventures
(dollars in thousands)
                                                     
    Our                   Gross                     JV Partners’  
    Ownership   Number of     Square     Book     Property     Other     Share  
Joint Ventures   Percentage   Buildings     Feet (1)     Value (2)     Debt     Debt     of Debt (3)  
Co-Investment Operating Joint Ventures:
                                                    
AMB Erie (4)
  50%     3       821,712     $ 52,942     $ 20,605     $ —     $ 10,303  
AMB Partners II (5)
  20%     118       9,913,375       678,796       323,532       65,000       311,470  
AMB-SGP (6)
   50%     74       8,287,424       444,990       235,480       —       117,449  
AMB Institutional Alliance Fund II (7)
  20%     70       8,007,103       515,334       243,263       —       192,058  
AMB-AMS (8)
   39%     33       2,172,137       153,563       78,904       —       48,420  
 
                                        
Total Co-Investment Operating Joint Ventures
   30%     298       29,201,751       1,845,625       901,784       65,000       679,700  
 
                                                    
Co-Investment Development Joint Ventures:
                                                    
AMB Partners II (5)
  20%     n/a       n/a       342       —       —       —  
AMB Institutional Alliance Fund II (7)
  20%     n/a       n/a       4,200       —       —       —  
 
                                        
Total Co-Investment Development Joint Ventures
   20%     —       —       4,542       —       —       —  
 
                                        
Total Co-Investment Consolidated Joint Ventures
   30%     298       29,201,751     $ 1,850,167     $ 901,784     $ 65,000     $ 679,700  
 
                                        
 
(1)   For development properties, this represents estimated square feet at completion of development for committed phases of development and renovation projects.
 
(2)   Represents the book value of the property (before accumulated depreciation) owned by the joint venture entity and excludes net other assets as of December 31, 2006. Development book values include uncommitted land.
 
(3)   JV Partners’ Share of Debt is defined as total debt less our share of total debt. See footnote 1 to the Capitalization Ratios table contained in Part II, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources” for a discussion of why we believe our share of total debt is a useful supplemental measure for our management and investors, of ways to use this measure when assessing our financial performance, the limitations of the measure as a measurement tool, and for a reconciliation of our share of total debt to total consolidated debt, a GAAP financial measure.
 
(4)   AMB/Erie, L.P. is a co-investment partnership formed in 1998 with the Erie Insurance Company and certain related entities.
 
(5)   AMB Partners II, L.P. is a co-investment partnership formed in 2001 with the City and County of San Francisco Employees’ Retirement System.
 
(6)   AMB-SGP, L.P. is a co-investment partnership formed in 2001 with Industrial JV Pte. Ltd., a subsidiary of GIC Real Estate Pte. Ltd., the real estate investment subsidiary of the Government of Singapore Investment Corporation.
 
(7)   AMB Institutional Alliance Fund II, L.P. is a co-investment partnership formed in 2001 with institutional investors, which invest through a private real estate investment trust.
 
(8)   AMB-AMS, L.P. is a co-investment partnership formed in 2004 with three Dutch pension funds.

12

 

Other Consolidated Joint Ventures
(dollars in thousands)
                                                         
        Our   Number             Gross                     JV Partners’  
        Ownership   of     Square     Book     Property     Other     Share  
Properties   Market   Percentage   Buildings     Feet     Value (1)     Debt     Debt     of Debt (2)  
Other Industrial Operating Joint Ventures
   Various   92%     32       2,982,313     $ 258,374     $ 60,435     $ —     $ 4,419  
Other Industrial Development Joint Ventures
   Various   81%     16       3,930,930       320,942       63,171       98       28,095  
 
                                            
Total Other Industrial Consolidated Joint Ventures
       86%     48       6,913,243     $ 579,316     $ 123,606     $ 98     $ 32,514  
 
                                            
 
(1)   Represents the book value of the property (before accumulated depreciation) owned by the joint venture entity and excludes net other assets as of December 31, 2006. Development book values include uncommitted land.
 
(2)   JV Partners’ Share of Debt is defined as total debt less our share of total debt. See footnote 1 to the Capitalization Ratios table contained in Part II, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources” for a discussion of why we believe our share of total debt is a useful supplemental measure for our management and investors, of ways to use this measure when assessing our financial performance, the limitations of the measure as a measurement tool, and for a reconciliation of our share of total debt to total consolidated debt, a GAAP financial measure.
Unconsolidated Joint Ventures:
     As of December 31, 2006, we held interests in 14 equity investment joint ventures that are not consolidated in our financial statements. Effective October 1, 2006, we deconsolidated AMB Institutional Alliance Fund III, L.P. on a prospective basis. The management and control over significant aspects of these investments are held by the third-party joint-venture partners and we are not the primary beneficiary for the investments that meet the variable-interest entity consolidation criteria under FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities.
     The tables that follow summarize our unconsolidated joint ventures as of December 31, 2006:
Unconsolidated Joint Ventures
dollars in thousands)
                                                             
    Our   Number             Gross                     Our     Our  
    Ownership   of     Square     Book     Property     Other     Net Equity     Share of  
Unconsolidated Joint Ventures   Percentage   Buildings     Feet (1)     Value     Debt     Debt     Investment     Debt (2)  
Co-Investment Operating Joint Ventures:
                                                            
1. AMB-SGP Mexico, LLC (3)
   20%     12       2,737,515     $ 165,381     $ 95,000     $ 11,700     $ 7,601     $ 20,912  
2. AMB Japan Fund I, L.P. (4)
   20%     12       3,814,773       602,397       368,086       82,184       31,811       90,004  
3. AMB Institutional Alliance Fund III, L.P. (5)
   23%     119       13,784,406       1,313,858       615,500       60,000       136,971       160,280  
 
                                              
Total Co-Investment Joint Ventures
   22%     143       20,336,694       2,081,636       1,078,586       153,884       176,383       271,196  
 
                                                            
Co-Investment Development Joint Ventures:
                                                            
1. AMB Institutional Alliance Fund III, L.P. (5)
  23%     1       179,400       9,636       —       —       —       —  
2. AMB DFS Fund I, LLC (6)
   15%     —       —       78,450       —       —       11,700       —  
 
                                                            
Other Industrial Operating Joint Ventures
   53%     48       7,684,931 (7)     295,036       184,423       —       47,955       89,262  
 
                                              
Total Unconsolidated Joint Ventures
   28%     192       28,201,025     $ 2,464,758     $ 1,263,009     $ 153,884     $ 236,038     $ 360,458  
 
                                              
 
(1)   For development properties, this represents estimated square feet at completion of development for committed phases of development and renovation projects.

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(2)   See footnote 1 to the Capitalization Ratios table contained in Part II, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources” for a discussion of why we believe our share of total debt is a useful supplemental measure for our management and investors, of ways to use this measure when assessing our financial performance, the limitations of the measure as a measurement tool, and for a reconciliation of our share of total debt to total consolidated debt, a GAAP financial measure.
 
(3)   AMB-SGP Mexico, LLC is an unconsolidated co-investment joint venture formed in 2004 with Industrial (Mexico) JV Pte. Ltd., a subsidiary of GIC Real Estate Pte. Ltd., the real estate investment subsidiary of the Government of Singapore Investment Corporation. Includes $5.5 million of shareholder loans outstanding at December 31, 2006 between us and the co-investment partnership and its subsidiaries.
 
(4)   AMB Japan Fund I, L.P. is a co-investment partnership formed in 2005 with 13 institutional investors as limited partners.
 
(5)   AMB Institutional Alliance Fund III, L.P. is an open-ended co-investment partnership formed in 2004 with institutional investors, which invest through a private real estate investment trust. Prior to October 1, 2006, the Company accounted for AMB Institutional Alliance Fund III, L.P. as a consolidated joint venture.
 
(6)   AMB DFS Fund I, LLC is a co-investment partnership formed in 2006 with a subsidiary of GE Real Estate to build and sell properties.
 
(7)   Includes investments in 7.4 million square feet of operating properties through the Company’s investments in unconsolidated joint ventures that it does not manage which it excludes from its owned and managed portfolio. Our owned and managed operating portfolio includes properties in which we have at least a 10% ownership interest, for which we are the property or asset manager, and which we intend to hold for the long-term.
     Mortgage and Loan Receivables and Other Investments:
     The tables that follow summarize our mortgage investments and other investments as of December 31, 2006:
Mortgage Investments and Other Investments
(dollars in thousands)
                         
            Mortgage    
Mortgage and Loan Receivables   Market   Maturity   Receivable (2)   Rate
1. AMB Pier One, LLC (1)
  San Francisco Bay   May 2026   $ 12,686       13.0 %
2. G.Accion
  Various   March 2010     6,061       10.0 %
 
                       
 
          $ 18,747          
 
                       
                             
                    Our   Our  
            Net     Ownership   Share  
Other Investments   Market   Property Type   Investment     Percentage   of Debt (5)  
1. Park One Land Parcel
   Los Angeles   Parking Lot   $ 75,498     100%   $ —  
2. G.Accion (3)
   Various   Various     38,343     39%     2,965  
3. IAT Air Cargo Facilities Income Fund (4)
   Canada   Industrial     2,644     5%     —  
 
                        
 
           $ 116,485         $ 2,965  
 
                        
 
(1)   AMB has an 0.1% unconsolidated equity interest (with a 33% economic interest) in this property and also has an option to purchase the remaining equity interest beginning January 1, 2007 and expiring December 31, 2009.
 
(2)   We hold inter-company loans that we eliminate in the consolidation process.
 
(3)   We also have a 39% unconsolidated equity interest in G. Accion, S.A. de C.V. (G. Accion), a Mexican real estate company. G. Accion provides management and development services for industrial, retail, residential and office properties in Mexico.
 
(4)   We also have an approximate 5% equity interest in IAT Air Cargo Facilities Income Fund, a public Canadian real estate income trust.
 
(5)   See footnote 1 to the Capitalization Ratios table contained in Part II, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operation – Liquidity and Capital Resources” for a discussion of why we believe our share of

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    total debt is a useful supplemental measure for our management and investors, of ways to use this measure when assessing our financial performance, the limitations of the measure as a measurement tool, and for a reconciliation of our share of total debt to total consolidated debt, a GAAP financial measure.
Secured Debt
     As of December 31, 2006, we had $1.4 billion of secured indebtedness, net of unamortized premiums, secured by deeds of trust or mortgages. As of December 31, 2006, the total gross consolidated investment value of those properties securing the debt was $2.6 billion. Of the $1.4 billion of secured indebtedness, $1.0 billion was consolidated joint venture debt secured by properties with a gross investment value of $1.9 billion. For additional details, see Part II, Item 7: “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources” and Part IV, Item 15: Note 6 of “Notes to Consolidated Financial Statements” included in this report. We believe that as of December 31, 2006, the fair value of the properties securing the respective obligations in each case exceeded the principal amount of the outstanding obligations.

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